India's Growth in the 2000s: Four Facts

35 Pages Posted: 23 Nov 2011

See all articles by Utsav Kumar

Utsav Kumar

Asian Development Bank

Arvind Subramanian

International Monetary Fund (IMF); Center for Global Development

Date Written: November 21, 2011

Abstract

This paper marks the first attempt at examining the growth performance across Indian states for the 2000s, a period also marked by the global financial crisis. Four key findings are reported. First, consistent with the fact that the 2000s was the best ever decade for Indian macroeconomic performance, growth increased across almost all major states in 2001-09 compared to 1993-2001. Second, nevertheless, there is a continued phenomenon of divergence or rising inequality across states: On average the richer states in 2001 grew faster in 2001-09. Third, during the crisis years of 2008 and 2009, states with the highest growth in 2001-07 suffered the largest deceleration. Since states with the highest growth were also the most open, it seems that openness creates dynamism and vulnerability. Finally, although the demographic dividend -- a young population boosting economic dynamism -- was evident before 2000, there is little evidence that there was any dividend in the 2000s. Demography alone cannot be counted on for future economic growth.

Keywords: India, economic growth, aggregate productivity, cross-country output convergence, Asia, Middle East

JEL Classification: O40, O47, O53

Suggested Citation

Kumar, Utsav and Subramanian, Arvind, India's Growth in the 2000s: Four Facts (November 21, 2011). Peterson Institute for International Economics Working Paper No. 11-17. Available at SSRN: https://ssrn.com/abstract=1962855 or http://dx.doi.org/10.2139/ssrn.1962855

Utsav Kumar

Asian Development Bank ( email )

6 ADB Avenue
Central and West Asia Department
Mandaluyong City
Philippines

HOME PAGE: http://works.bepress.com/kumarutsav/

Arvind Subramanian (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

Center for Global Development

2055 L St. NW
5th floor
Washington, DC 20036
United States

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