ISAS Working Papers

There are substantial disparities across India's southern and northern states (Bihar, Madhya Pradesh, Rajasthan and Uttar Pradesh) in terms of fundamental economic phenomena such as per capita net state domestic product, rural and urban poverty rates, and investment flows, with the southern states taking a lead over their northern counterparts. In this paper, we attempt to understand what factors have caused these differences. We examine human capabilities, skills and awareness, resources and the efficiency of their utilisation; extent of urbanisation; good governance, including law and order; and infrastructure across the two groups of states. With respect to the factors representing human capabilities - literacy, infant mortality, stock of graduates, enrolment in technical courses, population in working age group, number of higher educational institutions, and infrastructure such as installed capacity, households with electricity and telephone penetration, we find that the southern states have an advantage when compared to the northern states. The same is true with respect to factors indicating law and order, such as the proportion of cases pending trial in court.