Abstract
This article tries to unravel the linkages between the prevalence of a peaceful environment and the status of economic development amongst different states of India. The central contention hypothesized in the article is that the: crime rate has negative effect on economic growth. However, only those crimes that affect the investment behaviour, lead to lower growth rate. To test the hypothesis, the rate of murder is used as an indicator of crime. Further, the motive of murder is used to distinguish between growth affecting crime and other types of crime. Generally, results indicate large variations in crime rate amongst the states in India. The pooled cross-sectional regression results verified that economic growth is negatively affected by the rate of murder for gain or due to property dispute. Other motives of murder do not show any significant impact on growth rate. The analysis suggests that there is a pressing need to combat crime, having negative impact on investment, to trigger economic growth of the regions.
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