ABSTRACT:
Economic inequality can be estimated from data on economic variables like income, expenditure, wealth etc. at individual/household level in a region/country. In India, National Sample Survey Organisation (NSSO) collects only expenditure data and NSSO itself estimates inequality by two relative measures viz., the Gini coefficient and the Lorenz curve. However some academicians propose a plural view of inequality – both absolute and relative measure to have a complete view of inequality and also propose that they should be given equal importance. Many of them also suggest that absolute and relative measures of inequality based on standard deviation are able to provide better picture of inequality than Gini measures. Inequality in a region/country occurs due to several factors. By considering different measures of inequality and taking panel data of major states of India from 1983 to 2011-2012 this paper empirically investigates the factors those are responsible for the occurrence of different types of inequality in India. The results show that per capita public expenditure on secondary education, per capita public expenditure on higher education, growth rate of net state domestic product, monthly per capita consumption expenditure, work participation rate and share of non-agricultural employment have significant role in explaining inequality in India.