Adjustment and Distribution: The Indian Experience

Abstract

This paper attempts to assess the distributive impact of the economic adjustment program in India. It begins by discussing the analytical complexi¬ties of disentangling the impact of reforms from that of other autonomous de-velopments in the economy It then goes on to isolate and analv/e the main cause-effect linkages between adjustment and distribution. I'he paper points out that there has been a distinct increase in poverty incidence in the post-adjustment period, but that this cannot be automatically attributed to adjustment. The natural growth of the workforce, combined with the slowdown in growth on account of stabilization, led to some increase in unemployment However, the paper argues that this alone could not account for the increase in poverty incidence. The latter is mainly attributable to a sharp increase in administered food prices, a political decision which had little to do with reforms.