Poverty and Growth in India over Six Decades

Abstract

We study the evolution of consumption-poverty measures for post-independence India, including 20 years since extensive economic reforms began in 1991. Progress against poverty was negligible until the mid-1970s, after which a downward trend in poverty measures emerged. The pace of poverty reduction accelerated in the post-reform period, despite rising inequality amidst faster growth. A key finding is that the relationship to the pattern of growth changed greatly, suggesting stronger intersectoral linkages, with urban consumption growth benefiting both the rural and urban poor. In contrast to the pre-reform period, growth in primary, secondary and tertiary sector outputs yielded similar impacts on poverty.