Wealth inequality: the Indian case

Abstract

ABSTRACTThree decades have passed since India implemented market-oriented economic reforms. While levels of and trends in consumption and income inequality have been studied extensively, wealth inequality has not received the same level of attention. In this paper, we use nationally representative household surveys to show that the period of economic reforms has witnessed a sharp rise in interpersonal wealth inequality. A decomposition of this rising wealth inequality shows that wealth is increasingly concentrated in urban areas, among a few privileged social groups, and in the top decile of the Indian population.RÉSUMÉTrente ans ont passé depuis que l’Inde a implémenté ses réformes économiques axées sur le marché. Tandis que les niveaux et tendances des inégalités de consommation et de revenu ont été étudiés en profondeur, les inégalités de richesse n’ont pas encore reçu le même degré d’attention. Dans cet article, nous nous penchons sur des enquêtes auprès des ménages, représentatives à l'échelon national, afin de démontrer que la période des réformes économiques a témoigné d’une forte hausse des inégalités de richesse interpersonnelles. Une analyse de cette hausse montre que la richesse est de plus en plus concentrée dans les zones urbaines, dans certains groupes sociaux privilégiés, et dans le décile supérieur de la population indienne.KEYWORDS: WealthinequalitycasteIndiarural–urban gap AcknowledgementsWe thank the two anonymous reviewers and the editor for useful comments on earlier drafts of the manuscript. We also thank the participants of the Wealth Inequality Workshops conducted in 2019 and 2022 by the Southern Centre for Inequality Studies, University of the Witwatersrand, for their feedback. Any remaining errors are our own.Disclosure statementNo potential conflict of interest was reported by the author(s).Notes1 As per the latest Periodic Labour Force Survey, 55.6 per cent of India’s workforce was self-employed in 2020–2021.2 ‘Caste’ in the Indian context could mean the ‘Varna’ or ‘Jati’ system. The Varna system categorised people into Brahmins, Kshatriyas, Vaishyas, and Shudras, in descending order of ‘purity’. Outside the Varna system, or the ‘Avarnas’, were the Dalits and the Adivasis. The Jati system categorised people into thousands of groups and sub-groups, and these Jatis differ in their ritual ranking and occupation. For a detailed discussion, see Zacharias and Vakulabharanam (Citation2011).3 A Dematerialised (or in short, Demat) account is necessary to trade in equity and debt in the Indian financial markets.Additional informationNotes on contributorsIshan AnandIshan Anand is an assistant professor of economics at Department of Humanities and Social Sciences, Indian Institute of Technology Delhi, India. His research focuses on inequality, stratification, caste, agriculture, and labour.Anjana ThampiAnjana Thampi is an assistant professor of economics at Jindal Global Law School, O. P. Jindal Global University, Sonipat, Haryana, India. Her areas of research include food security, inequality, labour, gender, climate and sustainability.Vamsi VakulabharanamVamsi Vakulabharanam is Co-director, Asian Political Economy Program and Associate Professor of Economics, University of Massachusetts, Amherst. He works on Inequality in Asian Economies, Diversity and Economic Development in Cities and Agrarian Change.