There is now clear evidence of rising income and wealth disparities in India since the 1990s when economic reforms kicked off. While the NSSO?s surveys on consumer expen-ditures (as a proxy for income) do not indicate high or wor-sening levels of inequality, its all-India debt and investment surveys in 1991-92 and 2002-03, however, indicate that the richer segments of the country?s population have registered the maximum gains in wealth.
Arjun Jayadev, Sripad Moti-ram and Vamsi Vakulabhara-nam?s research published in Economic and Political Weekly use this information to focus on two measures of wealth, house-hold per capita net worth (assets net of indebtedness) and household per capita assets that include land, buildings, livestock, agricultural machin-ery and implements, non-farm business equipment, transport equipment, durables and finan-cial assets. It bears mention that such data isn?t adequately representative of the richer segments of society.
For starters, they note that per capita net worth has grown by 3% per annum between 1991-92 and 2002-03, sug-gesting that the ?growth experi-ence of liberalisation has trans-lated into rapid accumulation of household assets across the country?. However, the Gini index measuring inequality? that lies between 0 indicating perfect equality and 1 indicat-ing perfect inequality?rose from 0.64 to 0.66, suggesting that this process has been ac-companied by a significant and growing concentration of weal-th. While the top 20% of the population has further consoli-dated its wealth, the share of the bottom 80% of the popu-lation has been either stagnant or suffered a mild decline over this period. But it is the top 5% and 1% of the population that has registered the biggest gains. The ratio of assets held by the individual at the 95th percent-ile to the assets held by the median individual rose from 758% to 814% while in terms of net worth it grew from 766% to 824%. For the individual at the 99th percentile, the ratio ballooned from 1,851% to 1,958% for assets and 1,886% to 2,012% for net worth. The super rich have got richer.
Although these researchers refrain from examining causal linkages between reforms and wealth distribution, it?s undeni-able that disparities have wor-sened after reforms.?Even in the US, the rise in incomes of the top 1% of Americans from 2003 to 2005 exceeded the income of the poorest 20% of Americans, according to the US Congressional Budget Office. Growing wealth concentration at the top cannot but have serious implications.
