ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Economic Growth and Regional Divergence-in India, 1960 to 1995

Sugata Marjit Chiranjib Neogi The current literature on regional convergence has centred on the empirical relationship between initial income and its long run growth rate found among the regions in the developed countries. The fundamental basis of the 'converging' outcome is the neo-classical assumption of the law of diminishing returns to capital In contrast to the conventional results of the developed countries, the present paper has found that Indian states have been diverging over the period of last 35 years, Moreover, this result does not nullify the role of planning through disbursement of development funds across the states. The Indian scenario exhibits interesting relationship between private and public capital in the regional contextLater a simple model is developed to highlight the relationship between growth and public investment.

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