Indian States

The emergence of India as an economic powerhouse notwithstanding, growth has failed to trickle down to marginalised sections, rendering inclusive growth a major concern. That has made India one of the most unequal countries. In this context, the extent of inequality across states during the post-economic reforms period has been analysed in this paper. Income inequality is estimated by sourcing gross state domestic product data from the Reserve Bank of India’s Handbook of Statistics on the Indian Economy and using the Gini coefficient and Lorenz curve for 26 states and three union territories from 1993–94 to 2019–20. During this period, the western and southern zones have recorded a higher GSDP than the rest of the states in the country. The Gini coefficient was the lowest at 0.25 for Andhra Pradesh and the highest for Sikkim at 0.52. It is argued that the policy focus should not just be on a higher magnitude of growth, but on equitable growth, which requires region-specific interventions with a focus on several dimensions such as setting up agro-processing storage unit storage and transportation and generating accessible employment opportunities—supplemented by significant investments in education and health.

There is a large magnitude of income inequality in Indian states, as estimated by various measures, with substantial variation among states and between rural and urban areas of the states along with negligible evidence for a Kuznets-type curve.