This paper analyses the impact of the economic reforms initiated in India in 1991 on the poor and on poverty reduction. Using time series analysis of poverty indicators for all India and across states, it notes that while rural, urban and overall national poverty levels in India recorded a significant decline during the pre- reform period (1969-70 to 1990-91), during the post- reform period (1991-92 to 1993-94), these negative trends have weakened or even reversed in terms of one or more poverty indicators.
Across states a diversity of trends and patterns is observed. While during the pre- reform period all fifteen states recorded significant reductions in rural and urban poverty levels, during the post- reform period the scenario has changed. Although a majority of the Indian states continued to register negative trends in rural and urban poverty levels, these were not statistically significant in most cases. While a few states such as Gujarat and Karnataka reported a steeper decline in rural poverty levels in the latter period, others, notably Punjab and Haryana which ushered in the green revolution in India reported a reversal with rural poverty trends turning from negative to positive.
The study then probes into the role of different factors on poverty levels, using time series analysis of all India data and a cross section analysis of interstate data for two points of time covering the pre and post reform periods. It suggests that policies to accelerate agricultural growth, improve access to subsidised food through the public distribution system, and infrastructure development along with measures to control inflation and reduce inequalities promises to be most effective in reducing poverty in India. The poverty?aggravating effect of a rise in food prices is seen to be greater in respect of rural poverty, and during the post reform period.