How Do Different Categories of Infrastructure Affect Development?

This paper explores the role played by infrastructure in determining the level of economic development across the states over different time spans during the past quarter century. A comparative static framework is developed in order to test the movement of the development trajectory of the states in the infrastructure-income plane. The findings of the paper are statistically significant and have serious implications for future regional policies. It shows that, interstate disparities in physical, social and economic infrastructure facilities have remained at an alarmingly high level. There are also indications that interstate differences in infrastructure are responsible for a growing regional income disparities.