Convergence in Monthly Per Capita Expenditure and the Rural–Urban Dichotomy: Evidence from Major Indian States

Acharya, Debashis and Rath, Badri Narayan and Parida, Tapas Kumar (2021) Convergence in Monthly Per Capita Expenditure and the Rural–Urban Dichotomy: Evidence from Major Indian States. Rural–Urban Dichotomies and Spatial Development in Asia, 48. pp. 229-247. ISSN 2199-5974

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Abstract

In this chapter we make an attempt to examine convergence in monthly per capita expenditure (MPCE) of Indian households utilising data obtained from the National Sample Survey Organisation(NSSO) over the period 1993–94 to 2011–12, for 17 major Indian states. In the process, a probable existence of the rural urban dichotomy in convergence is also being explored. The choice of time period is guided by consistsnt avaialbility of data coinciding with the post reform period and the PS panel club convergence test is employed to achieve the objectives set in the chapter. All the states taken together indicate a divergence in MPCE and the major 15 states of India do not follow a unique single transition path. The monthly per capita consumption across these states exhibit distinct transition paths. Further, there is existence of convergence at sub-group level except three states. The speed of covergence and the transition paths being different in rural areas from that of the urban also yield evidence on the rural urban dichotomy. Finally, we attempt to study the determinats underlying the convergence obatined from the empirical analysis carried out in the first stage.

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