Did the splitting of three big States in 2000 help their backward former regions that became independent, small States? An analysis of a series of district-level data suggests that while the split did help, politics and policy matter more.
Since the official source of India’s GDP numbers, the Central Statistical Organisation, does not compute district-level data, the Delhi-based independent economics research firm Indicus, which estimates district domestic product, shared its numbers with The Hindu. The numbers show that while the districts that would later become Uttarakhand, Jharkhand and Chhattisgarh grew slower than the districts that remained in Uttar Pradesh, Bihar and Madhya Pradesh in the five years preceding the split (1995-2000), the smaller States grew faster than the parent States in the five years immediately after the split (2000-2005). But — and this is where policy and politics come in — there is a significant exception in the most recent five years: Bihar. Between 2005 and 2010, Bihar was the only parent State to buck the trend, growing at nearly double the pace as Jharkhand.
No State has had quite the sort of revolving door to the Chief Minister’s office as Jharkhand in the last five years: two Chief Ministers from 2000 to 2005; and from 2005 to 2010, changing hands six times, with two rounds of President’s Rule thrown in. In contrast, Bihar has had a stable government with good governance and development as its priority since 2005. “The first job was to make the administration functional. Then, Bihar raised substantial internal resources, in addition to sizeable devolution from the Centre,” Shaibal Gupta, founder member-secretary of the Patna-based Asian Development Research Institute, told The Hindu.
A sector-wise break-up of GDP data shows that Bihar lost substantial natural resources in the split from Jharkhand, and its primary sector growth — particularly in mining and quarrying — tanked as a result in the years immediately following the split. While the gap between Bihar and Jharkhand in manufacturing output has narrowed substantially over the last ten years, what really fuelled the parent state’s growth was construction; from 2001 to 2011, Bihar’s construction output has quintupled.
For the other two pairs — Uttar Pradesh and Uttarakhand, and Madhya Pradesh and Chhattisgarh — the story has been one of convergence; the gap between the GDPs of the parent and new States narrowed continuously over ten years since they split.
On human development indicators, the new States have done a slightly better job of improving their numbers over the 2000s than the larger parent States; Jharkhand reduced its Infant Mortality Rate from 70 (per 1,000 live births) in 2000, which was higher than the national average, to 39 in 2011, far lower than the national average, while Bihar went from being substantially better than the national average to just about meeting it. Chhattisgarh and Uttarakhand both started from a better position than their parent States in 2000, and have kept up the gap.
In 2001, Uttarakhand had two districts with primary school dropout rates over 40 per cent, while Uttar Pradesh had three. By 2011, the three Uttar Pradesh districts still had drop-out rates over 40 per cent, while all Uttarakhand districts had graduated from this benchmark. The smaller States all have far better pupil-teacher ratios than the bigger ones. The new smaller States were able to increase spending on health and education as a proportion of their total budgets to a point that all three smaller States spend a larger proportion than the parent States.