A Tale of Two States

This paper investigates the underlying causes of poor economic growth of Bihar and Uttar Pradesh (UP), India, despite being endowed with relatively rich natural resources. Against the conventional view, the analysis reveals that poor economic growth is not due to a particular factor but an outcome of a myriad of social, economic and political factors rooted in structural, historical and macro-economic policies. The economic marginalization of Bihar and UP began in the colonial era through the establishment of an exploitative landlord class, which constantly resisted economic and social development even after independence in 1947. The process of marginalization has further been reinforced by the federal central government’s policy of ‘freight equalization’, which nullified the comparative advantage of Bihar and UP in natural resources by subsidizing railway freights of industrial inputs like coal, iron ore, steel, cement and other bulk resources. This, combined with relatively low financial resources received from central government over the consecutive plan periods, has undermined these states’ capacity to invest in health, education, and other social and physical infrastructure and resulted in low human development. The poor performance of Bihar and UP may be attributed to low human capital, weak institutions and poor infrastructure coupled with political instability and social conflict rooted in sectarian politics based on caste, class and ethnic division. Keywords: economic growth; resources endowment; government policy; institutions; Bihar; Uttar Pradesh; India

2005

West Bengal, a major state of eastern India, is conspicuous not only for being ruled by an elected Leftist coalition-so-called Left Front-uninterruptedly for about last three decades (often described as sound 'political stability'), but also for its widely acknowledged successes in fertility transition, execution of redistributive land reform and political decentralisation programmes. Ironically, however, the state, in almost all comparative assessments of social, human, infrastructural developments-typically stands to occupy a clearly lagged position vis-à-vis many other states, especially in the south and even against all-India records on many key indicators. This paper seeks a clue to this by comprehensively evaluating West Bengal's relative performance in demographic and socioeconomic transformation. A well-disciplined grassroots political mobilisation network and machinery of the Left Front parties has been highly instrumental for comparatively fast declines of fertility and population growth rates and for lasting political stability in an otherwise 'laggard' infrastructural, social and human development regime. However, a government geared overwhelmingly to ensuring mass electoral support via grassroots mobilisation network and priority, with a relative neglect of social and economic infrastructure and human development, is likely from longer-term perspective to be stifled by major backlashes, of which one form could be adverse patterns of interstate migration.

This paper makes an attempt to re-examine the issue of inter-state inequality of growth and standards of living across 14 major states within the convergence analysis of neoclassical growth paradigm after economic reforms from 1993-94 to 2004-05. Despite inconclusive evidence for β-divergence in per capita real income, the evidence in favour of β-divergence in secondary and tertiary sector in per capita terms shows the rising inter-state inequality of growth and standards of living across the Indian states during this period. This indicates that growth rates of the relatively better off states of these sectors have grown faster than that of the worse off counter parts. Thus, Policy makers and planners can think of creating the investment climates through private-public partnership in different lagging sectors of the states to achieve the balanced inter-state growth and to catch up the standards of living of the better off states.

2017

In the first chapter of this dissertation, we create original annual average years of education across the major, present-day states of India from 1951 to 2011 in line with work done by Turner et al.(2007). Drawing from multiple volumes of the decennial censuses, Planning Commission reports, Ministry of Statistics and Programme Implementation databases and historical atlases to account for territorial changes since independence, our data show that the average Indian worker had less than a primary education even as late as 2011. However, this is still significantly more than the years of education of the average Indian, with the disparity growing in later years. We also construct original measures of real output per worker across the same period. Using OLS on differenced data, time fixed effects, as well as dynamic panel estimation, our results show an average return of between 20 and 25% to a year of education. After ensuring that our data show no feedback effects from worker output...

Journal of Namibian Studies : History Politics Culture

The inception of economic reforms in 1991 was the starting point towards integrating the Indian economy with the global economy. India opens its eyes to the reality and realizes the vast potential of a market economy. Economic reform leads to gradual integration of economies through free movement of goods, services and capital. The idea that economic reform can create "losers" as well as "winners" has, after an initial resistance, begun to attract the attention of economic researchers and of policy makers at both the national and multilateral levels. This paper aims to explore two key aspects of the impact of economic reform on the labor market i.e. shift in labor market and wage inequality. The period of study is 1971-2021. Indian occupational structure was changed in the post reform period. The study finds that after economic reforms the share of employment in agriculture sector decline. The paper observed an increasing trend of employment in industrial sector ...

Why a state like Kerala's development measures match with that of the OECD countries, and at the same time states like UP and Bihar in the same country that performs poorly in the same indices? It clearly shows that the diversity and variations that India possess in the cultural realm is analogous with the differences in the welfare and developmental performances of each Indian state. It is natural to reach a conclusion for the above if one decides to go by the stipulation that in a federal system, state governments have autonomy to decide on the policy practices and welfare and development initiatives. But the argument remains scanty. While having a unitary system in place why different states perform differently in development indices is a question that evoke multiple parameters to be identified with and which are at times contradicting with each other as well. Though it might appear as a developmental question, political ideology is an important indicator that determines the nature of redistributive politics in India. Moreover history, social structures including the dynamics of caste politics and power, the degree of regionalism expressed in terms of sub nationalism, nature of leadership in the state, political and economic interference of the propertied class and their bargaining power etc. decides the level of welfare politics and differential achievements across the country. The paper thus analyses these indicators in detail with examples of Indian states through the theoretical framework of comparative politics. The paper also examines the policy impacts and implications of the same with a reference to the current political context and future prospects as well

Journal of Development Studies, 2006

We examine India's regional disparities in economic performance between 1970-97. Our preliminary analysis shows that, in absolute terms, initially poorer states grew at slower rates than initially wealthier ones and that there is also evidence of increasing dispersion of income levels across the states. Our econometric analysis investigates the possibility of club convergence and conditional convergence. Although we do not find evidence of the former, we can suggest some of the factors associated in the latter. Our research also indicates that the onset of economic policy reform in 1991 significantly intensified growth differentials between the states.

2014

Inter-state economic and social disparities in India have been mounting in spite of various governmental measures to develop backward areas. This article assesses disparities in terms of demographic indicators, female literacy, state domestic product and poverty. This study attempts to check out this question by analyzing growth rates of aggregate and sectoral domestic product of major states in the pre- and post-reform decades. The results indicate that while the growth rate of gross domestic product has improved only marginally in the post-reform decade, regional disparity in state domestic product (SDP) has widened much more drastically. Industrial states are now growing much faster than backward states, and there is no evidence of convergence of growth rates among states.

2008