Abstract
This article deals with the changing pattern of levels of living in the rural regions of India during the period of 1993–1994 to 2011–2012 which also corresponds to the on-going economic reforms. These changes may be attributed either to the change in growth component or to the change in equity component or to both. The article therefore examines the effects of growth and distribution components on the variations in levels of living and their relative roles by a scheme of algebraic decomposition. It also investigates the influence of socio-economic factors on levels of living using econometric models. National Sample Survey Organisation consumer expenditure data for 15 major states of India are used for this analysis. Results show an improvement in levels of living (actual) in rural areas of all Indian states. Positive growth effect more than compensates the negative distribution effect and yield positive changes in some of the states. Further, this article argues that the main drivers of this positive change in the levels of living are development of rural physical infrastructure, attainment in education, farm income per capita, non-farm employment and livelihood diversification.
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