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Beyond Headline GDP Growth
Income and consumption growth rates vary for different income groups. Data shows that beyond the headline gross domestic product growth rate, there is a significant heterogeneity in growth rates depending on which part of the income distribution one is located in. The article highlights the important implications of such differences in growth on economic inequality.
Income and consumption growth rates vary for different income groups. Data shows that beyond the headline gross domestic product growth rate, there is a significant heterogeneity in growth rates depending on which part of the income distribution one is located in. The article highlights the important implications of such differences in growth on economic inequality.
India transitioned from a period of slow gross domestic product (GDP) growth of 3.5% in the early decades since independence to one of the fastest growing countries of the world in the 2000s. After the start of the liberalisation of the economy in 1991, the pace of growth picked up to 6.4% in the next two decades and possibly doubled the average productivity and living standards in just 16 years. However, the headline GDP growth number may actually hide the heterogeneity in growth rates of different income groups of the population. This article investigates how economic growth affected different income groups and the consequence of this on inequality.
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