ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846
-A A +A

Non-Food Expenditures and Consumption Inequality in India

Amit Basole (amit.basole@umb.edu) teaches at the Department of Economics, University of Massachusetts, Boston and Deepankar Basu (dbasu@econs.umass.edu) teaches at the Department of Economics, University of Massachusetts, Amherst.

This paper contributes to the ongoing debate about economic inequality in India during the post-reform period. It analyses consumption inequality through the hitherto neglected lens of non-food expenditure. Using household level consumption expenditure data from the quinquennial "thick" rounds of the National Sample Survey, the paper shows that inequality within food and non-food groups has declined, even as overall expenditure inequality has increased over time. The analysis suggests that the rise in overall expenditure inequality is due to the increased weight in the household budget of non-food spending, which tends to be more unequal than food spending. The paper also shows that inequality is very different across broad non-food items. Durables, education, healthcare, and consumer services show the most rapid increases in real expenditure, and also display the highest levels of inequality. Finally, the paper offers some possible mechanisms for this phenomenon and suggests policy measures to deal with this form of inequality.

We would like to thank an anonymous referee for very helpful comments. The usual disclaimers apply.

Comments

(-) Hide

EPW looks forward to your comments. Please note that comments are moderated as per our comments policy. They may take some time to appear. A comment, if suitable, may be selected for publication in the Letters pages of EPW.

Back to Top