Correct Option
The correct option is (d).
Explanation
The relationship between economic growth and poverty reduction is central to development economics. In the Indian context, empirical data demonstrates that higher Gross Domestic Product (GDP) growth creates the fiscal space for social spending and generates employment, thereby facilitating poverty alleviation.
Statement-wise Analysis
- Statement 1 is Correct: From independence until the early 1980s, India experienced what is often termed the "Hindu rate of growth," averaging around 3.5% annually. Due to a simultaneous high rate of population growth, the growth in per capita income was very low. Consequently, there was no significant structural reduction in poverty levels during this period.
- Statement 2 is Correct: Since the 1980s, and particularly after the economic reforms of 1991, India's economic growth trajectory shifted upwards. India consistently ranked among the fastest-growing major economies in the world during this phase.
- Statement 3 is Correct: There is a strong correlation between economic growth and poverty reduction. The acceleration in growth since the 1980s coincided with a significant decline in poverty ratios. Higher growth generates government revenues required for poverty alleviation programmes and creates income-generating opportunities for the workforce.
Key Takeaway: Economic growth is a necessary, though not always sufficient, condition for poverty reduction. In India, the acceleration of growth post-1980s is directly linked to a substantial decline in the poverty headcount ratio.