Convergence refers to the process by which poorer countries or regions grow faster than their rich counterparts. Regional wage rate per capita converged across Indian states between 1956-57 to 1992-93. The rate of convergence can be ex plained by a direct measurement of convergence, an indirect measurement of convergence, and panel data estimation. Again, wage rates (or factor prices) are taken as the source of convergence rather than per capita income. This is because factor prices are far more useful in accessing the sources of convergence than NSDP aggregates, as well as the fact that they have a more relevant influence on economic policy. Convergence with respect to factor prices implies that the gap in the average workers' living standard between rich and poor states falls over time.
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