India's Interstate Poverty Dynamics

Abstract

India's significant but slow progress in reducing poverty at the national level, masks substantial disparity in the incidence of poverty at the state level. This paper provides a description of the trends in interstate differences in rural poverty for the period 1978-97. In doing so certain stylized facts emerge. Among these facts are (i) growth has been pro poor, and quite strongly in the post-1991 reform period; and (ii) while in the pre-reform period both growth and the nongrowth factors affecting poverty were forces of convergence, i.e., they acted to narrow interstate differences in poverty, in the post-reform period, the effects of the two sets of variables decoupled - although growth continued to be a force of convergence, nongrowth factors widened interstate differentials.

Keywords: Regional poverty, growth

JEL Classification: C140, I320