Estimating the Contribution of Infrastructure in Regional Productivity Growth in India

There does not seem to be a consensus on the importance of infrastructure investments in the process of economic development. With persistent regional disparities, and increasing regional identities, there is a need to determine the drivers of regional growth. Contribution of infrastructure to regional productivity growth is analyzed in this paper. Empirical analysis using data from 25 states in India for the past two decades suggests that composition of infrastructure investment is important in facilitating economic growth. Empirical results also highlight that investments in economic infrastructure have the closest linkage with regional productivity growth.

Agglomeration Economies and Productivity Growth in India

Agglomeration economies have been analyzed in the literature as drivers of economic growth, as these contribute to productivity enhancement. The primary objective of this paper is to ascertain the existence of agglomeration economies, and to examine the extent to which these have contributed to productivity growth in India. Two sources of agglomeration economies are distinguished – (i) at the industry level – localization economies of intra-industry linkage; and (ii) at the regional level – inter-industry urbanization economies. Growth accounting framework is used with agglomeration parameters included in the shift term of a general production function, coefficients of which are estimated through panel data regression. I employ state level data for 25 state economies in India for the period 1980-81 to 2006-07. There is evidence that urbanization economies tend to exist; however, there is considerable variation in the sources and magnitude of agglomeration economies across sectors. Results indicate that for service sector, the economies of urbanization exist on a lower level of urbanization, whereas for manufacturing, these economies are present at higher levels. Results support regional diversity more than localization, even if some differences can be seen across sectors.

Regional Income Disparities in India and Test for Convergence - 1980 to 2006

We examine trends in regional disparities in India over a period of 26 years (1980 to 2006). There are wide and increasing variations in economic performances of states over time. We have employed panel data estimation method based on the neo-classical framework. The analysis is based on 25 state economies in India. Results of the analysis suggest convergent trend in regional incomes, conditional upon growth rates of inputs, and rate of technological progress. Speed of convergence has been faster during the period 1992-2006, when Indian economy embarked upon detailed structural reforms. Incomes of the special category states have experienced convergence at a higher rate.

Trends in Technical Progress in India .Analysis of Input-Output Tables from 1968 to 2003

The paper is based on the 8 Input . Output (I-O) tables for the Indian economy available over a period of 36 years from 1968-69 to 2003-04. The technical progress (TP) in the context of the I-O tables is based on the concept of a production function defining the relationship between gross output and material inputs as well as value added at the disaggregated sectoral level. The paper attempts to answer the following questions: (i) Was the TP substantial and continuous throughout the period?; (ii) Was the rate of TP during the inward looking and outward looking growth strategy phases of the economy the same?; and (iii) Was the rate of TP at the disaggregated sectoral level almost constant over time? In order to measure the rate of TP, the available eight national I-O tables in India are first made compatible for the number, scope and definitions of sectors as well as for prices by converting them at constant 1993-94 prices. Chenery-Watanabe coefficient is used for measuring the rate of TP for different sectors across the 8 I-O tables.

Trends in Technical Progress in India – Analysis of Input-Output Tables from 1968 to 2003

The paper is based on the 8 Input – Output (I-O) tables for the Indian economy available over a period of 36 years from 1968-69 to 2003-04. The technical progress (TP) in the context of the I-O tables is based on the concept of a production function defining the relationship between gross output and material inputs as well as value added at the disaggregated sectoral level. The paper attempts to answer the following questions: (i) Was the TP substantial and continuous throughout the period?; (ii) Was the rate of TP during the inward looking and outward looking growth strategy phases of the economy the same?; and (iii) Was the rate of TP at the disaggregated sectoral level almost constant over time? In order to measure the rate of TP, the available eight national I-O tables in India are first made compatible for the number, scope and definitions of sectors as well as for prices by converting them at constant 1993-94 prices. Chenery-Watanabe coefficient is used for measuring the rate of TP for different sectors across the 8 IO tables. [Working Paper No. 2009-11-02]Input-Output (I-O), Technical Progress, Technical coefficients, Indian economy, Liberalization, Globalization