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Regional growth policy experience in India: the spatial dimension

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  • Biswajit Mohanty

    (A.B. College)

  • N. R. Bhanumurthy

    (National Institute of Public Finance and Policy)

Abstract

New Economic Geography (NEG) literature emphasizes that growth of regions across space may show different possible patterns or clustering because of spatial agglomeration of economic activities and spatial spill over in the growth process. Using exploratory spatial data analysis, the paper explores the spatial character of outcome variables of regional growth process—per capita income, growth of per capita income and employment—and its possible determinants. The results reveal that regional growth in India has a definite spatial character, showing different clustering in space: group of rich states, group of backward states, spatial outliers where a rich state is found among poor states or a poor state is seen among rich states. Such spatial patterns are found to be matching with the spatial pattern in possible determinants such as FDI, infrastructure, manufacturing, and service sector’s contribution to regional output. These findings suggest the need for differential policy treatments for different spatial cluster of states. Further, the policy-designs may also need to consider the negative spillover effects of growth process.

Suggested Citation

  • Biswajit Mohanty & N. R. Bhanumurthy, 2018. "Regional growth policy experience in India: the spatial dimension," Asia-Pacific Journal of Regional Science, Springer, vol. 2(2), pages 479-505, August.
    • Handle: RePEc:spr:apjors:v:2:y:2018:i:2:d:10.1007_s41685-018-0075-3
    DOI: 10.1007/s41685-018-0075-3
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    More about this item

    Keywords

    Regional growth; Spatial dimension; Exploratory spatial data analysis; India;
    All these keywords.

    JEL classification:

    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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