Socio-economy of Indian States

Bibek DebroyLaveesh Bhandari

Indicus Analytics

This Presentation

INDIA TODAYRating and Ranking StatesWhat is happening within the statesINDIA TOMORROWWhere are the states going towards?

Socio-economic progressEconomic growth

Classification of States

Large-Small States: Large states have population of greater than 5 million and area greater than 35000 sq km

Example: Arunachal area similar to West Bengal’s area, population similar to Pondicherry’s populationExample: Delhi population similar to J&K’spopulation, similar to Goa’s area

Delhi and Pondicherry considered statesChief MinistersElected Assemblies

States & UTs

1 A&N Islands1 Arunachal11 Kerala1 Andhra2 Chandigarh2 Delhi12 Madhya2 Assam3 D&N Haveli3 Goa13 Maharashtra3 Bihar4 Daman Diu4 Manipur14 Orissa4Chhattisgarh5 Lakshadweep5 Meghalaya15 Punjab5 Gujarat

6 Mizoram16 Rajasthan6 Haryana7 Nagaland17 TN7 Himachal8 Pondicherry18 UP8 J & K9 Sikkim19 Uttaranchal9 Jharkhand10 Tripura20 WB10 Karnataka

UTsSmallerLarger States

CategoriesAgriculture: Cash crops, Productivity, IrrigationConsumer Market: TV, 2-wheeler, ExpenditureEducation: Literacy, primary school completion, states’ expenditureHealth: IMR, doctors, tap water, gender biasLaw & Order: Police, pending cases, violenceInfrastructure: Electricity, roads, telephone, LPGInvestment Environment: disputes, SSI sickness, commercial bank credit, public investmentBudget & Prosperity: Poverty, SGDP, State debt

Ranking of States

All states are differentThey have to be made comparableLarger States, Smaller States, UTsNormalization

Ratios and percentages Per capita

Infrastructure

Access to ElectricityRoad lengthBank branchesLPG connectionsPost officesTelephone density

Consumer Markets

TV ownershipRural households spending > Rs 615 per person per monthUrban households spending > Rs1120 per person per monthBank depositsTwo wheelers

Education

Literacy rate10 plus children completed primaryGirls to boys enrolled in elementary schoolTeacher student ratioExpenditure on elementary education

Law & Order, Justice

Police strengthPending to total cases in courtsIncidence of murderIncidence of kidnappingIncidence of rape & molestations

Health

IMRMale to female IMRBirths assisted Access to tap waterDoctorsSex ratioExpenditure on health and family welfare

Investment Attractiveness

Public administration GSDPState’s capital expenditureBank creditIndustrial disputesGross capital formationIndustrial workersSick SSIs

Agriculture

Cash cropsAgriculture GSDPElectricity consumptionFood grain yieldLoans to agricultureIrrigated to sown area

Budget & Prosperity

State’s capital expenditureTotal debtSales revenue ofSEBsPer capita GSDP UrbanizationInflationPoverty

Overall Performance

AgricultureConsumer marketsEducationLaw & order, justiceHealthInfrastructureInvestment attractivenessBudget & prosperity

How rapidly are regions growing

Motor SpiritDieselCreditDepositsCereals

R-Square of 93% with GSDP

Breadth of Social Progress

1. Demography: 0-6 sex ratio2. Education: Literacy, female to male literacy,

gross enrollment ratio in elementary school3. Health: IMR, fully immunized children4. Prosperity: Poverty, Hunger

An equal weighted index constructed for all 593 districts

Socio-economic status

States in 2020

1. Prosperity: SGDP, Poverty2. Health: Life expectancy, IMR3. Education: Literacy4. Demography: Age wise population5. Projections based on trends since

nineties

2000

Andh

ra P

rade

sh

Assa

m

Bih

ar

Chh

attis

garh

Guj

arat

Har

yana

Jhar

khan

d

Kar

nata

ka

Ker

ala

Mad

hya

Prad

esh

Mah

aras

htra

Oris

sa

Punj

ab

Raj

asth

an

Tam

il N

adu

Utt

ar P

rade

sh

Wes

t Ben

gal

0

10

20

30

40

50

60

70

80

90

100

What will happen to the statesPoverty

2020

Andh

ra P

rade

sh

Assa

m

Bih

ar

Chh

attis

garh

Guj

arat

Har

yana

Jhar

khan

d

Kar

nata

ka

Ker

ala

Mad

hya

Prad

esh

Mah

aras

htra

Oris

sa

Punj

ab

Raj

asth

an

Tam

il N

adu

Utt

ar P

rade

sh

Wes

t Ben

gal

0

10

20

30

40

50

60

70

80

90

100

What will happen to the statesStandard of Living

20002020

What will happen to the states

Inequality between states will be higher MigrationThis internal migration will be affected by Economic freedom

States that provide greater levels of freedom to carry out economic activities will attract

and retain human resources

Inequality, Migration & Freedom

Economic Freedom and Migration

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

0.00 0.10 0.20 0.30 0.40 0.50Economic Freedom Index

Out

mig

ratio

n as

% o

f Hom

e Pop

.

.

BiharUP

MP

WB Assam

Orissa

What will the states be like in 2020

International ComparisonBased on Standard of Living (Purchasing Power Parity, US dollars today)

How will the standard of living in the states in 2020 be like, in terms of other countries

today

= Bulgaria,Turkey

Andhra= Angola,

IndonesiaChhattisgarh

= Russia,Saudi Arabia

Gujarat

= Brazil,Mauritius

Haryana

= Pakistan, Zimbabwe

Assam

=Uganda, Bangladesh

Bihar

= Turkey,South Africa

Himachal

= Indonesia,Lebanon

J & K

= Zimbabwe,Sri Lanka

Jharkhand

= South Africa/ChilHungary

Karnataka

= Iran ,Russia

Kerala

=Angola,Indonesia

MP

= Mexico,Argentina

Maharashtra

= Ghana , Zimbabwe

Orissa

= Brazil,Mauritius

Punjab

=Lebanon,Iran

Rajasthan

= Russia,Saudi Arabia

TN

=Vietnam, Indonesia

UP

= Romania,Russia

WB

=New Zealand,Japan

Delhi

= Spain,Switzerland

Goa

= France,USA

Pondicherry

= Japan,USA

Chandigarh

Thank You