Crime and Inequality in India

Abstract

On one hand accelerating crime rates in India, in recent years, have been a matter of concern since it can potentially serve as an impediment to economic growth. On the other hand, income inequality has also exhibited a sharp increase. This chapter investigates the underexamined causal linkage between crime and inequality in India using time series data for 1966-2019, panel data for 33 states over 2009-2019 as well as cross-sectional data for 612 districts. Spatial distribution of crime rates and income inequality imply the presence of a positive relationship over time. Results indicate a one-way Granger causality where income inequality granger-causes crime. Further, both panel and cross-sectional analyses also demonstrate the existence of a convex relationship between crime and inequality. Higher economic growth along with widening inequality and rising poverty tends to increase crime. Among several categories of crime, while violent crime, crime against women, and against SC/STs increase with rising income inequality, property and economic crimes do not exhibit a significant relationship with inequality.

Keywords: crime, income inequality, gender inequality, socioeconomic status, India

JEL Classification: K42, J11