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Internal Migration, Center-State Grants and Economic Growth in the States of India

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  • Mr. Paul Cashin
  • Ms. Ratna Sahay

Abstract

This paper examines the growth experience of twenty states of India during the period 1961-91, using cross-sectional estimation and the analytical framework of the Solow-Swan neoclassical growth model. We find evidence of absolute convergence--initially-poor states did indeed grow faster than their initially-rich counterparts. There has also been a widening of the dispersion of real per capita state incomes over the period 1961-91. However, relatively more grants were transferred from the central government to the poor states than to their rich counterparts. Significant barriers to population flows also exist, as net migration from poor to rich states responded only weakly to cross-state income differentials.

Suggested Citation

  • Mr. Paul Cashin & Ms. Ratna Sahay, 1995. "Internal Migration, Center-State Grants and Economic Growth in the States of India," IMF Working Papers 1995/066, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:1995/066
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    Keywords

    WP; per capita income; center-State grant; least squares; cross-state migration calculation; closed economy; European OECD country; vital statistics; income elasticity; government of India; constant term; State income; rural-to-rural migration; elasticity of migration; Personal income; Migration; Public expenditure review; Disposable income; Europe;
    All these keywords.

    JEL classification:

    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
    • 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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