<blockquote><http://www.ft.com/cms/s/93a5dbd4-263b-11db-afa1-0000779e2340.html>
Time for India to reduce inequality
By Pranab Bardhan
Published: August 7 2006 20:24 | Last updated: August 7 2006 20:24
In the recent flurry of writings on the rise of India's economy, it is often said that economic inequality is far less widespread in India than in most other developing countries. For example, an article in Foreign Affairs on the "India model" claimed it is more "people-friendly" than most other development models, and that "inequality has increased much less in India than in other developing nations". On the Gini index, a measure of income inequality on a scale of zero to 100, India scores 33, compared with 41 for the US, 45 for China and 59 for Brazil, the article notes.
Such accounts ignore the fact that the Gini index for India is for consumption inequality, not income inequality. For most countries, consumption inequality is lower than income inequality, as the rich save more than the poor. India's National Sample Survey, a regular national survey of household expenditure, does not usually collect income distribution data, and the occasional alternative sources suggest a significantly higher Gini figure.
The survey does collect data on wealth. The Gini index for asset distribution inequality in 2002 was 63 (out of 100) in rural India, and 66 in urban India; the corresponding figures for China were 39 and 47 respectively. These data do not include ownership of human capital. In India, educational inequality – crudely measured as the Gini index of years of schooling in the adult population – is 56. This is not only much higher than in China (37), it is significantly higher than in most Latin American countries (Brazil is 39), and many African countries, not to speak of the US (which scores 13).
India's traditional caste system arguably makes it one of the world's most socially unequal countries. When one combines social and economic factors, India's inequality is at the higher end of the world scale. . . . </blockquote> -- Yoshie <http://montages.blogspot.com/> <http://mrzine.org> <http://monthlyreview.org/>