There is good news for India as a recent Asian Development Bank report finds that inequality has not increased significantly in India since the liberalization and rapid growth of the economy from 1991 onwards. This finding, the report says, is unlike the claims of many scholars who claim sharp increases in inequality. While other important economies in the region have registered comparatively sharp increases in inequality.

Most importantly it finds that rural expenditures grew by 17 per cent, comparatively faster to urban expenditures that grew by only 15 per cent during 1993-2004, although the absolute difference in expenditures remained, debunking the myth that only urban India is prospering.

Inequality in China and Nepal with Gini Coefficients of 47 were the highest in Asia, while India had a Coefficient of 36. Among the 22 developing member countries of the ADB, seven had Gini Coefficients of 40 or more while 15 had Coefficients of 30-40 — the higher the coefficient the worse off a country is in terms of relative inequality. Relative inequality is the difference between the share of GDP of those with the top 20 per cent incomes and the share of those with the bottom 20 per cent of incomes.

Changes in this measure over the study period indicate that not only inequalities in Asia are high; they have increased considerably in most countries. Nepal, China, Cambodia, Sri Lanka and Bangladesh top the list of countries where inequality has increased, with inequality increasing by nearly 10 percentage points in Nepal. While countries like Thailand and Malaysia have registered a reduction in inequality, with Thailand decreasing inequality by four percentage points. In India the increase was four percentage points.