Must-Read: Branko Milanovic: How Unequal Is India?

Must-Read: Branko Milanovic: How unequal is India?: “In the 1990s… the survey numbers began to diverge more and more from National Accounts statistics…

…NSS kept on producing a fairly stable consumption Gini… with only a small increase in inequality after India’s sharp turn toward capitalism in the early 1990s… made India inequality look about the same as in developed countries. But until recently we had no other reliable and nationally-representative survey to confront NSS with. Now… we have… the first income based surveys of Indian population for 2004 and, just released by LIS, another same survey for 2011…. First, Indian Gini is… 51… the level of Latin American countries and is some 15 points… higher than… NSS….

Now, if we replace NSS with the new income survey as I have done for the global inequality calculation for the year 2011 (unpublished), you may expect that the greater inequality revealed by IHDS would push global inequality up, especially since India is such a populous country. Right? Wrong…. Global inequality goes down by approximately 1 Gini point since the higher income levels implied by IHDS push Indians toward the middle of the global income distribution and more than offset the contribution to higher global inequality that comes from the stretched-out Indian distribution…. In conclusion, more unequal but richer India, makes the world more equal.