Polarization, inequality and growth: The Indian experience

Abstract

We analyze polarization in India roughly in the past two and half decades using consumption expenditure data. We show that polarization has increased sharply since the 1990s, reversing the earlier trend. On multidimensional polarization, we show that several pre-existing cleavages (caste, rural-urban, state, region) have accentuated. Overall, our results suggest that the high growth that India has been witnessing in recent years and the pro-market reforms initiated since 1990s have been associated with widening disparities. Comparing polarization and inequality, we find similarities, but also some differences. Our results therefore underscore the importance of studying polarization as distinct from traditional inequality.