IMPACT OF ECONOMIC AND SOCIAL INFRASTRUCTURE ON INCOME INEQUALITY - EVIDENCE FROM INDIAN STATES

This paper discusses how infrastructure impacts inter-district inequality in India using data for 12 states, that were categorised as leading and lagging for the period 2001-2011. Income data from 388 districts is used to compute state wise Gini coefficients to analyse how infrastructure impacts inequality. Unlike the existing literature which considers either quantity or quality of infrastructure, this study uses an alternate perspective that considers both 'availability' and 'usage' of infrastructure to study how the economic and social variants of infrastructure impact output and inequality in Indian states. The paper finds that only economic infrastructure has a sobering impact on inter-district income inequality in both the leading and lagging states. Social infrastructure was observed to accentuate income inequality in the lagging states. The worsening of social infrastructure in the backwards districts of both categories of states and more prominently in the lagging ones, appears to explain the findings.