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Is India's economic growth leaving the poor behind?

  • Datt, Gaurav
  • Ravallion, Martin

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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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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  1. 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.
  2. Shaohua Chen & Ravallion, Martin, 2000. "How did the world's poorest fare in the 1990s ?," Policy Research Working Paper Series 2409, The World Bank.
  3. 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.
  4. Baldwin, Richard E. & Martin, Philippe & Ottaviano, Gianmarco I.P., 1998. "Global Income Divergence, Trade and Industrialisation: The Geography of Growth Take-Offs," Working Paper Series 496, Research Institute of Industrial Economics.
  5. 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.
  6. 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.
  7. 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.
  8. Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, vol. 52(3), pages 761-66, May.
  9. Ravallion, Martin, 2001. "Growth, Inequality and Poverty: Looking Beyond Averages," World Development, Elsevier, vol. 29(11), pages 1803-1815, November.
  10. Deepak Lal, 2002. "Economic Reforms & Poverty Alleviation: India A Tale of two Surveys," UCLA Economics Working Papers 822, UCLA Department of Economics.
  11. 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.
  12. Ravallion, Martin, 2004. "Pro-poor growth : A primer," Policy Research Working Paper Series 3242, The World Bank.
  13. Gaurav Datt, 1999. "Has Poverty Declined since Economic Reforms? Statistical Data Analysis," Monash Economics Working Papers archive-31, Monash University, Department of Economics.
  14. Ravallion, Martin & Bidani, Benu, 1993. "How robust is a poverty profile?," Policy Research Working Paper Series 1223, The World Bank.
  15. 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.
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