Economic Growth, Structural Transformation and Incidence of Poverty: Evidence from Kerala Economy

Abstract

In this paper, the emphasis is given to discussing the association between the growth rate and poverty reduction in Kerala. Kerala has become one of the states registering a high growth rate in the country. Kerala has undergone a structural change in growth and structural changes bear its effects on poverty and unemployment. In other words, poverty could be regarded as a declining function of the growth and structural change of an economy. Kerala, to a greater extent, stands testimony to this hypothesis. It is obvious that Kerala has registered remarkable progress in the growth rate of State Gross Domestic Product (SGDP) and the per capita income compared to other states in India. Compared to the past record of the State in the fifties, sixties, and seventies, the growth in production and service sectors in recent times has been more commendable. It is also found that the high growth that Kerala achieved in recent times has led to a commensurate decline in her poverty ratio compared to the all India levels and other states in India.