Agricultural Resources Information System (AgRIS): An e ...

play a crucial role in aggregate poverty reduction. A well-known
stylized fact about rural poverty in India is that agricultural
laborers are highly represented among the rural poor in most
parts of the country.
1.5 Economic growth and poverty reductions were unimpressive
during the 1960s and 1970s, as India was weakly integrated into
the global economy and had relied heavily on planning and
licensing. The accelerated growth, during 1980s, was due to
unsustainable public spending and foreign borrowing. A large
share of total non-farm investment in India has been directed
at public works projects 6 , especially during the 1980s. However,
sustaining these expenditures during the 1990s has been
difficult, in the face of fiscal constraints, and this has resulted
in a slowdown of public investment-induced poverty reduction in
recent years.
1.6 Public works projects (a pro-rural-industry investment
climate) have also played a role in China and an estimated 31
percent of the rural labor force in China is employed in rural
industry, compared to 18 percent in India. Rural enterprises in
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