Income Inequality, Poverty, and Human Development: A District-Level Study of West Bengal

Abstract

This paper looks at the interlinkages between income inequality, poverty and human development at the district level in West Bengal. This study is based on the proposition that development outcomes are influenced not only by the level of income, but also by the distribution of income and on the social skills that facilitate health, education and living standards. The paper develops a district-level analytical framework, and builds a comparative profile for selected districts using indicators like per capita income, poverty incidence, literacy, life expectancy, infant mortality and a human development index. The analysis shows that districts with relatively high income averages do not always have a relatively high human development when inequality is high; and when gains are unevenly distributed amongst social groups and regions. On the other hand, in some districts with moderate income levels, the factors of wider social provisioning, better education outcomes and less multidimensional deprivation are positive. The results show that poverty has a statistically significant negative relationship with human development, while there is a negative relationship between inequality and human development, but this relationship is different in each district based on the level of poverty, the composition of the district economies and access to public services. The paper posits that the variations in the districts of West Bengal are a result of a process that involves a combination of agrarian structure, industrial concentration, uneven urban growth and differential state capacity in providing welfare services and social infrastructure. The results inform a policy package that combines income generation with a redistributive policy, capability building and development planning that is geographically targeted. The study enriches regional development literature because it has demonstrated that the level of deprivation can be measured more accurately at a district level than the state level and it has highlighted the need to examine both poverty reduction and human capability enhancement along with income distribution for ensuring inclusive development.