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

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Economic Reforms, Poverty, Income Distribution and Employment

The paper puts together various indicators on poverty, income distribution and employment in the pre- and post-reform periods, identifying the components of reforms having impact on these indicators. Given the newly emerging disparities with regard to urban and rural poverty, interstate inequalities, and agricultural sector, the paper argues for a more emphasis on agricultural growth and rural infrastructure, increasing social sector expenditure, and involvement of local level institutions during the phase of second generation of reforms.

Economic Liberalisation and Employment in South Asia - II

The fears that liberalisation would severely undermine employment growth in south Asia have been proved, at least at the aggregate level, to have been unwarranted. Empirical evidence also shows, on the other hand, that employment growth has picked up despite the continued existence of 'labour-market rigidities'. To improve the employment climate in the region governments should accord priority to investment in physical and human capital, institution development and the reduction of inequalities. [This paper appears in two parts. The first part was published last week.]

Rising Food Prices and Rural Poverty-Going Beyond Correlations

Going Beyond Correlations Introduction HOW does an increase in the relative price of food (RPF) affect rural poverty in India? This question begs an analytical and empirical understanding, and many pages of this journal have been recently devoted to a discussion and debate over this question. Sen (1996) claims that econometric models which include RPF1 along with other explanatory variables such as agricultural productivity and public development expenditure result in a much better explanation of pre-reform and post- reform poverty, than econometric models which ignore RPF. Furthermore Sen shows that RPF does better in tracking poverty than the inflation rate. Ravallion (1998a) uses 24 observations of the NSS rounds from 1958 to 1993-94. and obtains a correlation of 0,76 between poverty (the head count ratio, HCR) and RPF,2 Although this confirms the claim made by critics of the economic reforms of a strong positive correlation between measured poverty and RPF, Ravallion rejects the explanation that this correlation is driven by the adverse distributional effect of changes in relative food prices, and maintains that the correlation is due to the mean effect, via, depressed mean per capita consumption. In rebutting Mohan Rao's [Rao 1998] objection that econometric tests of distributional impact, which ignore d ecile specific changes in real income lead to misleading conclusions, Ravallion (1998b) claims that his conclusions are on solid ground si nee (a) EngeI expenditure curves3 are flat for the poorest four deciles and (b) using the Consumer Price Index for Agricultural Labour (CPIAL) actually overestimates the loss of real income to the poor, since their budget shares on food are lower than What the CPIAL assumes.4 While the last word might not have been said in the debate on the distributional consequence of a rise in RPF, in this paper while we comment on the correlation aspect, we wish to nudge the debate a bit away from the correlation issue and into a territory far less contentious. Specifically we will discuss (a) who among the rural poor are unambiguously hurt by rising RPF-the 'net purchasers of food;;(b) what is the received wisdom on the mechanism by which rising RPF is supposed to benefit the rural poor (the 'terms of trade' and the supply response), and why it might not work, and finally (c) what should be the appropriate mix of policy that goes along with the reforms induced rising food prices. In this paper we take it as an incontrovertible observation that economic reforms have led to an increase in food prices. The explanations for this may be varied5 and sometimes opposites of each other, but the crux of the matter is that economic liberalisation along with structural adjustment has meant that input subsidies are lower, and output (food) prices closer to international prices, which are typically higher than domestic prices.6 One of the sources of controversy surrounding the question of higher food prices and benefits to agriculture, is the theoretical possibility that the resultant surge in demand for rural labour, and hence wages, might more than compensate for the rise in food prices.

Public Distribution System Impact on Poor and Options for Reform

and Options for Reform S Mahendra Dev India's Public Distribution System: A National and International Perspective by R Radhakrishna, K Subbarao with S Indrakant and C Ravi; World Bank Discussion Paper No 380; The World Bank, Washington DC, 1997; pp xiii + 98.

Food Security PDS vs EGS-A Tale of Two States

Food Security: PDS vs EGS A Tale of Two States Introduction IMPROVING food security at the household level is an issue of great importance for a developing country tike India where millions of poor suffer from persistent hunger and malnutrition and some others are at the risk of doing so in the future. There are various definitions of food security. In this paper, we consider poverty as the major determinant of chronic and to some extent transient food insecurity. It is known that poor do not have adequate means to gain access to food in the quantities needed for a healthy life.

Maharashtras Agricultural Development-A Blueprint

A Blueprint S Mahendra Dev B L Mungekar This paper describes the agricultural scenario in Maharashtra and outlines the major interventions required to increase agricultural production in the state. The blueprint includes improved irrigation and water and soil conservation; reduction in subsidies; an increase in the role of the private sector, especially in horticulture and food processing; and greater concentration on agricultural research and extension.

Alleviating Poverty-Maharashtra Employment Guarantee Scheme

Maharashtra Employment Guarantee Scheme S Mahendra Dev In spite of the limitations in its design and implementation the EGS has made positive impact on the levels of living of the rural poor in Maharashtra. However, the EGS alone cannot remove the poverty in rural areas of the state. And any replication of the scheme in other states should involve prior establishment of decentralised district planning and implementing body, and assurance of adequate funds through additional taxation.

Economic Reforms and the Rural Poor

Economic Reforms and the Rural Poor S Mahendra Dev BOTH the critics and supporters of the economic reform now agree that the poverty has increased during the first 18 months (July 1991 to December 1992) of the reform period. They disagree, however, on the factors responsible for the increase in poverty, particularly rural poverty.

Is PDS Urban Biased and Pro-Rich-An Evaluation

Is PDS Urban Biased and Pro-Rich? An Evaluation S Mahendra Dev M H Suryanarayana The performance of the public distribution system in India has come in for severe criticism on the grounds that it is urban biased and that it benefits by and large the middle and upper income groups in the urban areas. This study attempts to evaluate the validity of these criticisms using the latest available NSS data on utilisation of the public distribution system. The study concludes that the debate is no longer one of urban versus rural in most of the states but whether the PDS serves the purpose of protecting the vulnerable sections of society.

Constraints on Agricultural Productivity-A District Level Analysis

A District Level Analysis S Mahendra Dev This paper examines the characteristics of 100 low yield districts and some non-low yield districts to bring out the constraints on agricultural productivity in the 100 low yield districts. Section II of the paper provides a methodology for analysing the constraints on low yield districts. Data base and definitions of the variables are given in section III, while section IV describes the location and significance of the low yield districts. Section Vanalyses the constraints on agricultural productivity in the 100 low yield and some non-low yield districts and discusses the role of fertilisers and fixed capital in raising agricultural productivity The last section presents the summary and conclusions.

Non-Agricultural Employment in Rural India-Evidence at a Disaggregate Level

Evidence at a Disaggregate Level S Mahendra Dev This paper furnishes evidence on some dimensions of rural non-agricultural employment, specifically the changes in the distribution of workforce in agriculture and non-agriculture at the all-India level and in Kerala and Bihar, the factors determining inter-regional variations in the share of non-agricultural employment, estimates on unemployment and poverty for agricultural and non-agricultural households and analyses projections of rural non-agricultural workforce in the year 2001.

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