Inter-State Variation in Sectoral Growth after State Reorganisation: A Comparative Study of Parent and Newly Formed States in India

Abstract

Since India’s independence in 1947, federal transformations have shaped the formation of new states. In November 2000, Chhattisgarh, Uttarakhand and Jharkhand were created from Madhya Pradesh, Uttar Pradesh and Bihar, respectively. This article explores inter-state sectoral growth variations among these new states. Using panel data from 2004–5 to 2020–21, it compares agriculture, industry, construction, manufacturing, banking and insurance, and services on a per-capita basis. The findings show that while Uttarakhand achieved a higher compound annual growth rate than Uttar Pradesh, the other two parent states outperformed their new counterparts. The analysis also reveals significant sectoral differences, particularly highlighting Uttarakhand’s economic strength as a hilly state.