Impact of Financial Development, Economic Growth, and Public Outlay on Alleviating Poverty in India

Abstract

The present study was intended to investigate the main determinants of poverty from 1980–2021. The empirical results revealed that financial development, economic growth, and government expenditure were helpful in reducing poverty in India. In addition, the causality showed that there was bidirectional causation between economic growth and government expenditure, while there was unidirectional causation between financial development and poverty. Based on the empirical findings, the possible policy implications were that banks should provide more funds at a low cost that will increase income and reduce poverty directly and indirectly. Furthermore, the government should invest more in developmental activities, formulate job-oriented policies and educational schemes that provide jobs, enhance human capital, and spur long-term economic growth.