Consumption inequality fell to a near-four-decade low in FY21, shows data

IMF study attributes it to free foodgrain supply to 800 million beneficiaries

This may come as a surprise. Consumption inequality in India during pandemic-hamstrung 2020-21 (FY21) fell near its lowest level in 40 years, primarily because of free food supply to 800 million people, revealed a recently published International Monetary Fund (IMF) working paper.  

However, consumption inequality rose somewhat in FY21, compared with the previous year, if food transfers are not taken into account, showed the paper titled ‘Pandemic, Poverty, and Inequality: Evidence from India’.

Moreover, inequality in wages of casual and daily-wage workers declined drastically in 2019-20 (FY20), compared with 2011-12 (FY12), but rose from 2018-19 (FY19).

The inequality is measured by the Gini