Have Indian States Converged on Consumption Expenditure on Food and Non-Food Items? an Analytical Treatise

This analytical paper examines the validity, or otherwise, of 'catching up hypotheses ’for the 14 major Indian states in respect of per capita consumption expenditure on major food and non-food items, compiled separately for rural and urban regions through 26 rounds of the National Sample Surveys Organisation. For this purpose, σ-convergence (for studying the very presence) and β-convergence (for estimating speed) analyses were carried out. Keeping in view the varying inter-round periodicities, the analysis was carried out, under panel-data framework, through a suitably adapted computer programme in R-language, so as to account for the differential periodicities. Results obtained through σ-and β-convergences were not in a perfect harmony which, however, is not unusual. As per the speed of convergence, interstate gaps have, in general, narrowed down rather rapidly in respect of per capita consumption expenditure on food items. Findings from the study are expected to assist the policymakers in knowing the differential impact of macro-adjustment policies across different regions.