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Growth and Distribution Effects of Changes in Levels of Living in Rural India: A Decomposition Analysis

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  • Jayanta Sen

Abstract

This article deals with the changing pattern of levels of living in the rural regions of India during the period of 1993–1994 to 2011–2012 which also corresponds to the on-going economic reforms. These changes may be attributed either to the change in growth component or to the change in equity component or to both. The article therefore examines the effects of growth and distribution components on the variations in levels of living and their relative roles by a scheme of algebraic decomposition. It also investigates the influence of socio-economic factors on levels of living using econometric models. National Sample Survey Organisation consumer expenditure data for 15 major states of India are used for this analysis. Results show an improvement in levels of living (actual) in rural areas of all Indian states. Positive growth effect more than compensates the negative distribution effect and yield positive changes in some of the states. Further, this article argues that the main drivers of this positive change in the levels of living are development of rural physical infrastructure, attainment in education, farm income per capita, non-farm employment and livelihood diversification.

Suggested Citation

  • Jayanta Sen, 2020. "Growth and Distribution Effects of Changes in Levels of Living in Rural India: A Decomposition Analysis," Indian Journal of Human Development, , vol. 14(3), pages 407-423, December.
    • Handle: RePEc:sae:inddev:v:14:y:2020:i:3:p:407-423
    DOI: 10.1177/0973703020967904
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    References listed on IDEAS

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    1. Parthapratim Pal & Jayati Ghosh, 2007. "Inequality in India: A survey of recent trends," Working Papers 45, United Nations, Department of Economics and Social Affairs.
    2. Padmaja Mishra & Ashok Parikh, 1992. "Household Consumer Expenditure Inequalities In India: A Decomposition Analysis," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 38(2), pages 225-236, June.
    3. Jayanta Sen & Debarati Das, 2018. "Commodity-specific consumer expenditure in India: pro-poor or pro-rich," Economics Bulletin, AccessEcon, vol. 38(1), pages 501-508.
    4. Shorrocks, Anthony F, 1983. "Ranking Income Distributions," Economica, London School of Economics and Political Science, vol. 50(197), pages 3-17, February.
    5. Sen, Amartya, 1973. "On Economic Inequality," OUP Catalogue, Oxford University Press, number 9780198281931, Decembrie.
    6. Jayanta Sen & Debarati Das, 2018. "Consumer expenditure inequality in India: a source decomposition analysis," International Journal of Development Issues, Emerald Group Publishing Limited, vol. 17(2), pages 157-167, May.
    7. Runu Bhakta, 2015. "Educational attainment of young adults in India: Measures, trends and determinants," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2015-034, Indira Gandhi Institute of Development Research, Mumbai, India.
    8. Amit Basole & Deepankar Basu, 2015. "Non-Food Expenditures and Consumption Inequality in India," UMASS Amherst Economics Working Papers 2015-06, University of Massachusetts Amherst, Department of Economics.
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