D i v - ergent Policies for Convergence Clubs:

9 In brief, the discussion presented above shows that although the convergence debate in the context of India is yet to reach a consensus on the issue of long-run tendencies in the distribution of regional per capita income, a broad trend in the literature has emerged that shows divergence of state per capita incomes in the post-reform period with a possibility of club convergence among these regi. [...] This divergence between the clubs can also be observed from the relative transition paths of the clubs presented in Figure 2 that represent the time path of the mean per capita income of the members of each club as a ratio of the average per capita income of all regions. [...] As explained in the methodology section, if no break is identified for a region, the average growth for the first episode is the same as the growth rate of the entire period. [...] The marginal effects show that the average pre-transition growth and the number of up breaks are significant for all the four clubs while the number of down breaks is insignificant for all the clubs. [...] Based on this, we interpret the up-breaks and down-breaks in the regional economies as the result of the growth up-break in 2002 and slowdown around 2010 in the Indian economy.