ABSTRACT
This chapter addresses the causes and effects of state economic growth. The analysis of the growth process is based on the pioneering research of scholars such as Kuznets. The research of Kuznets indicates that a long term increase in income per capita tends to result in fundamental changes in the structure of an economic system. The chapter describes the structural transformation of the state economies. The national income accounting methods developed by Kuznets were adopted by Indian scholars to estimate changes in economic variables. The agricultural states of India have undergone changes with respect to the proportion of income derived from each sector. Economic growth can occur as a result of technological change or an increase in the inputs used in the production process. Substantial empirical evidence exists to support the contention that most economic growth experienced by the industrialized world can be attributed to the technological innovation.
