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

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Reform, Food Prices and Poverty in India

Martin Ravallion There are understandable concerns about the effects on India's poor of higher food prices stemming from recent or proposed policy reforms. Over 24 rounds of the National Sample Survey, spanning 1959-94, one finds a strong positive correlation between the relative price of food and India's poverty rate. This article questions how reform critics have interpreted this correlation. It is not an income-distribution effect. Rather it appears to be due to covariate fluctuations between average consumption and food prices due to other variables, including food supply; bad agricultural years simultaneously lower rural living standards and increased food prices. The correlation is uninformative about the welfare effect of a sustained increase in the relative price of food.

India s Checkered History in Fight Against Poverty-Are There Lessons for the Future

India's Checkered History in Fight Against Poverty Are There Lessons for the Future? Martin Ravallion Gaurav Datt Looking back 40 years or so, progress against poverty in India has been highly uneven over time and space. It took 20 years for the national poverty rate to fall below and stay below its value in the early 1950s. And trend rates of poverty reduction have differed appreciably between states. This paper provides an overview of results from a research project which has been trying to understand what influence economywide and sectoral factors have played in the evolution of poverty measures for India since the 1950s. There are some clear lessons for the future.

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