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Socioeconomic Progress across the Major Indian states: Converging or Diverging

Goli, Srinivas and Perianayagam, Arokiasamy and Bheemeshwar, Reddy (2013): Socioeconomic Progress across the Major Indian states: Converging or Diverging.

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Abstract

The purpose of this paper is to examine the progress in socioeconomic conditions across the major states of India by using convergence hypothesis. Earlier studies that examined regional disparities of development used per capita State Net Domestic Product (SNDP) as an important proxy for assessing human well-being. This study attempts a more comprehensive assessment of socioeconomic convergence in terms of critical indicators of economic inequality, poverty ratios, literacy rate and Human Development Index (HDI) along with per capita SNDP. The results reveal that in the period between 1981 and 2011, statistically significant absolute and conditional Beta (β)-convergence in literacy rates and HDI have been observed but only conditional β-convergence has been evident in case of per capita SNDP and poverty ratios. β-convergence estimates for the recent period (post-2001) show, a divergence in per capita SNDP and poverty ratios but convergence in literacy rates and HDI. Kernel density plots for socioeconomic indicators show the existence of convergence clubs but not absolute convergence among all the major states. Thus, this study suggests that use of the non-parametric convergence measures is crucial to gain more clear insights on socioeconomic progress and to identify the short-term divergent paths.

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