Regional Income Disparity and Government Intervention in India

Bharatee Dash

South Asia Economic Journal, 2014, vol. 15, issue 2, 281-314

Abstract: This study examines the relationship between the fiscal intervention of the government and regional income disparity in 14 major Indian states. The impact of decentralization on the regional disparity of these states is also examined. The findings suggest that both policy measures have reduced the level of regional disparity. This study has also investigated the impacts of policy measures on regional income disparity within the clusters of states of similar income levels. Results suggest that both types of policy interventions have reduced regional disparity in low-income states, whereas only fiscal intervention is found significant in reducing regional disparity in middle-income states. Surprisingly, no relation is found between regional disparity and the policy measures in high-income states.

Keywords: Government intervention; regional disparity; local governments; Indian states; constitutional amendments (search for similar items in EconPapers)
JEL-codes: H11 H71 R11 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:sae:soueco:v:15:y:2014:i:2:p:281-314

DOI: 10.1177/1391561414548953

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