The Journal of Income and Wealth
Year : 2003, Volume : 25, Issue : 1&2
First page : ( 115) Last page : ( 128)
Print ISSN : 0000-0000.

Regional disparity in economic and human development in India

Dholakia Ravindra H.

Indian Institute of Management, Ahmedabad

JEL Classification: I31, I32

Absrtact

Trends in regional disparity in the economic and human development in India over the last two decades and the direction of their causality are examined. While PCI does not show any significant trend in regional disparity, 19 out of 25 human development indicators (HDI's) display a marked decline. The Indian regional data suggests two-way causality between human and economic development. The structure of the estimated equations varies over time when HDI's are the cause and PCI is the effect, but remains the same in the reverse causality case. Moreover, it takes about eight years for HDI's to influence PCI, but PCI affects the HDI's in two years. The paper concludes by arguing that the central institutions like Finance Commission and Planning Commission need not be unduly concerned about regional imbalance in human nor in economic development. Emphasis on economic growth as per the national priority is likely to address the issue of twin disparities in income and human development in the shortest time.

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