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Reducing Poverty in India: The Role of Economic Growth

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  • Pradeep Agrawal

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, the paper 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.

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  • Pradeep Agrawal, 2015. "Reducing Poverty in India: The Role of Economic Growth," Working Papers id:7693, eSocialSciences.
    • Handle: RePEc:ess:wpaper:id:7693
    Note: Institutional Papers
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    References listed on IDEAS

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    1. 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, December.
    2. Gaurav Datt & Martin Ravallion, 2002. "Is India's Economic Growth Leaving the Poor Behind?," Journal of Economic Perspectives, American Economic Association, vol. 16(3), pages 89-108, Summer.
    3. 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.
    4. 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.
    5. 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.
    6. 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.
    7. Angus Deaton and Jean Drèze & Jean Drèze, 2002. "Poverty and Inequality in India: A Reexamination," Working papers 107, Centre for Development Economics, Delhi School of Economics.
    8. repec:dau:papers:123456789/10091 is not listed on IDEAS
    9. 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.
    10. repec:pri:rpdevs:deaton_dreze_poverty_india is not listed on IDEAS
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    1. repec:mth:ijafr8:v:8:y:2018:i:3:p:29-38 is not listed on IDEAS

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