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“Maharashtranomics” and Bihar

by · November 9, 2008

In Part I of this series a few weeks ago, I had promised to share some data on statewise GDP, taxes and population in India.

I am still working through the various numbers but below is snapshot data* for the five largest states in India (population-wise). Together these states make up almost half of Lok Sabha.

Name of State GSDP (Rs.  billions) Population (in millions) Per Capita (Rs.  ‘000s) Lok Sabha Seats
         
Andhra Pradesh 2.69 76.21 30.48 42
Bihar 7.96 82.99 9.60 40
Maharashtra 4.32 96.87 44.63 48
Uttar Pradesh 2.73 166.19 16.47 80
West Bengal 2.36 80.17 29.44 42

It reveals some interesting facts:

Maharashtra has more than 5-times the GDP of Bihar, mainly driven by its 5x per-capita GDP as compared to Bihar. In terms of number of seats in Lok Sabha though, it has 48 compared to 40 for Bihar.

Andhra Pradesh and West Bengal have similar-sized GDPs (AP is about 14% more GDP than WB) and not much different per-capita GDP.; Both send 42 candidates to the Lok Sabha.

UP’s per capita GDP is twice that of Bihar but it is still only 55% of AP or WB. Compared to Maharashtra, its per capita GDP is barely 37%. It is of course, the state that sends the maximum number of MPs to LokSabha and these numbers make it obvious why Mayawati might actually make it all the way to 7, Race Course Rd (although it will by no means be easy).

More on this in the days to come.

Related Posts:

No longer funny…

Alaskonomics and Bihar – Part I

“Biharnomics” Examined 

* Source: Various, incl. Wikipedia and 12th Finance Commission Report

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B Shantanu

Political Activist, Blogger, Advisor to start-ups, Seed investor. One time VC and ex-Diplomat. Failed mushroom farmer; ex Radio Jockey. Currently involved in Reclaiming India - One Step at a Time.

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11 Responses

  1. Hemant says:
    November 9, 2008 at 11:42 am

    @Shantanu a very good effort. Thanks for all the info.

    I had also liked a similar post on Jammu and Kashmir on this blog.

    Such posts encourage the readers to think more rather than just expressing opinions!

  2. Dirt Digger says:
    November 13, 2008 at 4:54 am

    That is a smart analysis. However its my opinion that democracy being rule of majority is actually ‘Rule by idiots for idiots, of idiots’ since they make up the majority.
    The BIMARU states hardly pull their weight, but would like to piggy back on others for benefits based on severely flawed thinking of entitlement.
    Let me pose this question, rather than rearrangement of the seats, would it not be better to give states more revenue based on their contribution? (Not that it would help largely)

  3. ajit says:
    November 14, 2008 at 9:01 am

    This analysis is incomplete without showing the investment and contribution of plannning commission towards allocation of funds for development of these states.No efforts have been made to bridge the development gaps between states.

  4. B Shantanu says:
    November 14, 2008 at 11:54 am

    @ Dirt Digger, Ajit: Thanks for sharing your thoughts…There is more analysis needed here…and I am working on the next post in this series which will specificaly look at relationship between expenditure and income (or contribution)

  5. Patriot says:
    November 14, 2008 at 4:47 pm

    This is just the revenue part of the analysis – now if you do the tax-share analysis for the states, you will see what a lopsided picture this is – and the amount of subsidies spent on UP and Bihar.

    To rectify this issue – I have the following suggestions (also aired elsewhere):

    1. Number of parliamentary seats to be set on a GNP per capita basis, rather than a population basis. Then, there will be a direct reward for better governance

    2. States that have a total deficit of more than 15% lose the right to elect their own legislature – they will be governed by a non-political group, previously constituted (like a SWAT) until the deficit falls below 7.5%. The group will have no politicians.

    3. No state to have more than 40 (less than 10% of total parliament strenght) parliamentary seats – hence, this will cause more small states to be created, which are generally better administered. We can also look at adjusting the GNP per capita number, every 5 years based on a national GDP per capita growth number.

  6. Patriot says:
    November 14, 2008 at 5:02 pm

    And, while this is something that is not talked about actively, IMHO, this is the most serious issue for India today and the next 50 years or so – it dwarfs terrorism, minority appeasement, hindu revivalism, and what have you.

    If there is a civil war in India, and I think there is a better than even chance that we will see one in the next 50 years, it will be fought over economics.

    Sitting in the south, I have absolutely no sympathy or empathy or respect for the north of country – they control the political power over the whole of federal India, have brought us to a state of near anarchy, riding on the economic strength of the south. How long do you think before the people of the south throw off this tyranny of the north? And, I am not alone in this thinking – talk to any of the big corporate houses in the south or some of the progressive politicians, as well, in AP or Tamil Nadu.

    I really see no reason why we should not have an independent, federal republic of Southern India, if the north refuses to reform or share power equally.

    This is one reason that I have cheered the rise of strong regional parties in the south – TDP, DMK/A-DMK and now the MNS. Ironically, they act as a safety value for pressure building up in the system and defer the occurrence of our civil war.

  7. Rohit Shrivastava says:
    November 15, 2008 at 4:37 pm

    @author…

    U r suffering from Biharofobia………..
    Consult a mental doctor…

  8. B Shantanu says:
    January 27, 2009 at 8:31 pm

    Excerpts from a guest post on The Acorn by V. Anantha Nageswaran:

    …let us look at some objective facts. We go by the State of the States report published by India Today every year in September. The statements made below are based on the reports for 2006, 2007 and 2008. This analysis is done by Laveesh Bhandari and Bibek Debroy for India Today every year.

    By 2006, over 85% of Gujarat’s villages are connected with all-weather roads – just four years ago, only 72% of the villages had such connectivity. This improved to 99% by the time the 2007 survey was done. When it comes to quality of roads, Gujarat ranks the best with 59% of the villages having roads with a width of 18 ft. or more.

    A more ingenious achievement has been the Jyotirgram scheme under which every village in the State is to get 24-hour domestic power supply. Notwithstanding the government’s claim, the actual power supply is only for about 20 hours a day, which too is a boon for most people. Over 17,000 villages have been covered under the scheme.

    The availability of power has triggered reversal of rural-urban migration. People are returning to villages from cities –many of them start their own small businesses. At 46.5 mega kilowatt per hour per one lakh population, Gujarat’s rural power consumption is next only to Punjab.

    The State has done extremely well in port sector too. It has the maximum number of minor ports – 40 along the 1600 km coast.

    At 3.91%, the annual average percentage growth in physical capital in the 1990s was the highest in Gujarat. Unsurprisingly, the % growth in the State attributable to physical capital growth (4.99%) was the highest in Gujarat among all the big States. [Physical capital index includes % growth in households electrified and % growth in road length and % growth in fixed capital spending].

    At 2.66%, Gujarat was the last among big States in the annual average growth rate recorded in human potential in the 1990s. [Human capital index includes % growth in share of graduates in total population and % growth in share of 26-40 year old in population].

    In the category called “Investment environment”, Gujarat held the first spot for three consecutive years from 2005 to 2007. It conceded the first place to Himachal Pradesh in the 2008 survey but the difference was marginal. [The “investment environment” category measures % of State GDP spent on administration, per capita capital expenditure, commercial bank credit, capital formation, number of factories and industrial disputes, sick small scale industries, number of industrial workers per urban population in 15-59 group].

    In a category called “Infrastructure”, Gujarat was ranked 9th among 20 big States in 2006 and 2007, improving slightly to 8th position in 2008. This category measures % of households with electricity, % of villages connected with pucca roads (surfaced + unsurfaced), road length/population, no. of bank branches/population, no. of domestic LPG consumers/total households, no. of post offices/population, no. of telephone connections/population

    Under a category called “Budget and Prosperity”, re-christened “Macro economy” in 2008, Gujarat was ranked no. 3 behind Punjab and Himachal Pradesh in 2007. It captured the first position in 2008. This category is based on urbanisation, 100-head count ratio (I do not know what this means), capital expenditure/population, GDP deflator (current GSDP/constant GSDP), per capita GSDP, total population/total debt, GSDP for electricity, gas and water supply (at current price)/population.

    Finally and perhaps, most importantly, the annual average GDP growth in the decade of 1999-2008 in Gujarat was 8.8%, bettered only by the small States of Chandigarh (UT), Nagaland and Manipur. The comparable figure for the nation is 7.3%.
    [According to the authors, these are trend growth estimates derived from the latest Central Statistical Organisation data]

  9. Mod Prakash says:
    June 30, 2009 at 3:13 am

    I can see that there is a clear North-South divide among the commentators.

    I have few comments on this.

    Please look at the state GDP ranking during independence (1950). I do not have the exact data, but I remember having read somewhere that Bihar was among the top states. Can someone help me with teh data?

    Some obvious facts –

    One of the most fertile alluvial soils of the world is in Ganga valley of Bihar.
    One of the most mineral rich region is chotanagpur plateau -a part of erstwhile Bihar.

    The combined region has the power of being economic powerhouse of the country.

    In last fifty years the state has ben divided and it has gone down from among the top states to the bottom group.

    Any one can say – it is the people of the state; but, there are reasons beyond people only.

    I would request the analysts and economists to provide some answers to this. I will over next few weeks try to come with some answers.

    The logic of relating political representation to economic condition of states militates against the basic tenets of our constitution which promotes equity and social justice. Had the same policy been applied fifty years ago by the founders of our polity, many states on the top ranks or GDP ranking today would have never been able to get any sizeable representation.

    What Kerala is to middle east, Bihar is to the rest of India – labor supplier. The only difference is color of currency. It is not up to Bihar and its political and administrative class to channelize the money and skills earned by the Non Residents Biharis.

  10. महेश पाटील says:
    June 30, 2009 at 10:14 am

    If we go on the concept of 10% of People in the world hold 90% of the worlds wealth… then same applies for MUMBAI WHICH IS IN MAHARASHTRA… houses these 10% of the people/corporates who holds 90% of the wealth in India…

    According the recent budget 47000 is the per capita GDP of MAH…

    The numbers need to be relooked excluding the south Mumbai elite… as VIDHARBHA(11dist) is scaling with farmers sucide, MARATHWADA(8dist) always draught or famine affected and KHANDESH (NASIK DIVISION) .. is high in child deaths due to malnutrition.

    PUNE AND KONKAN DIVISION (which includes mumbai) are the only money rich areas of Maharashtra!…

    EVEN JUST BY EXCLUDING MUMBAI CITY ALONE.. you will find how drastically our per capita GDP CHANGES!

  11. B Shantanu says:
    January 2, 2012 at 4:14 pm

    Somewhat related..From Cracking the kerala myth by Dr Arvind Panagariya…
    That Kerala has the best indicators of health and education outcomes among all Indian states and enjoys a low rate of poverty is beyond question. The state unequivocally enjoys the highest male and female literacy rates and life expectancy at birth, and the lowest rates of infant mortality, maternal mortality and malnutrition.

    Because the communist and other left-of-centre governments have ruled Kerala for the better part of its post-Independence history, analysts routinely attribute its superior achievements in health and education to the high priority these governments have allegedly assigned to equity and related social goals over time. This view has gained so much currency that, while its advocates feel little obligation to offer supporting evidence, detractors remain ill at ease to insist upon it.

    Yet, like all conventional wisdom, this too must be subjected to careful empirical scrutiny and, if need be, challenged.
    …Poverty levels in urban and rural Kerala have, thus, fallen not because its left-of-centre governments promoted equity but because per capita expenditures rose rapidly, thanks in large part to inflows of remittances.

    But what about education and health? In a nutshell, Kerala enjoys the highest indicators in these areas because it started at the highest level at Indepen-dence. In 1951, it had a literacy rate of 47% compared with 18% for India as a whole and 28% for Maharashtra, the closest rival among the large states. By 2011, these rates had risen to 94, 74 and 83%, respectively. The gains made, thus, equal 47, 56 and 55 percentage points for Kerala, India and Maharashtra, respectively. Even Bihar, the poorest state in India, made a gain of 50 percentage points over the six decades, beating Kerala!

    The story is no different in health. …
    Can we find compelling evidence of successful public sector interventions in education and health as the source of sustained high levels of education and health in Kerala? The answer to even this question is in the negative. Consider health first. True, setting aside the small state of Goa, whose public expenditures on health are consistently three to four times those of Kerala, the latter has ranked first or second in per capita public expenditures on health since 1991-92.

    But this observation masks two facts. One, these expenditures have hovered around a bare 1% of GSDP. Two, and much more importantly, private expenditures on health dwarf public expenditures in Kerala: in 2004-05, the latest year for which we have data, whereas public expenditures amounted to just 0.9% of GSDP, private expenditures were a gigantic 8.2%. The corresponding India-wide figures were 0.9 and 3.6% of GDP, respectively.
    …
    This same pattern is obser-ved in education. NGO Pratham carries out extensive surveys of children in school up to 16 years of age in rural India. According to its latest report ASER 2010, excluding two or three tiny northeastern states, at 53% Kerala has the highest proportion of students between ages 7 and 16 in private schools in rural India. The corresponding figure for the nearest rival, Haryana, is barely 40%. No matter how we look at it, the conventional and dominant story of Kerala as a state-led success crumbles in the face of hard facts.