'National-level conversations mask high degree of variation of growth and access at regional level'

Why did you choose to write about regional economic diversity in India?

Dr Poornima Dore: My journey with the regional economy began while helping businesses make investment and growth choices. I became curious about the role of the region and what makes firms and individuals choose some locations over others.

Also, travel made me realise that national- and state-level conversations mask the high degree of variation of growth and access that exists at the regional (sub-state/local) level.

The interplay of investment preferences and regional factors stoked my interest to delve deeper, and engage with the concept of economic geography.

I then connected with Dr Narayanan at IIT Bombay to find ways in which theory and practice can be combined to unpack what is happening in economies like ours.

What core questions did you start with? What kind of data did you collect and analyse, and what were the sources of this data?

Dr Dore: Does growth require a nation/region to build on its natural competitive advantage to the exclusion of all else, or should it diversify its risks to be an all-weather player? Also, what is the impact of growth over time - does it lead to a convergent state, where all nations/regions move to a higher equilibrium in time; or is the growth journey bound to create divergence and increase inequalities over time? Our book is situated right in the midst of these two debates, and seeks to analyse how these competing forces work in our immediate environment.

In how we define the “regions” for India, we choose the classification adopted by the National Sample Survey Organisation (NSSO) for the purpose of its surveys across the country. It divides each state into regions based on homogeneity related to agro-climatic conditions, demography, geographical contiguity, etc.

In terms of data, we have looked at parameters of economic structure and access based on public datasets in India – covering population density, sectoral shares of employment, urbanisation, highly skilled labour, access to bank accounts, proximity to markets, etc.

We rely on public datasets released by the NSSO Employment and Unemployment rounds, Population Census of 2001 and 2011, and the Reserve Bank of India.

How did you complement each other's experience and expertise as co-authors?

Dr K. Narayanan: I have a long teaching experience of multiple courses related to the Indian economy. Dr Dore has a rich corporate experience in looking at various regions of India. We have brought in our experience while preparing the manuscript. Both of us are aware of the challenges faced by different regions in catching up with others on development and the diversity of the economy. This collaboration and interaction resulted in this book.

What are the three most important things that you learnt about regional economic diversity in the course of this research?

Dr K. Narayanan: The three most important things to me have been

(a) What extent does the presence of variety of industries or sectors help a region to grow faster,

(b) Access to skills, credit and promotion of urbanization are very critical for a region to grow, and

(c) The need to develop smaller cities to facilitate economic activities.

Dr Dore: I would like to highlight that the NSS region as a framework can be useful for technically mapping information as a least common denominator, and also be used as a planning tool by business as well as government. Its potential is yet to be fully realised.

Secondly, the top 10 and bottom 10 regions that we identify under different parameters, reveal that there are very high variations even within the same state, and that economic diversification can hold the key to growth for certain pockets.

Thirdly, during the cluster analysis, certain “acute” clusters emerged that require significant intervention by both policy and industry to unlock their economic potential.

What target audience do you have in mind for this book, and what impact are you hoping for?

Dr Dore: Our book underscores the need for countries and businesses to adopt a nuanced regional framework for planning and investment, while also strengthening their data backbone.  It looks at the Indian experience to identify

(a) Which regions offer a promise for the future as growth drivers, and

(b) Which ones demand our concentrated attention.

As regions are important units to be promoted as a means to achieve the goals of stability and growth, the target audience for the book is students as well as practitioners in these areas – like investors, policy makers and business leaders.

In addition, anyone dealing with the subject of regional business and diversification and their co-relation with socio-economic performance will also find this book very useful... it could be a good companion for strategists in the social as well as private sectors.