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Mind the Gap—Is Economic Growth in India Leaving Some States Behind?

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  • Miss Catriona Purfield

Abstract

This paper examines how growth has varied across India's states. It finds that (i) the income gap between rich and poor states has widened; (ii) rich and faster-growing states have been more effective in reducing poverty; (iii) poor and slower-growing states have had little success in generating private sector jobs; (iv) labor and capital flows do little to close income gaps; and (v) the volatility in economic growth is greatest in poor states. Differences in states' policies affect the cross-state pattern of growth. Greater private sector investment, smaller governments, and better institutions are found to have a positive impact on growth.

Suggested Citation

  • Miss Catriona Purfield, 2006. "Mind the Gap—Is Economic Growth in India Leaving Some States Behind?," IMF Working Papers 2006/103, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2006/103
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    WP; state; growth performance;
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