The American economist Robert Solow developed the neo-classical theory
of economic growth. Solow won the Nobel Prize in Economics in 1987.
The Solow Neo-classical Growth Model features the idea of catch-up growth when a poorer country is catching up with a richer country – often because a higher marginal rate of return on invested capital in faster-growing countries.
It is said that developing countries find it easier to get rich once their neighbour/s already are. The same pattern can often be seen in the developed world. Not just between countries but within countries as well.
But that is not the case in India. The states are becoming even more unequal.
This has been a puzzle to economists.
One theory blames it on poor infrastructure, another on India's skill intensive IT sector, and a third on poor governance.
As long as the divergence does not become more serious and forces of convergence gain strength in other socio-economic spheres all will be better off.
