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

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  • Catriona Purfield
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    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.

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    Bibliographic Info

    Paper provided by International Monetary Fund in its series IMF Working Papers with number 06/103.

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    Length: 16
    Date of creation: 01 Apr 2006
    Date of revision:
    Handle: RePEc:imf:imfwpa:06/103

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    Related research

    Keywords: Economic reforms; Economic growth; Income distribution;

    This paper has been announced in the following NEP Reports:

    References

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    Citations

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    Cited by:
    1. Fleisher, Belton M. & Li, Haizheng & Zhao, Min Qiang, 2008. "Human Capital, Economic Growth, and Regional Inequality in China," IZA Discussion Papers 3576, Institute for the Study of Labor (IZA).
    2. Petia Topalova, 2008. "India: Is the Rising Tide Lifting All Boats?," IMF Working Papers 08/54, International Monetary Fund.
    3. Amartya Lahiri & Kei-Mu Yi, 2009. "A Tale of Two States: Maharashtra and West Bengal," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 12(3), pages 523-542, July.

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