Revisiting Regional Growth Dynamics in India in the Post Economic Reforms Period

276 Pages·2013·1.312 MB·English

by  Biswa Swarup Misra (auth.)

Revisiting Regional Growth Dynamics in India
in the Post Economic Reforms Period
Revisiting Regional
Growth Dynamics in
India in the Post
Economic Reforms Period
Biswa Swarup Misra
Professor and Acting Dean, Xavier Institute of Management,
Bhubaneswar, Orissa, India
© Biswa Swarup Misra 2013
Softcover reprint of the hardcover 1st edition 2013 978-1-137-30367-7
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First published 2013 by
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ISBN 978-1-349-45426-6 ISBN 978-1-137-30368-4 (eBook)
DOI 10.1057/9781137303684
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Dedicated to the Lotus Feet of Lord Jagannath
Contents
List of Illustrations xi
Preface xiii
Foreword xiv
Acknowledgements xvii
List of Abbreviations xix
1 Introduction 1
2 Key Challenges 6
2.1 Macroeconomic management 7
2.2 Centre–state and inter-state relations 1 3
2.3 Game-changer initiatives 1 8
2.4 Conclusion 23
3 Growth Performance 27
3.1 Growth performance 3 0
3.2 Sectoral growth performance 4 2
3.3 Sectoral contribution to growth 4 9
3.4 Variability of output 5 0
3.5 Contribution of states to growth in GDP and
population 52
3.6 Conclusion 54
Annex 3.1 Data Issues 5 7
Annex 3.2 Sectoral growth 2000–3 5 8
Annex 3.3 Sectoral growth 2004–8 6 0
Annex 3.4 Sectoral growth 2009–12 6 2
Annex 3.5 Sectoral growth 2000–12 6 4
Annex 3.6 Sectoral shares 2000–3 6 6
Annex 3.7 Sectoral shares 2004–8 6 8
Annex 3.8 Sectoral shares 2009–12 7 0
Annex 3.9 Sectoral shares 2000–12 7 2
Annex 3.10 Share of states in combined SDP and
population 74
Annex 3.11 Contribution to growth in combined
output and population 76
vii
viii Contents
Annex 3.12 Variability in sectoral output 78
Annex 3.13 Sectoral contribution to growth 80
4 Income Inequality 8 1
4.1 Consumption-based inequality 8 2
4.2 Behaviour of per capita income 8 5
4.3 Inequality measures 91
4.4 Convergence amongst Indian states 9 9
4.5 Conclusion 109
Annex 4.1 Estimates of absolute convergence
behaviour in cross-section and panel
dimension 111
5 Infrastructure and Growth 112
5.1 Approach to provision of infrastructure 1 13
5.2 Recent initiatives for infrastructure push 1 16
5.3 Infrastructure index 118
5.4 Infrastructure index – Relative position of states 123
5.5 Infrastructure and growth 125
5.6 Conclusion 130
Annex 5.1 Causality between social and economic
infrastructure for general category states 131
Annex 5.2 Causality between social and economic
infrastructure for special category states 132
Annex 5.3 Causality between growth in SDP and
growth in economic infrastructure for GCS 1 33
Annex 5.4 Causality between growth in SDP and
growth in social infrastructure for GCS 134
Annex 5.5 Causality between growth in SDP and
growth in overall infrastructure for GCS 1 35
Annex 5.6 Causality between growth in SDP and
growth in economic infrastructure for SCS 1 36
Annex 5.7 Causality between growth in SDP and
growth in social infrastructure for SCS 1 37
Annex 5.8 Causality between growth in SDP and
growth in overall infrastructure for SCS 138
Annex 5.9 Overall Infrastructure Index – General
category states (2001–10) 1 39
Annex 5.10 Overall Infrastructure Index – special
category states (2001–10) 1 46
Contents ix
Annex 5.11 Infrastructure Index with qualitative
dimensions for general category states
(2004–10) 150
Annex 5.12 Infrastructure Index with qualitative
dimensions for special category states
(2004–10) 154
6 Health and Growth 157
6.1 Review of the literature 160
6.2 Stylised facts 162
6.3 Empirical methodology 174
6.4 Results 179
6.5 Concluding observations 184
Annex 6.1 Panel unit root tests 185
Annex 6.2 Panel cointegration tests 186
7 Credit and Growth 187
7.1 Growth of credit and credit allocation
across sectors 189
7.2 Credit–output growth at the state level 1 93
7.3 Shares of different sectors in
credit and output 198
7.4 Methodology and empirical results 2 01
7.5 Conclusion 204
Annex 7.1 Credit-SDP growth 2001–4 2 06
Annex 7.2 Credit-SDP growth 2005–8 2 08
Annex 7.3 Credit-SDP growth 2009–11 2 10
Annex 7.4 Credit-SDP growth 2001–11 2 12
Annex 7.5 Sectoral shares in credit and
output 2001–4 2 14
Annex 7.6 Sectoral shares in credit and
output 2005–8 2 15
Annex 7.7 Sectoral shares in credit and
output 2009–11 2 16
Annex 7.8 Sectoral shares in credit and
output 2001–11 2 17
Annex 7.9 Panel unit root tests – general
category states 2 18
Annex 7.10 Panel unit root tests – special
category states 2 19
x Contents
Annex 7.11 Panel cointegration tests 220
Annex 7.12 FMOLS estimates of responsiveness
between credit and output 221
Notes 2 24
Bibliography 2 26
Index 241
List of Illustrations
Tables
3.1 Growth of the Indian economy 30
3.2 Growth of GSDP, population and
per capita GSDP 32
3.3 Ranking of states based on level and
growth per capita SDP 40
4.1 Per capita state income 2000–12 86
4.2 Ranking of states 2000–12 88
4.3 Coefficient of concordance 2000–12 90
4.4 Index of rank concordance 91
4.5 Inequality measures 92
4.6 Gini decomposition by income sources 96
4.7 Select convergence studies for Indian states 100
4.8 Absolute convergence scenario across
states and sectors 104
4.9 Fixed effect estimates of convergence 105
4.10 Steady-state income of states 2005–12 107
4.11 GMM estimates 1 07
4 .12 Speed of convergence during 2001–12 108
5.1 Infrastructure index – alternate methodologies 120
5.2 Infrastructure index – quantitative dimension 124
5.3 Infrastructure index – qualitative dimension 126
5.4 Impact of infrastructure on growth 128
5.5 Causality between growth in output and
growth in infrastructure 129
6.1 Progress in health care availability 164
6.2 Share of health related expenditure in SDP 166
6.3 CAGR of health expenditure and SDP 168
6.4 Responsiveness of health expenditure and
IMR to SDP 181
6.5 Panel causality tests 182
6.6 FMOLS estimates of health expenditure, health
outcome and SDP 183
7.1 Growth of output and credit 190
xi