Economic Growth and Human Development in Indian States after two decades of Economic Reforms

Abstract

This paper examines the relative performance of 28 major Indian states over the two decades (1990-2010) on economic growth and human development indicators by empirically confirming the two-way nexus between economic growth (EG) and human development (HD) and identifying other important links in the relationship from cross-sectional growth regressions. The paper finds a strong and consistent convergence in indicators of human development across states even as incomes have diverged over the two decades. Further, the classification of the states into vicious, virtuous, HD-lopsided and EG-lopsided categories and the shifts across categories of different states over the two decades reveal the importance of the requirement of simultaneous thrust on EG and HD in order to escape the vicious cycle