Economic growth has a far greater impact on poverty alleviation than inequality and India needs to focus on growth to lift poor out of poverty, the Economic Survey for 2020-21 said on Friday.
The Survey said that unlike in advanced economies, in India, economic growth and inequality converge in terms of their effects on socio-economic indicators.
"Economic growth has a far greater impact on poverty alleviation than inequality… Given India''s stage of development, India must continue to focus on economic growth to lift the poor out of poverty by expanding the overall pie" it said.
The survey noted that redistribution is only feasible in a developing economy if the size of the economic pie grows.
It also pointed out that China has made exceptional strides in reducing its extreme poverty rates since 1970s.
As per data from China National Bureau of Statistics, the head count ratio of poverty has reduced by 94 per cent from 1980 to 2015 in rural China.
The Economic Survey 2019-20 had also argued that ethical wealth creation — by combining the invisible hand of markets with the hand of trust — provides the way forward for India to develop economically.