Disentangling the poverty effects of sectoral output, prices and policies in India

Sushanta Mallick ()

No 1202, Development Papers from United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) South and South-West Asia Office

Abstract: This paper attempts to disentangle the poverty effects of key policy variables that directly affect the poor (namely the government-led channel of development spending and financing) in both agricultural and non-agricultural sectors after accounting for the effect of respective sectoral per capita income and prices, using data from India over five decades. The paper emphasizes the sectoral composition of income and prices as mechanisms influencing the level of poverty and establishes empirically that it is the rise in non-agricultural per capita income that reduces rural poverty via the channel of internal migration, after having controlled for the variation in key components of fiscal spending and monetary/financial policy via the availability of credit. Uneven sectoral growth pattern explains why urban poverty becomes a spill-over of persistent rural poverty when the agricultural sector shrinks. While checking for robustness, there is evidence that the rise in non-agricultural income alone may not reduce rural poverty, when measured in terms of rural infant mortality rate as a non-income indicator of well-being.

Keywords: Poverty reduction; Capital spending; Development finance; Infant mortality (search for similar items in EconPapers)
JEL-codes: E6 I3 O2 Q1 (search for similar items in EconPapers)
Pages: 47 pages
Date: 2012-05
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Disentangling the Poverty Effects of Sectoral Output, Prices, and Policies in India (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:eap:sswadp:dp1202

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