Infographics 2025

Urban-Rural Income Inequality in India: Trends, Disruptions, and Recovery

Rajesh Shukla

The 90th to 10th Percentile Ratio highlights distinct trends in income inequality across urban and rural India. In the early post-independence years, urban areas consistently exhibited higher inequality, with a ratio of 12.3% compared to rural India's 7.3% in 1953-55. Urban inequality peaked at 20.5% in 1963-65, driven by rapid industrialization, while rural inequality reached 19.7% in 1967-68. Over the following decades, both regions saw declining ratios, reflecting the impact of economic reforms and social welfare programs. By 2013-14, urban inequality dropped to 11.8%, and rural inequality fell to 9.1%.

The COVID-19 pandemic in 2020-21 caused an unprecedented surge, with urban ratios spiking to 38.8% and rural ratios to 29.4%, exposing vulnerabilities in both sectors. By 2022-23, these disparities significantly declined to 12.2% (urban) and 11.8% (rural), signaling recovery. Despite urban areas historically showing higher inequality, both regions remain susceptible to economic disruptions, underscoring the importance of targeted interventions.