India : A Study of Poverty And Prosperity During Post-Reform Period

Abstract

The growth effect, which is beneficial for poverty reduction, seems to have gone up in the post reform period. The adverse inequality effect also fell in magnitude in the second period compared to the first. States with a greater beneficial growth effect in the second period relative to the first, also show a fall in the magnitude of an adverse population shift effect in the urban areas, i.e. a relatively less rise in the incidence of urban poverty caused by rural-urban migration. States where economic reforms were initiated performed better than the rest in terms of the effects mentioned above. Though reforms might have impacted factors representing agglomeration economies of scale, which in turn possibly led to divergence across states in terms of economic growth (per capita SDP), convergence seems to have taken place in terms of the growth/mean effect on poverty in the post-reform period compared to the eighties.