India: economic growth and income distribution in rural and urban areas.

This chapter addresses whether poverty has been reduced in both rural and urban areas in India. It is indicated that India had a share in global GDP of 6% in 2002, which is foreseen to rise to 11% by 2025. The share of agriculture in GDP is on the decline. High growth rates (over 8% per annum) seem to be achieved largely in the industrial and service sectors, and are benefiting mainly the high-income population groups in urban areas. The study also concludes that growth patterns exceeding 8% would reduce the share of real income in rural areas, largely because agricultural growth patterns remain lower than the rest of the economy.