ATTAINING GROWTH CONVERGENCE WITH DIVERGING FUND ALLOCATION IN INDIA: EMPIRICAL EVIDENCE FROM MOST STATES

The feasibility of infrastructure-driven economic growth nowadays unanimously is accepted among the academicians especially in the developing countries. But the problem of this hypothesis is that there is a likelihood of regional growth variability caused by unbalanced public investment on different infrastructures both economic and social infrastructures which are meant otherwise to bring convergence in the economy. Thus, using Panel data regression the paper found that per capita income (PCY) is positively associated with the availability of physical infrastructure like railway, road and power. India has recognized this fact, which is evident in the priority placed on developmental capital expenditure on infrastructure. Moreover, the findings of the paper reveal that capital expenditure on infrastructure has significant impact on growth. Moreover, the findings of the paper reveal that capital expenditure on infrastructure has significant impact on growth but the impact of education and health is much lower than the impact of infrastructure.