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

Author/Editor:

Catriona Purfield

Publication Date:

April 1, 2006

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

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.

Series:

Working Paper No. 2006/103

Subject:

Employment Labor Personal income Poverty Poverty reduction

English

Publication Date:

April 1, 2006

ISBN/ISSN:

9781451863635/1018-5941

Stock No:

WPIEA2006103

Pages:

28

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