Income Distribution In India

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

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arrow the income spread between skilled and unskilled labor in such developing countries (Ekelund & Hebert, 1996). Because it is held that international trade increases the scope of labor specialization, and achieves economies of scale through the enlargement of markets, most economic theory holds that international trade should be free of artificial restrictions. The most recent experience of many developing countries has not conformed to the various international economic theoretical predictions, however, and the validity of many of the essential policies upon which international economic development is being based are being called into question (World Bank, 1997). One important problem within the context of this policy dilemma appears to be the mistaken assumption that global corporations are seeking to gain advantages through the exploitation of unskilled labor in developing countries. Rather, in the contemporary international economic environment, most global corporations appear to be attempting to replace skilled labor in the developed countries with skilled labor in the developing countries. Thus, the rationale of extant international economic polices is becoming irrelevant. One reason, therefore, for the continuing
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Approximate Word count = 3800
Approximate Pages = 15 (250 words per page)

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