IDEAS home Printed from https://ideas.repec.org/a/sae/millen/v6y2015i2p176-190.html
   My bibliography  Save this article

Structural Transformation, Trade Policies and Income Distributional Impacts: A Computable General Equilibrium Model of India

Author

Listed:
  • Mythili G.

Abstract

The liberalization and globalization process which India initiated in the 1990s have been carried on successfully and this has taken the economy to higher growth path of more than 8 per cent GDP growth post-2000. However, there is no substantial achievement on the income distributional front and there are no convincing studies to empirically demonstrate the impact of various domestic and global policies of India on income inequality. This study proposed to simulate alternative scenario of external shocks and counterbalancing trade policies on income accounts of different groups of households classified by consumption expenditure by rural and urban using computable general equilibrium (CGE) modelling. The data pertain to social accounting matrix (SAM) of 2006–2007 for India. Apart from policies, it is also looked at the income distributional impacts of various anticipated structural changes in the domestic economy that will influence the Indian trade. Alternative GDP growth scenarios give a clear picture that higher GDP growth does not favour agriculture sector. Rural income share has come down from 61 to 56 per cent. It has a structural bias towards urban rich. This is a challenge for planners as the real issue is how to make agriculture progress when the economy is moving towards higher growth path. Among the policy scenarios, it is found that reduction in foreign capital inflow renders biggest loss to rural areas.

Suggested Citation

  • Mythili G., 2015. "Structural Transformation, Trade Policies and Income Distributional Impacts: A Computable General Equilibrium Model of India," Millennial Asia, , vol. 6(2), pages 176-190, October.
    • Handle: RePEc:sae:millen:v:6:y:2015:i:2:p:176-190
    DOI: 10.1177/0976399615590519
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/0976399615590519
    Download Restriction: no
    File URL: https://libkey.io/10.1177/0976399615590519?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Manoj Panda & A. Ganesh-Kumar, 2008. "Trade Liberalization, Poverty and Food Security in India," Trade Working Papers 22410, East Asian Bureau of Economic Research.
    2. Ravallion, Martin & Datt, Gaurav, 1996. "How Important to India's Poor Is the Sectoral Composition of Economic Growth?," The World Bank Economic Review, World Bank, vol. 10(1), pages 1-25, January.
    3. Gaurav Datt & Martin Ravallion, 1998. "Farm productivity and rural poverty in India," Journal of Development Studies, Taylor & Francis Journals, vol. 34(4), pages 62-85.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Mythili, G., 2013. "Structural Transformation, Trade Policies and Income Distributional Impacts: A CGE Model of India," Conference papers 332418, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    2. Gaurav Datt & Martin Ravallion & Rinku Murgai, 2020. "Poverty and Growth in India over Six Decades," American Journal of Agricultural Economics, John Wiley & Sons, vol. 102(1), pages 4-27, January.
    3. Sen Gupta, Abhijit & Hasan, Rana & Lamba, Sneha, 2014. "Growth, Structural Change, and Poverty Reduction: Evidence from India," MPRA Paper 55247, University Library of Munich, Germany.
    4. Peter Lanjouw, 2007. "Rural Non-Farm Employment in India: Access, Income, farm, Poverty Impact," Working Papers id:913, eSocialSciences.
    5. RAMDE, Fousseni & LO, Sérigne Bassirou, 2015. "Le Role Du Secteur Agricole Dans L’Economie Du Senegal [The Role Of The Agricultural Sector In The Senegal Economy]," MPRA Paper 81906, University Library of Munich, Germany.
    6. Mendali, Rebati & Gunter, Lewell F., "undated". "Impact of Agricultural Productivity Changes on Poverty Reduction in Developing Countries," 2013 Annual Meeting, February 2-5, 2013, Orlando, Florida 143073, Southern Agricultural Economics Association.
    7. Ligon, Ethan & Sadoulet, Elisabeth, 2018. "Estimating the Relative Benefits of Agricultural Growth on the Distribution of Expenditures," World Development, Elsevier, vol. 109(C), pages 417-428.
    8. Angelo Antoci & Paolo Russu & Elisa Ticci, 2008. "Structural Change, Environment and Well-being: Interactions Between Production and Consumption Choices of the Rich and the Poor in Developing Countries," Working Papers 2008.48, Fondazione Eni Enrico Mattei.
    9. Raghbendra Jha, 2002. "Rural Poverty in India: Structure, determinants and suggestions for policy reform," ASARC Working Papers 2002-07, The Australian National University, Australia South Asia Research Centre.
    10. Datt,Gaurav & Ravallion,Martin & Murgai,Rinku, 2016. "Growth, urbanization, and poverty reduction in India," Policy Research Working Paper Series 7568, The World Bank.
    11. Peter Warr & Waleerat Suphannachart, 2021. "Agricultural Productivity Growth and Poverty Reduction: Evidence from Thailand," Journal of Agricultural Economics, Wiley Blackwell, vol. 72(2), pages 525-546, June.
    12. Mulubrhan Amare & Bekele Shiferaw & Hiroyuki Takeshima & George Mavrotas, 2021. "Variability in agricultural productivity and rural household consumption inequality: Evidence from Nigeria and Uganda," Agricultural Economics, International Association of Agricultural Economists, vol. 52(1), pages 19-36, January.
    13. Victor GAMARRA ECHENIQUE, 2018. "Sectoral Composition Of Growth And Poverty Reduction In Peru: A Regional Approach (2001-2016)," Regional and Sectoral Economic Studies, Euro-American Association of Economic Development, vol. 18(2), pages 23-42.
    14. Ryan, James G., 2002. "Agricultural Research and Poverty Alleviation: Some International Perspectives," Working Papers 118375, Australian Centre for International Agricultural Research.
    15. John W. Mellor, 2001. "Employment Multipliers from Agricultural Growth and Poverty Reduction," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 40(4), pages 371-400.
    16. Timmer, Peter & Weisbrod, Julian & McCulloch, Neil, 2006. "The Pathways out of Poverty in Rural Indonesia: an empirical assessment," Proceedings of the German Development Economics Conference, Berlin 2006 29, Verein für Socialpolitik, Research Committee Development Economics.
    17. Ravallion, Martin & Chen, Shaohua, 2007. "China's (uneven) progress against poverty," Journal of Development Economics, Elsevier, vol. 82(1), pages 1-42, January.
    18. Ravallion, Martin, 2000. "Prices, wages and poverty in rural India: what lessons do the time series data hold for policy?," Food Policy, Elsevier, vol. 25(3), pages 351-364, June.
    19. Dzanku, Fred M. & Jirström, Magnus & Marstorp, Håkan, 2015. "Yield Gap-Based Poverty Gaps in Rural Sub-Saharan Africa," World Development, Elsevier, vol. 67(C), pages 336-362.
    20. Thirtle, Colin & Lin, Lin & Piesse, Jenifer, 2003. "The Impact of Research-Led Agricultural Productivity Growth on Poverty Reduction in Africa, Asia and Latin America," World Development, Elsevier, vol. 31(12), pages 1959-1975, December.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:millen:v:6:y:2015:i:2:p:176-190. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.