Structural adjustment and its impact on the rural poor
Parikh, K.S.; Panda, M.
Entwicklung + Landlicher Raum 31(1): 14-16
1997
Document Number: 338753
The effects of structural reform measures introduced in India in 1991 were analysed with the help of a general equilibrium model. The analysis showed that trade liberalization helped to accelerate economic growth in the medium and long term by increasing allocative efficiency within agriculture and between agriculture and other sectors. The rural areas benefit and poverty declines from both agricultural and non-agricultural reforms. In the short run, however, the effects were adverse. The effects on rural areas of removing agricultural subsidies depended on how the savings were utilized. If they were used for general tax relief rural poverty increased and urban areas gained. If savings were used for productive rural investment, say in irrigation facilities, rural welfare increased.