Poverty reduction in rural India during 2004-05 to 2011-12: role of growth, redistribution, and population shifts

This paper is a contribution to the empirical literature that seeks to understand the factors contributing to poverty reduction in developing countries. Studies have sought to explain changes in poverty between two points in time by decomposing aggregate change in poverty into component factors, viz. growth of consumption expenditures or incomes and its distribution, and quantifying their respective contributions. Recent contributions to this literature have emphasized spatial and temporal differences in the importance of the growth and distribution factors in accounting for changes in poverty. For instance, based on the analysis of data for 76 developing countries for the period of 1990-2010, Alvaredo and Gasparini (2015) find that while the growth component accounts for the bulk of the changes in poverty across various regions of the world, the impact of growth is relatively stronger in Asia and its importance in determining poverty reduction increased during the more recent period of 1999-2010. They also find that depending on the time period of analysis, the redistributive component has either aided or impeded pace of poverty reduction.