Economic Growth and Social Development: An Empirical Study on Selected States in India

Abstract

The paper attempts to explore the relationship between economic growth and social development in India across states. The study uses panel regression technique to measure the impact of Economic Growth on Social Development of 16 states in India explaining the development process for the period spanning 1981 to 2009. The panel regression technique helps incorporate both the cross-section and time-series aspects of the data. In order to analyze the differences in impact of the explanatory variables on the explained variable across states, the study uses Fixed Effect Dummy Variable Model. The results reveal that most of the economic indicators have played a significant role for the reduction of death rate (Social Development Indicator) in the various states in India. The conclusion of the study is that economic growth has a desirable impact on social development, and that the impact is different for different states in India.

Keywords: Panel Regression, Fixed Effect Model, Economic Growth Indicators, Social Development Indicator.