Role of Geography in Structural Transformation: The Story of Indian States

By : Chhaya Singh

Page No: 343-354

Abstract
Economic activity as a measure of development is generally estimated in terms of Gross Domestic Product (GDP). But the propriety of GDP as a measure of development has been subject to debate. Different theoretical as well as empirical evidences have hinted towards a relationship between geography and economic growth. This paper attempts to test the geographical proximity hypothesis (i.e., economic growth of a region is determined by its geography in general, and its proximity to other developing or under developed regions in particular) in context of India. This paper argues that the growth rate of a region is determined by the proximity to developed or under-developed states and such clusters of proximate states grow together as a whole. This inference has huge policy implications and makes a favourable case for inclusion of geography as a significant determinant of economic growth.

Author :
Chhaya Singh
Assistant Director, Department of Commerce, Ministry of Commerce and Industry, New Delhi, India.

DOI: https://doi.org/10.32381/PROD.2022.63.03.9