2011 Reports

Growth, Openness and the Socially Disadvantaged

Mukim, Megha; Panagariya, Arvind

We offer a comprehensive analysis of the evolution of poverty by social groups in India since 1983 and study the impact of growth and openness on the headcount ratio. We show that at the national level poverty has declined with every successive quinquennial survey in both rural and urban areas for the Scheduled Castes (SC), Scheduled Tribes (ST) and the non-Scheduled (NS) population. We conclude that there is no statistically significant evidence whatsoever that rising per-capita incomes and increased openness have hurt any of the three broad social groups. Beyond this bottom line, we find that per-capita income has a negative and statistically significant effect on poverty levels for the SC, non-Scheduled groups and all groups taken together. The effect on poverty levels for the SC is negative but statistically insignificant. We also find the effect of one or more measures of openness on poverty reduction to be positive and statistically significant in rural and urban areas and in both regions taken together for the SC and non-Scheduled groups, although for the ST the effect is statistically significant in urban areas only.