THE INCOME TRANSITION IN RURAL INDIA: EVIDENCE FROM ARIS/REDS SURVEYS

Measuring changes in inequality helps determine the effectiveness of policies aimed at correcting inequality and generates the data necessary to use inequality as an explanatory variable in policy analysis. Income inequality per period and income mobility across periods can be pooled into one overall measure of multiple period inequality. This paper highlights some aspects of structural changes and examines its impact on economic mobility in Indian rural economy. We have used a unique Additional Rural Income Survey/Rural Economic & Demographic Survey (ARIS/REDS) surveys data set for rural India spanning 3 decades to determine the reasons and magnitude of income mobility. The triggers, that have been identified, include land ownership, affirmative action program and occupation. The income mobility continues to be low. Further, the land reforms and advantages from affirmative action programs have not made any significant impact on the income mobility for the rural households in India over the periods.