Regional Income Disparities in India and Test for Convergence - 1980 to 2006

Astha Agarwalla and Prem Pangotra

No WP2011-01-04, IIMA Working Papers from Indian Institute of Management Ahmedabad, Research and Publication Department

Abstract: We examine trends in regional disparities in India over a period of 26 years (1980 to 2006). There are wide and increasing variations in economic performances of states over time. We have employed panel data estimation method based on the neo-classical framework. The analysis is based on 25 state economies in India. Results of the analysis suggest convergent trend in regional incomes, conditional upon growth rates of inputs, and rate of technological progress. Speed of convergence has been faster during the period 1992-2006, when Indian economy embarked upon detailed structural reforms. Incomes of the special category states have experienced convergence at a higher rate.

Date: 2011-01-12
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