Income concentration in British India, 1885–1946

Abstract

International audienceWe use a novel income tax data set to present evidence on the evolution of income concentration in the last 60 years of colonial rule in India. These data allow us to study the evolution of income concentration at the country level as well as the location of top income earners across provinces. We identify three key facts: (1) the evolution of income concentration in British India was nonlinear, following a U-shape, (2) the majority of top income earners were non-Europeans, and (3) the geographical location of top income earners changed over time with the province of Bombay gaining in importance in the early XXth century. We provide an interpretation of these results in the light of the economic and political changes in British India over the period

Indian Income Inequality, 1922‐2015: From British Raj to Billionaire Raj?

“…We present the data used to produce series on the evolution of income for the entire distribution from 1951–52 to 2014–15 (period covered by both household surveys and tax data, as well as national accounts) and for the evolution of incomes of the top 1 percent share and above from 1922–23 to 2014–15 (period covered by tax data and national accounts only, with no survey data prior to 1951). For pre‐1922 Indian income inequality series, see Alvaredo, Bergeron, and Cassan (). The authors mobilize income tax data to study the concentration of income in British India, from 1885 to 1946.…”

Top Indian wealth shares and inheritances 1966–1985

“…But from various indicators, it appears that this stagnation was not detrimental to at least a fraction of the population. First, as per the calculations of Alvaredo et al (2017), top income shares had peaked over the first half of the twentieth century. Second, real non-wage incomes did rise between 1900-1946 (Roy, 2002), so while poverty was creating losers, there were also some winners in the colonial economic environment.…”

“…Importantly, only a very small fraction of these winners could potentially be British colonialists because of their insignificant share of the population. From social compositions and the correlations of income shares, Maddison (1971) and Alvaredo et al (2017) conclude that the rich classes of late colonial India were predominantly Indians.…”

Economic growth and Indian wealth-income ratios in the long run, 1860-2018

“…Top income shares surged and income from property holdings peaked between 1920-39 ( Figure 7). Alvaredo et al (2017) estimate that the rich were mostly Indians, rather than British officials based in India. These included professionals who worked outside agriculture but also the landowning classes and indigenous capitalists (Maddison, 1971).…”