Decoding state growth: Focus on boosting existing economic centres

Strengthening existing economic centres, rather than building greenfield cities, is key to faster state-level growth

Prime Minister Narendra Modi has given a clarion call for India to achieve developed country status by 2047. While there is near-unanimity that India’s state governments will drive the future reform agenda, the jury is still out on what it takes to accelerate growth. Should states strengthen human or physical capital, or the quality of governance? Should they focus on existing cities or greenfield developments? And should all states pursue the same strategy?

 

An analysis of the gross domestic product (GDP) growth performance of 20 major Indian states over the past 30 years reveals two fundamental axes for accelerated state