Spatial Income Inequalities in India: an Inter-State and Intra- State Analysis
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Spatial Income Inequalities in India: An Inter-State and Intra- State Analysis S V Hanagodimath1 ABSTRACT: No country/state is an exception for the challenge of regional imbalances. In the recent years, in India, the problem of intra-state REGIONAL DISPARITY is more serious than the inter-state disparity. In the present study inter-state and intra-state disparities have been analysed for per capita state and district domestic products. This study is a unique of its kind, which traces the inter-state, intra-state and intra-division regional disparity for Indian states. The study found that inter-state disparity in per capita income has increased in India over the period of time. With respect to intra-state disparity no state is an exception for it. Quantum of imbalances differs, in some states it has become a serious challenge. States like Uttar Pradesh, Bihar and Himachal Pradesh have higher disparity. Whereas, states like Kerala, Punjab, Andhra Pradesh, Rajasthan and Jammu Kashmir have lower intra-state disparity. To measure the regional disparity more meaningfully and to suggest the proper policy, strong data base at different disaggregated level is the prerequisite. For this purpose, first of all, district (as well as taluk) domestic product should be calculated/estimated every year. At present, only some states like, Karnataka, Andhra Pradesh, Telangana calculate district domestic product every year. Hence, CSO should make proper guidelines and give appropriate training to the officials of Directorate of Economics and Statistics of all states. Thus, one can see the per capita income level of all the districts of the country and also these districts can be ranked. Through this, intra- state disparity can properly be addressed more meaningfully. The present study has observed that in most of the states, the divisions, which have the higher per capita income, have the higher quantum of regional disparity. This is because of centralisation of industrial units in one place. Moreover, economic activities are concentrated only in some selected place. Hence, to achieve the balanced regional development- proper infrastructure facilities (to increase the income and employment opportunities) should be developed in all the regions/divisions based on potentiality and necessity. Increasing of number of administrative divisions (wherever is necessary) is needed for decentralised governance. Further, decentralised administration will be helpful in reduction of regional imbalances. Hence, number of administrative divisions should be increased based on agro-climatic zones. Along with other policies and programmes, these initiatives will be helpful in achieving the BALANCED REGIONAL DEVELOPMENT. 1Assistant Professor, CMDR, Dharwad, Karnataka, India Author is very much grateful to Prof. P R Panchamukhi, Prof. G K Kadekodi, Prof. V B Annigeri and Prof. N S Nayak for their useful comments and suggestions for this paper. 1 Introduction: India is a vast country with diversification in geographical contours, languages and also several socio-economic conditions. Further, diversification can be found not only between states (inter-state) but also between districts and taluks (intra-state). Every region has its own identity and uniqueness in consumption, spending patterns and economic activities. In such circumstances, measurement of national accounts statistics becomes very difficult2. However, we have a very good mechanism3 for the national accounts calculation thanks are due to Central Statistical Organisation (CSO). The contribution of CSO is highly appreciated for its handling of systematic and scientific measurements of national accounts statistics in India since independence. Further, at the state level, Directorate of Economics and Statistics of many states are estimating the district domestic products for their respective states under the guidance of CSO. However, some states do not calculate district domestic product every year. In recent years, several socio-economic policies and programmes are being planned implemented at the grass-root level, even up to blocks and villages. Hence, availability of data on different socio- economic measures at district and sub-district levels is important in general and per capita income or domestic product in particular. This is helpful to understand the intra-state regional disparity in economic growth. Further, it also improves the process of framing and implementing of policies and programmes at the grass-root level. Brief Review of Earlier Studies: There are a plethora of studies on regional imbalances in India at the inter-state levels [see among others, Ahluwalia (2002), Dholakia (1977), Dholakia (1985), Rao, Ric and Kalirajan (1999), Sachs, Jeffrey, Bajpai and Ramaiah (2002), Singh (1999)]. Further there are good number of studies, which have examined the intra-state disparities taking district as the unit of the study for individual states. But there is a scarcity of studies, which have studied the intra-state disparity in incomes taking into consideration of all Indian states. However, there are studies, which have analysed the intra-state disparities taking into consideration of more than one state (but not all states). Kanbur and Venables (2005) found 2 Major difficulties in calculation of national income are different consumption patterns of food and non-food commodities, assigning weight to different commodities and so on. 3CSO successfully modifies the methodology of calculation of National Income over the period of time. 2 that regional disparity in income and social indicators are increasing in most developing and transition economies world over. India is not an exception for growing regional disparity. Suryanarayana (2009) analysed the intra-state regional disparities in Karnataka and Maharashtra. The study reveals that even though Karnataka and Maharashtra are in some better-off positions in terms of mean-based estimates of average income, they have experienced inter-regional disparities, interpersonal inequalities and intra-regional deprivations. Dubey (2009) using the National sample survey (NSS) consumption data, analysed the intra-state disparity for Gujarat, Haryana, Kerala, Orissa and Punjab. The study found that not only inter-state disparities but also intra-state disparities are increasing in India. Bhattachary (2009) has also observed increasing intra-state disparities in government expenditure taking into consideration of six north Indian states. Using NSSO data, Chaudhuri and Gupta (2009) estimated poverty ratios for districts, and found wide spatial disparity in the levels of living of the Indian districts, both within and across the states. The study indicated that the range of disparity at the sub-state level within a state is often more serious than the disparity between the states. However, as it has been already mentioned that there is a scarcity of studies, which have studied the intra-state disparity in per capita income, taking into consideration of all Indian states (with comprehensive approach).There is a need for a study, which should analyse the intra-state disparities for Indian states with per capita income and its (intra-state disparity) association with economic growth of the nation.Hence, the present study is an attempt to fulfil this research gap. Data and methodology: The study is entirely based on secondary sources of data. State-wise domestic product and population data have been collected from ‘Hand book of statistics on Indian economy’ of RBI (Reserve Bank of India). GSDP and per capita GSDP data have been used from 1993-94 to 2015-16 at constant prices of 2011-12. For this purpose base shifting and GSDP deflator methods have been used. District wise domestic product and population data have been collected from Directorate of Economics and Statistics (DES) of respective state governments. All the states do not estimate the district domestic products every year. Among the available district domestic product data, latest year data have been used (see appendix table 1 for source of data for different states for district domestic product). Comparison of districts ‘within the state’ has been made; not for ‘inter-state’. For intra-state analysis, only those states are selected, which have the data on district level domestic product, are selected. 3 For more meaningful analysis districts are categorised into four groups namely Very High, High, Above Average, Below Average, and Very Low. For this purpose all the states are first divided into two groups on the basis of state average index values - one above the all- India average and the other below the all-India average. Then two more averages are worked out, one for the group of states whose values are above the all-India average and another for the group of states whose values are below the all-India average. The states whose values are above and below the former average are classified as ‘Very High’ and ‘Above Average’ states, respectively. The states whose values are above and below the latter average are classified as ‘Below Average’ and ‘Very Low’ states respectively. Different tools such as ratios, averages, percentage, compound annual growth rates (CAGR), coefficient of variation (CV) and correlation coefficient are used. Further, for the pictorial presentation line, bar and scatter diagrams have been used. Thematic maps have been used (QGiS Softwate) to mark the regions on the basis of level of development and quantum of disparity. This study has been divided into 4 sections; apart from introduction;