Urban Growth and Rural Poverty in India: Evidence from National Sample Survey and Poverty Map Data

Date and Time

May 24, 2011

10:15 am to 12:00 pm


As part of our new Urban Workshop Series, the Centre for Policy Research (CPR) and Centre de Sciences Humaines (CSH), Delhi are delighted to invite you to a Workshop on Urban Growth and Rural Poverty in India: Evidence from National Sample Survey and Poverty Map Data by Peter Lanjouw (with Rinku Mugai)_________________________________________________________________________________________
Analysis of time series data on poverty in India has revealed a clearly discernable link between urban poverty decline and rural poverty decline. Previous analysis, focusing on the pre-reform period, had failed to identify an impact of urban development on rural poverty. This paper examines one possible route through which urban development might have come to exercise an influence on rural livelihoods: the impact of urban development on rural non-farm diversification. It shows that the non-farm sector in rural India has grown steadily during the past 25 years, with some acceleration during the late 1990s and first half of the present decade. This process has contributed to declining rural poverty both directly, through employment generation, and indirectly through an impact on agricultural wages. The paper illustrates that urban consumption growth contributes to growth in the rural non-farm economy, and thereby to rural poverty reduction. It speculates that the link from urban development to rural poverty reduction might have been stronger if urban poverty reduction had been centered in India’s smaller towns and cities. It is in such small towns and cities that the bulk of the urban poor are concentrated, and these same towns and cities are also more tightly connected to surrounding rural areas. The paper ends by asking whether the patterns described here are unique to India, and presents evidence for Brazil that suggest that a similar process may be underway there.Peter Lanjouw is the Research Manager of the Poverty Group in the Development Economics Research Group of the World Bank. He is also an Honorary Fellow of the Amsterdam Institute of International Development, Netherlands. Earlier, he was a visiting scholar at the Agriculture and Resource Economics Department at UC Berkeley, and he held the appointment of Professor of Economics at the VU University of Amsterdam. He has also taught at the University of Namur, Belgium, and at the Foundation for the Advanced Study of International Development in Tokyo, Japan. His research focuses on various aspects of poverty and inequality measurement as well as on rural development issues._________________________________________________________________________________________
The Urban Workshops by the Centre de Sciences Humaines (CSH), New Delhi and Centre for Policy Research (CPR) seek to provoke public discussion on issues relating to the development of the city and try to address all its facets including its administration, culture, economy, society, and politics. For further information, please contact: Marie-Hélène Zerah at or Partha Mukhopadhyay at