On Wed, 2007-09-26 at 17:53 +0530, Ingrid wrote: > The merits of this article aside, Gini coefficients, that measure income > inequality, have risen steadily in India since 1980 from 0.32 to 0.38. For > the record, a Gini above 0.35 is generally believed to be unsustainable > socially and politically. If it's any consolation the comparable Ginis for > China are 0.32 and 0.40 and for the US 0.35 to 0.40 over the same period. > Naturally, sheer arithmetic implies that greater income inequalities require > greater rates of GDP growth to reduce poverty to the same extent.
i think the figures show that absolute numbers of people living in poverty (whatever the definition) have reduced over the past 20 years, and furthermore the absolute inflation-adjusted incomes have increased for almost all income groups of the indian population. quality of life, has also increased, as measured in DALYs (disability-adjusted life years, the third-world version of the rich world's "quality-adjusted life years"). "rich get richer and poor get poorer" is thus mainly true for india in a _relative_ sense, as pointed out by the gini coefficients ingrid cites. (a gini of 1.0 is when the richest person has all the money, 0.0 is when everyone is equal). i.e., the rich and poor have got absolutely richer, but the rich are getting richer faster. to the discomfort of those who favour socialist economic policies, fast growing economies almost always have growing inequalities, as the rich tend to be able to take the most advantage, soonest, of growth opportunities. moreover, most attempts to focus on inequality rather than growth result in stunted growth and increased absolute poverty - making any reduction in inequality irrelevant for most of the poor. for very poor societies, like india, appreciation among the poor of absolute wealth increases are probably going to overshadow relative poverty (envy of the rich) for a while. i believe high gini coefficients are much more social and political problem for richer, slower growing economies, than poor ones, for this reason. this is also why richer, slower growing economies face more social pressure (and can more easily afford) increased social safety nets or even sustained financial support for a stagnant poor underclass. for the record, india has a pretty low gini coefficient compared to other poor countries (and even rich ones). in most of latin america ginis are _much_ higher - and growth rates have been historically low, too, leading to frequent political problems. -rishab
