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States’ Performance- Manipur One Of The Biggest Losers

Economically, India‘s most successful regions are small, relaxed, beautiful and reasonably well governed ‘” not its industrial powerhouses

The central statistical office has released figures of state domestic product from 1999-2000 to 2007-08. This nine-year period comprises both the latter years of the BJP government which saw the telecommunication revolution, and the great industrial boom after 2005. There was some doubt in the 1990s whether the reforms had had a positive effect on growth. The results varied according to what initial and terminal years one chose, but growth in the 1990s was not distinctly higher than in the 1980s. Factors other than reforms were at work. In particular, the 1980s had seen high agricultural growth, and substantial capital inflows; the investment that public enterprises then made by borrowing abroad boosted growth, but led to the payments crisis of 1991.

Thus, the verdict on the reforms from the 1990s was not negative; but they were also not a runaway success. The period after 1999 was not subject to such reservations. The process of tariff reduction, which stretched through the 1990s, was complete; and the elimination of import licensing in 2001 left the economy substantially open to trade. So the first decade of the century can be called the first truly liberalized decade of independent India.

In the nine-year period to 2007-08, gross national product grew at an annual rate of 7 per cent ‘” higher than achieved over any period of similar length in the 1980s or 1990s. This was the time of shining India; although the BJP did not enjoy the fruits of what it sowed, the shine did not fade with its departure.

The highest growth ‘” 13.1 per cent a year ‘” was shown by Pondicherry. It was not a triumph of manufacturing or information technology; it was just beauty, calm and hospitality that attracted people and made Pondicherry richer.

The next highest growth ‘” 11.3 per cent ‘” was recorded by Chandigarh, another place known for good living conditions. Uttarakhand (8.9 per cent) and Sikkim (7.8 per cent) too put their good looks to good use.

The third highest growth ‘” 9 per cent ‘” was in Delhi; this was even before its renovation in preparation for the Commonwealth Games had started. It is India’s richest city, getting richer by the day. And it helped Haryana, which invested in Gurgaon into which the activities that could not find space in Delhi could spill over. Haryana too grew at 9 per cent, far exceeding Punjab’s 4.7 per cent, which joined the company of Uttar Pradesh (4.8 per cent) and Madhya Pradesh (3.6 per cent).

These three states recall the memory of Bimaru states, which earned that title by their poor growth in the 1990s. That decade showed higher growth in the peninsula, especially the southern states, than in the northern ones of Bihar, Madhya Pradesh, Rajasthan and Uttar Pradesh. That pattern has not entirely disappeared, but it has blurred. Bihar grew at 6 per cent, and Rajasthan at 5.9 per cent ‘” rates lower than the national average, but still better than in the 1990s, and better than their neighbors’.

At the end of the near-decade, Chandigarh retained the first place as richest. The next three ‘” Delhi, Goa and Pondicherry ‘” also stayed at the top, though there were minor changes in their ordering. Gujarat and Kerala moved up three places; Punjab, Madhya Pradesh, West Bengal and Assam moved down three places. The biggest gainers were Uttarakhand, which moved up eight places, and Nagaland, which moved up six places. The biggest losers were Mizoram, which moved down six places, and Manipur, which moved down four places; Jammu and Kashmir moved down three places. Terrorism does affect states’ growth adversely; conversely, poor growth is good for terrorists, who face less competition in the job market.

So much changed over the nine years, but some things remained the same. Uttar Pradesh and Bihar remained at the bottom. UP’s annual growth was a measly 4.8 per cent; Bihar’s, at 6 per cent, was better, though still below the national average. Mayawati’s elephants did not stampede her state into prosperity, but Nitish Kumar’s labors of love did make a difference.

Small states figure among the top performers, namely Pondicherry, Chandigarh and Delhi. Uttarakhand went up eight places, Nagaland six (though Mizoram, Manipur and Kashmir slipped). Smaller states face less interregional conflict; their governments have to make fewer compromises that hurt growth. Small size does not guarantee good government; but it does remove certain drags on performance. The current agitations for smaller states do not have the least concern about growth; but they may have an unintended beneficial effect.

*You can read the original article here

(Courtesy: Business World)

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