Does economic growth have an impact on poverty in India?

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Abstract

This research study is focused on discerning the impact of economic growth on poverty in India. To conduct the study, quantitative approach with secondary research method was used. Secondary research method was used because data was collected through secondary sources including World Bank and OCED database for statistics pertaining to economic growth and poverty variables. For quantitative study, eight factors representing economic growth and eight other factors aptly representing poverty were selected upon which data ranging between 7-12 years were collected so as to apply quantitative method for data analysis. With the collection of the data, one variable of economic growth was matched against most appropriate poverty variable for which scatter plot was drawn, following which trend line was generated. Regression equation was also determined and Pearson coefficient of determination was also calculated so as to indicate the strength of the model. Eight scatter plots were generated using 16 variables so as to effectively represent economic growth and poverty from multiple dimensions in an attempt to determine valid and reliable correlation. Following this analysis, it was found that economic growth significantly impact poverty in India with six out of eight scatter grams indicating the same.

CHAPTER 1: INTRODUCTION1

Hypothesis1

Background1

Aim3

Significance3

Outline4

CHAPTER 3: METHODOLOGY5

Research Design5

Research Questions5

Importance of the chosen methodology6

Limitations of the chosen methodology6

CHAPTER 4: DATA ANALYSIS AND DISCUSSION8

Application of Multivariate regression22

In the light of Economic Growth and Poverty-related Theories24

CHAPTER 5: CONCLUSION26

Limitations28

Recommendations29

REFERENCES30

CHAPTER 1: INTRODUCTION

Hypothesis

The hypothesis that this study will test; as also reflected in the topic of the dissertation, is stated below along with its null hypothesis:

Research or Alternative Hypothesis (H1): Economic growth produces an impact on Poverty.

Null Hypothesis (H0): Economic growth does not produce any impact on Poverty.

Background

India is an emerging market which boosts significant economic growth; however, despite this economic growth that is apparent in India, there exists widespread poverty in India. As defined by researchers and disparate sociologists, poverty is primarily a condition where people belonging to certain class or income level fail to fulfil basic needs remaining within the income they earn. India is considered as among such countries where majority of the population is living below the poverty line. It was found that highest number of poor people reside in India with around 300 to 400 million people out of an Indian population of approximately 1 billion people being poor; living below the poverty line.

Furthermore, the impact of economic growth is not found to be significant enough upon rural areas and poor people and in the reduction in poverty because of major chunk; almost 75%, of the poor people live in the rural areas where people mainly live life as daily wagers. Although poverty comprises of rural as well as urban poverty, rural poverty is recorded as significantly higher than urban poverty in India (Sharma and Panagiotidis, 2005, pp. 240). The reasons that are characterised as the basic factor behind this are the unequal distribution of income, progressively increasing population, illiteracy, large families and caste ...