Poverty, growth, inequality: some general and India-specific considerations

Purpose - This paper aims to address the thesis that poverty is best alleviated by a policy emphasising the growth of per capita average income, a strategy that affords little room for direct pro-poor interventions or a movement towards a more equal distribution of incomes. This policy prescription is based on the empirical finding that cross-country variations in poverty are largely explained by variations in growth rates of average income. Design/methodology/approach - The paper contends, as has been done in other commentaries on the subject, that inferring the dictum that “growth is [virtually the only thing] good for poverty” from cross-country evidence on poverty, growth and inequality is neither logically plausible nor normatively compelling. This is sought to be established both through conceptual reasoning and (secondary) data-based analysis. In particular, the thesis under review implicitly rejects the value of counter-factual analysis. Such a hypothetical illustrative analysis is attempted here, using evidence relating to urban poverty, growth and inequality in India. Findings - The paper concludes, without undermining the salience of growth, that there is little basis for the pre-eminence accorded to it astheinstrument for poverty redress. Originality/value - This paper has not been published elsewhere. A collaborative paper by one of the present authors with another scholar, on a similar theme is, however, under preparation for publication.