Widespread Poverty Amidst High Economic Growth: Some Lessons from South Asia

South Asia has a formidable economic agenda to pursue for conquering over poverty. There is no scope, whatsoever, for complacency on the growth front; it has to grow faster in the coming times. Then, the pattern of growth has also to change; agriculture has to be accorded its due importance, most ostensibly, because the poverty alleviation effects of higher agricultural growth are proven to be far more pronounced, and enduring, than those emanating from non-farm growth that is typically selective in offering employment and is hugely disparate in wage rates and per person earning capabilities. There are many studies, for example, in India, to show that ‘aggregate GDP growth matters in poverty alleviation but agricultural growth matters more despite a sharp reduction in its contribution to GDP’; more pointedly, ‘the elasticity of the headcount poverty ratio, measured at the cut-off point of US$ 1.25 (2005, ppp), with respect to agricultural value added is nearly twice as high as that of GDP (both on a per capita basis)’ (Gaiha and Kulkarni, The Economic Times, 12, 2012). Taking cognizance of South Asia’s economic realities, the most effective medium-term strategy of making a marked dent into poverty, especially rural poverty, is to ensure a high, and sustained, growth of agriculture.