By: Dhritiman Gupta
As the Telangana statehood movement continues to simmer, people continue to ask if creating new states is good or bad for India. There is very little information on how a newly created state performed vis-a-vis its parent state.
What are the arguments in favour of and against divided states? How do the growth and prosperity indicators stack up over time? 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.
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Author can be reached at: dhritiman@indiaspend.org
Originally published at: http://www.indiaspend.com/states/jharkhand-uttarakhand-the-post-split-growth-story