Why worry about inequality in India?
Data on incomes and wealth suggest India is far more unequal than official estimates based on consumption expenditure data suggest
Inequality is in the news once again and the news is not particularly good. In a speech last month, Reserve Bank of India governor Raghuram Rajan commented that increasing inequality could be curtailing world demand. Since the rich typically spend a smaller portion of their income compared with the poor—who spend almost all of their income—rising inequality is a threat to aggregate demand in the global economy, Rajan argued.