Growth elasticity of poverty and pro-poor growth during post reform period: a tale of two Indian states

Abstract

ABSTRACT In 1991, India embarked on economic reform. This research asked if post-reform growth in the two newly formed states of Undivided Andhra Pradesh was or was not pro-poor. In both states, real monthly per capita expenditure increased, but poverty declined faster in 2004–05 to 2011–12 than in 1993–94 to 2004–05. Even though Telangana’s economic growth was lower than that of Andhra Pradesh, its growth elasticity of poverty was high enough to cause a more rapid decline in poverty. In the second period, growth in both states was found to be pro-poor because of high-growth elasticities of poverty and lower income inequality.