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Jharkhand, Uttarakhand & Chattisgarh; The Post Split Growth Story

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Former Uttar Pradesh Chief Minister Mayawati last year had proposed the break-up of UP into four states. The proposition received a mixed response.

 

There was general agreement that the most populous state in the country and 75 districts could do with a break-up for easier administration. But the move was seen as politically motivated. And subsequently, Mayawati lost the elections.

 

But what are the arguments in favour of and against divided states? How do the growth and prosperity indicators stack up over time? IndiaSpend’s Dhritiman Gupta picks up the trail of the three divided states that were formed in 2000. The inevitable conclusion: breaking up may be hard to do but is good for everyone.

 

But for reasons which may not be what you would think. Specifically, all the states– Jharkhand, Uttarakhand and Chhattisgarh – have seen their residents’ lives improve dramatically with massive jumps in per capita income and overall economic growth.

 

New States Have Higher Growth

 

Significantly, all three states beat their mother states in industrial growth. While Chhattisgarh is an exception of sorts, the new states also achieved greater progress in terms of social indicators compared to the mother states of Bihar, Uttar Pradesh & Madhya Pradesh.

 

Let’s start by comparing the growth rates of Gross State Domestic Product (GSDP) of the states pre and post separation.

 

Table 1- Growth before 2000

 

Years State Pair 1 State Pair 2 State Pair 3
  JH BI UT UP CH MP
1994-95 4.2 10.9 8.8 5.7 1.2 2.8
1995-96 2.6 -13.9 -0.2 3.6 3.0 6.1
1996-97 -4.1 23.7 6.4 10.7 4.1 6.5
1997-98 26.3 -3.8 1.8 -0.09 3.1 5.0
1998-99 5.7 7.5 1.6 2.7 5.3 6.5
1999-00 -2.7 3.6 0.8 5.4 0.2 10.5
2000-01 -9.8 16.0 12.0 2.1 -5.1 -6.9
Average Growth over 1994-95 and 2001-02 3.6 4.9 4.6 4.0 3.1 4.7

 (Figures are in %)

Source: Planning Commission Data

 

Note 1: JH-Jharkhand, BI-Bihar, UT-Uttarakhand, UP- Uttar Pradesh, CH-Chhattisgarh, MP- Madhya Pradesh

 

Note 2: Even though the states did not exist before 2000, Planning Commission has data for the areas which formed the new states.

 

Table 2: Growth after 2000

 

Years State Pair 1 State Pair 2 State Pair 3
  JH BI UT UP CH MP
2001-02 6.7 -4.7 5.5 2.1 13.2 7.1
2002-03 2.5 11.8 9.9 3.7 -0.06 -3.9
2003-04 8.0 -5.1 7.6 5.2 16.5 11.4
2004-05 15.2 12.1 12.9 5.4 5.4 3.0
2005-06 -3.2 0.9 14.0 -6.5 3.2 5.3
2006-07 2.3 17.7 14.1 8.0 18.6 9.2
2007-08 20.5 7.6 17.8 7.3 8.6 4.6
2008-09 -1.7 14.5 12.6 6.9 8.3 12.3
2009-10 4.9 10.4 11.1 6.1 3.2 10.5
2010-11 6.0 14.7 7.3 7.8 11.1 8.1
2011-12 6.5 13.1 8.8 6.2 10.8 NA
Average since 2004-05 6.3 11.4 12.3 6.8 8.6 7.6

(Figures are in %)

Source: Planning Commission Data

 

Note 1: JH-Jharkhand, BI-Bihar, UT-Uttarakhand, UP- Uttar Pradesh, CH-Chhattisgarh, MP- Madhya Pradesh

 

If we take a look at average growth rates for the period before the formation of the states (over 1994-95 and 2001-02) (Table 1), we see that with the exception of Uttarakhand-Uttar Pradesh pair, the mother states were growing at faster rates over that period.

 

Jharkhand was growing at 3.6% while Bihar grew at 4.9%. Madhya Pradesh was growing at 4.7% while Chhattisgarh grew at 3.1%. Uttarakhand’s growth rate was 4.6%, marginally higher than Uttar Pradesh, which grew at 4%.

 

The period after 2000, (Table 2) was a good period for the newly formed states. Uttarakhand did particularly well, stepping up its average growth rate to 12.3% since 2004-05 which is way better than the figure for Uttar Pradesh at 6.8%. Chhattisgarh also outstripped Madhya Pradesh over the same period by 1 percentage point. Jharkhand, however, has failed to match Bihar’s performance since 2000.

 

Agriculture The Growth Driver

 

Bihar’s growth was mostly powered by a steady agricultural growth rate of 8.1% over 2004-09, while the corresponding figure for Jharkhand was 1.4%. This could be one of the reasons behind Jharkhand lagging Bihar post 2000.

 

Agriculture in Chhattisgarh grew at 2.8%, which was way better than Madhya Pradesh at 0.8%. The gap between Uttar Pradesh and Uttarakhand was, however, mostly thanks to industrial growth. Agricultural growth in Uttarakhand was 1.5%, lower than figures for Uttar Pradesh at 2.7%.

 

Better Industrial Growth

 

If we look at the average industrial growth rates of the states over 2004-2009, we see that the newly formed states have outstripped their mother states.

 

The industrial sector in Chhattisgarh grew at 13% over the 5-year period while the growth rate was only 6.7% for Madhya Pradesh. The growth rate of industries in Uttarakhand was 11.8% while the figure for Uttar Pradesh was only 6.5%. The figures for Jharkhand and Bihar are 11.5% and 5.8% respectively.

 

Better Per-Capita Income

 

We will look at per-capita income of the states to get an idea of general well being of its people.

 

Table 3

 

State Per-Capita Income 2000-01 (Rs.) Per-Capita Income 2010-11 (Rs.) Per-Capita Income of 2010-11 as a multiple of 2000-01
1. Bihar 6,554 13,632 2.0
2. Jharkhand 9,980 21,734 2.1
3. Madhya Pradesh 11,150 22,382 2.0
4. Chhattisgarh 10,808 27,156 2.5
5. Uttar Pradesh 9,721 17,349 1.7
6. Uttarakhand 14,932 44,723 3.0

Source: Planning Commission Data

 

The new states have managed to increase its citizen’s incomes much faster than their mother states. Bihar and Jharkhand have doubled the per-person income over the last decade.

 

Madhya Pradesh also doubled its citizen’s income but Chhattisgarh did better with a figure of 2.5. The stand out was Uttarakhand, which tripled the per-capita income while Uttar Pradesh failed to even double it.

 

Table 4

 

States Poverty Rate 1993-94 (%) Poverty Rate 2004-05 (%) Poverty Rate 2009-10 (%) % Reduction in poverty since 2004-05
1. Bihar 60.5 54.4 53.5 0.9
2. Jharkhand NA 45.3 39.1 6.2
3. Madhya Pradesh 44.6 48.6 36.7 11.9
4. Chhattisgarh NA 49.4 48.7 0.7
5. Uttar Pradesh 48.4 40.9 37.7 3.2
6. Uttarakhand NA 32.7 18.0 14.7

Note- Poverty Rate- Number of people below poverty line as a % of total population

Source: Planning Commission Data

 

Of the 354 million poor people in India in 2009-10, these 6 states had 180 million or 50.8%. Uttar Pradesh had the maximum number of poor people in the country at 73 million.

 

New States Reduce Poverty Better

 

Over 2004-09,Uttarakhand and Jharkhand have done a better job in reduction of poverty than their mother states reducing the poverty rates by 14.7% and 6.2% respectively while Uttar Pradesh and Bihar could manage figures of 0.9% and 3.2% respectively. Chhattisgarh did badly reducing its poverty rate by 0.7% where the corresponding figure for Madhya Pradesh was 11.9%.

 

If we take absolute number of poor people into account Bihar did the worst with an increase of 5 million (49 million to 54 million) over 2004-09. Jharkhand reduced the number of poor people by 1 million (12 million to 11 million).

 

Madhya Pradesh reduced its poor population by 5 million (31 million to 26 million) while in Chhattisgarh the number of poor people went up by a million (11 million to 12 million).

 

Uttarakhand did the best by reducing the number of poor by 12 million (29 million to 17 million) while in Uttar Pradesh the numbers went up by 0.7 million (73 million to 73.7 million).

 

Let’s look at the literacy rates of the states.

 

Table 5

 

States Literacy Rate in 2001 (% of population) Literacy Rate in 2011 (% of population) % Improvement
1. Bihar 47.0 63.8 16.8
2. Jharkhand 53.5 67.6 14.1
3. Madhya Pradesh 63.7 70.6 6.9
4. Chhattisgarh 64.6 71.0 6.4
5. Uttar Pradesh 56.2 69.7 13.5
6. Uttarakhand 71.6 79.6 8.0

Source: Planning Commission Data

 

Better Literacy Rates

 

The first thing to note is that the newly formed states had a more educated population than their mother states in both the years 2001 and 2011.

 

While the impressive improvements recorded by Bihar, Jharkhand and Uttar Pradesh,16.8%, 14.1% and 13.5% respectively, can be attributed to low bases in 2001, Madhya Pradesh and Chhattisgarh, at 6.9% and 6.4% respectively have not done so well. Uttarakhand despite being on a higher base than Madhya Pradesh and Chhattisgarh recorded a higher improvement rate of 8%.

 

IMR: New States Perform Better

 

As a health indicator, we will use Infant Mortality Rates, instead of Life Expectancy as we have done in previous article, due to unavailability of such data for Jharkhand, Chhattisgarh and Uttarakhand. Infant Mortality Rate is defined as number of child deaths per 1000 live births.

 

Let’s look at the Infant Mortality Rates (IMR)

 

Table 6

 

States IMR in 2006 IMR in 2008 IMR in 2010 Reduction since 2008
1. Bihar 60 56 38 18
2. Jharkhand 49 46 30 16
3. Madhya Pradesh 74 70 42 28
4. Chhattisgarh 61 57 44 13
5. Uttar Pradesh 71 67 44 23
6. Uttarakhand 43 44 25 19

Source: Planning Commission Data

 

In 2006, all the newly formed states were better than their mother states when it comes to infant mortality. Madhya Pradesh and Uttar Pradesh had IMR figures higher than 70.

 

Since then improvements have taken place. Particularly since 2008, Madhya Pradesh has reduced IMR by 28. Now Chhattisgarh is behind Madhya Pradesh.

 

Uttarakhand has done better than Uttar Pradesh all through. In fact in 2010 Uttarakhand had the lowest IMR of all these 6 states. And even though Jharkhand does better than Bihar when it comes to IMR, Bihar has done a good job reducing its IMR by 16 since 2008.

 

The numbers as a whole do suggest that small states clearly have an edge when it comes to transforming the lives of their citizenry. While a 10-year study is useful and insightful, we would also admit that perhaps a longer time horizon is needed for a sharper assessment of what worked and didn’t. For now, this is story the figures tell.

  1. k V Narayana Rao Reply

    July 17, 2012 at 5:53 am

    Provide information,if any,on special assistance from the planning commission, central government or other sources ,for general or specific purposes

  2. Anil Reply

    August 4, 2013 at 3:26 pm

  3. srikanth Reply

    December 22, 2015 at 8:29 am

    Good paradigm for the newly formed Telangana state since people were spelling doom for smaller states.

  4. KUMAR GAURAV Reply

    February 1, 2016 at 10:51 am

    The provided data have given an analysis of a different paradigm of social development, but in the case of Bihar and Jharkhand, the data of population are not shared. With data on population, the comparison will be more accurate and rational, though it can change the whole paradigm, excluding the industrial development as Bihar is more populous than Jharkhand.

  5. Tanvi Kumari Reply

    June 10, 2016 at 12:09 pm

    provided data are not sufficient for the analysis, if all the information and rank are available then plz share with your web.

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