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INCOME INEQUALITY
Group Members:SURAJ PATEL 14MBA074VINESH PATEL 14MBA076VIVEK PATEL 14MBA078PAYAL PATEL 14MBA080MANISH PRAJAPATI 14MBA082 SIDDTHARTH RAJGURU 14MBA084
MANEGERIAL ECONOMICS : MB700.1
May 3, 2023 1
Article topic: Income inequality up both in rural and urban areas
May 3, 2023 2
INTRODUCTION Income inequality is the gap between rich and poor i.e. is the differences in the distribution of economic assets (wealth) and income within or between populations or individuals. It is the state of an economy in which the shares of total income earned by the rich and poor are highly unequal
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CAUSES OF INCOME INEQUALITY
• Labour market outcomes
• Globalization• Technological
changes
TRADE LIBERALISATION
• Gender pay gap• Nepotism• Wealth
concentration
Racial discriminationCHANGES IN
TAXATION
• Policy reforms• More regressive
taxation• Access to
education
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CAUSES OF INCOME INEQUALITY IN INDIA
1. GROWTH FACTORAs development proceeds,
the earnings of different groups rise differently. The incomes of the upper-income and middle-income groups rise more rapidly than those of the poor, during the early stages of growth through which India is passing at present shift of population from agriculture which is a slow growing sector to the modern large industrial sector which grows more rapidly. Again, there is the capital-intensive nature of the development of the modern sector.
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HIGHLY UNEQUAL ASSETS DISTRIBUTION Incomes are derived from two main sources, namely, assets like land, cattle, shares, etc., and labour. In India a few own a large chunk of income – earning assets. These inequalities enable the few to get incomes in the form of rent, interest and profit. As these assets accumulate and pass on from generation to generation, the earning capacity of these increases continuously. As for rural areas, the ownership pattern of the most important asset, namely, land, is highly unequal Private ownership of property and inheritance laws is mainly responsible for highly unequal distribution of assets.
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DIFFERENTIAL REGIONAL GROWTHOf the large many at the bottom rung of incomes, a very great proportion lives in the poor backward states regions, and most of the few at the top live in the high- income states regions.This is the geographical facet of income inequalities for the country as a whole. Within the states also there are inequalities, perhaps larger in the poorer states. Both these aspects are the outcome of the different growth rates of the states, with a few having grown at a fast rate, and many having lagged behind.
7May 3, 2023
INADEQUTE EMPLOYMENT GENERTIONPeople at the bottom could raise their economic status and to an extent reduce the distance separating them from those at the top, if they could get work. In other words, if they did not possess adequate earning assets, they could at least earn from their labour.
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Income inequality up both in rural and urban areasIncome inequality has increased in both rural as well as urban areas.According to Gini co-efficient thee has been increase in income inequality in rural India by 13% and in Urban India by 15%India Financial Protection Survey (IFPS) has covered 63.016households in depth across the countryThere was increase in inequality because of
disparity income expenditure and saving patternUrban income data shows that the size of a town/city makes a great difference to the household income levelThus income share is double than its population shareIn India the income inequality is as follow
STATES URBAN INCOME
% OF URBAN POPULATION
JAIPUR 0.99% 1.05%LUCKNOW 0.93% 0.83%CHANDIGARH 7% 0.3%
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What is Gini Co-efficient
Gini co-efficient is devised by Italin Statistician Corrado Gini in 1990It is variability measure employed by o policy maker o economist o academicians
It has value from 0 to 1 with lower co-efficient indicate more equal distribution of consumption or incomeo zero indicates Perfect equalito one indicate perfect inequality
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Statistical Data on income inequality of BRICS COUNTRIES AND USACountry Name
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
India 33.38 33.9
0 33.60
Country Name
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
China 42.48 42.6
342.0
6 37.01
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Country Name
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Brazil 57.68
57.42
56.77
55.89
55.07
54.69 52.
67
Country Name 2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Russia 37.14
37.51
42.13
43.71
42.27
39.69
Country Name
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
South Africa 67.40 63.1
4 65.02
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LEARNINGSMeaning of Gini co-efficient and for what purpose it is usedGini co-efficient is used for the calculation of statistical data i.e Growth Rate,
Population, Male and Female sex ratio etc
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References http://articles.economictimes.indiatimes.com/2008-02-07/news/27704400_1_gini-coefficient-income-inequality-households
http://timesofindia.indiatimes.com/india/Indias-income-inequality-has-doubled-in-20-years/articleshow/11012855.cms
http://data.worldbank.org/indicator/SI.POV.GINI
Link for pdf file http://www.epw.in/commentary/dynamics-income-inequality-india.html
www.slidesshare.com
May 3, 202314
THANK YOU