Impact of Agriculture Growth on Poverty Reduction: A Case of Karnataka, India

Abstract

Karnataka is one of the progressive states in the country even though it experiences the challenges of poverty and it has wide variation, depending on rural-urban disparities, region, caste, and religion. Agriculture as primary sector contribute notably to the country’s Gross Domestic Product (GDP) and being main occupation for majority population acts as largest source of livelihood for the rural poor by creating enormous employment opportunities thus by increasing the income levels, agriculture play a key role in reducing poverty. The present study was conducted to analyse the impact of agriculture growth on poverty reduction in Karnataka state by using secondary data. The relationship between poverty, agriculture GDP per worker and non-agriculture GDP per worker was analysed using pooled panel regression analysis. The results of the study shows that contribution of agriculture sector was far more in decreasing poverty than the non-agricultural sector, as every one per cent increase in agriculture GDP per worker reduced poverty by 1.36 per cent as against 0.80 per cent in non-agriculture GDP per worker. As majority of people depends on agriculture for their livelihood, it is evident that the agriculture sector has a greater impact on alleviating poverty among rural population. However, it suggested that the balanced growth across all three sectors of the economy will help to reduce the poverty rates by increasing income level of the population.