Despite its rapid growth in recentdecades, GDP per capita in India remains at a relatively lowlevel by international standards, and the country continuesto be marked by large subnational disparities in levels ofwell-being. These large disparities naturally lead tointerest in India’s spatial landscape of potential foreconomic development. Against this backdrop, this paperpresents the results of an analysis of underlying variationsin economic potential across Indian districts, whereeconomic potential is defined as the extent to which adistrict possesses factors that are important determinantsof the ability to experience a high level of productivity.The analysis is based on a simple composite EconomicPotential Index, which is constructed from variables forwhich robust evidence exists of their importance asdeterminants of local productivity. From the analysis, apicture emerges of a heterogeneous landscape of economicpotential characterized by strong geographic clustering ofdistricts. The paper also reveals particularly high levelsof underperformance, relative to potential, for districts inUttar Pradesh.
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