Trends in Poverty and Inequality: An Analysis of the High Growth Period in India

Abstract

In this paper, the author analyses the trends in poverty and inequality from 2004-05 to 2007-08 using NSSO data. Statewise figures for the rise in the monthly per capita consumption expenditure and the corresponding reduction in poverty in rural and urban areas have been estimated to examine the underline heterogeneity. Furthermore, these findings have been supplemented with an analysis of data on real wage growth in the labour and salaried employment categories. Additionally in order to assess the impact of growth rate of 9 per cent on the trajectory of inequality, the authors, instead of relying solely on inequality based on consumption expenditure, have estimated wage inequality as well. The estimates show how inequality, based on different parameters, has not followed a homogeneous trend.

Keywords: India, Poverty, Inequality, Inequality Decomposition, General Entropy, Theil Index