The many hues of inequality in India -T Haque & D Narasimha Reddy

-The Hindu Business Line

There has been a spike in income inequality in the post reforms period with wealth concentrated at the top deciles

India has somehow nurtured a widely shared impression that it has a well established statistical system with reliable databases compiled through effective methods of data collection through its network of central agencies and periodic nation-wide surveys. However, India is one of the very few countries which does not collect information on income through household surveys. Hence, it has rightly earned the snide remark that India has entered the digital age without any surveys for collecting income data from households.

For quite some time, consumer expenditure data based on all-India consumer household expenditure surveys (AIHS) by the NSSO served as the proxy for income inequality estimates. However, it is well known that consumption expenditure as a proxy for income would be a gross underestimation of income, especially of the higher income groups.

The only other source of household income data is the India Human Development Survey (IHDS) available since 2005. Though IHDS data does not cover the entire country, the sample size is considered large enough to provide indicative measures of distribution of income.

For the estimation of household wealth, the only source available as of now is the NSSO decennial All India Debt and Investment Survey (AIDIS). However, there are some measurement issues, comparability problems, under-reporting of wealth, under-sampling of the super rich, and so on, which point to the limitation of the data. Yet the data do help in capturing the broad trends, and the data sets are put to extensive analysis of inequalities not only of wealth but also of income over a period across different social groups and urban–rural areas.

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The Hindu Business Line, 30 June, 2019,

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