Top Indian incomes, 1956-2000
By: Abhijit V. Banerjee [and] Thomas Piketty
Contributors: Piketty, Thomas, 1971-; Massachusetts Institute of Technology. Dept. of Economics
Series: Working paper series / Massachusetts Institute of Technology, Dept. of Economics -- working paper 03-32; Working paper (Massachusetts Institute of Technology. Dept. of Economics) -- no. 03-32.
Publisher: Massachusetts Institute of Technology, Dept. of Economics
Published: 2003
Place of publication: Cambridge, MA
Language: eng
Number of pages: 16
Description: This paper presents data on the evolution of top incomes and wages from 1956 to 2000 in India using individual tax returns data. Our data shows that the shares of the top 0.01%, the top 0.1% and the top 1% in total income, shrank very substantially until the early to mid 1980s but then went back up again, so that today these shares are only slightly below what they were in 1956. We argue that this U-shaped pattern is broadly consistent with the evolution of economic policy in India: The period from 1956 to the early to mid 1980s was also the period of "socialist" policies in India, while the subsequent period, starting with the rise of Rajiv Gandhi, saw a gradual shift towards more pro-business policies. Although the initial share of this group was small, the fact that the rich were getting richer had a non-trivial impact on the overall income distribution. In particular, its impact is not large enough to fully explain the gap between average consumption growth in survey-based NSS data and the National accounts based NAS data, but is sufficiently large to explain a non-negligible part of it (between 20% and 40%). Keywords: Top Incomes, Inequality, Liberalization. JEL Classification: D31, O15, O53.
Notes: "June 2003."

Includes bibliographical references (p. 12-13, 1st group).

Abstract in HTML and working paper for download in PDF available via World Wide Web at the Social Science Research Network.