Poverty Reduction in Rural India During 2004–2005 to 2011–2012: Role of Growth, Redistribution, and Population‐Shifts

Abstract

We assess the relative importance of factors contributing to poverty reduction in rural India, between 2004–2005 and 2011–2012, a period when India was one of the fastest growing economies of the world, at the national as well as sub‐national level. We quantify the relative importance of population shifts across land size classes in determining the pace of poverty reduction vis‐à‐vis the intra‐land size class growth in average consumption and redistribution components. While we do not find population shifts to be a statistically significant factor in explaining poverty reduction, we find that growth in intra land consumption is the dominant factor accounting for poverty reduction in each Indian state as well as at the national level. While the impact of redistribution component varied at the sub‐national level, overall, it marginally impeded the pace of poverty reduction at the national level.