(almost) as good for the rich as for the poor!

As per The World Fact Book, the Gini Coefficient of India in 2004 was 36.8. What does this mean? Gini Coefficient is a measure of statistical dispersion, often used to measure income or wealth inequality, i.e. the gap between the rich and the poor. Simply put, a country with a lower Gini Coefficient has more economic equality than a country with a higher one (0 signifying perfect equality).

So where does India stand? Not too high, but not too low either (to be precise 79 out of 134). Though the economic disparity in India is vast, most of us are probably fortunate to be on the right side of that divide. Then does all this “really” affect us? As per Richard Wilkinson and Kate Picket it does, and it will – more than we think. Their research has shown that beyond a certain point (India is probably not beyond that point yet) equality is more important than wealth for a better society. They have established correlations between several development parameters (infant mortality rate, mental health, violence, trust, and so on) and equality, with evidence gathered from several rich countries in the world, and also from the fifty states of the USA.

Take, for example, the relation between violence and equality. In the graph shown below, the number of homicides per million people in a country is plotted against the degree of inequality. Countries with lower inequality, such as the Norway and Denmark, experience much lesser rate of crime than countries with higher inequality, such as the UK, Singapore and Portugal.

Similarly, the correlation between mental health and income inequality is demonstrated in the graph below.

This might not, at first hand, sound like good news, but this site is about good news. The silver lining in all this is that one can create a better society by reducing income disparity. To spread awareness about this important finding, Richard Wilkinson and Kate Picket have co-authored “The Spirit Level: Why More Equal Societies Almost Always Do Better“. In this book, they also suggest how societies can achieve greater equality, also explore how achieving greater equality within rich countries can redistribute wealth more evenly between rich and poor countries.

Taking it a step further, Richard Wilkinson, Kate Picket and Bill Kerry founded The Equality Trust in 2009 to “reduce income inequality through a programme of public and political education” by creating a widespread understanding of the harm caused by income inequality and obtaining the public and political support required to implement policy measures to correct it.

While we, in India, we have the more fundamental problem of not having the enough wealth for our people, it is imperative that we take into account this important aspect of holistic development and stop the problem of inequality from becoming too big to address. After all, which side of the divide you are on is not as important as the extent of the divide.