Satish
2011-12-07 03:18:30 UTC
7-12-2011
India's income inequality has doubled in 20years
NEW DELHI: Inequality in earnings has doubled in India over the last
two decades, making it the worst performer on this count of all
emerging economies. The top 10% of wage earners now make 12 times more
than the bottom 10%, up from a ratio of six in the 1990s.
Moreover, wages are not smoothly spread out even through the middle of
the distribution. The top 10% of earners make almost five times more
than the median 10%, but this median 10% makes just 2.4 times more
than the bottom 10%.
"The main driver has been an increase in wage inequality between
regular wage earners-contractual employees hired over a period of
time," says the Organisation for Economic Cooperation and Development
(OECD) in a new report on inequality in the developed world and
emerging economies. "By contrast, inequality in the casual wage sector-
workers employed on a day-to-day basis-has remained more stable," the
report said.
South Africa is the only emerging economy with worse earnings
inequality, but it has halved this number since the last decade. "The
combination of marked spatial divides, persistently high shares of
informal sector jobs and disparities in access to education accounts
for much of the widespread variation in earnings from work in the
EEs," the report said.
Wage inequality has driven more general income inequality in the
country. India has got more unequal over the last two decades-India's
Gini coefficient, the official measure of income inequality, has gone
from 0.32 to 0.38, with 0 being the ideal score. In the early 1990s,
income inequality in India was close to that of developed countries;
however, its performance on inequality has diverged greatly since
then, bringing it closer to China on inequality than the developed
world.
There is evidence of growing concentration of wealth among the elite.
The consumption of the top 20% of households grew at almost 3% per
year in the 2000s as compared to 2% in the 1990s, while the growth in
consumption of the bottom 20% of households remained unchanged at 1%
per year.
In comparison, the income of the bottom 20% of households in China
grew at double the rate in the 2000s as compared to the 1990s, while
the increase for the top 20% of households was much slower. In Brazil,
household incomes have been growing faster among the poorest
households than among the richest for the last two decades.
Of all the emerging economies, India has by far the highest proportion
of informal employment, by any national or international measure. "In
India...informal employment includes a disproportionate number of
women, home-based workers, street sellers and workers sub-contracted
by firms in the formal sector," the OECD report said.
India spends less than 5% of its GDP on social protection schemes as
compared to Brazil's more than 15%. Its tax revenue as a proportion of
GDP is under 20%-the lowest of all emerging economies, and just half
that of developed countries.
http://timesofindia.indiatimes.com/india/Indias-income-inequality-has-doubled-in-20-years/articleshow/11012855.cms
India's income inequality has doubled in 20years
NEW DELHI: Inequality in earnings has doubled in India over the last
two decades, making it the worst performer on this count of all
emerging economies. The top 10% of wage earners now make 12 times more
than the bottom 10%, up from a ratio of six in the 1990s.
Moreover, wages are not smoothly spread out even through the middle of
the distribution. The top 10% of earners make almost five times more
than the median 10%, but this median 10% makes just 2.4 times more
than the bottom 10%.
"The main driver has been an increase in wage inequality between
regular wage earners-contractual employees hired over a period of
time," says the Organisation for Economic Cooperation and Development
(OECD) in a new report on inequality in the developed world and
emerging economies. "By contrast, inequality in the casual wage sector-
workers employed on a day-to-day basis-has remained more stable," the
report said.
South Africa is the only emerging economy with worse earnings
inequality, but it has halved this number since the last decade. "The
combination of marked spatial divides, persistently high shares of
informal sector jobs and disparities in access to education accounts
for much of the widespread variation in earnings from work in the
EEs," the report said.
Wage inequality has driven more general income inequality in the
country. India has got more unequal over the last two decades-India's
Gini coefficient, the official measure of income inequality, has gone
from 0.32 to 0.38, with 0 being the ideal score. In the early 1990s,
income inequality in India was close to that of developed countries;
however, its performance on inequality has diverged greatly since
then, bringing it closer to China on inequality than the developed
world.
There is evidence of growing concentration of wealth among the elite.
The consumption of the top 20% of households grew at almost 3% per
year in the 2000s as compared to 2% in the 1990s, while the growth in
consumption of the bottom 20% of households remained unchanged at 1%
per year.
In comparison, the income of the bottom 20% of households in China
grew at double the rate in the 2000s as compared to the 1990s, while
the increase for the top 20% of households was much slower. In Brazil,
household incomes have been growing faster among the poorest
households than among the richest for the last two decades.
Of all the emerging economies, India has by far the highest proportion
of informal employment, by any national or international measure. "In
India...informal employment includes a disproportionate number of
women, home-based workers, street sellers and workers sub-contracted
by firms in the formal sector," the OECD report said.
India spends less than 5% of its GDP on social protection schemes as
compared to Brazil's more than 15%. Its tax revenue as a proportion of
GDP is under 20%-the lowest of all emerging economies, and just half
that of developed countries.
http://timesofindia.indiatimes.com/india/Indias-income-inequality-has-doubled-in-20-years/articleshow/11012855.cms