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The united states of inequality



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The united states of inequality

India’s south is richer and better developed than its north. But incomes are unevenly spread in either half. Urban decay and misogyny are just as common in both

Rathin Roy
Updated on: 
17 Feb 2025, 12:30 am
4 min read


To live in peninsular or south India means, for the most part, to live in a more prosperous India than the Great Indian Plain (GIP), a polite geographical name for northern and eastern India.

The peninsular states have per capita incomes (PCIs) at least double that of most GIP states. Tamil Nadu and Kerala have PCIs close to Indonesia’s. But Uttar Pradesh and Bihar are poorer than Nepal. Human development—as measured by life expectancy, health, educational attainment, and poverty ratios—in the GIP is comparable to that of the poorest countries. In the peninsula, it compares favourably with upper middle-income countries.

The difference between the GIP and the peninsula is the same as between India and China. The former is only ahead of the latter in population. China and the peninsula are more advanced than India and the GIP on every other count.

This has led to talk in the peninsula about “subsidies” given by the peninsular states to the poor GIP states. To be sure, political power is vested in the GIP, and an obscurantist, Hindi-imposing nationalist government is in power at the Centre and in most of the GIP, fuelling the optics of discrimination.

The lazy ignoring of the peninsula in constituting successive finance commissions—the 15th commission had zero members from the peninsula—the increasing preponderance of senior Central government officials and armed forces chiefs from the GIP, the favouritism shown to GIP states when promoting foreign investment, and the disgraceful behaviour of GIP-born governors of Tamil Nadu and Kerala in subverting the work of duly elected state governments have further fuelled this resentment.

But the vacuity and pettiness of the Centre should not blind the peninsula to two disturbing facts. One, while inequality has stalled progress in the GIP, it poses an equal impediment to further progress in the peninsula. And two, the peninsula shares many retrograde social and low-fraternity characteristics with the GIP.

If there is a country in the world that can host a museum of inequality, it is India. Income, asset, property and inter-generational inequalities are ubiquitous across the country. The gap has increased with the nation’s growth explosion and is as much a part of the India story as the boom in mutual funds.

The peninsula has not escaped this trend. The per capita income of Tamil Nadu is over three times Bihar’s, but the average daily wages for men in agriculture are not even double that in UP and Bihar. This signals an extractive economy where the bulk of the rise in prosperity is being skimmed by the already-rich.

This is despite the fact that supposedly high manufacturing wages contribute 21 percent to TN’s GDP, as opposed to 11 percent in UP. The situation is better in Kerala but the same or worse in the other peninsular states. Economic transformation has not led to an inclusive increase in prosperity.

As a result, the peninsular states suffer sharp within-state inequalities. Consider the following information from TN’s submission to the current finance commission. The average difference in the PCI of a district in TN from the average income of the state is `85,000, compared to just `15,000 in Bihar. The PCI of the poorest district is 25 percent that of the richest. Dharmapuri district in TN has a literacy rate worse than 36 districts of UP, which is three times as poor. Over 60 percent of Telangana and Karnataka’s PCI is earned in just 3-4 districts of these states.

Now consider some negative things the peninsula has in common with the GIP despite being richer, healthier, better educated and more prosperous.

Patriarchy and misogyny are as embedded in the peninsula as in the GIP—just watch a Telugu blockbuster, ask Prajwal Revanna or a female tourist in Kerala. Hyderabad is as filthy as Patna, except in the bizarre gated communities. Superstition continues to dominate rational action. Traffic rules, building regulations and anti-pollution laws are flouted with as much impunity in Chennai, Bengaluru and Hyderabad as in Delhi, Jaipur or Kolkata.

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Caste discrimination is rampant in every aspect of peninsular society. Clearly, improved PCIs and human development outcomes have not brought the necessary societal transformations that would permit progress to the next stage of prosperity. This social backwardness, in fact, remains a major unifier of the rich peninsula with the poor GIP.

A natural consequence is that peninsular states, just like GIP ones, spend a large proportion of their resources compensating for economic failure and insufficient growth in universal prosperity despite a huge expansion in their PCIs. The same programmes adopted in the poor parts of the country and by the central government—which I have labelled the rise of the ‘compensatory state’—are also prominent in the peninsula.

The persistence of low fraternity, the overweening significance of caste politics, weak institutions and disregard for rules means the peninsula punches much below its weight in terms of prosperity and social cohesion, compared to what one would expect looking just at PCI.

The informal sector persists, boosted by migrant labour from north and east India, letting the rich continue to enjoy feudal lifestyles and allowing low-productivity activities to flourish, instead of the formalised high-productivity, high-investment, high-wage virtuous cycle typical of societies at close to $3,000 levels of PCI.

The divide between the peninsula and the GIP is as real as the asymmetry between the locus of economic prosperity and political power in India and the malicious acts of a biased and destructive Centre bent on hegemonic control.

But to use the latter as an excuse to overlook the very real and serious problem that the peninsula confronts in executing the next phase of economic transformation—one that requires inclusivity and better social cohesion—would be a blunder of historic proportions.

It is time this became an important focus of the many cross-peninsular intellectual discussions and policy dialogues I am fortunate to be part of.

(Views are personal)

Rathin Roy | Distinguished Professor, Kautilya School of Public Policy, Hyderabad; Visiting Senior Fellow, Overseas Development Institute, London
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