ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

Gaurav NayyarSubscribe to Gaurav Nayyar

India's 'Poverty of Numbers'

The number of "poor" derived by applying price adjustment to an old consumption basket, which is largely what official poverty measures have done, are very different from estimates based on actual consumption baskets that have changed over time. For instance, the share of cereals in household expenditure halved between 1993-94 and 2011-12 in rural areas. In the light of this, we ask if all expenditure would be on food, what percentage of the population would be unable to meet the prescribed calorie requirement? Adding a "minimum" level of expenditure on clothing-bedding-footwear, fuel and light, and conveyance to the "derived" sum of food expenditure provides a second counterfactual. Similarly, the cumulative addition of expenditure on other consumer goods and services provides further counterfactual scenarios.

Economic Growth and Regional Inequality in India

Given the disparate levels of income and development among the states in India, do they exhibit any tendency in the data to converge to common steady-state paths? In a panel data study for 16 Indian states for the period from 1978-79 to 2002-03, it is found that (a) the states are not converging to identical levels of per capita income in the steady-state; (b) once factors that affect steady-state levels of income are controlled for, the poor states grow faster on average than the rich ones; and (c) there is an increase in the dispersion of per capita incomes across states over time. This is indicative of Indian states converging to increasingly divergent steady-states, which may be attributed to increasing inter-state disparities in levels of private and public investment and an insignificant equalising impact of centre-state government transfers.

Growth and Poverty in Rural India

The object of this paper is to analyse differences in poverty levels across states in rural India during the period 1983-2000. In doing so, it seeks to focus on inter-state differences in economic growth as an explanation. It also attempts to analyse the effect of policies and institutions on the poverty-reducing impact of growth. In a panel data study for India's 15 major states, we find that economic growth is a crucial determinant of poverty reduction, but it does not provide a complete explanation. Public expenditure on anti-poverty programmes has a significant impact on rural poverty, as does greater gender equality and increased democratic decentralisation. Rates of inflation and differences in initial conditions also matter.
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