Chapter

State-Level Performance under Economic Reforms in India

Edited by Montek S. Ahluwalia

in Economic Policy Reforms and the Indian Economy

Published by University of Chicago Press

Published in print July 2002 | ISBN: 9780226454528
Published online February 2013 | e-ISBN: 9780226454542 | DOI: http://dx.doi.org/10.7208/chicago/9780226454542.003.0004
State-Level Performance under Economic Reforms in India

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This chapter reports new evidence on differentials in growth rates among the Indian states, and a preliminary analysis of the reasons for these differentials. The performance of the major states in the postreform period 1991–92 to 1998–99 is reviewed and compares it with performance in the previous decade. The influence of economic reforms at the national level on the growth rate of individual states depended on the net effect of forces. Private investment is one of the principal drivers of growth. Public investment and state plan expenditure are not nearly as obviously correlated with growth as many would have expected. The central government has a major role in developing infrastructure in the poorer states by influencing its own expenditure on infrastructure to help overtake infrastructure bottlenecks in the poorer states as quickly as possible. It noted that trade, payment, industrial, fiscal, and financial policies affected growth of states.

Keywords: Indian states; growth rates; economic reforms; private investment; public investment; state plan expenditure; infrastructure; trade; payment

Chapter.  15050 words. 

Subjects: International Economics

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