Growth and Regional Divergence in Agriculture

Abstract

This chapter evaluates regional economic growth and divergence in agriculture in 15 major states in India during 1960/1961–2008/2009. While the estimates of absolute β-convergence provide evidence of absolute divergence in agricultural worker productivity with no evidence of significant convergence or divergence in land productivity and per capita agricultural output across the states, the results of σ-convergence show declining interstate disparities in land productivity, but increasing disparities in worker productivity and per capita agricultural output. The evidence on conditional β-convergence displays significant interstate variations in the steady-state levels of agricultural development indicators, and these variations are largely due to variations in the conditioning variables like human and physical capital and rural infrastructure. While ten states have been converging to the national average steady-state level, the remaining five states have been diverging from it. The results have important policy implications for achieving regional balances in agricultural development.