The relationship of economic growth from 1988 to 2012 in Indian states with poverty and inequality is analysed. The results suggest that in faster-growing states, poverty levels have declined, but poverty intensity has not changed and the highest increase is in inequality. An examination of the performance of development spending (which should mostly benefit the poor) incurred by the states indicates that though faster-growing states showed high spending on the development sector, development spending benefited the rich more effectively than the poor—contrary to the intent behind it—thereby raising inequality in the state.
