This study examines the non-linear relationship between corruption and economic development in India by analysing five states: Maharashtra, Kerala, Goa, Rajasthan, and Uttar Pradesh. Using quadratic regression and panel data models, corruption levels are measured through the Corruption Perceptions Index (CPI) to determine threshold points where corruption begins to significantly affect economic growth. The findings reveal a U-shaped relationship in most states, indicating that while lower levels of corruption may temporarily coexist with economic activity, higher levels eventually hinder development. The study contributes to the literature on governance and development by highlighting the importance of state-specific policy interventions to control corruption and promote sustainable economic growth.
Atish Choudhary (Sat,) studied this question.