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Resource centre on India's rural distress
 
 

Hope for poor states

It is indeed heartening to note that most states have been growing remarkably fast, going by the Central Statistical Organisation’s (CSO) current data on the economic growth of states over the last decade. Even chronically poor states such as Orissa, Bihar, Rajasthan and, more anaemically, Uttar Pradesh have participated in the boom, sending out a clear message that no state can be written off.

One can argue that GDP alone cannot be the final indicator of the overall well being of people living in these states. They need good governance to register growth on the human development index as well. Higher growth would, in fact, help reach this goal. States will have more revenues to invest in social infrastructure such as health and education. This, in turn, will lead to an improvement in the quality of human capital, thereby making it a virtuous cycle.

That gross state domestic product (GSDP) has been growing well in states like Haryana, Maharashtra and Gujarat, along with the southern pack, does not come as a surprise. But Bihar growing at 11.4% last fiscal, surpassing even Gujarat, India’s fastest growing state over the last seven years, is something else. Its growth accelerated from an average of 3.7% over the 9th Plan (1997-’02) to 8.5% over the 10th Plan (2002-’07). Orissa’s growth rate accelerated from 5.1% over the 9th Plan to 9.2% over the 10th. The newly created states of Chhattisgarh, Uttarakhand and Jharkhand, too have been growing particularly well.

But Madhya Pradesh continued to be a laggard, its growth rate stagnant at 4.5% over the 9th and 10th Plan periods. The growth rate of India’s largest state, Uttar Pradesh, picked up from an abysmal average of 2.6% during the 9th Plan to a still low 5.4% over the 10th Plan. West Bengal has been another disappointment, with its average growth rate for the 10th Plan, 6.3% actually lower than the level of 6.5% achieved during the 9th Plan in contrast to Kerala, the other Communist-ruled state. Without stellar performance from the states, there would have been no India growth story, of course.