Mind the Gap - is Economic Growth in India Leaving Some States Behind?

28 Pages Posted: 17 May 2006

Date Written: April 2006

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.

Keywords: Conversions, State Level Growth, Economic Reforms

JEL Classification: E61, E66, O18, O40, O47, O53

Suggested Citation

Purfield, Catriona, Mind the Gap - is Economic Growth in India Leaving Some States Behind? (April 2006). IMF Working Paper, Vol. , pp. 1-28, 2006. Available at SSRN: https://ssrn.com/abstract=902757

Catriona Purfield (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

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