From a 2010 paper: Economic growth and ethnic violence: An empirical investigation of Hindu–Muslim riots in India by Anjali Thomas Bohlken, University of British Columbia and Ernest John Sergenti, The World Bank.From the abstract:
Most studies of Hindu–Muslim riots in India have tended to emphasize the effects of social, cultural, or political factors on the occurrence of ethnic violence. In this article, the authors focus on the relationship between economic conditions and riots. Specifically, this article examines the effect of economic growth on the outbreak of Hindu–Muslim riots in 15 Indian states between 1982 and 1995. Controlling for other factors, the authors find that just a 1% increase in the growth rate decreases the expected number of riots by over 5%.
Mostly Economics has a good analysis on the paper.
Probably one of the handicaps of the study is that, because of lack of data, the authors are not able to consider the effect of civic or cultural factors. Actually, other studies, and specifically Ashutosh Varshney's work, have found that "civic factors" are important as well:
What explains these local concentrations of communal violence? Based on a comparison of six Indian cities, three riot-prone and three entirely or mostly peaceful, my book argues that the pre-existing local institutions of civic engagement—political parties; business associations; trade unions; professional associations of teachers, students and lawyers; NGOs; reading and film clubs, especially if they are mass-based, as in South India—explain why some towns remain peaceful, while others go up in flames. Source.
Nonetheless the contribution of the paper is very important because it brings another relevant variable to the debate of conflict in India. It seems that the next step, and challenge, is to include both types of variables (civil/cultural and economic) in the same analysis (be it regression analysis or any other).