India's Growth: Is it helping the poor?

Economic growth may have been spectacular since 1993 — that is, post-economic reforms — but it seems to be trickling down rather slowly.

A soon-to-be-released official report has estimated that poverty declined by a mere 0.74% during the 11-year period ended 2004-05. Although there are signs of things moving a little faster, at 0.79%, between 1999-2000 and 2004-05, going by another measure, the number of people below poverty line may have remained unchanged.

National Sample Survey Organisation’s (NSSO) findings show the number of people living below poverty line (BPL) at 22.15% in 2004-05, compared with 26.09% in 1999-2000. In the same period, the country’s GDP grew at around 6%. This mismatch between growth and its distribution is politically worrying as it indicates a rise in economic disparities.

Economists say uneven growth often leads to social unrest which, in turn, can cause problems for politicians. Anyone consuming less than 2,100 calories in urban areas, and 2,400 calories in rural areas, is classifed in the BPL category.

The NSSO study also shows that poverty declined the sharpest in the poorer states.