Free India's Economic Growth Essay Sample
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In the paper, Datt and Ravallion do examine the household survey which is based on the measures on poverty reduction from 1951 to 2006. They concluded that several factors that include the growth in the urban economies and the post reform era, the two were played a very crucial role by playing a part in the economic growth and also playing a part in the poverty reduction in India. It had earlier been assumed that the major force that played a part in the reduction of poverty in the country growth of the economy in the rural areas also it was assumed that the growth in the urban economic contributed very minimal or no benefits to the poor people in the rural area.
Datt and Ravallion in the paper found a huge connection of evidence from the feedback effect, which is possible with the application of migration, trade and transfers. It is by the growth in the urban economic to the rural reduction of poverty that is led by the distributional effect that will emanate from the growth in the urban areas which will play a part in the growth of the poor people in India's rural areas during the period of post reform.
Poverty is reduced in the rular areas due to activities such as the poor people migrate to urban areas in search of jobs. After they get jobs in the urban areas, the work towards poverty reduction in the rural areas through them taking care of those who they left back in the villages by them ensuring that they send financial remittances back to those in the village. This has two benefits in that it reduces the demand for jobs in the rural areas and people can easily get these jobs in the areas and thus help in the maintenance of an upward pressure that exists in the rural wages.
All this with the addition of the compositional effect of that are caused by the migration of the people to the cities leading to the decrease in the number of those who live in the rural areas that are considered to be poor, it works in the flattering of the statistics in the rural growth and thus has the effect of deceiving the figures in the urban areas. They also argued that the increasing important role that is played by the growth in the urban economic towards the reduction of poverty (and the way this translates towards the economic growth in the rural areas) may have a substantial explanation on the high rate of growth in the rural area compared to that in the urban areas, in the last decade. The high growth rate in the rural areas has drawn a lot of attention in the recent past which has been caused by the urban migration, this may be because the higher urban growth due to the migration may have been a positive cause of increase or growth of a vibrant life in the rural economies.
All the externalities that are positive and the continued economic multiplier which has been associated by the economic growth in the urban which work to underline the crucial role that is played by cities in India towards the economic prospects. There is a huge danger that if there are no sufficient investments that are made to the infrastructure in the urban areas, the rapid urbanization and from the huge migration from the poor people in the rural areas, there will be huge costs that will be imposed which can work to overburden and work in the derailment of the growth in the urban economy. Therefore India has to employ various measures to ensure it growth.