Amartya Sen writes in the preface to his classical studies on economic inequality (1972) that the idea of inequality is both too simple and too complex. In its simplest form, the idea has enormous public appeal. At another level, however, it is an extremely complex notion that makes statements on inequality highly problematic. A rich literature has emerged, with contributions from economists, sociologists and philosophers highlighting the many dimensions of inequality. There are objective measures (such as the Gini coefficient) and standard measures (Atkinson’s measure which includes the dispersion of inequality). We use a new measure that shows the difference between aspirational income/expenditure and actual income/expenditure. More specifically, the maximum proportion of actual per capita expenditure in the primary sample unit (or PSU, group of villages/wards). It has two qualities: (i) simplicity, and (ii) intuitive appeal in so far as it captures a relativity that figures prominently in individual decisions. We examine the relationship between this measure of inequality and trust in state government and other covariates.
We draw on two visits to the nationally representative India Human Development Study (IHDS) in 2005 and 2012. The first round (IHDS-I in 2004-05) was a survey of 41,554 households, while the IHDS-II in 2011-12 included duplication. Interviews with 83% of original families, split households living in the same locality, and an additional sample of 2,134 as replacement families (so the sample was 42,152). Interviewing the same family at two times facilitates a better understanding of which families were able to participate in the benefits of development, what allowed them to move on, and the process through which they included in or excluded from a growing economy. Confidence in the state government is measured in successive levels of confidence: a great deal of confidence, only some confidence and hardly any confidence.
The mean (hereinafter ‘ratio’) of the ratio of actual expenditure to maximum in PSUs remained almost unchanged at 0.45, and so did the standard deviation at 0.26. Thus the distinction between achievement and aspiration and its spread remained unchanged. Our quantitative analysis provides useful insight. The greater the trust in the state government, the higher the ratio, which means that trust narrows the gap between achievement and aspiration. This is not surprising, as social safety nets are mostly implemented by state governments. Confidence in these is driven by the ruling party itself: whether it is the same in the state at the centre, and the margin of victory in state elections. If it is a single party, its implementation failures are more likely to be overlooked. If the margin of victory is high, trust is likely to dwindle, perhaps because it breeds complacency in the state government, and concerns about transparency and accountability backfire. Competitive state politics can thus increase confidence in state governments.
Age and the ratio in question are positively related. As people get older, their income increases. However, income growth also declines in older groups, as physical stamina, dexterity and adaptability of skills to a rapidly changing economic environment decline with age.
Compared to rural areas, the ratio of achievement and aspiration is significantly lower in urban areas, while the ratio is higher in urban slums. It is not surprising to find a greater disparity in this ratio in urban areas. The distinction between rural areas and slums is interesting, as it suggests a greater adaptation of aspirations to miserable living conditions and dire prospects for economic progress.
Schooling and proportion also exhibit an interesting pattern. Compared to the illiterate, the proportion of those with a middle level of schooling (5–8 years) is more likely, as well as those with matriculation (9–10 years) and those above matriculation (>10 years). In fact, Matriculate and above showed the strongest association.
The caste figures reveal a socio-economic hierarchy, with Brahmins at the top and Dalits and Adivasis at the bottom. Relative to the largest group, Other Backward Classes (OBCs), Brahmins and other upper castes are likely to be closer to their aspirational income, while Dalits are likely to be farthest. In contrast the tribals are close to their aspiration, but the relationship is not that strong.
Finally, more affluent states offer better prospects of earning an aspirational income, primarily because there are more opportunities for gainful employment. If growth is inclusive it is more likely.
Confidence in state governments increased between 2005 and 2012 under the United Progressive Alliance. The share of families showing a lot of faith in the state government rose and hardly any fell. But the trust remained low due to widespread corruption. However, the dramatic shift in governance led by the Bharatiya Janata Party (BJP) on centralization and the pursuit of Hindutva led to a sharp erosion of trust. The number of states in which the BJP rules or shares power has increased from eight in 2014 to 20 in four years. It helped in implementing the political will and agenda of the Centre. Hindutva has been aggressively promoted not only by state government agencies, but also by Hindutva-oriented groups. The rights of minorities, especially Muslims and lower castes, have been trampled openly, even violently, while the authorities have mostly kept quiet.
Finally, the emergence of a strong opposition appears to be a fantasy.
Vani S. Kulkarni and Raghav Gaiha, respectively, are affiliated with the Department of Sociology, University of Pennsylvania; and research associate, Population Aging Research Center, University of Pennsylvania
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