The Relation Among Inequality, Poverty and Economic Growth (GDP) in India

Abstract

In this paper, the relationship among economic growth, inequality and poverty between the post and pre reform period is shown. To capture the impact of th-is, we will take consideration the GDP at constant prices and on the other side we will take poverty ratio of both urban and rural area, poverty head count ration and number of peoples. It is well established now that growth and poverty have on undescribed relationship. Growth is necessary but proverty is not and, alone growth cannot riddle out poverty. The study examines the question of whether economic growth tends to reduce poverty, where using the most recent data available, the paper shows that an increase in the rate of GDP growth translates into a direct one-for-one increase in the rate of growth of average income of poor's. The economic growth also indicates that economic growth is essential for poverty reduction, especially when it leads to increase in employment and improvement in opportunities for productive activities among the people that are poor. The result obtained indicates that the positive change in economic growth is prone to poverty reduction. To therefore improve and sustain the rate of economic growth in India from which poverty could be reduced measures, such as, stable macroeconomic policies, huge investment in agriculture, infrastructural development and good governance are suggested. But the main focus of the paper is to show the casual relationship between economic growth and poverty. The study will cover that the initial level of economic growth will have significant impact on the reduction of poverty as per given duration. The objective in this present research paper is to check the status of relation among inequality, poverty and economic growth (in Terms of GDP) in India.