Macroeconomic crisis led to India’s initiation of wide ranging economic reforms in 1991. To what extent have these reforms, aimed at accelerating economic growth, adversely affected the poor? Have they increased poverty and inequality? An Institute of Development Studies working paper looks at poverty levels before and after the reform programme. Whilst rural and urban poverty levels declined overall pre-reform, this decline slowed down or reversed post-reform. What poverty reducing measures would succeed in the context of India’s economic reform programme?
To what extent did the reforms benefit the poor and other marginalised groups? Did they reduce poverty, improve food entitlements and access to other basic needs? Or have they, in fact, accentuated poverty and inequality? There is a widespread belief that the benefits of reform have largely accrued to the better-off sections of society but that the costs have most often been borne by the poor. The paper looks at poverty indicators between 1969 and 1991 and again after the introduction of the economic reform programme between 1991 and 1993, both nationally and across states. Second, it probes into the role of different factors on poverty levels across the pre- and post-reform periods using time series data.
Research findings include:
- Rural and urban poverty levels declined overall pre-reform but this decline slowed down or reversed in the period immediately post reform.
- Pre-reform, all 15 case study states recorded reductions in rural and urban poverty levels.
- Post-reform, a diversity of trends in poverty reduction was found across the 15 states.
- Although post-reform a majority of states recorded significant reductions in rural and urban poverty levels, these were not statistically significant in most cases.
- While Gujarat and Karnataka reported a steeper decline in rural poverty levels post-reform, others, notably Punjab and Haryana reported that levels of rural poverty were actually increasing.
- Rising food prices have a greater poverty-aggravating effect in rural areas, and during the post reform period.
Policy measures to promote poverty reduction include:
- accelerating agricultural growth
- improving access to subsidised food through the public administration system
- promoting infrastructure development
- strongly controlling inflation.
Source(s):
‘Economic Reforms in India: Impact on the Poor and Poverty’ IDS Working
Paper #102 Institute of Development Studies, Brighton by K.N. Ninan (2000)
Funded by:
Unknown
id21 Research Highlight: 13 February 2001
Further Information:
K.N. Ninan
Institute for Social and Economic Change
Nagarbhavi P.O.
Bangalore 560072
India
Fax:
+91 80 3217008
Contact the contributor: ninan@isec.kar.nic.in
Contact the contributor: ninankn@hotmail.com
Other related links:
Refer to MYRADA for information on Microcredit and Sustainable Development
in Southern India
Search the IMF pages for Poverty Reduction Strategy Papers
WIDER is dedicated to the study of major economic processes for the
purpose of fostering widespread improvements in human life and society
Search the Organisation for Economic Co-operation and Development pages
for further information
The University of Sussex Poverty Research Unit aims to develop existing
and new areas of poverty research
MOST features further research on Poverty and Social Exclusion
Go to the Centre for Analysis of Social Exclusion for further issues
