Economic Development in India: An Inter-State Analysis

This paper analyses the development experience of Indian states during the last four decades by exploring income growth, employment generation, poverty reduction and human development. During the last two decades, Indian economy has moved out of the slow growth phase to that of a higher growth era, recording an average GDP growth of 7-8 per cent. Whether this growth has resulted in corresponding changes in the development indicators is an important question. The study examines this subject two decades before and two decades after the initiation of liberalisation measures. A majority of states have recorded higher economic growth during the latter period. But due to differentials in the initial endowments, inequality among them still persists and is increasing over time. Majority of the states failed to translate higher economic growth into higher employment growth and poverty reduction. Though many of them made significant improvement in terms of human development, the lagging states still have disadvantages. The pace of transformation is slow and the country has not succeeded in translating higher growth into higher overall development.