Impact of fiscal transfers policy on regional growth convergence in India

Bibliographic Data

ID12549488
AuthorsKirubanandan Shanmugam (Madras Institute of Development Studies), Shanmugam K (Economics, Madras School of Economics, Chennai, Tamil Nadu, India), Shanmugam K Rangasamy (Economics, Madras School of Economics, Chennai, Tamil Nadu, India, corresponding author)
Year2021
Volume29
Issue1
Pages38-55
Publication date2021-10-14
Open AccessNo
TypeARTICLE
VenueJournal of the Asia Pacific Economy (JOURNAL)
Journal identifiersISSN: 1354-7860 • E-ISSN: 1469-9648
PublisherRoutledge (PUBLISHER • GB)
DOI10.1080/13547860.2021.1991089
OpenAlexW3205991857
LanguageEN
References cited22

This study is an attempt to empirically analyze the effect of fiscal transfers on growth and regional growth convergence in India during 2005–2019, using the standard growth convergence model for panel data. Results indicate the growth convergence across Indian States. The regional income gaps reduced at a rate of 17.7–31.9% per annum. The fiscal transfers contribute to the growth of 22 out of 29 States and also contribute significantly to the convergence. Moreover, there is strong evidence for convergence across General Category States and across Special Category States. The average income growth is higher in Special Category States and higher in post global crisis period. It is our hope that these results will be useful to policymakers and other stakeholders to take appropriate strategies to design fiscal transfer policy such that it will speed up the convergence process in India

Convergence (economics · Development economics · Econometrics · Economic system · Economics · Fiscal policy · Growth theory · International economics · Keynesian economics · Macroeconomics · Panel data · Economic Growth and Productivity · Fiscal Policy and Economic Growth · Global Health Care Issues

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