INCOME DISTRIBUTION IN INDIA: AN ANALYSIS
This research examines income distribution in India. To the extent possible, income distribution is considered within the context of class differentials, wherein class is defined as low-, middle-, and high-income groups. For the greater part, however, income distribution is considered within the context of population quintiles, as it is in this form that the reliable data on income distribution of collected and published by organizations such as the World Bank. Factors that explain income distribution patterns in India also are addressed.
India is a massive country with a huge population. Almost one-billion people (929.4 million in mid-1995) reside in a country of 3,288 square kilometers. The per capita gross domestic product (GDP) in India of US$340 indicates that only a comparatively small proportion of the population will be well-off economically. The estimate is that 52.5 percent of the population in India have annual incomes below the poverty level (World Bank, 1997).
Population in India currently is increasing at the rate of 1.8 percent per year. At this rate of growth, India's population will exceed one-billion by the end of 1999, and will increase further to more than 1.1 billion by 2015. While the country's population is growing at an annual rate of 1.8 percent, GDP in India is growing at an annual rate of 3.2 percent (World Bank, 1997). Thus, some progress with respect to income is occurring in spite of the massive population growth.
Income distribution in India is highly skewed in favor of the higher income groups in the country. Income distribution according to population quintile is presented in Table 1, which may be found below on this page. Data for the United States are included in the table for comparative purposes.
Income Distribution By Quintile in India and the United States
As the data presented in Table 1 indicate, the income distribution rage ...