Rising Inequality in Shining India

This paper presents a new set of integrated poverty and inequality estimates for India and Indian states for 1987-88, 1993-94 and 1999-2000. Regional disparities increased in the 1990s, with the southern and western regions doing much better than the northern and eastern regions. Economic inequality also increased within states, especially within urban areas, and between urban and rural areas. The macroeconomic policies responsible for these trends—fiscal tightening, regressive tax policies and expenditure cuts; financial sector reform and liberalization of rules for foreign and domestic investment, leading to more regional imbalance and skewed investment patterns. Most indicators that are examined in this paper have continued to improve in the nineties, but social progress has followed very diverse patterns, ranging from accelerated progress in some fields to slow down and even regression in others