Income Inequality : Difference between income or expenditure or assets of various groups or individual.
In India, according to World Bank:
Poorest 20% holds 8% of GDP
Richest 20% holds 45% of GDP
Quantile ratio: income of richest 20%/income of poorest 20%
Palma ratio: income of richest 10%/income of forest 40%
Gini coefficient
G = area between 45 degree line and Lorenz curve/ area below 45 degree line, 0 < G < 1.
In India, G = 0.352
In USA, G = 0.41
Reasons
- Land and property
- Inheritance law
- Education and health services
- Scarcity of capital
- Unemployment and poverty
- Social infrastructure
- Leakage in welfare schemes
- Efficiency and capacity
Government efforts
- Land reforms
- Mahalabonis model ( 2nd 5 year plan)
- Promotion of MSMEs
- Nationalisation of banks
- Priority sector lending (PSL)
- Reservation
- Progressive tax system
- Welfare programmes and schemes
Refer Economics Important Topics for more other such topics