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Convergence Club Empirics: Some Dynamics and Explanations of Unequal Growth across Indian States

  • Bandyopadhyay, Sanghamitra

This paper documents the convergence of incomes across Indian states over the period 1965 to 1998. It departs from traditional analyses of convergence by tracking the evolution of the entire income distribution, instead of standard regression and time series analyses. The findings reveal twin-peaks dynamics - the existence of two income convergence clubs, one at 50 per cent, another at 125% of the national average income. Income disparities across states seem to have declined over the sixties, only to increase over the following three decades. The observed polarization is strongly explained by the disparate distribution of infrastructure, and that of education, and to an extent by a number of macroeconomic indicators, that of capital expenditure and fiscal deficits.

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Paper provided by World Institute for Development Economic Research (UNU-WIDER) in its series Working Paper Series with number UNU-WIDER Research Paper DP2003/77.

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Length: 28 pages
Date of creation: 2003
Date of revision:
Handle: RePEc:unu:wpaper:dp2003-77
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