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Evidence from Income Tax Data (2012–13)

‘Two Class’ Distribution of Income in India

Results from the 2012–13 income tax data reveal that Indian incomes, particularly high salaries and wealth-related income, are statistically distributed into two distinct classes. The bulk of the reported income distribution can be explained by an exponential distribution, while a small fraction at the top follows a more unequal power law (Pareto) distribution. This distinction has important implications for inequality, and provides a point of comparison with similar statistical regularities observed in rich countries.



 

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Updated On : 15th Feb, 2017

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