Dynamics of Economic Growth: A Study of Some Selected Indian States

Abstract

This paper makes an attempt to analyze the pattern of economic growth of North Eastern (NE) States of India and comparative levels of growth in other advanced Indian states. The North Eastern states are lagging far behind the advanced Indian states in terms of economic development. So it is interesting to study the comparative levels of growth of these two groups of states. The reason for analyzing growth of NE states is that the rate and pattern of economic growth of these states are quite different from the other advanced Indian states. Growth curves were estimated by using the Gompertz growth equation and plotted using Gompertz software to see the comparative growth levels of these two groups of states. The methodology we followed is that after studying existing theories of growth we have evaluated their usefulness and application in less developed states like North East. We have calculated the growth for the period 2000-01 to 2005-06 for NE states from NSDP data by simple growth formula to facilitate comparison of economic growth between NE states and advanced states. Also the growth curve was plotted using Gompertz Growth curve by Gompertz Software to see the comparative position of these two groups of states. The influence of infrastructre on economicv growth is studied through regression technique by regressing the infrastructre index on growth rate. The main finding of the study is that the growth in NE states are falling continuously due to poor infrastructure in these states.The other important factors responsible for falling economic growth in NE states are non utilisation of Central Govt. funds for investment purposes, lack of capital investment, lack of industrialization, insurgency and primitive method of agriculture etc. while growth is increasing continuously in advanced Indian states due to better infrastructure as well as positive impact of the other factors. So necessary steps to be taken urgently by Central as well as respective State Govt. to create infrastructre to accelerate the economic growth in NE states so as to reduce gap with that of advanced Indian states. The plan of the paper is as follows (i) Defining Economic Growth (ii) Different Theories of Economic Growth (iii) Literature Review (iv) Methodology (iv) Application of the Growth Theories in NE Economy (iv) Empirical Analysis (vi) Main Findings and Conclusion.