Literature Review 文献综述
Bajpai and Sachs (1996), found in the post reform period the central government has freed up states which has allowed greater dynamism by fostering greater competition among the state governments. Some have made use of this opportunity by bringing in more reforms while some still lagging behind. For the purpose of analysis they have divided the states into three categories i.e., reform oriented states (Andhra Pradesh, Gujarat, Karnataka, Maharashtra, and Tamil Nadu), intermediate reformers (Haryana, Orissa, and West Bengal) and lagging reformers(Assam, Bihar, Kerala, Madhya Pradesh, Punjab, Rajasthan, and Uttar Pradesh). With the initiation of reforms in 1991 the role of private investment has acquired a greater deal of significance. States are now in competition with one another to attract private investment both domestic and foreign. The southern states accounted for the 34 percent of the proposals that have been approved in 1998 and Gujarat and Maharashtra accounted for 21 percent in the corresponding period. On the other hand, the states in the North and the East are far behind, except for investments in Delhi.
Shand and Bhide (2004), the economic reforms of 1991 brought to the fore the role of state governments in attracting private investment. In the previous regime of centralized planning the role of state governments was limited to lobbying for public sector investments. In the new environment of liberalized economic policies the states are realizing the need for more competitive strategies to attract private investment in their own states. For further analysis they have divided the 14 states into High Performing State Economies (Karnataka, Maharashtra, Tamil Nadu and Gujarat), Medium Performing State Economies (West Bengal, Andhra Pradesh, Kerala, Haryana, Madhya Pradesh and Rajasthan) and Low Performing State Economies (Orissa, Punjab, Uttar Pradesh and Bihar). In the industrial sector there was increase in the average growth rate for HPSE and MPSE whereas decline for the LPSE. HPSE registered an increased growth in the service sector whereas the growth rate was almost steady in the MPSE and fell in the LPSE.
Ahluwalia (2000), the liberalization has eliminated many of the controls earlier exercised by the central government and increased the role of state governments in many areas that are critical for economic development. The co-efficient of variation of growth rates has increased in the post reform period. Growth accelerated sharply for Gujarat and Maharashtra whereas it decelerated in Orissa, Uttar Pradesh and Bihar. He attributes this variation across states to the business environments in the states. States with investment and business friendly environment performed well than the other states.
Rossiter(2010), is of the view that in the post 1991 period the center began the long retreat from its highly regulatory environment. The reduction in financial transfers and public investment posed major challenges to the state governments. They have to compete with each other via the investment climate for FDI and domestic investment. The nationalist parties of Tamil Nadu and the Congress-BNP split in Karnataka have produced a strong movement towards liberalization whereas liberalization process in Kerala has been slower due to ideological factors by communist parties.(责任编辑：BUG)