Poverty and Inequality among Social Groups in Rural India

This study examines economic disparity among social groups in rural India. While the pace of poverty reduction for disadvantaged groups, who benfited from both economic growth and redistribution, surpassed that of other caste households during the period from 1999-2006, they remain the most poor among the rural poor. This study’s decomposition analysis confirms that they are not only less wealthy than other castes but also have lower returns on their assets due to discrimination or lower productivity. In addition, the contribution of the latter has become larger over time, implying that programs established by the government and development agencies to reduce economic disparity between two groups may be less effective. For example, an antipoverty program is vital, and the government also needs to strengthen the effectiveness of the current affirmative action programs. There are also lessons from South Korea’s past experience to be shared for the improvement of productivity.