BackIndia plays catch-up at a glacial pace
Given the growth differential India has enjoyed with respect to developed countries, its per capita income should have come closer to the levels of the latter
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The theory of conditional convergence in economics says that poor economies benefit from a growth catch-up potential and all economies will eventually converge in terms of per capita income. That’s because poorer countries can benefit from adopting the institutions, techniques and production methods already developed in the rich countries. It’s conditional because much depends on the policies pursued.
How has this convergence theory worked for India?
Given the significant growth differential India has enjoyed with respect to developed countries, our per capita income should have come closer to the levels of the latter. But as the chart shows, India’s per capita income (current prices) as a proportion of the US’s has hardly grown in the past 30 years. Even China, while it has grown considerably, still has a lot of catching up to do.
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