Economic Inequality in India

Abstract

If the income of the poor falls or rises by the same percentage as it does for the rich, economists generally say that income inequality has not changed. But not all analysts believe this is true assessment of social and economic equity, especially in poorer countries. A 10 percent increase for the poor in a developing country is usually trivial compared to a 10 percent increase even for middle-income people, no less the rich. The authors propose a better way to measure income inequality, and it shows that in India, for example, inequality is on the rise.