The Rich Keep Getting Richer in country-India! Says Who? Asia-Pacific Research and Training Network on Trade.

Banerjee, A.N.; Banik, N.

Abstract

In India, the popular perception is that economic reforms have benefited the rich more than the poor, leading to unequal income distribution as in Quah’s twin peaks hypothesis. If economic reforms are pro-rich then we would see the emergence of twin peaks in the underlying income distribution function – clustering of rich people and clustering of poor people. On the other hand, a uniform growth process at a pan-India level will lead to the disappearance of any such clusters. Considering district-level per capita income data from the Planning Commission of India, in 1999/2000 and 2004/05, we find that income distribution has not changed; thus, the perception about economic reforms having benefitted only the rich is not supported by the data. The results suggest that between 1999/2000 and 2004/05 there was no statistically significant difference in the median-adjusted income distribution functions. In fact, the income density function for 2004/05 became more platykurtic (with fewer extreme values) than it was during 1999/2000, suggesting that there has been a reduction in inter-district per-capita income disparity.

Citation

Banerjee, A., & Banik, N. The Rich Keep Getting Richer in country-India! Says Who? Asia-Pacific Research and Training Network on Trade

• Working Paper Type: Working Paper
• Publication Date: 2011-09
• Deposit Date: Nov 24, 2014
• Series Title: ARTNeT Working Paper
• Series Number: 105
• Public URL: https://durham-repository.worktribe.com/output/1168042
• Publisher URL: https://hdl.handle.net/20.500.12870/1395