Bermuda vs Bangladesh strategy

It8217;s UP8217;s politics that will hold economic India down. But BJP, Congress seem happy to be led by others

There is a time lag in getting data on income growth in states. So we are still stuck with 2004-05. That year, real income in Uttar Pradesh grew by 4.8 per cent. For the country as a whole, it grew by 7.5 per cent. In that particular year, the only states that performed worse than UP were Arunachal, MP and Rajasthan. But this is overall income growth. Let8217;s take away rate of population growth and consider per capita income. To state the obvious, among major states, faster growing states such as in the south tend to have lower rates of population growth. And laggards such as in the Hindi heartland tend to have higher rates of population growth. In 2004-05, per capita income growth in UP was 2.7 per cent, with lower figures in Arunachal, J038;K, MP and Rajasthan. One shouldn8217;t generalise on a single year. Let8217;s take a trend. If one takes a trend since 1991, real income growth in UP has been around 5.5 per cent a year, with population rate of growth of around 2 per cent. Income growth is lower than the all-India average, but doesn8217;t seem that bad. However, the point is that while growth in other states has accelerated since 1991, in UP it has decelerated.

Thus, if one takes a trend from 2000, instead of from 1991, real income growth in UP has been around 3 per cent a year, while the all-India average has been almost 6.5 per cent. And this is not a small state like Arunachal, population-wise. In 2003, UP8217;s population was 174 million. The optimistic future one conjures up for India, with 9 per cent-plus growth, is not do-able unless Bihar and UP take off. Because of differential rate of growth among states, more marked in 90s than 80s, UP8217;s share in national income has also been progressively declining.

To dramatise what is happening in India regionally, consider a scenario. India continues to grow at 8 per cent till 2020 and this growth is apportioned among states in the ratio that it is distributed today. Let8217;s also assume present differential rates of population growth across states continue. What will India8217;s per capita income be in 2020, expressed in today8217;s purchasing power parity PPP dollars? Note that this is PPP dollars, so the exchange rate is roughly around 9.7 rupees to a dollar.

The Indian per capita income will be around 7,600, up from the present 3,700. This means that, in purely per capita income terms, India will be where Brazil is today. For the record, Goa will have per capita income a shade over 29,000 and will roughly be where Switzerland is today. UP will have a per capita income of 2,750 and will roughly be where Azerbaijan is today. Marginally ahead of Zimbabwe.

The Indian economic problem is largely an UP one. Conventionally, India8217;s backward states have been BIMARU Bihar, Madhya Pradesh, Rajasthan, UP. One should add Orissa now and change BIMARU to BIMAROU. But MP and Rajasthan are fast changing, partly facilitated by improved road connectivity and better education indicators. Bihar is a metaphor for India8217;s black hole. By all anecdotal accounts, Bihar is now changing and today8217;s anecdote becomes tomorrow8217;s data. That still leaves out Chhattisgarh, Jharkhand and Orissa, but their population sizes are considerably smaller than UP8217;s. Therefore, UP will make or break India and also determine whether the demographic dividend becomes a demographic deficit.

Consider also that in 1999-2000, 31.6 per cent of UP8217;s population was below the poverty line. Urbanisation is usually correlated with development and UP8217;s urbanisation rate 2001 Census is 20.8 per cent. The infant mortality rate is 83 per thousand. Only 28.7 per cent of births are assisted by trained personnel. The percentage of 10-year-plus children who have completed primary education is 25.68. The percentage of one-year-olds who have been immunised is 24.52. Notwithstanding the proclivity towards production wrestlers within the assembly and outside, at 2.58 kg, average birth weight in UP is lowest in India. Percentage of households with electricity connections is 31.9 per cent. Pendency in subordinate courts in UP is 3.88 million and 53.4 per cent of judge posts in district and subordinate courts are vacant. Of the 200 backward districts identified under National Rural Employment Guarantee Act, 22 are in UP. And in all this, one should remember that all-UP level data are misleading. Contrasts would be more striking if one could take away the NOIDA effect. Figures for eastern parts of the state are worse. Income growth, to the extent it has happened, has been driven by manufacturing in western UP. Agriculture and services have floundered. And this development deficit is in a state that has several rivers and is relatively fertile, and had several major cities, markets and centres of entrepreneurship and higher education.

If you consider the Express pre-poll survey, Uttam Pradesh is certainly on the citizen agenda. And contrary to what politicians think, intended voting reflects this demand. Development matters for 30 per cent, price rise for 15 per cent, unemployment for 9 per cent and 8216;bipasa8217; bijli-pani-sadak for 7 per cent cent. These aren8217;t quite neat categories and not everything is state responsibility. But the bulk of development, employment and 8216;bipasa8217; is state responsibility. Local and regional parties are myopic. That8217;s precisely the reason they aren8217;t national parties and can8217;t think beyond their Small Pradesh SP and Bigoted Small Pradesh BSP. In this era of coalitions, certain at the Centre and possibly in several states, whose responsibility is it to set the country8217;s economic agenda, in which improved governance and development in UP will be a core ingredient? The responsibility for transcending the caste/religion mindset should vest with the two major parties. But then, their attitudes are best summarised in this week8217;s brilliant Express cartoon, with an over-aged, overweight and over-hyped Indian cricket team waiting for Bermuda to beat Bangladesh for a chance to qualify.

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Whenever I feel optimistic about a post-poll Uttam Pradesh, two thoughts befuddle me. The first concerns lotus-eaters of Greek mythology. They lived on an island and feed on lotus flowers. Thanks to the narcotic effects, they became completely uninterested and apathetic. The second thought is from some stuff I read on chiromancy about a missing fate line on one8217;s hand. 8220;If there be no line at all8230; it is the mark of a singularly aimless individual, who drifts through life with no specific direction or purpose.8221; The connection with election symbols is coincidental. But why won8217;t the image of driftwood go away?

The writer is an economist