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Is India's economic growth leaving the poor behind?

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  • Datt, Gaurav
  • Ravallion, Martin

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 authors argue 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 study's resultsare 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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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 2846.

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Date of creation: 31 May 2002
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Handle: RePEc:wbk:wbrwps:2846

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Keywords: Economic Conditions and Volatility; Public Health Promotion; Health Monitoring&Evaluation; Environmental Economics&Policies; Services&Transfers to Poor; Achieving Shared Growth; Poverty Assessment; Environmental Economics&Policies; Governance Indicators; Economic Conditions and Volatility;

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  1. Shaohua Chen & Ravallion, Martin, 2000. "How did the world's poorest fare in the 1990s ?," Policy Research Working Paper Series 2409, The World Bank.
  2. Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, vol. 52(3), pages 761-66, May.
  3. Datt, Gaurav & Ravallion, Martin, 1996. "Why have some Indian states done better than others at reducing rural poverty?," Policy Research Working Paper Series 1594, The World Bank.
  4. Ravallion, Martin & Datt, Gaurav, 1996. "How Important to India's Poor Is the Sectoral Composition of Economic Growth?," World Bank Economic Review, World Bank Group, vol. 10(1), pages 1-25, January.
  5. Ravallion, Martin, 1996. "How Well Can Method Substitute for Data? Five Experiments in Poverty Analysis," World Bank Research Observer, World Bank Group, vol. 11(2), pages 199-221, August.
  6. Richard E. Baldwin & Philippe Martin & Gianmarco I. P. Ottaviano, 1998. "Global Income Divergence, Trade and Industrializatiion: The Geography of Growth Take-Offs," NBER Working Papers 6458, National Bureau of Economic Research, Inc.
  7. Jha, Raghbendra, 2002. "Reducing Poverty and Inequality in India: Has Liberalization Helped?," Departmental Working Papers 2002-04, The Australian National University, Arndt-Corden Department of Economics.
  8. Ravallion, Martin & Bidani, Benu, 1994. "How Robust Is a Poverty Profile?," World Bank Economic Review, World Bank Group, vol. 8(1), pages 75-102, January.
  9. repec:fth:iniesr:496 is not listed on IDEAS
  10. 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.
  11. Ravallion, Martin, 2001. "Growth, Inequality and Poverty: Looking Beyond Averages," World Development, Elsevier, vol. 29(11), pages 1803-1815, November.
  12. 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.
  13. Ravallion, Martin, 2004. "Pro-poor growth : A primer," Policy Research Working Paper Series 3242, The World Bank.
  14. 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.
  15. Gaurav Datt, 1999. "Has Poverty Declined since Economic Reforms? Statistical Data Analysis," Development Research Unit Working Paper Series archive-31, Monash University, Department of Economics.
  16. Deepak Lal, 2002. "Economic Reforms & Poverty Alleviation: India A Tale of two Surveys," UCLA Economics Working Papers 822, UCLA Department of Economics.
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