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Is India's Economic Growth Leaving the Poor Behind?

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Author Info
Gaurav Datt
Martin Ravallion

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Abstract

There has been much debate about how much India's poor have shared in the economic growth unleashed by economic reforms in the 1990s. The paper argues that India has probably maintained its 1980s rate of poverty reduction in the 1990s. However, there is considerable diversity in performance across states. This holds some important clues for understanding why economic growth has not done more for India's poor. India's economic growth in the 1990s has not been occurring in the states where it would have the most impact on poverty nationally. If not for the sectoral and geographic imbalance of growth, the national rate of growth would have generated a rate of poverty reduction that was double India's historical trend rate. States with relatively low levels of initial rural development and human capital development were not well-suited to reduce poverty in response to economic growth. The paper's results are consistent with the view that achieving higher aggregate economic growth is only one element of an effective strategy for poverty reduction in India. The sectoral and geographic composition of growth is also important, as is the need to redress existing inequalities in human resource development and between rural and urban areas.

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Article provided by American Economic Association in its journal Journal of Economic Perspectives.

Volume (Year): 16 (2002)
Issue (Month): 3 (Summer)
Pages: 89-108
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Handle: RePEc:aea:jecper:v:16:y:2002:i:3:p:89-108

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Ravallion, Martin, 1996. "How Well Can Method Substitute for Data? Five Experiments in Poverty Analysis," World Bank Research Observer, Oxford University Press, vol. 11(2), pages 199-221, August.
  2. Paul Cashin & Ratna Sahay, 1995. "Internal Migration, Center-State Grants and Economic Growth in the States of India," IMF Working Papers 95/66, International Monetary Fund.
  3. Ravallion, Martin, 2001. "Growth, inequality, and poverty : looking beyond averages," Policy Research Working Paper Series 2558, The World Bank. [Downloadable!]
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  4. Alessandro Tarozzi, 2002. "Estimating Comparable Poverty Counts from Incomparable Surveys: Measuring Poverty in India," Working Papers 186, Princeton University, Woodrow Wilson School of Public and International Affairs, Research Program in Development Studies.. [Downloadable!]
  5. Ravallion, Martin & Bidani, Benu, 1994. "How Robust Is a Poverty Profile?," World Bank Economic Review, Oxford University Press, vol. 8(1), pages 75-102, January.
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  6. Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, vol. 52(3), pages 761-66, May. [Downloadable!] (restricted)
  7. Angus Deaton & Alessandro Tarozzi, 2000. "Prices and poverty in India," Working Papers 213, Princeton University, Woodrow Wilson School of Public and International Affairs, Research Program in Development Studies.. [Downloadable!]
  8. Jha,R., 2000. "Reducing Poverty and Inequality in India: Has Liberalization Helped?," Research Paper 204, World Institute for Development Economics Research.
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  9. Ravallion, Martin & Datt, Gaurav, 1996. "How Important to India's Poor Is the Sectoral Composition of Economic Growth?," World Bank Economic Review, Oxford University Press, vol. 10(1), pages 1-25, January.
  10. Bell, Clive & Rich, Robert, 1994. "Rural Poverty and Aggregate Agricultural Performance in Post-independence India," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 56(2), pages 111-33, May.
  11. Deepak Lal, 2002. "Economic Reforms & Poverty Alleviation: India A Tale of two Surveys," UCLA Economics Working Papers 822, UCLA Department of Economics. [Downloadable!]
  12. Shaohua Chen & Ravallion, Martin, 2000. "How did the world's poorest fare in the 1990s ?," Policy Research Working Paper Series 2409, The World Bank. [Downloadable!]
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  13. Baldwin, Richard E & Martin, Philippe & Ottaviano, Gianmarco I P, 2001. " Global Income Divergence, Trade, and Industrialization: The Geography of Growth Take-Offs," Journal of Economic Growth, Springer, vol. 6(1), pages 5-37, March. [Downloadable!] (restricted)
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  14. Bruno, Michael & Ravallion, Martin & Squire, Lyn, 1996. "Equity and growth in developing countries : old and new perspectives on the policy issues," Policy Research Working Paper Series 1563, The World Bank. [Downloadable!]
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Nicolas Gravel & Abhiroop Mukhopadhyays, 2007. "Is India Better off Today than 15 Years ago? A Robust Multidimensional Answer," IDEP Working Papers 0704, Institut d'economie publique (IDEP), Marseille, France, revised 18 May 2007. [Downloadable!]
    Other versions:
  2. Chetan Ghate & Stephen Wright, 2008. "V-Factor: Distribution, timing and correlates of the the great Indian growth turnaround," Indian Statistical Institute, Planning Unit, New Delhi Discussion Papers 08-03, Indian Statistical Institute, New Delhi, India. [Downloadable!]
  3. Yoko Kijima & Lanjouw, Peter, 2003. "Poverty in India during the1990s - a regional perspective," Policy Research Working Paper Series 3141, The World Bank. [Downloadable!]
  4. Petia Topalova, 2005. "Trade Liberalization, Poverty And Inequality: Evidence From Indian Districts," Working Papers id:222, esocialsciences.com. [Downloadable!]
    Other versions:
  5. Raghbendra Jha & Raghav Gaiha, 2003. "Determinants of Undernutrition in Rural India," ASARC Working Papers 2003-01, Australian National University, Australia South Asia Research Centre. [Downloadable!]
    Other versions:
  6. Nobuhiko Fuwa & Christopher Edmonds & Pabitra Banik, 2005. "How inefficient are small-scale rice farmers in eastern India really?: Examining the effects of microtopography on technical efficiency estimates," Economics Study Area Working Papers 79, East-West Center, Economics Study Area. [Downloadable!]
  7. Anirudh Krishna, 2005. "Poverty Knowledge and Poverty Action: Evidence from Three States in India," Working Papers id:274, esocialsciences.com. [Downloadable!]
  8. Takashi Kurosaki & Yasuyuki Sawada & Asit Banerji & S. N. Mishra, 2007. "Rural-Urban Migration and Urban Poverty: Socio-Economic Profiles of Rickshaw Pullers and Owner-Contractors in North-East Delhi," Hi-Stat Discussion Paper Series d06-205, Institute of Economic Research, Hitotsubashi University. [Downloadable!]
    Other versions:
  9. Stifel, David & Christiaensen, Luc, 2006. "Tracking poverty over time in the absence of comparable consumption data," Policy Research Working Paper Series 3810, The World Bank. [Downloadable!]
    Other versions:
  10. Melanie Morten, 2006. "Indian Poverty during the 1990s: Resolving Methodological Issues from the 55th NSS Round," ASARC Working Papers 2006-07, Australian National University, Australia South Asia Research Centre. [Downloadable!]
  11. Mehtabul Azam, 2007. "India’s Increasing Skill Premium: Role of Demand and Supply," Departmental Working Papers 0710, Southern Methodist University, Department of Economics. [Downloadable!]
    Other versions:
  12. Aditya Bhattacharjea, 2006. "Labour Market Regulation and Industrial Performance in India--A Critical Review of the Empirical Evidence," Working papers 141, Centre for Development Economics, Delhi School of Economics. [Downloadable!]
  13. Dhongde, Shatakshee, 2004. "Decomposing Spatial Differences in Poverty in India," Working Papers UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER). [Downloadable!]
  14. Raghbendra Jha, 2006. "Vulnerability of Consumption Growth in Rural India," ASARC Working Papers 2006-04, Australian National University, Australia South Asia Research Centre. [Downloadable!]
  15. Angus Deaton and Jean Drèze & Jean Drèze, 2002. "Poverty and Inequality in India: A Reexamination," Working papers 107, Centre for Development Economics, Delhi School of Economics. [Downloadable!]
    Other versions:
  16. Stephan Klasen, 2006. "Economic Growth and Poverty Reduction: Measurement Issues using Income and Non-Income Indicators," Ibero America Institute for Econ. Research (IAI) Discussion Papers 142, Ibero-America Institute for Economic Research. [Downloadable!]
    Other versions:
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