Infrastructure Inequality Across Indian States: Role of Economic, Social, Institutional, and Political Factors

Govinda R. Timilsina (), Pravakar Sahoo () and Ranjan Kumar Dash
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Govinda R. Timilsina: Development Research Group, World Bank, Washington, DC, United States
Pravakar Sahoo: Institute of Economic Growth, Delhi University, New Delhi, India
Ranjan Kumar Dash: Symbiosis School of Economics, Symbiosis International (Deemed) University, Pune, Maharashtra, India

Asian Development Review (ADR), 2025, vol. 42, issue 03, 137-173

Abstract: Infrastructure development is a major factor of interstate inequality in India’s economic development; however, much less is known about the causes of unequal infrastructure development. Using 11 parameters, this study develops three separate indices: physical, social, and financial infrastructures. It also examines the differential determinants using the system generalized method of moments model for 18 major states in India from 2005 to 2019. The results show that economic factors such as economic performance, financial development, investment, and economic structure have a pivotal impact on physical infrastructure. In addition to economic factors, fiscal (investment, capital expenditure, and internal debt) and demographic (urbanization, agglomeration, and scheduled caste and scheduled tribe population) factors emerge as more relevant in the case of social infrastructure. Political factors play an equally important role in all three types of infrastructure development. The magnitude and significance of drivers vary across the type of infrastructure considered.

Keywords: dynamic panel data; Indian states; inequality; infrastructure development (search for similar items in EconPapers)
JEL-codes: C33 G23 H57 N76 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1142/S0116110525500179

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