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Income Convergence and Regional Growth in India

Author

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  • Rasika P. Chikte

    (University of Oklahoma, Norman, USA 11018; Le Jardin Cir, Unit 202, Temple Terrace, FL 33617, USA. Emails: rasika@ou.edu; chikterp@yahoo.com)

Abstract

In this article I study regional growth and sub-national income convergence in India in the context of economic reforms that have been undertaken since 1991. I also examine convergence in development inputs such as population growth, literacy and investment at the sub-national level. My results show that there is a strong evidence of divergence in per capita income of the 15 states studied in the sample. The standard deviation of net state domestic product has increased over time indicating no evidence of convergence in the pre- or post-reform period. Population, state capital expenditure and commercial bank credit have also diverged over time across these 15 Indian states. However, literacy shows evidence of convergence across states.

Suggested Citation

  • Rasika P. Chikte, 2011. "Income Convergence and Regional Growth in India," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 12(2), pages 239-269, September.
    • Handle: RePEc:sae:soueco:v:12:y:2011:i:2:p:239-269
    DOI: 10.1177/139156141101200203
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    References listed on IDEAS

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    7. Sanghamitra Bandyopadhyay, 2011. "Rich States, Poor States: Convergence And Polarisation In India," Scottish Journal of Political Economy, Scottish Economic Society, vol. 58(3), pages 414-436, July.
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    9. Piyaporn Sodsriwiboon & Sanjay Kalra, 2010. "Growth Convergence and Spillovers among Indian States: What Matters? What Does Not?," IMF Working Papers 2010/096, International Monetary Fund.
    10. Grier, Kevin & Grier, Robin, 2007. "Only income diverges: A neoclassical anomaly," Journal of Development Economics, Elsevier, vol. 84(1), pages 25-45, September.
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    Cited by:

    1. Abhimanyu Dadu & Namrata Gulati, 2014. "Inequality, neighborhoods and variation in prices," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2014-001, Indira Gandhi Institute of Development Research, Mumbai, India.

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    More about this item

    Keywords

    JEL: O18; JEL: O2; JEL: O40; JEL: R11; Economic growth; convergence; economic reforms; regional inequality; India; Asia;
    All these keywords.

    JEL classification:

    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • O2 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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