In India, the government provides agricultural electricity subsidies amounting to 85% of the average cost of supply to encourage agricultural production and economic growth, especially among the rural poor. However, these agricultural input subsidies may compromise environmental quality and have the potential to reduce agricultural output in the long run. This article provides an overview of these subsidies in India, detailing the rationale behind their introduction and their evolution over time. It then examines the benefits of the subsidies, notably a rise in agricultural productivity and an increase in rural incomes. In addition, it considers the environmental and economic costs of this policy: accelerated groundwater extraction, increased electricity usage and in turn greenhouse gas emissions, a contribution to the intermittent and lowquality electricity service characteristic of India, and potential impacts on industrial growth. The authors then broaden the lessons learned from electricity subsidies in India to other countries and contextualize these findings within the discussion on environment and development.

This paper examines changes in living conditions in the six villages in Andhra Pradesh and Maharashtra, initially surveyed during 1975-84. We link the original Village Level Survey (VLS) households to a new survey in the villages conducted during 2001-04 and further extensive survey work in 2005-06, including tracking survey of all individuals ever interviewed in the original VLS. Despite issues related to attrition and changes in the survey instruments, we find that monetary welfare indicators (such as incomes, assets, consumption and poverty), and non monetary indicators of well-being (such as basic literacy, education and health outcomes) have improved considerably. We find the considerable attrition rates observed can be linked to within-household relational variables such as gender, relationship to the head and birth order. Migrants have experienced faster welfare improvements than non-migrants, but more analysis is needed to confirm whether this is due to their initial characteristics or due to their migration. Finally, we explore the correlates of consumption and income growth, and changes in poverty. We find that consumption growth is linked to initial households characteristics, in particular the presence of high literacy in the household, and of young children, especially boys, in the baseline year (1983) is strongly correlated with growth. Other assets, such as land, have a negligible impact, suggesting that labour and human capital have been instrumental for growth. Poverty declined in all villages, but especially in the Mahbubnagar villages in Andhra Pradesh. Labour endowments and literacy appear to have been crucial. Surprisingly, lower caste groups have experienced faster poverty declines, although this effect is largely confined to Mahbubnagar in Andhra Pradesh. ContentsAbstract and acknowledgements (i) 10 2. The Data

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