The Effects of Globalization on Poverty Removal in India

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The Effects of Globalization on Poverty Removal in India!

Globalization is the new buzzword that come to dominate the world since the nineties of the last century with the end of the cold war and the breakup of the former Soviet Union and the global trends towards the rolling ball, globalization in the form of increased integration though trade and investment is a reason why much progress has been made in reducing poverty and global inequality over recent decades. But, it is not only the reason for this often unrecognized progress, good national policies, sound institutions and domestic political stability also matters.

Since 1991, and the advent of the era of economic reforms there has been considerable debate about the impact of these policies on the poor. The statistics on poverty show some significant decline in poverty in the pre-reform period; the head count ratios in both rural and urban areas fell continuously and consistently from 1973-74 (national head-court ratio 54%) to 1987-88 (head-count 37%) and after a slight rise then fell to about 35% in 1990. After 1991, poverty in rural areas rose again to around 44% with only a slight rise in urban areas, and though there has been some fall during the 1990’s, the fall has only been pronounced in urban areas. As more than 80% of the poor live in rural areas it would seem that the liberalization and reform process has no significant impact on reducing poverty, infact it suggests quite the reverse.

Although most recent survey evidence suggests a substantial reduction in poverty in rural as well as urban areas. The statistical evidence on changes in Equality is quite sparse, but the loreny ratios calculated from consumption distribution by the Planning Commission for rural and urban areas are suggestive of a marginal increase in disparities. The reform process has hardly touched agriculture.


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