Is our Growth Pro-poor?

The last decade saw the economy grow. A question that seems to be on many a minds is that is it giving benefits to the poor and rural sectors as well or only benefiting urban areas. Is our growth pro-poor or it is just for industrialization?

Economists have come up with new research, which shows that after liberalization India’s growth is pro-poor and has decisively reduced poverty. Consumption-based measures show that slightly more than one in two families were below poverty line in 1950s and 60s. By 1990 this has fallen to one in three. By 2005, it fell again, and only one in five were below the poverty line. It has shut the mouth of people who say that our growth not pro-poor. Truth is that our growth is virtuous.

More people in the world have risen out of poverty in the past 25 years than any other time in history. And this has become possible due to sustained economic growth in countries like India, China and Brazil, which cover more than 40% of the world’s population and have a large composition people who are below the poverty line.

After liberalization urban growth has come up with significant gains to the rural people as well as urban poor. They are now linked through migration and trade which explains why progress in towns is reducing poverty in villages. Our agricultural growth is not relatively high but overall growth has affected rural areas in a good manner. That is what our reformers have dreamt of. Our productive economy is transforming both urban and rural society. This has already happened in the west and now this miracle is happening in India.

Our economy grew very slowly before liberalization. It grew at the rate of 1 percent after independence, 3 per cent during the 80s and more than 4 per cent in 90s. Till that period poverty increased in rural areas continuously and then came the green revolution. Continuously increasing growth rate which has now reached at 8 percent and has brought new hope for rural people in the coming decade.

If we would have reformed agriculture, education and healthcare sectors as well, we would have gained more from the high rate of growth. Failure in these sectors is not due to lack of money alone. One of the main reasons is lack of accountability. In a government school in a rural area, where for example, eight teachers are required for a given strength of children, we are able to provide only four and out of these four, one is absent and one does not perform his duty. We need accountability while delivering services to the rural areas.

Vineet Kumar Singh