Regional convergence of growth, inequality and poverty in India—An empirical study

Abstract

The paper attempts to examine whether there is regional convergence of per capita consumption, inequality and poverty across various states in India. Using panel unit root tests that are robust to cross-sectional dependence, we find that inequality and poverty indicators converge at both rural and urban levels. Further, per capita consumption converges at urban level but not at rural level. Based on factor analysis, we find two groups of states for rural sectors, viz., low-growth and high-growth states, for each of which per capita consumption converges. We also attempt at identifying the responsible entities — central or state governments or both in cases where convergence is not achieved.