Abstract

AbstractDespite India’s per capita GDP doubling over the last decade, states like Goa compare to countries in Latin America, while states like Uttar Pradesh compare to low-income countries in sub-Saharan Africa in terms of their development outcomes. In this chapter, we identify that comparative advantages that arise due to resource availability, agro-climatic conditions, investments in human capital and the differential growth of the non-agricultural sector explain this subnational divergence. We show that states that continue to develop economic sectors in which they have no comparative advantages will remain locked into a low growth equilibrium. Reorienting agriculture based on comparative advantages in agricultural production, reducing entry barriers into the urban labor market and upskilling the rural and urban workforce are keys to develop equitable food systems for the future.

Highlights

  • The Green Revolution of the 1960s transformed India from a net importer of food to a self-sufficient agricultural giant

  • India’s growth experience has been marred by subnational divergence. This has led to the emergence of states like Goa and Delhi whose development experiences compare to high growth countries in Latin America, while states like Bihar and Uttar Pradesh are more comparable to some of the low-income countries in sub-Saharan Africa

  • In the former, development is driven by a high growth urban economy, while the latter’s development is weighed down by a low productive agricultural sector

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Summary

Introduction

The Green Revolution of the 1960s transformed India from a net importer of food to a self-sufficient agricultural giant. India has emerged as a thought leader in discussions related to climate change, poverty and development and international trade This economic progress of the country has come about due to its structural transformation (ST) from a subsistence agriculture-based ­economy to. While India leads the South Asia experience for growth, some states such as Bihar and Uttar Pradesh have worse economic outcomes compared to some countries in sub-S­ aharan Africa. ST processes have come to be associated with greater economic growth, increase in productivity of factors of production, a reduction in the share of the agricultural sector in GDP, increase in the rates of urban-led growth, increase in incomes, poverty reduction, better nutritional security and greater diet diversity J&K, Gujarat, Jharkhand, Karnataka, Orissa, Punjab, Manipur, Uttarakhand, Nagaland, UP, TN, Tripura, West Pradesh, Rajasthan

Explaining Inter-State Divergence in Structural Transformation
Characterizing ST by Development Process Adopted
An Empirical Exercise on Characterizing ST in India
Transition from the Agriculture to the Non-­ agricultural Sector: Frictions and Search Costs in Labor Markets
The Push and Pull of Migration in Response to Disequilibria in Labor Markets
Explaining
Explaining Low R2U Migration Rates
Changing Demographic Structure and Its Impact on Rural Productivity
Findings
Conclusion
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