India Development Coalition of America-IDCA-Poverty Alleviation

In economic writings on India it is commonplace to describe Indian economic inequality to be relatively low. In support, the inequality measure of Gini coefficient (with values of zero for no inequality, and one for extreme inequality) on the basis of NSS consumption data is usually cited. This Gini coefficient in 2004-5 was 0.325, and is indeed lower than in many developing countries, including China, and by constant repetition, both in national and international documents and the financial press, this has become part of the folklore about Indian inequality. But there are reasons to believe that the NSS data under-represent the rich, and in any case while for other developing countries the Gini coefficient often refers to income distribution, India's refers to distribution of consumption expenditure (as NSS does not collect income data), which is usually less than that of income (partly because the rich tend to save more than the poor). The NCAER occasionally collects income data,