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Competitive Pressure on the Indian Households: A General Equilibrium Approach

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  • Thijs Ten Raa
  • Amarendra Sahoo

Abstract

How would competitive pressure impact upon the income distribution and the poverty of household groups? We analyse the gains in efficiency and productivity due to competitive pressure, and its distributional effects using a general equilibrium input-output framework. Efficient utilization of the available resources, technical progress and free trade constitute our sources of growth. Welfare would increase under competition, but the income distribution would become more skewed. Rural household groups would stand to lose relative to the urban ones. Urban poverty would be reduced significantly more than rural. In fact, the agricultural worker would even suffer from an increase in poverty. The study shows that competitive pressure has a positive effect on efficiency, productivity and poverty, but an adverse effect on the income distribution in the Indian economy.

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Bibliographic Info

Article provided by Taylor & Francis Journals in its journal Economic Systems Research.

Volume (Year): 19 (2007)
Issue (Month): 1 ()
Pages: 57-71

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Handle: RePEc:taf:ecsysr:v:19:y:2007:i:1:p:57-71

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Related research

Keywords: Efficiency; productivity; applied general equilibrium; income distribution; poverty;

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Cited by:
  1. John Gilbert, 2009. "Agricultural Trade Reform Under Doha and Poverty in India," Working Papers, Utah State University, Department of Economics 2009-03, Utah State University, Department of Economics, revised 28 Jun 2009.
  2. Pieters, Janneke, 2010. "Growth and Inequality in India: Analysis of an Extended Social Accounting Matrix," World Development, Elsevier, vol. 38(3), pages 270-281, March.

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