Eleventh Global Studies Conference

Abstract

India is on course to join the ill-famed league of most unequal countries of the contemporary world. Mounting economic inequality does not augur well for Indian society at large which is still characterized by widespread caste-based and gender discrimination. Since its birth as a free nation in the late seventies, both rural and urban inequality fell considerably at an equal pace. But after 1980 the fall ceased and urban inequality began to grow and grew faster than rural income inequality. The latter began to grow during the turn of the last millennium. India is now a more unequal nation than China. India’s income Gini of 0.53 is higher than China’s income Gini of 0.47. India’s rising income inequality to a large extent is caused by the enormous difference in learning outcomes after completion of education. Decomposition analysis of India’s current state of inequality points out that rural income inequality causing this outcome. Interstate difference in mean income and urban-rural gap of mean income within states are often held responsible for giving rise to India’s current state of income inequality. Intra-state income inequality is no less responsible. The non-farm sector has been expanding rapidly and within that category the service sector is expanding. The service sector works need skills in various trades. Thus unskilled and semi-skilled workers are left out in this new pattern. Formal employment is also characterized by duel wage structure. Income disparity or earning differential has its roots embedded in education delivery system in particular and human capital formation in general. The state must create opportunities for growth for all through provisioning of universal quality education, skill training, and healthcare