Abstract
Chapter 2 makes an attempt to find homogeneity in the structural pattern by classifying all states into six broad regions of east, west, north, south and central, (categorized by Zonal Council of India), and northeast (under Northeastern Council). It justifies such a categorization of regions as adjoining states share similarities in terms of socio-cultural traits, agro-climatic conditions, natural resources and topography. Such homogeneity offers vast potential for states within a region for resource sharing and emulation of best practices through inter-state co-ordination for improving and harmonizing both overall growth outcomes of India and of individual states. In this context, the author discusses institutional mechanisms to secure coordination amongst states. Discussing the evolution of zonal councils and the Inter-State Council, the author notes that institutional mechanisms do exist but they need to be activated to sort out the vexed issues cross-cutting states to secure not only higher but also harmonious growth. The chapter extensively shows the dimensions of the growth and variability across sectors at these six regional levels, and then the contribution of these regions towards all-India growth. The chapter has studied the period 2000–2012 under three sub-periods of 2000–2003, 2004–2008 and 2009–2012. These sub-periods broadly correspond to the phases of low growth, high growth and the post-crisis period respectively. The growth results suggest that except the Northeast region, all others shared the benefits of high growth during 2004-08. Further, except the southern and the western regions, all the other regions experienced acceleration in absolute as well as per capita growth in the second and third sub-periods. The western region had the highest growth rate during 2004–2008 and 2009–2012 and also for the entire period of study. The Gross State Domestic Product share of the tertiary sector was the highest followed by that of the secondary and the primary sectors for the northern, southern and the western regions whereas for the eastern, central and Northeastern regions, the share of the tertiary sector was the highest, followed by that of the primary and the secondary sectors. The western and the southern regions have been the key drivers of higher growth rates for the Indian economy. However, sustenance of the higher growth rates would require that growth is shared evenly across regions rather than being concentrated in a few regions. Further, the central and eastern regions account for more than half of the country’s population. Thus, from a welfare perspective, higher growth rates for these two regions are crucial. Most importantly, the dispersion of income across states and regions has gradually increased between 2000 and 2012, and this aspect demands serious attention. Thus while reframing policy process more voices and representation must be incorporated from central and eastern regions to ensure balanced development.
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Notes
- 1.
The National Integration Council (1961) held that ‘a rapid development of the economically backward regions in any state should be given priority in national and state Plans, at least to the extent that the minimum level of development is reached for all states within a stated period’.
- 2.
As Rao et al. (March 27, 1999) observe ‘Our analysis of convergence takes into account the 14 major states in the Indian Union. These 14 major states account for 93 per cent of population and 91.5 per cent of net domestic product in the country and are therefore representative’. They further assert that the ‘special-category’ states and the small state of Goa have been excluded from the analysis because of the significant differences in the structure of their economies from the rest of the states and, therefore, their steady-state values of income are likely to be different.
- 3.
The classification of regions is along the lines of zonal councils.
- 4.
Classification of the zones is given in Annexure 2.
- 5.
ISC consists of the prime minister as the chairman and chief ministers of all states and UTs having a legislative assembly and administrators of UTs which did not have a legislative assembly, governor of a state under president’s rule, six union cabinet ministers nominated by the prime minister as members. The chairman of ISC is also authorised to nominate some union ministers as permanent invitees to the ISC.
- 6.
Classification of different sectors for the purpose of this study is as per Central Statistical Organization (CSO) and is given in Annexure 1.
- 7.
The year 2000 refers to 1999–2000. Thus, the period of analysis is from 1999–2000 to 2011–2012. In this form of reporting, the 1999–2000 covers 9 months of the calendar year 1999 and 3 months of the calendar year 2000. Thus, in calendar year terms, the period of analysis broadly corresponds to 1999–2011.
- 8.
The sectoral growth rates have been reported on an absolute rather than per capita basis. This is because we do not have information on population on a sectoral basis. As such, applying the overall population growth numbers to derive the sectoral growth on a per capita basis might not give the correct picture.
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Appendices
Annexure 1
2.1.1 Data Issues
The State Domestic Product (SDP) data published by the Central Statistical Organization (CSO) spreads over seventeen subsectors. The classification of the primary, secondary and tertiary sector is based on the following subsectors:
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Primary Sector: ‘Agriculture’, ‘forestry and logging’, ‘fishing’ and ‘Mining and quarrying.’
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Secondary Sector: ‘Registered manufacturing’ and ‘unregistered manufacturing’, ‘construction’ and ‘electricity, gas and water supply’. Sum of the registered and the unregistered components gives the figures for manufacturing.
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Tertiary Sector: Transport (Railways and by other means), ‘Storage’ and communication, ‘trade, hotel and restaurants’, ‘banking and insurance’, ‘Real Estate, Ownership of Dwellings and Business Services’, ‘Public Administration’ and ‘other Services’.
In addition, we can have the following classification of the three sectors: Agriculture, Industry and services. As per this popular classification,
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Agri-allied: Agriculture, Forestry and Fishing.
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Industry: Secondary Sector plus mining.
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Services: Tertiary Sector.
Over the past few years, there has been a significant improvement in the reporting of SDP data. First, we now have information on SDP with significantly reduced lag and the combined SDP of all states accounts for a higher proportion of the GDP than it was a few years ago. For instance, in the year 2000, combined SDP of all states accounted for 92 % of the GDP. This significantly increased to 96 % by 2012.
Annexure 2
2.2.1 Classification of Zonal Councils
Section 15 of the States Reorganization Act 1956 provided that there shall be a zonal council for each of the five zones of the country . The present composition of these zonal councils is as under:
Northern Zonal Council
It consists of the states of Haryana, Himachal Pradesh, Jammu and Kashmir, Punjab, Rajasthan, National Capital Territory of Delhi and the Union Territory of Chandigarh.
Central Zonal Council
It consists of the states of Chhattisgarh, Uttarakhand, Uttar Pradesh and Madhya Pradesh.
Eastern Zonal Council
It consists of the states of Bihar, Jharkhand, Odisha and West Bengal.
Western Zonal Council
It consists of the states of Goa, Gujarat, Maharashtra and the UT of Daman and Diu and Dadra and Nagar Haveli.
Southern Zonal Council
It consists of the states of Andhra Pradesh, Karnataka, Kerala, Tamil Nadu and the Union Territory of Puducherry.
Northeastern Council
The northeastern States, i.e. (i) Assam (ii) Arunachal Pradesh (iii) Manipur (iv) Tripura (v) Mizoram (vi) Meghalaya and (vii) Nagaland are not included in the zonal councils and their special problems are looked after by the North Eastern Council, set up under the North Eastern Council Act, 1972. The state of Sikkim has also been included in the North Eastern Council vide North Eastern Council (Amendment) Act, 2002, notified on 23 December 2002.
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Misra, B. (2015). India’s Growth Performance 2000–2012: Region-Based Perspective. In: Bhattacharya, R. (eds) Regional Development and Public Policy Challenges in India. India Studies in Business and Economics. Springer, New Delhi. https://doi.org/10.1007/978-81-322-2346-7_2
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