State Heterogeneity, Redistributive Policy and Pro-Poor Growth: Evidence from India with a special reference to Education


Amartya Paul and Srikanta Kundu


BASE University Working Paper Series: 15/2022


Does redistributive policy make economic growth pro-poor? We investigate this for India by using a set of axiomatic pro-poor growth indices and deprivation measures that are computed using nationally representative sample survey data from 1983 to 2011-12. Estimation using a linear panel shows that redistributive policies have a positive and significant impact on pro-poor growth, and a negative impact on poverty. The results are consistent irrespective of the initial conditions of the state, across income groups and for an alternative measure. An endogenously determined threshold level of education, estimated from a non-linear threshold panel model reveals that policy impacts are asymmetric for states that have attained a minimum threshold level of education.

Keywords: Pro-poor growth, Redistributive Policy, Education, Threshold Panel, India

JEL Classification: D63, H53, I32, I38