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What all
this means in terms of regional inequality is indicated in Table 4.
While Maharashtra remains the richest state in terms of per capita income,
the gap between it and other rich states has grown over the second part
of the decade of the 1990s. The increase in the gap is particularly
noticeable in the case of the second richest state, Punjab. Also, Gujarat
has supplanted Haryana as the third richest in terms of per capita income.
The poorest states of Assam, Orissa and Bihar, have actually experienced
a relative worsening of their position, in terms of widening the gap
between their per capita incomes and those of the richest state.
Table 4 >>
What explains
this very wide variation in growth experience across the states of India
? At one level, it appears that the overall growth process in the Indian
economy has widened income differentials not only across classes and
economic groups, but also across the regions. Thus, richer states such
as Gujarat, Karnataka and Tamil Nadu have also had among the highest
growth rates over the recent period. Meanwhile, as is clear from the
charts, the poorest states have also been the most laggard in terms
of economic performance.
If, despite
this, some of the relatively poorer states have managed to gain and
to grow at relatively faster rates, there would have been particular
specific factors at work, including the ability to the state government
to deal with the problem of inadequate local resources and low tax base.
Here it must be noted that among the poorer states (that is those with
a per capita GDP of less than 60 per cent of the richest state) only
West Bengal has shown a rate of growth that is significantly higher
than the national average and higher than that of most other states.
The other
poor states have exhibited low rates of growth as well. (Rajasthan,
for which data are available only till 1997-98, also shows a relatively
high rate of growth over that period.) This makes the performance of
West Bengal even more exceptional, and clearly it is something that
deserves further investigation as to the factors that have been associated
with it.
One point
is however clear for all the states. Only those states have shown relatively
good performance which have managed to achieve some degree of structural
change in terms of reducing the share of the primary sector in the economy.
Alternatively, they must have started the period with a relatively low
share of the primary sector. In particular, the high growth states show
shares of the secondary sector of 20 per cent or more, and this is something
which also typically increases over the period. By contrast, the low
growth states exhibit secondary sector shares of less than 20 per cent.
This is something that is clearly suggested by the different sub-tables
in Table 5.
Table 5 >>
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