Unequal Inequalities in India: Income and Non-income Dimensions

We have focused on a range of issues that have surfaced in discussions on the growing economic inequality in India in both income and non-income dimensions. First, we present a brief account of the changing nature of income inequality during and after the COVID pandemic drawing on various sources. During COVID-19, the rising inequality has been associated with an absolute decline in the economic conditions of a large number of people, unlike in the period since the 1980s when most people experienced some gain but the poorer classes gained rather less. The central argument in the paper is that economic inequality had been high in India for quite some time, and COVID pandemic has exacerbated it in the most recent period. Using two rounds of IHDS and applying the technique of decomposition, we find that overall inequality increased but the contribution of inequality between social groups to the overall inequality declined. We then presented an alternative procedure which would allow us to find out how each of the groups fared vis-à-vis others. Finally, we looked at changes in child stunting between NFHS-3 and NFHS-4 across different states, as an instance of inequality in non-income dimensions. Applying three different methods, we find that in five states, the declines in the bottom quintile of households were more than the average decline, whereas in four states, declines were less than average, across all the three methods. The overall purpose of this paper is to demonstrate that if we want make a substantive statement on changes in economic inequality in India, we need to use multiple sources of data and carefully consider multiple methods in order to check robustness of the statement.