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Shedding Light on Regional Growth and Convergence in India

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  • Chanda, Areendam
  • Kabiraj, Sujana

Abstract

One of the well documented facts about India's rapid growth since 1991 has been the accompanying unequal sub-national experiences. In this paper, using unsaturated night-light data for 1996-2010, we investigate patterns of growth at the district level. We find evidence of absolute convergence. Disaggregating along rural and urban dimensions, we also show that this is mainly due to faster growth in rural areas. Further, districts that have grown faster are ones that are geographically disadvantaged - further away from the coast, with lower agricultural suitability of land, and more rugged terrains. The convergence results are also robust to a few of the major policy initiatives that overlapped during this time.

Suggested Citation

  • Chanda, Areendam & Kabiraj, Sujana, 2017. "Shedding Light on Regional Growth and Convergence in India," MPRA Paper 92506, University Library of Munich, Germany, revised 15 Dec 2018.
    • Handle: RePEc:pra:mprapa:92506
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    2. Beyer, Robert & Yao, Jiaxiong & Hu, Yingyao, 2022. "Measuring Quarterly Economic Growth from Outer Space," VfS Annual Conference 2022 (Basel): Big Data in Economics 264007, Verein für Socialpolitik / German Economic Association.
    3. Priyaranjan Jha & Karan Talathi, 2021. "Impact of Colonial Institutions on Economic Growth and Development in India: Evidence from Night Lights Data," CESifo Working Paper Series 9031, CESifo.
    4. Beyer, Robert C.M. & Franco-Bedoya, Sebastian & Galdo, Virgilio, 2021. "Examining the economic impact of COVID-19 in India through daily electricity consumption and nighttime light intensity," World Development, Elsevier, vol. 140(C).
    5. Beyer, Robert C.M. & Jain, Tarun & Sinha, Sonalika, 2023. "Lights out? COVID-19 containment policies and economic activity," Journal of Asian Economics, Elsevier, vol. 85(C).
    6. Priyaranjan Jha & Karan Talathi, 2023. "Trade liberalization and local development in India: evidence from nighttime lights," Indian Economic Review, Springer, vol. 58(1), pages 61-83, July.
    7. Syed Abul Basher & Salim Rashid & Mohammad Riad Uddin, 2023. "Regional convergence in Bangladesh using night lights," Applied Economics Letters, Taylor & Francis Journals, vol. 30(18), pages 2581-2588, October.
    8. Syed Abul, Basher & Jobaida, Behtarin & Salim, Rashid, 2022. "Convergence across Subnational Regions of Bangladesh – What the Night Lights Data Say?," MPRA Paper 111963, University Library of Munich, Germany.
    9. Ajit Nag & Jalandhar Pradhan, 2023. "Does club convergence matter? Empirical evidence on inequality in the human development index among Indian states," Palgrave Communications, Palgrave Macmillan, vol. 10(1), pages 1-12, December.
    10. Costa de Arguibel Facundo & Sánchez Vargas Isabela & González Fernando Antonio Ignacio & Dip Juan Antonio, 2023. "Convergencia entre distritos argentinos: Un enfoque de econometría espacial," Asociación Argentina de Economía Política: Working Papers 4638, Asociación Argentina de Economía Política.
    11. Ahmad, Zofia & Chicoine, Luke, 2021. "Silk Roads to Riches: Persistence Along an Ancient Trade Network," MPRA Paper 105146, University Library of Munich, Germany.
    12. Matthieu Charpe, 2023. "Convergence heterogeneity at the local level in sub‐Saharan Africa," Papers in Regional Science, Wiley Blackwell, vol. 102(2), pages 273-305, April.
    13. Chanda, Areendam & Cook, C. Justin, 2022. "Was India’s demonetization redistributive? Insights from satellites and surveys," Journal of Macroeconomics, Elsevier, vol. 73(C).
    14. World Bank, 2020. "India Development Update, July 2020," World Bank Publications - Reports 34367, The World Bank Group.
    15. Bibek Adhikari & Saroj Dhital, 2021. "Decentralization and regional convergence: Evidence from night‐time lights data," Economic Inquiry, Western Economic Association International, vol. 59(3), pages 1066-1088, July.
    16. Nurlatifah Hartojo & Mohamad Ikhsan & Teguh Dartanto & Sudarno Sumarto, 2022. "A Growing Light in the Lagging Region in Indonesia: The Impact of Village Fund on Rural Economic Growth," Economies, MDPI, vol. 10(9), pages 1-19, September.
    17. Syed Basher & Francesca Di Iorio & Stefano Fachin, 2020. "Regional Income Dynamics in Bangladesh: The Road to a Balanced Development is in the Middle," DSS Empirical Economics and Econometrics Working Papers Series 2021/1, Centre for Empirical Economics and Econometrics, Department of Statistics, "Sapienza" University of Rome.
    18. Priyaranjan Jha & Karan Talathi, 2023. "Trade Liberalization and Local Development in India: Evidence from Nighttime Lights," CESifo Working Paper Series 10294, CESifo.
    19. Priyanka Dutta & Hemanta Barman, 2022. "Services sector growth and interstate income divergence in India," Asia-Pacific Journal of Regional Science, Springer, vol. 6(3), pages 995-1015, October.

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    More about this item

    Keywords

    Convergence; Regional Growth; India; Rural-Urban; Night Lights;
    All these keywords.

    JEL classification:

    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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