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Regional Income Disparity and Government Intervention in India

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  • Bharatee Bhusana Dash

Abstract

This study examines the relationship between the fiscal intervention of the government and regional income disparity in 14 major Indian states. The impact of decentralization on the regional disparity of these states is also examined. The findings suggest that both policy measures have reduced the level of regional disparity. This study has also investigated the impacts of policy measures on regional income disparity within the clusters of states of similar income levels. Results suggest that both types of policy interventions have reduced regional disparity in low-income states, whereas only fiscal intervention is found significant in reducing regional disparity in middle-income states. Surprisingly, no relation is found between regional disparity and the policy measures in high-income states.

Suggested Citation

  • Bharatee Bhusana Dash, 2014. "Regional Income Disparity and Government Intervention in India," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 15(2), pages 281-314, September.
    • Handle: RePEc:sae:soueco:v:15:y:2014:i:2:p:281-314
    DOI: 10.1177/1391561414548953
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    Cited by:

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    More about this item

    Keywords

    Government intervention; regional disparity; local governments; Indian states; constitutional amendments;
    All these keywords.

    JEL classification:

    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • 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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