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India: Is the Rising Tide Lifting All Boats?

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Author Info
Petia Topalova

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Abstract

While many have celebrated India's accelerating economic growth, some have expressed concern about the distributional impacts of the growth process. Cognizant of the vulnerability of its large population below poverty, India's authorities have made faster and more inclusive economic growth the primary goal of their development strategy. This paper aims to document how the benefits of economic expansion were shared across the income distribution over the last two decades using disaggregate household level data. Experiences across Indian states suggest an important role for economic policy in shaping the inclusiveness of growth. States with higher financial development, more flexible labor markets, and higher average education experienced greater relative gains for the poor. Improving infrastructure may also lead to a growth process that is more inclusive of the poor.

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Paper provided by International Monetary Fund in its series IMF Working Papers with number 08/54.

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Length: 29 pages
Date of creation: 04 Mar 2008
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Handle: RePEc:imf:imfwpa:08/54

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Keywords: Poverty ; India ; Economic growth ; Income distribution ; Labor markets ; Poverty reduction ;

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  1. Poonam Gupta & Rana Hasan & Utsav Kumar, . "What Constrains Indian Manufacturing?," Indian Council for Research on International Economic Relations, New Delhi Working Papers 211, Indian Council for Research on International Economic Relations, New Delhi, India. [Downloadable!]
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  2. Robin Burgess & Rohini Pande, 2005. "Do Rural Banks Matter? Evidence from the Indian Social Banking Experiment," American Economic Review, American Economic Association, vol. 95(3), pages 780-795, June. [Downloadable!]
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  3. Berta Esteve-Volart, 2004. "Gender Discrimination and Growth: Theory and Evidence from India," STICERD - Development Economics Papers 42, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE. [Downloadable!]
  4. 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!]
  5. Banerjee, Abhijit V & Duflo, Esther, 2003. " Inequality and Growth: What Can the Data Say?," Journal of Economic Growth, Springer, vol. 8(3), pages 267-99, September. [Downloadable!] (restricted)
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  6. Catriona Purfield, 2007. "India: Asset Prices and the Macroeconomy," IMF Working Papers 07/221, International Monetary Fund. [Downloadable!]
  7. Ahsan, Ahmad & Pages, Carmen, 2007. "Are all labor regulations equal ? Assessing the effects of job security, labor dispute, and contract labor laws in India," Policy Research Working Paper Series 4259, The World Bank. [Downloadable!]
  8. Chaudhuri, Shubham & Ravallion, Martin, 2006. "Partially awakened giants : uneven growth in China and India," Policy Research Working Paper Series 4069, The World Bank. [Downloadable!]
  9. Ravallion, Martin & Shaohua Chen, 2001. "Measuring pro-poor growth," Policy Research Working Paper Series 2666, The World Bank. [Downloadable!]
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  10. Rodrik, Dani & Subramanian, Arvind, 2004. "From "Hindu Growth" to Productivity Surge: The Mystery of the Indian Growth Transition," Working Paper Series rwp04-013, Harvard University, John F. Kennedy School of Government. [Downloadable!]
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  11. Timothy Besley & Robin Burgess, 2003. "Halving Global Poverty," Journal of Economic Perspectives, American Economic Association, vol. 17(3), pages 3-22, Summer. [Downloadable!] (restricted)
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