Net State Domestic Product Research Articles

Issue of Convergence - A Study of Selected Western States of India

There is no point to disagree that in recent time inequality has become a growing socio-economic problem. This problem has turned out to be more evident since the economic reforms of 1991. This paper attempts to examine the issue of convergence in terms of per capita net state domestic product in three selected western states of India from 1980–1981 to 2012–2013 and to that end we have applied the Barro regression analysis. But as there emerges non-stationarity problem in the context of absolute as well as conditional convergence, we have introduced time as an argument on the assumption of non-stochastic trend of the time series data. There has been strong evidence of absolute beta-convergence in Gujarat, Maharashtra and Rajasthan in the presence of time as an argument. We have also found strong evidence of conditional convergence in two states except Maharashtra. But there is no evidence of the declining dispersion of incomes among these three states. Sigma divergence among these states as implied by the dispersion of incomes among the states has mounted over time. Both liberalization and Crisis have no significant effect on the reduction of inter-state disparity.

Development patterns in India: Spatial convergence or divergence?

The impact of globalization has led some nations to attain higher rates of growth while others have shown declining growth, along with widening regional disparities within nations. The regional convergence (RC) thesis addresses this issue of measuring inequality among sub-national economies of a nation, and across nations over a long period of time. This thesis utilizes two measures beta and sigma convergence to analyze if poor nations catch up with developed nations, and if regions within a nation close the gap with developed regions. The Indian economy has witnessed increasing economic inequality since independence. Given this overview the objective of this paper is to review recent literature on RC and address the following four questions: (1) What insights do recent studies provide on convergence debate? (2) What are the various explanations and tools to understand and measure regional convergence? (3) What is the role of geography in explaining spatial convergence/divergence analysis of economies? (4) What are the trends of regional inequality in India during the 1961–2011 periods? Domestic Product of States in India (1960–1961 to 2006–2007) and Reserve Bank of India publications provide data for the past fifty years on per capita net state domestic product. Simple measures of dispersion reveal increase in regional inequality during the study period with moderate drops during 1970–1971 and 1980–1981 periods. Descriptive measures indicate persistence and limited upward mobility of states. Also, prosperous regions are located in the rich agricultural and industrial states of Punjab, Gujarat and Maharashtra, and lagging regions are the impoverished agricultural states of Bihar and Madhya Pradesh.

Trends of Economic Growth and Population Change in Rajasthan: A District Level Panel Data Investigation

The present paper highlights the trends of economic growth in the economy of Rajasthan and discusses its relative share in the national economy of India. It reviews the trends of year-wise growth rate of per capita net national product in India, per capita net state domestic product for Rajasthan state and per capita net district domestic product for districts of Rajasthan for the period of 2004-05 to 2012-13. It is indicative of the fact that the economy of Rajasthan has registered many ups and downs in the growth trajectory, but the current decade is a period of fair stability and positive growth. Results of Random Effects Model suggest that one percentage point increase in population will be able to increase per capita NDDP by 1.125 percent for twenty nine districts of Rajasthan. District dummies show that higher per capita district domestic product districts like Rajsamand and Jaisalmer have a significant positive association while Jaipur, Alwar, Jodhpur, Barmer, Bharatpur and Sikar have a significant negative association with population. In low fifteen per capita income districts only Nagaur district was observed as negatively and significantly associated with population, while Baran, Bundi and Sirohi have been observed as significantly and positively associated with the population.

Impact of Banking Penetration on Economic Growth: A State-wise Comparative Study

The study tries to investigate the level of banking penetration in 16 major states of India in terms of population covered per branch, banking business (deposit + advances) per branch, credit-deposit ratio and also examines their impact on socio-economic development in these states in terms of per capita Net State Domestic Product (pcNSDP) and Human Development Index (HDI). These parameters have been analysed through the time series data from 1991 onwards i.e. after the implementation of economic and banking sector reforms. The analyses have shown that there exist significantly high between banking indicators and development indicators i.e. the developed states are the gainers from banking penetration. The functional relationship between these two types of indicators/variables has also been established through regression analysis. The overall analyses have clearly pointed towards the reasonably strong relationship between 'banking penetration' and 'socio-economic development' of states. Thus, the Government of India, the Reserve Bank of India, the commercial banks and the respective state government have to give extra attention to the banking developments in less developed states so as to facilitate economic growth and minimize regional disparities in socio-economic development of the states.

Use of Artificial Neural Network for the Construction of Lorenz Curve

Lorenz curve and Gini index are the most widely used measures of income inequality in Economics. Artificial Neural Networks (ANN) are mathematical models that learn complex relationships in data. ANN is widely used for prediction and classification tasks in many fields of knowledge. In this paper, Lorenz points are generated from a trained ANN by systematically varying some underlying parameters of ANN and the behavior of Lorenz curve is studied. It is shown that ANN technique generates better Lorenz curve in the sense of better distribution of income points and having smaller Gini Index. A real life illustration is provided by taking the per capita Net State Domestic Product at current prices for 32 States / Union Territories of India for the period 1997-1998.

Did technological intervention help to spare land from agriculture: evidence from post liberalisation India

India has witnessed fairly high economic growth since economic liberalisation started in 1991. However, agriculture has remained excluded from the growth experienced in other economic sectors. This growth paradox has serious implications for the agricultural land use pattern. This study uses the Environmental Kuznets Curve hypothesis to examine the impact of agricultural technology and economic development on agricultural land expansion in India. Panel data regression is performed on an unbalanced sample covering information from 25 Indian states for the period 1990 to 2008. Our results suggest a nonlinear (N shaped) relationship between agricultural land expansion and Net State Domestic Product (NSDP) per capita. Two incomes turning points, showing the level of NSDP per capita at which infl ection between agricultural land expansion and NSDP per capita takes place, occur at INR 20986.14 and INR 42855.10 respectively. We fi nd mixed results as far as the impact of technological variables on agricultural land expansion is concerned. The study concludes that rapid economic growth in the post liberalisation period has failed to reverse agricultural land expansion in India.

Public Expenditure on Education in Karnataka

The role of education in nation building is not merely a question of social equity and equipping persons for securing employment; it is much more than that, and this is universally recognized. The human resource development revolution has also placed investment in education on the priority list of Governments across nations. In-line with Wagner's law of increasing State government activity, total public expenditure has registered a positive compound annual growth rate of 29.8 % over a period of 20 years. Though expenditure on education has increased in nominal terms, in real terms, expenditure on education has decreased. Despite ups and downs in fiscal conditions, the state of Karnataka has managed to keep expenditure on education in between 2-4% of net state domestic product.

Determinants of Agricultural Land Expansion: Evidence from Indian States

Technological intervention in agriculture has helped many developing countries not only to overcome food deficit but also supported their economic growth. On the contrary, technological intervention in agriculture is criticized by many researchers due to its adverse effects on local environmental quality. One of such arguments is its potential to change land use dynamics in developing countries (Cropper and Griffith 1994; Barbier 1997). Environmental Kuznets Curve (EKC) suggests that technological intervention in agriculture combined with overall economic development should eventually help to spare land from agriculture (Kumar and Agarwal, 2003). India seems to be a classic case to test above mentioned hypothesis as it is one of the early adopter of agricultural technology and has also witnessed fairly high growth since 1990s. Data used in this study is borrowed from various Government and non-government sources. Panel data regression is performed for 25 Indian states from 1990 to 2008. Our results suggest that an 'N' shaped relationship exists between agricultural land expansion and net state domestic product per capita. The results also suggest that that technology remained responsible for inducing farmers to bring additional land under agriculture instead of sparing land from agriculture.

Tourism as a Long Run Economic Growth with Special Reference to North-Eastern Region in India

North-Eastern Region (NER) in India comprises eight states. Tourism in these states based on wildlife, natural beauty, unique flora & fauna, hold shrines, lush green tea gardens, turbulent rivers, vibrant and colourful cultural festivals. But unfortunately, due attention has not been paid to the socio-economic development of these states either by the Central Government or by the States Government. The apathy of the Government at the central and states is largely responsible for the low level of growth of industrial sector in the state. The natural beauty of these states attracts tourist from all over India and also from abroad. These industries have become important sources of income and employment of most of the people living in the states. While the development of agriculture is constrained by limited cultivated area (the states are mostly covered by with hill), development of heavy industries is not easy, and the development of tourism industries can be given greater importance. In this paper an attempt is made to access the contribution of tourism industry in these eight states to the Net State Domestic Product (NSDP). I. INTRODUCTION Tourism is today the worlds largest industry, with the travel and tourism (T & T) industry and T & T economy contributing 4.2% and 10.7% of global GDP respectively. This industry is also the highest generator of jobs, with T & T economy accounting for 8.2% of total employment or in every 12.2 jobs. No wonder than the Tourism has been described as one of the most remarkable economic and social phenomena of the last century. Similarly, this industry significantly contributes GNP in our country and also the Gross State Domestic Product (GSDP) for its states which are the most important industries of economic growth. The present paper examined the contribution of tourisms in economic growth which is represented by the increased in per capita NSDP North-Eastern Region, as NER becomes a separate world having natural scenic beauty, beautiful reserved forest and also their cultural heritages. Due to this reason, NER in India have a high potentiality of the development of tourism industry. From the above stated research problem, the rest of the paper organized as follows: section 2 reviews the literature in brief, section 3 discusses the objective data and methodology, section 4 makes the analyses of the findings and section 5 concludes the papers.

Investment and economic opportunities: Urbanization, infrastructure and Governance in the North and South of India

There are substantial disparities across the southern Indian and northern (Bihar, Madhya Pradesh, Rajasthan and Uttar Pradesh) states in terms of fundamental economic phenomena, such as per capita net state domestic product, rural and urban poverty rates, and investment flows, with the southern states taking a lead over their northern counterparts. In this paper, we make an attempt to understand what factors have caused some states to grow faster than others. We examine human capabilities, skills and awareness, resources and the efficiency of their utilization, extent of urbanization, good governance including law and order, and infrastructure across the two group of states. We conclude that the upward shift in per capita income, downward trend in poverty reduction and investment flows that occurred in the south relative to that in the northern states can be explained partly by the advantage the former had in terms of human capabilities, infrastructure, urbanization and some law and order conditions and partly by the economic liberalization of 1991.

Income Convergence and Regional Growth in India

In this article I study regional growth and sub-national income convergence in India in the context of economic reforms that have been undertaken since 1991. I also examine convergence in development inputs such as population growth, literacy and investment at the sub-national level. My results show that there is a strong evidence of divergence in per capita income of the 15 states studied in the sample. The standard deviation of net state domestic product has increased over time indicating no evidence of convergence in the pre- or post-reform period. Population, state capital expenditure and commercial bank credit have also diverged over time across these 15 Indian states. However, literacy shows evidence of convergence across states.

Is economic growth associated with reduction in child undernutrition in India?

Economic growth is widely perceived as a major policy instrument in reducing childhood undernutrition in India. We assessed the association between changes in state per capita income and the risk of undernutrition among children in India. Data for this analysis came from three cross-sectional waves of the National Family Health Survey (NFHS) conducted in 1992-93, 1998-99, and 2005-06 in India. The sample sizes in the three waves were 33,816, 30,383, and 28,876 children, respectively. After excluding observations missing on the child anthropometric measures and the independent variables included in the study, the analytic sample size was 28,066, 26,121, and 23,139, respectively, with a pooled sample size of 77,326 children. The proportion of missing data was 12%-20%. The outcomes were underweight, stunting, and wasting, defined as more than two standard deviations below the World Health Organization-determined median scores by age and gender. We also examined severe underweight, severe stunting, and severe wasting. The main exposure of interest was per capita income at the state level at each survey period measured as per capita net state domestic product measured in 2008 prices. We estimated fixed and random effects logistic models that accounted for the clustering of the data. In models that did not account for survey-period effects, there appeared to be an inverse association between state economic growth and risk of undernutrition among children. However, in models accounting for data structure related to repeated cross-sectional design through survey period effects, state economic growth was not associated with the risk of underweight (OR 1.01, 95% CI 0.98, 1.04), stunting (OR 1.02, 95% CI 0.99, 1.05), and wasting (OR 0.99, 95% CI 0.96, 1.02). Adjustment for demographic and socioeconomic covariates did not alter these estimates. Similar patterns were observed for severe undernutrition outcomes. We failed to find consistent evidence that economic growth leads to reduction in childhood undernutrition in India. Direct investments in appropriate health interventions may be necessary to reduce childhood undernutrition in India. Please see later in the article for the Editors' Summary.

Economic Performance of Seventeen Major (Indian) States during 2004-05 to 2008-09

This paper is an attempt to analysis the issue of inter-state disparities in the growth of Gross State Domestic Product (GSDP) and Per Capita Net State Domestic Product (NSDP) of the seventeen major states beginning from the 2004-05 to 2008-09. Finding of this research shows that inter-regional disparities in the growth of Gross State Domestic Product (GSDP) and Per Capita Net State Domestic Product (NSDP) of seventeen major states have decreased from 49.8 to 27.2 and 71.2 to 33.5 respectively in the recent years i.e. from 2004-05 to 2008-09.Â

Nutritional status of children in India: household socio-economic condition as the contextual determinant.

BackgroundDespite recent achievement in economic progress in India, the fruit of development has failed to secure a better nutritional status among all children of the country. Growing evidence suggest there exists a socio-economic gradient of childhood malnutrition in India. The present paper is an attempt to measure the extent of socio-economic inequality in chronic childhood malnutrition across major states of India and to realize the role of household socio-economic status (SES) as the contextual determinant of nutritional status of children.MethodsUsing National Family Health Survey-3 data, an attempt is made to estimate socio-economic inequality in childhood stunting at the state level through Concentration Index (CI). Multi-level models; random-coefficient and random-slope are employed to study the impact of SES on long-term nutritional status among children, keeping in view the hierarchical nature of data.Main findingsAcross the states, a disproportionate burden of stunting is observed among the children from poor SES, more so in urban areas. The state having lower prevalence of chronic childhood malnutrition shows much higher burden among the poor. Though a negative correlation (r = -0.603, p < .001) is established between Net State Domestic Product (NSDP) and CI values for stunting; the development indicator is not always linearly correlated with intra-state inequality in malnutrition prevalence. Results from multi-level models however show children from highest SES quintile posses 50 percent better nutritional status than those from the poorest quintile.ConclusionIn spite of the declining trend of chronic childhood malnutrition in India, the concerns remain for its disproportionate burden on the poor. The socio-economic gradient of long-term nutritional status among children needs special focus, more so in the states where chronic malnutrition among children apparently demonstrates a lower prevalence. The paper calls for state specific policies which are designed and implemented on a priority basis, keeping in view the nature of inequality in childhood malnutrition in the country and its differential characteristics across the states.

Patterns and Distribution of HIV among Adult Men and Women in India

BackgroundWhile the estimated prevalence of HIV in India experienced a downward revision in 2007, the patterning and distribution of HIV in the population remains unclear. We examined the individual and state-level socioeconomic patterning of individual HIV status among adult men and women in India as well as the patterning of other individual demographic and behavioral determinants of HIV status.Methodology/Principal FindingsWe conducted logistic regression models accounting for the survey design using nationally representative, cross-sectional data on 100,030 women and men from the 2005–2006 India National Family Health survey which, for the first time, provided objective assessments of HIV seroprevalence. Although there was a weak relationship between household wealth and risk of being HIV-positive, there was a clear negative relationship between individual education attainment and risk of being HIV-positive among both men and women. A 1000 Rupee change in the per capita net state domestic product was associated with a 4% and 5% increase in the risk for positive HIV status among men and women, respectively. State-level income inequality was associated with increased risk of HIV for men. Marital status and selected sexual behavior indicators were significant predictors of HIV status among women whereas the age effect was the most dominant predictor of HIV infection among men.Conclusions/SignificanceAlthough the prevalence of HIV in India is low, the lack of strong wealth patterning in the risk of HIV suggests a more generalized distribution of HIV risk than some of India's high-risk group HIV prevention policies have assumed. The positive association between state economic development and individual risk for HIV is intriguing and requires further scrutiny.

Environment, Human Development and Economic Growth After Liberalisation: An Analysis of Indian States

Economic growth does not necessarily ensure environmental sustainability for a country. The relationship between the two is far more complicated for developing countries like India, given the dependence of a large section of the population on natural resources for livelihood. Under this backdrop, the current study attempts to analyze the relationships among Environmental Quality (EQ), Human Development (HD) and Economic Growth (EG) for 14 major Indian States during post liberalisation period (1991-2004). Further, for understanding the changes in EQ with the advancement of economic liberalisation, the analysis is carried out by dividing the sample period into two: Period A (1990-1996) and Period B (1997-2004). For both the sub-periods, 63 environmental indicators have been clustered under eight broad environmental groups and an overall index of EQ is created using the HDI methodology. The EQ ranks of the States exhibit variation over time, implying that environment has both spatial and temporal dimensions. Ranking of the States across different environmental criteria (groups) show that different States possess different strengths and weaknesses in managing various aspects of EQ. The HDI rankings of the States for the two periods are constructed by the HDI technique following the National Human Development Report 2001 methodology. We attempt to test for the Environmental Kuznets Curve hypothesis through multivariate OLS regression models, which indicate presence of non-linear relationship between several individual environmental groups and per capita net state domestic product (PCNSDP). The relationship between EQ and economic growth however does not become clear from the current study. The regression results involving individual environment groups and HDI score indicate a slanting N-shaped relationship. The paper concludes that individual States should adopt environmental management practices based on their local (at the most disaggregated level) environmental information. Moreover, since environmental sustainability and human well-being are complementary to each other, individual States should attempt to translate the economic growth to human well-being.

Performance of Agriculture in the Changing Structure of the Orissa Economy: Issues Revisited

The economy of Orissa is characterized by the dominance of agricultural sector. Agriculture continues to be the mainstay of the state's economy with contribution about 28.13 percent to net state domestic product during 2001-2002. The agriculture alone provides direct and indirect employment to around 65 percent of the total workforce of the state as per 2001 provisional census. Nevertheless, the sector is continues to be characterized by low productivity. Although the contribution of agriculture to state income has significantly declined, the percentage of work force engaged in agriculture has remained somewhat unchanged. This implies that there has been an overcrowding in agriculture without any perceptible increase in production. Therefore, agricultural growth holds the key to the overall development of the state by way of creating employment, generating income, providing raw materials to the industrial sector and last but not the least ensuring self-reliance in food production and food security to the deprived sections.In this paper, we have studied the pattern of structural change in the last two decades. It is observed that, while the share of Primary sector has gone down drastically in gross state domestic product in 90's vis-a-vis 80's, the secondary or manufacturing sectors share is hovering around 17 percent throughout last fifty years. The only substantial change is occurred in service sector. In 1980, the share of service sector in GSDP was 30 percent. In 2000, it is reached at 45 percent. The issue at hand is that, while the share of primary sector has gone down in state income, it is not showing any trend of releasing labour force. In 1951, 72.86 percent of total workforce was engaged in primary sector, also in 1991, 72.9 percent is workforce is engaged there. Hence, whatsoever developmental effort has been undertaken by state, the fruit is unequally distributed as per capita income of service sector worker is much higher than primary sector.In this scenario, we have gone to explore the productivity in agriculture district wise. It is found that inter district variation in agricultural productivity is very high. Also, the input use in agriculture is skewed across the districts. In the plain and coastal land, the high productivity is explained by higher use of input. It is a vicious circle. Poverty reduces purchasing power i.e. in our case low application of input, and this again leads to poverty due to low agricultural productivity. This gives a strong message. That is Orissa which is a typical rural based agrarian economy, any developmental effort without due consideration for agricultural improvement will be proved nullified. It is also shown that over the years, the plan outlay on agriculture has gone down which reflects the priority of state government. Finally, we have tried to explain the role of several input in explaining agricultural productivity and concluded the paper with few suggestions.

Integrating forest resources into the system of national accounts in Maharashtra, India

The objective of the study is to construct forest resource accounts for the state of Maharashtra in India and incorporate the value of depletion and degradation of forest resources into the system of national accounts (SNA). The net state domestic product (NSDP) is adjusted for the depletion of the forest resources to obtain Environmentally adjusted net state domestic product (ESDP). The results show that the value added by forests is 3.56 per cent of NSDP and the value of depletion is 19.8 per cent of the estimated value added. The ESDP of Maharashtra is found to be 99.3 per cent of the estimated NSDP. The study has demonstrated that, although the existing database needs further improvement, forest resource accounting is feasible for the state of Maharashtra in India and can serve as an indicator of economy's performance.