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Determinants of economic growth at the subnational level in the Indian context: Role of governance

Author

Listed:
  • Shrawan, Aakanksha

    (National Institute of Public Finance and Policy)

Abstract

The present study attempts to assess the potential determinants of economic growth at the state-level for 27 Indian states for the period 2000-01 to 2021-22. We also incorporate a quantitative variable, unspent funds as a proportion of total budgeted expenditure, to control for the quality of governance, along with other macroeconomic and structural factors. The paper finds a negative and statistically significant impact of unspent funds on the per capita GSVA growth of the states under study at the aggregate level. In addition, we also evaluate the unique growth experiences of different states separately without assuming a homogeneous response of the explanatory variables on the growth processes of all states which might assist the policymakers in offering explanations for the better or worse performing states with respect to the same macroeconomic variable.

Suggested Citation

  • Shrawan, Aakanksha, 2024. "Determinants of economic growth at the subnational level in the Indian context: Role of governance," Working Papers 24/420, National Institute of Public Finance and Policy.
    • Handle: RePEc:npf:wpaper:24/420
    Note: Working Paper 420, 2024
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    File URL: https://www.nipfp.org.in/media/medialibrary/2024/11/WP_420_2024.pdf
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    More about this item

    Keywords

    GSVA Growth ; Unspent Funds ; Feasible Generalised Least Squares ; Industry ; India;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • L80 - Industrial Organization - - Industry Studies: Services - - - General

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