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

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Income Convergence among the Districts of West Bengal

Evidence from Neoclassical Growth and Panel Unit Root Models

The study of the inter-district convergence of per capita incomes in any state or country is crucial to policy agenda as it exposes the scenario of real income distribution. The present paper examines inter-district convergence of per capita income in West Bengal using the neoclassical growth and panel unit root models; the second is an advanced approach compared to the first. The results in line with the two approaches show that the districts are not converging in terms of income; rather the districts are diverging between 1993 and 2014. It is an alarming knock to the state since divergence in income leads to rising inequality across districts; it will hamper the development of the state.

The authors are grateful to the anonymous reviewer for providing insightful comments that helped them immensely in improving the quality of the paper.

Since the introduction of the liberalisation policy in India, there has been an increasing growth of income in aggregate and per capita terms. However, there have been growing disparities across states in income and several other economic indicators during the post-liberalisation period (Marjit and Mitra 1996; Ghosh et al 1998; Subrahmanyam 1999; Dasgupta et al 2000; Das and Dinda 2014; Bhaduri 2008, 2016). Evidently, the states are diverging from each other. The districts in these states are also affected by unequal development. In common terms, the effect of the liberalisation policy has not trickled down to the bottom quartile of the population of the districts in West Bengal.

There are a few studies on income convergence at the district level in India. While the studies of Singh et al (2014) and Das et al (2015) cover 210 Indian districts, the study related to the districts of Odisha was carried out by Panda and Trivedi (2015). No studies on income convergence or divergence have been conducted on the districts of West Bengal to date, although Raychaudhury and Halder (2009) have investigated on the inter-district disparity in social and physical infrastructure in West Bengal. The present paper, thus, examines whether the districts of West Bengal are income converging in individual and panel data formats.

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Published On : 20th Jan, 2024

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