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

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

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Length: 28 pages
Date of creation: 28 Apr 2006
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Handle: RePEc:imf:imfwpa:06/103

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Keywords: Conversions ; state level growth ; economic reforms ; Economic growth ; India ; Economic reforms ; Income distribution ;

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  1. 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. [Downloadable!] (restricted)
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