Recent trends in poverty and inequality: some preliminary results

India's poverty reduction targets becoming less achievable

This paper reports the trends in poverty and inequality in India from the 1960s to the present day. The major finding from the study is that while poverty did reduce during 1993-2005, the annual rate of reduction in this period was lower than in the 1970s and 1980s. The opportunity for escaping poverty at the household level is therefore not what it once was.

Some conclusions include:

the bulk of this decline in poverty reduction occurred in 1999-2005, with little or no reduction in poverty in 1993-2000, confirming the earlier consensus that the 1990s were indeed the lost decade for poverty reduction in India
there are a few exceptions to this trend, especially among the traditional high poverty incidence states in the eastern part of the country - some of these high poverty states did better not only on non-income indicators but also on employment and income indicators
some of the relatively rich states not only saw a worsening of income and employment indicators, their performance on non-income indicators is also a cause for concern.

Whilst it is difficult to derive any concrete policy recommendations from this data, it becomes however clear that the variable which matters most for measured poverty reduction is the relative price of food.

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Recent trends in poverty and inequality: some preliminary results