Re g iona l Ine qua lity In Bra zil a nd India Structure of - - PowerPoint PPT Presentation

Re g iona l Ine qua lity In Bra zil a nd India

Structure of presentation

• 1. Pa tte rns o f re g io na l ine q ua lity in Bra zil a nd I

ndia

• 2. Cha ng e o ve r time
• 3. Re g io na l ine q ua lity a nd the g ro wth re g ime

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Regional Inequality: Brazil

Regional inequality: India

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Regional inequality – GDP per capita, 2011-12

5 20 40 60 80 100 120 140 160 Centre Northeast South/West Northwest Kerala

Net domestic product per capita by region, India, 2010-11 (all-India=100)

Regional inequality – Poverty (%), 2011-12

6 10 20 30 40 Centre Northeast South/West Northwest Kerala

India, poverty, % of households 2011-12

Regional inequality – Regular/registered workers (%), 2011-12

7 5 10 15 20 25 30 Centre Northeast South/West Northwest Kerala

India, Regular wage workers (% of all workers, 2011-12)

Regional inequality – Casual wages (India); labour income of unregistered workers (Brazil), 2011-12

8 50 100 150 200 250 Centre Northeast South/West Northwest Kerala

India, casual wages by region, 2011-12 (all-India = 100)

Change in regional inequality over time

• Long term trend in India of growing inequality of per capita output

between states after 1980

• This reflects polarizing effects of liberalizing growth and reduced

compensatory role of state (NSDP per capita growth since 1993 < 4% in poorer regions, 4.5 to 5.8% in richer regions)

• Recently increased integration of the Indian labour market tending to

reduce interregional wage differentials for casual labour. But accumulation still concentrated in richer regions

• In Brazil regional inequality declining since the 1980s, and especially

since 2000.

• But inequality within poorer regions remains high in Brazil
• Next slides give some of the evidence on this

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Regional growth rates of NSDP, 1982-83 to 2011-12

India

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0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 10.0 Centre Northeast South and West Northwest Kerala 1982-83 to 1993-94 1993-94 to 2004-05 2004-05 to 2011-12

Brazil

Changes in wage patterns

• .In Brazil, on the whole, wage differences across regions rose in the

1980s and 1990s, but declined after 2005

• In Brazil, decomposition of Theil index of labour income, the contribution
• f regional differences declined from 10% in 1983 to 6% in 2011
• In India, a complex picture. Per cent contribution of regional differences

to overall inequality (Theil index):

• So much larger regional contribution to inequality in casual than regular
• wages. In urban areas, Northwest and Kerala pulling away from others

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1983 1993-94 2004-05 2011-12 Rural regular 4 1 4 5 Rural casual 14 24 28 24 Urban regular 1 1 2 Urban casual 7 10 18 14

Poverty rates by region, proportion of national average, India 1983 to 2011-12, Brazil 1993-2011

India

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Brazil

0.00 0.20 0.40 0.60 0.80 1.00 1.20 1.40 1.60 1983 1993-94 2004-05 2004-05 revised 2009-10 2011-12 Northeast Centre Northwest South and West Kerala

Regional inequality and the growth regime

• Why is regional inequality declining in Brazil and widening in India?
• In Brazil, labour market dynamism and a rising and effective national

minimum wage. After 2000 benefits of formalization, minimum wage and cash transfers greatest in disadvantaged regions, with impact on growth and incomes

• But note growth of inequality within regions in Brazil (role of minimum

wage which especially benefits intermediate groups – so the same policy may have regionally differentiated effects)

• In India, some reduction in regional wage differentials but unbalanced

employment creation because of the concentration of capital in advanced regions (and shift away from wages towards profits, also concentrated). Reduction in wage differentials reflects migration, especially of unskilled workers

• Connections between regional inequality and other aspects of inequality

(tribal in India, blacks in Brazil). These differentials declining in Brazil but not in India (session in the afternoon).

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Regional inequality and the growth regime

• Regional inequality embedded in the growth regime because of regional

variations in the structure of accumulation

• Concentration of manufacturing investment (especially FDI) and skilled

workforce in SE Brazil and Western/Southern India

• Relatively backward regions (NE Brazil, Central India) may serve as

labour reserves supplying unskilled labour to accumulation in advanced regions (construction labour, domestic service)

• True in Brazil in the past but not today
• To some degree true of India today. But India is particularly large and
• complex. Does India have a single growth regime with regional

components or different regimes?

• Local factors important

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exploitative agrarian systems preventing accumulation and perpetuating inequality

–

local accumulation process (Tamil Nadu different from Gujarat)

–

Local state differs in effectiveness and orientation

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Summing up

• Regional inequality reflects growth regime in two ways

–

Structural inequality between regions within national growth regime

–

Local forces and institutions with some autonomy creating different regional dynamics

• Regional labour markets connected by migration but this is a source of

exclusion and discrimination as well as opportunity, not always equalizing

• Public sector investment can offset tendency for regional differences to
• widen. In India the growth in regional inequality coincided with shift from

public to private investment. In Brazil recent reduction in inequality connected with regional pattern of public investment

• Same forces at work in both Brazil and India at different points in time

but India shows greater variety and in recent years more regional concentration.

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