Reducing Poverty and Inequality in India: Has Liberalization Helped?

  • View
    214

  • Download
    0

Embed Size (px)

Transcript

  • Working Papers N

    o. 204N

    ovember 2000

    Reducing Poverty and Inequality inIndiaHas Liberalization Helped?

    Raghbendra Jha

  • 818:RUOG,QVWLWXWHIRU'HYHORSPHQW(FRQRPLFV5HVHDUFK818:,'(5

    :RUNLQJ3DSHUV1R

    5HGXFLQJ3RYHUW\DQG,QHTXDOLW\LQ,QGLD

    +DV/LEHUDOL]DWLRQ+HOSHG"

    5DJKEHQGUD-KD

    1RYHPEHU

    7KLVVWXG\KDVEHHQSUHSDUHGZLWKLQ WKHSURMHFWRQ5LVLQJ ,QFRPH ,QHTXDOLW\DQG 3RYHUW\ 5HGXFWLRQ $UH 7KH\ &RPSDWLEOH" MRLQWO\ VSRQVRUHG E\818:,'(5DQGWKH8QLWHG1DWLRQV'HYHORSPHQW3URJUDPPH81'3DQGGLUHFWHGE\3URIHVVRU*LRYDQQL$QGUHD&RUQLD

    818:,'(5JUDWHIXOO\DFNQRZOHGJHVWKHILQDQFLDOFRQWULEXWLRQWRWKHSURMHFWE\ WKH *RYHUQPHQW RI 6ZHGHQ 6ZHGLVK ,QWHUQDWLRQDO 'HYHORSPHQW&RRSHUDWLRQ$JHQF\6LGD

    3URIHVVRU5DJKEHQGUD-KDLVDIILOLDWHGZLWKWKH$XVWUDOLDQ1DWLRQDO8QLYHUVLW\$VLD3DFLILF6FKRRORI(FRQRPLFVDQG0DQDJHPHQW&DQEHUUD

  • 818:RUOG,QVWLWXWHIRU'HYHORSPHQW(FRQRPLFV5HVHDUFK818:,'(5$UHVHDUFKDQGWUDLQLQJFHQWUHRIWKH8QLWHG1DWLRQV8QLYHUVLW\

    7KH%RDUGRI818:,'(5

    1RUD/XVWLJ+DUULV0XWLR0XOH-XNND3HNNDULQHQ9LFH&KDLUSHUVRQ5XEHQ

  • LLL

    &217(176

    /,672)7$%/(6$1'),*85(6 LY

    $&.12:/('*(0(176 Y

    $%675$&7 YL

    , ,1752'8&7,21

    ,, 6$/,(17(&2120,&3(5)250$1&($63(&76$1'5(&(1732/,&

  • LY

    /,672)7$%/(6$1'),*85(6

    7DEOH .H\QDWLRQDODFFRXQWDJJUHJDWHV 7DEOH +RXVHKROGGLVWULEXWLRQE\HPSOR\PHQW 7DEOH $OO,QGLDXQHPSOR\PHQWUDWHV 7DEOH 6HOHFWHGPHDVXUHVRILQHTXDOLW\DQGSRYHUW\ 7DEOH 3URILOHRILQHTXDOLW\DQGSRYHUW\LQ,QGLD 7DEOH 3HUFDSLWDIRRGDYDLODELOLW\ 7DEOH 'HWHUPLQDQWVRILQHTXDOLW\LQ,QGLD 7DEOH $QQXDOFRPSRXQGJURZWKLQHPSOR\PHQWE\LQGXVWU\ 7DEOH $QQXDOUHDO*'3JURZWKUDWHVLQDJULFXOWXUHPDQXIDFWXULQJ

    DQGVHUYLFHV 7DEOH 5DQNFRQFRUGDQFHDPRQJVWDWHV 7DEOH 5DQNFRQFRUGDQFHDPRQJVWDWHVGXULQJWKHUHIRUPSHULRG 7DEOH &RQYHUJHQFHWHVWVLQOHYHOV

    )LJXUH 3HQVLRQHUZRUNHUH[DPSOHPDUNHWLQFRPHDQGQHWLQFRPH )LJXUH 5XUDOVHFWRUUHVXOWVVHOHFWHGPHDVXUHVRILQHTXDOLW\DQG

    SRYHUW\ )LJXUH 8UEDQVHFWRUUHVXOWVVHOHFWHGPHDVXUHVRILQHTXDOLW\DQG

    SRYHUW\ )LJXUH 5HDODJULFXOWXUDOZDJHV )LJXUH ,QHTXDOLW\SRYHUW\DQGPHDQFRQVXPSWLRQXUEDQUXUDOGLIIHUHQFHV )LJXUH ,QIODWLRQWUHQGVLQGXVWULDODQGDJULFXOWXUDOZRUNHUV )LJXUH 6KDUHRIIDFWRUVLQQHWGRPHVWLFSURGXFW )LJXUH )DFWRULQFRPHVLQWKHRUJDQL]HGVHFWRU )LJXUH )DFWRULQFRPHVLQWKHXQRUJDQL]HGVHFWRU )LJXUH &RHIILFLHQWVRIYDULDWLRQLQUXUDOPHDQFRQVXPSWLRQLQHTXDOLW\

    DQGSRYHUW\LQ,QGLDQVWDWHV )LJXUH &RHIILFLHQWVRIYDULDWLRQLQXUEDQPHDQFRQVXPSWLRQLQHTXDOLW\

    DQGSRYHUW\LQ,QGLDQVWDWHV

  • Y

    $&.12:/('*(0(176

    )RU YHU\ KHOSIXO FRPPHQWV RQ WZR HDUOLHU GUDIWV WKH DXWKRU LV JUDWHIXO WR*LRYDQQL$QGUHD&RUQLD&RQYHUVDWLRQVZLWK*LDQQL9DJJL0LFKDHO/LSWRQ7RQ\$GGLVRQ DQG 7RQ\ $WNLQVRQ KDYH KHOSHG LPSURYH WKH SDSHU 5DJKDY*DLKDDQG0DUWLQ5DYDOOLRQJHQHURXVO\SURYLGHGFRSLHVRI WKHLUZRUN LQ WKLVDUHD 7KH DXWKRUV VWXGHQW ,ERWRPEL /RQJMDP H[WHQGHG LQYDOXDEOH UHVHDUFKDVVLVWDQFH 7KH UHVSRQVLELOLW\ IRU DOO RSLQLRQV DQG DQ\ HUURUV LV WKH DXWKRUVDORQH

    5DJKEHQGUD-KD%RPED\2FWREHU

  • YL

    $%675$&7

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

  • , ,1752'8&7,21

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

    ,Q ,QGLD WKHDFFHSWHGZLVGRP LV WKDW WKH WUHQG UDWHRIHFRQRPLFJURZWKZDVORZ DQG VWDEOH IRU D FRQVLGHUDEOH SHULRG$ EUHDNZDV DFKLHYHG WKURXJK WKHSURFHVVRIWUDGHDQGLQYHVWPHQWOLEHUDOL]DWLRQDQGHFRQRPLFUHIRUPVEHJXQLQ 7KLV OHG WR D VKDUS ULVH LQ WKH WUHQG UDWH RI HFRQRPLF JURZWK $QLPSRUWDQWTXHVWLRQWKDWDULVHVKHUHLV+RZKDVWKLVHFRQRPLFJURZWKDIIHFWHGOHYHOVRI LQHTXDOLW\ DQGSRYHUW\ LQ ,QGLD"7KLV VWXG\ LVGHVLJQHG WR DUULYH DWVRPHWHQWDWLYHFRQFOXVLRQVRQWKLVLPSRUWDQWLVVXH

    7KHDSSURDFK WR OLEHUDOL]DWLRQ LQ ,QGLD WKH'HOKL FRQVHQVXVKDV VRPH FOHDUGLIIHUHQFHV ZLWK WKH VWDQGDUG DSSURDFK WKH :DVKLQJWRQ FRQVHQVXV 2ISDUWLFXODULPSRUWDQFHDUHGLIIHUHQFHVLQWKHEDVLFSKLORVRSK\RIOLEHUDOL]DWLRQ,QGLDKDVRSWHG IRUJUDGXDO DQGFRQWUROOHG OLEHUDOL]DWLRQ DQGGRZQSOD\HG WKHVWUHVV RQ WKH VSHHGRI UHIRUPV HPSKDVL]HG E\ WKH:DVKLQJWRQ FRQVHQVXV ,QDGGLWLRQ WKHUH DUH GLIIHUHQFHV LQ GHWDLO 7KXV DSDUW IURP WKH ,0) IXQGVUHFHLYHG LQ UHOLDQFH RQ IRUHLJQ ELODWHUDO RU PXOWLODWHUDO SXEOLF FDSLWDOLQIORZVKDVEHHQYHU\OLPLWHG&RQVHTXHQWO\DIWHUWKHUHIRUPVSROLF\PDNHUVKDYHEHHQ IDFLQJDKDUGJRYHUQPHQWEXGJHW FRQVWUDLQW EXWQRW D WKUHDWHQLQJH[WHUQDO SD\PHQWV VLWXDWLRQ 7KH 'HOKL FRQVHQVXV KDV HPSKDVL]HG WKH VORZOLEHUDOL]DWLRQ RI WUDGH DQG YHU\ JUDGXDO SULYDWL]DWLRQ DQG DYRLGHG FDSLWDODFFRXQWOLEHUDOL]DWLRQ

    7KLV SUXGHQW DSSURDFK KDV VLGHVWHSSHG PDMRU VKRFNV DQG WKH FKDQJHV LQLQHTXDOLW\FRQVHTXHQWXSRQWKHVHUHIRUPVKDYHEHHQPRGHVWE\ WKHVWDQGDUGVRI VD\ WKH WUDQVLWLRQ HFRQRPLHV5XUDO LQHTXDOLW\KDV ULVHQ DW D VORZHUSDFHWKDQKDVXUEDQDQGRYHUDOOLQHTXDOLW\

    6RPH KDYH DUJXHG WKDW JURZWK SLFNHG XS LQ WKHPLGV DV D VHTXHO WR WKH UHIRUPVLQLWLDWHG WKHQ 1HYHUWKHOHVV VWLOO PDUNV D ZDWHUVKHG \HDU IRU HFRQRPLF UHIRUPV LQ,QGLD

  • 7KHULVHLQLQHTXDOLW\KDVEHHQWKHUHVXOWRIWKUHHIDFWRUVLDVKLIWLQHDUQLQJVIURP ODERXU WR FDSLWDO LQFRPH LL WKH UDSLG JURZWKRI WKH VHUYLFHV VHFWRUSDUWLFXODUO\ WKH ),5( VHFWRUZLWK D FRQVHTXHQW H[SORVLRQ LQ GHPDQG IRUVNLOOHG ZRUNHUV DQG LLL D GURS LQ WKH UDWH RI ODERXU DEVRUSWLRQ GXULQJ WKHUHIRUP SHULRG 7KHUH KDV DOVR EHHQ DQ LQFUHDVH LQ UHJLRQDO LQHTXDOLW\HVSHFLDOO\LQWKHLQFLGHQFHRIUXUDOSRYHUW\7KLVULVHLQLQHTXDOLW\KDVLPSOLHGWKDWGHVSLWHEHWWHUJURZWKSRYHUW\UHGXFWLRQKDVEHHQVOXJJLVK

    7KHSODQRIWKLVSDSHULVDVIROORZV6HFWLRQ,,RXWOLQHVVDOLHQWDVSHFWVRI WKHHFRQRPLFSHUIRUPDQFHRIWKH,QGLDQHFRQRP\VLQFHWKHVDQGSURYLGHVDEULHIRYHUYLHZRIWKHHFRQRPLFUHIRUPVLQLWLDWHG6HFWLRQ,,,DQDO\VHVWUHQGVLQDJJUHJDWH LQHTXDOLW\ DQGSRYHUW\ DQG VXJJHVWVSRVVLEOH H[SODQDWLRQV 6HFWLRQ,9RXWOLQHV WKHPDMRUFKDUDFWHULVWLFVRISRYHUW\DQGLQHTXDOLW\DW WKH OHYHORILQGLYLGXDOVWDWHV6HFWLRQ9FRQFOXGHV

    ,, 6$/,(17(&2120,&3(5)250$1&($63(&76$1'5(&(1732/,&

  • LPSO\WKDWSHUFDSLWDRXWSXWJUHZE\DIDFWRURIDERXWRYHUWKHSHULRG

    TABLE 1KEY NATIONAL ACCOUNT AGGREGATES (AT 1980-1 PRICES, %)

    Mean growth GDP shareRGDP PFCE GFCE Per capita

    NNPAgriculture Manufactures Services

    1951-63 (phase I) 3.8 3.4 6.8 1.6 53.50 17.43 29.071964-90 (phase II) 4.3 3.8 5.8 1.8 40.92 24.22 34.821991- (phase III)* 5.02 5.22 3.16 3.8 31.53 25.65 42.821992- 5.04 4.49 5.04 4.7 31.35 25.35 43.29

    Note: RGDP = real GDP (at 1980-81 prices). PFCE = private final consumptionexpenditure. GFCE = government final consumption expenditure. NNP = net nationalproduct. * Phase III figures are given in two stages: one including, and the other excludingthe crisis year, 1991.Source: calculated from figures provided by Central Statistical Organization (CSO).

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

    )OXFWXDWLRQV LQ WKHJURZWK UDWHRI*'3ZHUHXQWLO UHFHQWO\GULYHQPRVWO\E\WKHYDJDULHVRI WKHPRQVRRQ*RRGUDLQIDOOZRXOG OHDGWREHWWHUKDUYHVWVDQGEHWWHU*'3SHUIRUPDQFH+RZHYHUVLQFHWKHVLQDUHIOHFWLRQRIWKHVKLIWLQWKHVHFWRUDOFRPSRVLWLRQRIRXWSXWWKHHFRQRP\KDVEHFRPHOHVVGHSHQGHQWRQ WKHPRQVRRQV*'3 JURZWKZDV SRVLWLYH LQ DQG GHVSLWH SRRUUDLQV

    7KH*'3JURZWKUDWHZDVQHJDWLYHLQ WKHGURXJKW\HDUVRIDQG

  • FIGURE 1PENSIONER-WORKER EXAMPLE: MARKET INCOME AND NET INCOME

    Source: calculated from figures provided by Central Statistical Organization (CSO).

    &KDQJHVLQHPSOR\PHQWSDWWHUQVKDYHEHHQVOXJJLVKLQFRPSDULVRQWRWKHVKLIWLQWKHVHFWRUDOFRPSRVLWLRQRIRXWSXW$JULFXOWXUHVWLOODFFRXQWVIRUWKHEXONRIHPSOR\PHQW 7DEOH (YHQ DV ODWH DV DERXW SHU FHQW RI WKHSRSXODWLRQ ZDV GHSHQGHQW IRU ZRUN RQ DJU