SPECIAL ARTICLE Regional Disparities in India A Moving Frontier Sanchita Bakshi, Arunish Chawla, Mihir Shah Among the various axes of inequality in India, regional Overview 1 disparities have acquired greater salience in recent times, he Eleventh Plan period saw states with the lowest per PCI with demands being made for special status for certain capita income ( ) register relatively higher rates of Tgrowth. Bihar, Odisha, Uttar Pradesh, Madhya Pradesh states on this basis. What has been completely and Rajasthan had the lowest PCI in the Eighth Plan. All of these overlooked in the process is that regional backwardness have gradually improved their growth rates, particularly in in India is a moving frontier with the most intense forms the Eleventh Plan. The average gross domestic product (GDP) of poverty and deprivation getting increasingly growth rate of these states increased from 4.6% in the Eighth Plan to 6.76% in the Tenth Plan and 8.58% in the Eleventh Plan. concentrated within enclaves of backwardness, Table 1 provides growth rates of states across plan periods. especially those inhabited by adivasi communities. This These show several convergence trends. First, the average GDP paper reports on a recent exercise within the Planning growth rate of states with lowest PCI over the last three plans Commission that tries to capture this dynamic of is increasing continuously and during the Eleventh Plan, it exceeded the average growth rates of general category states. regional backwardness in India. Table 1: Growth Rates in State Domestic Product across Plan Periods (% per annum) Sl No States/Union Territories Eighth Plan Ninth Plan Tenth Plana Eleventh Plan 1 Andhra Pradesh 5.4 4.6 6.7 8.33 2 Bihar 2.2 4.0 4.7 12.11 3 Chhattisgarh NA NA 9.2 8.44 4 Goa 8.9 5.5 7.8 9.02 5 Gujarat 12.4 4.0 10.6 9.59 6 Haryana 5.2 4.1 7.6 9.10 7 Jharkhand NA NA 11.1 7.27 8 Karnataka 6.2 7.2 7.0 8.04 9 Kerala 6.5 5.7 7.2 8.04 10 MP 6.3 4.0 4.3 8.93 11 Maharashtra 8.9 4.7 7.9 9.48 12 Odisha 2.1 5.1 9.1 8.23 13 Punjab 4.7 4.4 4.5 6.87 14 Rajasthan 7.5 3.5 5.0 7.68 15 Tamil Nadu 7.0 6.3 6.6 8.32 Annexures A (“List of districts in descending order of backwardness 16 UP 4.9 4.0 4.6 6.90 based on the index”) and B (“List of sub-districts in descending order of 17 West Bengal 6.3 6.9 6.1 7.32 backwardness based on the index”) are posted on the EPW website Special category states along with this article. 18 Arunachal Pradesh 5.1 4.4 5.8 9.42 19 Assam 2.8 2.1 6.1 5.50 The authors gratefully acknowledge inputs received from Montek Singh Ahluwalia, B K Chaturvedi, Siddharth Coelho-Prabhu, 20 Himachal Pradesh 6.5 5.9 7.3 5.50 Kishore Chandra Deo, Radhicka Kapoor, Jairam Ramesh, Abhijit Sen 21 J&K 5.0 5.2 5.2 4.40 and P S Vijayshankar. The authors also acknowledge the inputs of the 22 Manipur 4.6 6.4 11.6 4.60 members of the Advisory Council of the Ministry of Rural Development’s 23 Meghalaya 3.8 6.2 5.6 7.50 India Rural Development Report 2014, which will carry a modifi ed 24 Mizoram NA NA 5.9 8.70 version of this paper. 25 Nagaland 8.9 2.6 8.3 3.50 Sanchita Bakshi (sanchita.bakshi @gmail.com) is Young Professional, 26 Sikkim 5.3 8.3 7.7 12.20 Planning Commission, Government of India; Arunish Chawla (arunish. 27 Tripura 6.6 7.4 8.7 8.00 [email protected]) is Joint Secretary (Expenditure), Ministry of 28 Uttarakhand NA NA 8.8 9.30 Finance, Government of India; Mihir Shah ([email protected]) is a Average of 2002-03 to 2005-06 for all states except J&K, Mizoram, Nagaland (2002-03 to Secretary, Samaj Pragati Sahayog. 2004-05) and Tripura (2002-03 to 2003-04). Source: Twelfth Five-Year Plan, Volume 1, Chapter 11. 44 january 3, 2015 vol l no 1 EPW Economic & Political Weekly SPECIAL ARTICLE Second, these also exceeded the growth rates of all states Figure 3: Growth during 2001-10 and Income in 2001 (including special category) during the Eleventh Plan. Third, 10 y = 3.2326 x - 8.08 the ratio of average growth rates of states with lowest PCI, as R² = 0.0968 against those of fi ve highest PCI states, increased from 57% (Eighth Plan) to 94% (Eleventh Plan). Fourth, the coeffi cient 8 of variation indicating the extent of inequality in growth rates amongst different states also shows an increasing convergence 6 of gross state domestic product (GSDP) growth rates over suc- cessive plan periods. This can be seen in Table 2 and Figure 1. Table 2: Convergence of GDP Growth Rates in Successive Plans 4 Eighth Ninth Tenth Eleventh Plan Plan Plan Plan Average GDP growth of top five states, among general category states (%) 8.02 5.00 7.00 9.10 2 Average annual growth rate ofper capita NSDP 2001-10 Ratio of average growth of bottom 3.7 3.9 4.1 4.3 4.5 4.7 five states to that of all India 0.68 0.75 0.87 1.08 PCI (log Scale) Source: , Volume 1, Chapter 11. Ratio of average growth of bottom five states Twelfth Five-Year Plan to that of non-special category states 0.73 0.84 0.96 1.02 in income levels, the relationship would have been downward Ratio of average growth rate of bottom five states with that of top five sloping. But as Figure 3 shows, the relationship is upward sloping. (general category states) 0.57 0.82 0.96 0.94 States with higher initial per capita NSDP on average grew Figure 1: Convergence of GDP Growth Rates during Successive Plans faster, suggesting that the inequality across states is actually 2 1.1 increasing. Of course, it is important to clarify that although 1.08 Ratio of average growth rates of bottom five states to that of all-India we see no unconditional convergence (reducing dispersion of 1 0.96 income), there still might be conditional convergence. Conditional 0.94 0.9 convergence can be consistent with divergence in PCIs over a 0.82 0.87 certain period of time. It is possible that Indian states are 0.8 converging to increasingly divergent steady states. 0.7 0.75 0.68 Ratio of average growth rates of bottom five states to that of top five states Disparities in Human Development 0.6 0.57 Human development indicators show greater convergence than 0.5 incomes across states. The India Human Development Report Eighth Plan Ninth Plan Tenth Plan Eleventh Plan IHDR (1992-97) (1997-2002) (2002-07) (2007-12) 2011 ( -2011), which estimates the Human Development Table 3: Human Development Index (1999-2000 and 2007-08) Figure 2: Weighted Gini Coefficient (Per capita GSDP, current prices) State HDI HDI Change in Percentage 0.26 (2007-08) (1999-2000) HDI Change Uttarakhand 0.49 0.339 0.151 44.54 Kerala 0.79 0.677 0.113 16.69 0.24 Assam 0.444 0.336 0.108 32.14 Jharkhand 0.376 0.268 0.108 32.14 0.22 Andhra Pradesh 0.473 0.368 0.105 28.53 North-east (excluding Assam) 0.573 0.473 0.100 21.14 MP 0.375 0.285 0.090 31.58 0.2 Tamil Nadu 0.57 0.48 0.090 18.75 Karnataka 0.519 0.432 0.087 31.64 0.18 Odisha 0.362 0.275 0.087 31.64 All India 0.467 0.387 0.080 20.72 Chhattisgarh 0.358 0.278 0.080 28.78 0.16 Bihar 0.367 0.292 0.075 25.68 1980- 1983- 1986- 1989- 1992- 1995- 1998- 2001- 2004- 2007- 2010- 2011- 81 84 87 90 93 96 99 02 05 08 11 12 Himachal Pradesh 0.652 0.581 0.071 12.22 Maharashtra 0.572 0.501 0.071 14.17 Growing Disparities in Per Capita Incomes West Bengal 0.492 0.422 0.070 16.59 However, as Ahluwalia (2011) has shown, convergent growth J&K 0.529 0.465 0.064 13.76 rates have not translated into equalising incomes across states. UP 0.38 0.316 0.064 20.25 An update of the Ahluwalia computation is provided in Figure 2. Punjab 0.605 0.543 0.062 11.42 The coeffi cient of variation of per capita net state domestic Gujarat 0.527 0.466 0.061 13.09 Haryana 0.552 0.501 0.051 10.18 product (NSDP) has increased from around 28% in the early Rajasthan 0.434 0.387 0.047 12.14 1980s to 36% in 2004-05 and further to 41% in 2011-12. Goa 0.617 0.595 0.022 3.70 Figure 3 plots the growth rate of the states for the period Delhi 0.75 0.783 -0.033 -4.21 2001-10 against the log of PCI in 2001. If there was convergence Source: India Human Development Report, 2011. Economic & Political Weekly EPW january 3, 2015 vol l no 1 45 SPECIAL ARTICLE Index (HDI) for states at beginning of the decade and for of our “hungriest” districts.