India's Middle-Expenditure Groups: Size and Inequality
DOI:
https://doi.org/10.55763/ippr.2026.07.02.004Abstract
India’s middle expenditure group (MEG) is large and plays a critical role in determining overall inequality in per capita expenditures. This study focusses on measuring inequality within the MEG separately for rural and urban areas in India. The study utilizes per capita expenditure data for different expenditure groups provided by the NSSO 2011-12, 2022-23 and 2023-24 surveys. For this purpose, we use a framework in which absolute and relative aspects of inequality are captured together. We find that urban inequality is higher than rural inequality in all the three reference years and both have fallen over time. A decomposition of the Gini coefficient of MEG inequality highlights the relatively larger role of between group inequality as compared to within group inequality.
Keywords:
Income inequality, Middle-expenditure group, India, Censored distributions, Gini coefficientDownloads
References
Ahalya, R., and Sourabh Bikas Paul. 2024. “Middle Class and Development: A Study of Indian State.” Artha Vijnana 66 (1): 101–114.
https://gipe.ac.in/middle-class-and-development-a-study-of-indian-state/.
Banerjee, Abhijit V., and Esther Duflo. 2008. “What Is Middle Class about the Middle Classes around the World?” Journal of Economic Perspectives 22 (2): 3–28.
https://doi.org/10.1257/jep.22.2.3.
Das, K. S., P. Gopalakrishnan, and D. Mazumder. 2025. “Is Consumption Inequality Declining? What the 2022–23 NSSO Survey Tells Us.” RBI Bulletin, September: 97–105.
https://www.rbi.org.in/scripts/BS_ViewBulletin.aspx?Id=23647.
Ghosh, Abhik, Kausik Gangopadhyay, and B. Basu. 2011. “Consumer Expenditure Distribution in India, 1983–2007: Evidence of a Long Pareto Tail.” Physica A: Statistical Mechanics and Its Applications 390 (1): 83–97.
Krishnan, S., and N. Hatekar. 2020. “Understanding the Burgeoning Indian Middle Class through Its Expenditure and Asset-Ownership Patterns.” In The Middle Class in World Society, 219–241. Routledge.
https://www.taylorfrancis.com/chapters/edit/10.4324/9781003049630-13.
Maitra, S. 2021. “Revisiting the Indian Middle Class: A Multi-Dimensional Latent Class Analysis Using NSS Household Data.” The Indian Economic Journal 69 (1): 54–74.
Meyer, Christian J., Nancy Birdsall, and Justin Sandefur. 2012. “New Estimates of India’s Middle Class.” CGD Technical Note No. 13. Center for Global Development.
Ministry of Statistics and Programme Implementation. 2024. Survey of Household Consumption Expenditure: 2022–23. Report No. 591. National Sample Survey Office.
https://www.mospi.gov.in/sites/default/files/publication_reports/Report_591_HCES_2022-23New.pdf.
Ministry of Statistics and Programme Implementation. 2025. Survey of Household Consumption Expenditure: 2023–24. Report No. 592. National Sample Survey Office. https://www.mospi.gov.in/sites/default/files/publication_reports/Final_Report_HCES_2023-24L.pdf.
Ramanathan, A., and S. B. Paul. 2017. “Identification and Characterization of the Middle Class in India.” Working Paper No. 2017/05. Gokhale Institute of Politics and Economics.
https://www.isid.ac.in/~epu/acegd2017/papers/AhalyaRamanathan.pdf.
Ravallion, Martin. 2009. “The Developing World’s Bulging (but Vulnerable) ‘Middle Class.’” Policy Research Working Paper No. 4816. World Bank. https://documents1.worldbank.org/curated/en/510831468155726199/pdf/WPS4816.pdf.
Sen, Amartya K. 1974. “Informational Bases of Alternative Welfare Approaches: Aggregation and Income Distribution.” Journal of Public Economics 3 (4): 387–403.
Sen, Amartya K. 1976. “Poverty: An Ordinal Approach to measurement.” Econometrica 44 (2): 219–231.
Srivastava, D. K. 1987. “On Aggregate Measures of Poverty.” Working Paper No. 29. National Institute of Public Finance and Policy.
https://nipfp.org.in/media/pdf/working_papers/WP_1987_29.pdf.
Srivastava, D. K. 1988. “On Aggregate Measures of Poverty.” Bangladesh Economic Studies 5 (2).
Takayama, Noriyuki. 1979. “Poverty, Income Inequality, and Their Measures: Professor Sen’s Axiomatic Approach Reconsidered.” Econometrica 47 (3): 747–759.
Thon, D. 1979. "On Measuring Poverty". Review of Income and Wealth. 25, 429-439. https://doi.org/10.1111/j.1475-4991.1979.tb00117.x.
Vakulabharanam, Vamsi. 2024. “Indian Inequality (1951–1983): Consolidating the Urban and Rural Elites and Strengthening the Middle Strata.” In Class and Inequality in China and India, 1950–2010, 98–130. Oxford: Oxford University Press.
https://doi.org/10.1093/9780198934158.003.0005.
World Inequality Lab. 2024. Income and Wealth Inequality in India, 1922–2023: The Rise of the Billionaire Raj. WID Working Paper 2024/09. Paris School of Economics.
