Dynamics of inequality and poverty in India

We are delighted to invite you to the sixth Consumer Pyramids Research Seminar on 18 January 2021 at 6.00 PM IST.

Prof. Anand Sahasranaman from Krea University and Mr. Nishanth Kumar from Dvara Research will present

Dynamics of inequality and poverty in India

Their paper will be discussed by Prof. Bharti Nandwani from the Indira Gandhi Institute of Development Research.

You can sign up for the webinar here.

Abstract

We study the evolution of income in India from 2014-19 and find that while income inequality remains largely consistent over this time, the lower end of the income distribution has experienced significant losses the bottom ventile shows not only a decline in income share of 38%, but also negative real average income growth of -4.6% per annum. We further investigate the composition of this part of the distribution using rural and urban splits, and find that even as income shares at the bottom of the urban distribution have increased over time, those at the bottom of the rural distribution have decreased income share of bottom decile of the rural income distribution declined by 41%, and real average income growth was at -4.3% per annum from 2014-19. We also empirically confirm that the bottom ventile of the consolidated Indian income distribution is composed primarily of rural incomes, and therefore the decline in real incomes is essentially a rural phenomenon. Studying occupation data of households, we find that the bottom decile of the rural distribution correlates strongly with occupations of small or marginal farmers and agricultural labour, highlighting the increasing economic fragility of such occupations. Using the RGBM model to estimate the nature of reallocation in the Indian income distribution, we find that reallocation has been decreasing from 2015 and even turned negative in 2018, which is in keeping with empirical evidence of real income declines at the bottom of the distribution, and heralds the risk that persistent negative reallocation in the future could result in regressive redistribution of resources from the poor to the rich.

Format

- 6.00 to 7.00 PM: Paper presentation by Mr. Nishanth Kumar

- 7.00 to 7.30 PM: Discussion by Prof. Bharti Nandwani followed by moderated Q&A

About the Consumer Pyramids Research Seminar Series

The Consumer Pyramids Research Seminar Series features work based on the Consumer Pyramids Household Survey. It is a platform for researchers to receive critical and technical feedback from accomplished peers. It is also meant to engage with the larger research community who may gain from technical discussions.

The Consumer Pyramids Household Survey is India’s largest regular household survey and the world’s largest household panel survey. CPHS has collected data on over 232,000 households and 1.19 million individuals surveyed since 2014. The survey collects information on household demographics, individual identities, employment, health status, financial inclusion, individual and household incomes, consumption expenditures, ownership of assets and intentions to buy them, household amenities and consumer sentiments. Income and expenses data are a monthly time-series since January 2014.

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