An Empirical Analysis of Socio-Economic Indicators on Income Inequality in India

Abstract

The study examines the emerging problem of income inequality through the lens of significant socio-economic indicators in India. According to the IMF, too much income inequality could "erode social cohesion, lead to political polarization, and ultimately lower economic growth”. The paper uses secondary data from 2000 to 2023 using World Bank reports, RBI reports and PWT 10.0. The disparities in income distribution are analyzed taking employment, education, healthcare, necessities, etc. as independent variables, and their impact is studied on income inequality using Gini coefficient as the dependent variable with the help of statistical tools (SPSS). In the empirical analysis it was found that the overall regression model is statistically significant at 1 percent level. It shows the strong fit of the regression model for data. In addition, the descriptive statistics reveals that while India has experienced steady economic and human development, there persists challenges like volatility in inflation, and inequalities in income. The policy recommendations aiming at addressing the inequalities through social protection, improved necessities, redistributive measures, and fiscal measures are suggested. This analysis also highlights the need of adopting inclusive and equity-oriented development policies to guarantee sustainable growth in India.