Dynamic Links between Economic Prosperity and Human Development

Economic growth, in recent development paradigm, has been identified as necessary, but not sufficient condition for the expansion of human capabilities. Academic literature hypothesizes that there exists a two-way relationship between economic prosperity and human development. It is quite possible for the absence of income growth to steadily erode standards of human development; and without human development, growth is not sustainable, offers only temporary gains. Using disaggregated sub-national data over a reasonably long period, this study examines the relationship between economic performance and human development in Indian sub-national context. Key findings reveal that both chains of transformation are operational. However, as the chain of transformation from human development to economic prosperity is comparatively strong than that of the other this study recommends a policy which emphasizes the promotion of both aspects of development.