IDEAS home Printed from https://ideas.repec.org/p/awe/wpaper/349.html
   My bibliography  Save this paper

Reducing Poverty in India The Role of Economic Growth

Author

Listed:
  • Pradeep Agrawal

    (Institute of Economic Growth, Delhi)

Abstract

This paper empirically examines the relation between economic growth and poverty alleviation for the case of India. We provide evidence that higher growth rates were associated with faster decline in poverty, partly because growth helped increase employment and real wages which contributed to poverty reduction. The increase in government social expenditure is also shown to have contributed significantly to poverty alleviation. However, we also find that higher GDP growth increased government revenues, which enabled the government to increase expenditure on the social sectors. Overall, this evidence suggests that for rapid reduction in poverty, sustaining high growth is the most crucial element.

Suggested Citation

  • Pradeep Agrawal, 2015. "Reducing Poverty in India The Role of Economic Growth," IEG Working Papers 349, Institute of Economic Growth.
    • Handle: RePEc:awe:wpaper:349
    as

    Download full text from publisher

    File URL: https://iegindia.org/upload/publication/Workpap/wp349.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Hans Binswanger & Shahidur Khandker, 1995. "The impact of formal finance on the rural economy of India," Journal of Development Studies, Taylor & Francis Journals, vol. 32(2), pages 234-262.
    2. Robert J. Barro, 1998. "Determinants of Economic Growth: A Cross-Country Empirical Study," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262522543, April.
    3. repec:dau:papers:123456789/10091 is not listed on IDEAS
    4. Johansen, Soren & Juselius, Katarina, 1990. "Maximum Likelihood Estimation and Inference on Cointegration--With Applications to the Demand for Money," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 52(2), pages 169-210, May.
    5. 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.
    6. Becker, Gary S., 1978. "The Effect of the State on the Family," Working Papers 5, The University of Chicago Booth School of Business, George J. Stigler Center for the Study of the Economy and the State.
    7. 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.
    8. Cecilia Garcia-Penalosa & Eve Caroli & Philippe Aghion, 1999. "Inequality and Economic Growth: The Perspective of the New Growth Theories," Journal of Economic Literature, American Economic Association, vol. 37(4), pages 1615-1660, December.
    9. Timothy Besley & Robin Burgess, 2000. "Land Reform, Poverty Reduction, and Growth: Evidence from India," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 115(2), pages 389-430.
    10. Angus Deaton & Jean Dreze, 2002. "Poverty and Inequality in India: A Re-Examination," Working Papers 184, Princeton University, Woodrow Wilson School of Public and International Affairs, Research Program in Development Studies..
    11. Martin Ravallion & Gaurav Datt, 1996. "India's Checkered History in Fight against Poverty: Are There Lessons for the Future?," Monash Economics Working Papers archive-33, Monash University, Department of Economics.
    12. repec:pri:rpdevs:deaton_dreze_poverty_india is not listed on IDEAS
    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. Pradeep Agrawal, 2015. "Reducing Poverty in India: The Role of Economic Growth," Working Papers id:7693, eSocialSciences.
    2. Chaudhuri, Shubham & Ravallion, Martin, 2006. "Partially awakened giants : uneven growth in China and India," Policy Research Working Paper Series 4069, The World Bank.
    3. 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.
    4. Ravallion, Martin & Chen, Shaohua, 2007. "China's (uneven) progress against poverty," Journal of Development Economics, Elsevier, vol. 82(1), pages 1-42, January.
    5. Peter Lanjouw, 2007. "Rural Non-Farm Employment in India: Access, Income, farm, Poverty Impact," Working Papers id:913, eSocialSciences.
    6. Gaurav Datt & Martin Ravallion & Rinku Murgai, 2016. "Growth, Urbanization and Poverty Reduction in India," Monash Economics Working Papers 09-16, Monash University, Department of Economics.
    7. Robin Burgess & Rohini Pande, 2005. "Do Rural Banks Matter? Evidence from the Indian Social Banking Experiment," American Economic Review, American Economic Association, vol. 95(3), pages 780-795, June.
    8. 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.
    9. Dethier, Jean-Jacques & Effenberger, Alexandra, 2012. "Agriculture and development: A brief review of the literature," Economic Systems, Elsevier, vol. 36(2), pages 175-205.
    10. Krishna, Anirudh & Shariff, Abusaleh, 2011. "The Irrelevance of National Strategies? Rural Poverty Dynamics in States and Regions of India, 1993-2005," World Development, Elsevier, vol. 39(4), pages 533-549, April.
    11. Ravallion, Martin & Datt, Gaurav, 2002. "Why has economic growth been more pro-poor in some states of India than others?," Journal of Development Economics, Elsevier, vol. 68(2), pages 381-400, August.
    12. Sudip Ranjan Basu, 2005. "Correlating Growth with Well-Being during Economic Reforms Evidence from India and China," Development and Comp Systems 0509010, University Library of Munich, Germany.
    13. Sushil Kumar Haldar, 2009. "Economic Growth in India Revisited," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 10(1), pages 105-126, January.
    14. Gylfason, Thorvaldur, 2001. "Natural resources, education, and economic development," European Economic Review, Elsevier, vol. 45(4-6), pages 847-859, May.
    15. 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.
    16. Ramu M R, Anantha & Gayithri, K, 2016. "Fiscal deficit composition and economic growth relation in India: A time series econometric analysis," MPRA Paper 76304, University Library of Munich, Germany, revised 08 Sep 2016.
    17. Peter Lanjouw & Rinku Murgai, 2009. "Poverty decline, agricultural wages, and nonfarm employment in rural India: 1983–2004," Agricultural Economics, International Association of Agricultural Economists, vol. 40(2), pages 243-263, March.
    18. Stijns, Jean-Philippe, 2006. "Natural resource abundance and human capital accumulation," World Development, Elsevier, vol. 34(6), pages 1060-1083, June.
    19. Arne Bigsten & Jörgen Levin, 2001. "Growth, Income Distribution, and Poverty," WIDER Working Paper Series DP2001-129, World Institute for Development Economic Research (UNU-WIDER).
    20. 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.

    More about this item

    Keywords

    Growth; poverty; inequality; education expenditure; health expenditure; social assistance; India;
    All these keywords.

    JEL classification:

    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

    Statistics

    Access and download statistics

    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:awe:wpaper:349. 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: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/iegggin.html .

    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.