Development without Inclusion? Indigenous Regions and the Limits of Convergence in Odisha

Persistent intra-state disparities remain a critical barrier to achieving Sustainable Development Goal 10 (reduced inequalities), especially in regions with significant Indigenous populations. This study investigates development gaps between Indigenous-majority and non-Indigenous-majority blocks in Odisha, India, during 1994 and 2021. Employing composite development indices (CDIs) constructed from six key socio-economic indicators across 314 administrative blocks, we apply sigma and beta convergence frameworks to assess spatial and temporal development dynamics. Blinder–Oaxaca decomposition further disentangles the structural drivers of inter-group disparities. Our findings reveal a paradox: while aggregate convergence is evident across Odisha’s blocks, stark and persistent divergence characterises Indigenous versus non-Indigenous areas. Indigenous blocks demonstrate lower development returns on literacy, employment diversification and health infrastructure compared to their non-Indigenous counterparts—indicating that disparities stem not merely from resource deficits but from differential effectiveness of existing endowments. The findings underscore the importance of disaggregated, meso-level analysis in identifying structural bottlenecks and inform the design of region-specific policy interventions aimed at fostering inclusive development. By highlighting persistent exclusion at the sub-state level, the study contributes to a more nuanced understanding of inequality and convergence in developing regions. JEL Codes: D63, R12, R58, P25, N90