Macroeconomic Policy, Inequality and Poverty Reduction in India and China C.P. Chandrasekhar & Jayati Ghosh

[Working Paper No. 05/2006] 

The two “success” stories of globalisation, India and China, characterised by the high and sustained rates of growth of aggregate and per capita national income, the absence of major financial crises and substantial reduction in income poverty, along with their significant impact on global inequalities make a good case for a comparison of the nature of macroeconomic policies in these two countries, and the extent to which these have been “pro-poor”. This paper attempts such an examination, assessing the growth performance and its impact on poverty and inequality in these two countries, and also specifically addressing the question of how their macro policies have contributed to the observed outcomes. The paper deals with the Indian and Chinese experiences in separate sections, followed by a comparative assessment and some relevant policy conclusions.

WP_05_2006  (Download the full text in PDF format)