Montek S. Ahluwalia

Bio: Montek S. Ahluwalia is an academic researcher from Planning Commission (India). The author has contributed to research in topics: Poverty & Income distribution. The author has an hindex of 17, co-authored 38 publications receiving 2902 citations. Previous affiliations of Montek S. Ahluwalia include World Bank & International Bank for Reconstruction and Development.

Economic Reforms in India Since 1991: Has Gradualism Worked?

Abstract: Opinions on the causes of India's growth deceleration vary. World economic growth was slower in the second half of the 1990s, and that would have had some dampening effect, but India's dependence on the world economy is not large enough for this to account for the slowdown. Critics of liberalization have blamed the slowdown on the effect of trade policy reforms on domestic industry. However, the opposite view is that the slowdown is due not to the effects of reforms, but rather to the failure to implement the reforms effectively. This in turn is often attributed to India's gradualist approach to reform, which has meant a frustratingly slow pace of implementation. However, even a gradualist pace should be able to achieve significant policy changes over ten years. This paper examines India's experience with gradualist reforms from this perspective.

Income Distribution and Development: Some Stylized Facts

Abstract: In recent years, the relationship between income distribution and the process of development has come under increasing scrutiny. Much of the debate has focused on the hypothesis, originally advanced by Simon Kuznets, that the secular behavior of inequality follows an inverted U-shaped pattern with inequality first increasing and then decreasing with development. This hypothesis has become so much a part of the conventional wisdom on this subject that it has generated considerable skepticism about the welfare implications of the development process. Indeed, on some interpretations, developing countries face the grim prospect not just of increasing relative inequality, but also of declining absolute incomes for the lower income groups.

Rural poverty and agricultural performance in India

Abstract: Time-series evidence on rural poverty over the past two decades in India is examined. In general, the time series shows a pattern of fluctuation, with the incidence of poverty falling during periods of good agricultural performance and rising during periods of bad performance. The incidence of poverty in all of India is inversely related to agricultural performance measured in terms of agricultural NDP per rural person. This correlation between poverty and agricultural performance suggests that faster agricultural growth might have led to reduced poverty rates. The state level analysis demonstrates a similar significant inverse relationship in at least seven states, accounting for 75 percent of the rural poor. On the other hand, state level analysis also shows that there may be a process at work in the rural economies that tends to increase poverty over time. The existence of an underlying force within the rural economy is extremely important. The nature of these forces, their variation across states, and technique to mitigate their effects require further analysis. Statistical data are included. 20 references.

Inequality and Growth in a Panel of Countries

Abstract: Evidence from a broad panel of countries shows little overall relation between income inequality and rates of growth and investment. For growth, higher inequality tends to retard growth in poor countries and encourage growth in richer places. The Kuznets curve—whereby inequality first increases and later decreases during the process of economic development—emerges as a clear empirical regularity. However, this relation does not explain the bulk of variations in inequality across countries or over time.

How important to India's poor is the sectoral composition of economic growth?

Abstract: Using a new series of consistent, consumption-based poverty measures spanning forty years, the author assess how much India's poor shared in the country's economic growth, taking into account its urban-rural and output composition. Rural consumption growth reduced poverty in both rural and urban areas. Urban growth brought some benefits to the urban poor, but had no impact on rural poverty. And rural-to-urban population shifts had no significant impact on poverty. Decomposing growth by output sectors, we found that output growth in the primary and tertiary sectors reduced poverty in both urban and rural areas but that secondary sector growth did not reduce poverty in either.