The southern slowdown
Is the south Indian sentiment that “others” are holding South India down true?
There is a widely held sentiment among us South Indians that when it comes to development the four southern States are marching to the faster beat of a different drummer than the rest of India. Many well known south Indians, like the historian and cricket aficionado Ramachandra Guha, have even written, with little concealed glee, about this. Mr. Guha rhapsodises (Outlook, July 19, 2007) that “it appears that by most indicators of development the so
uth of India is comfortably ahead of the north.” How good you are invariably depends upon who you are compared with. Thus, when compared with the conventionally accepted notions of what constitutes the North, East and West, South India does look good.
The average per capita income of the four major South Indian States of Rs.25,027 is well above the national average of Rs. 23,223. It is also well above the politically significant Uttar Pradesh’s per capita income is just Rs.11,477. Bihar’s is a little more than half that of U.P. These two States account for about a quarter of our Members of Parliament and it is small wonder then that they have generally dominated our politics. Has the size of their political footprint influenced the economics of allocation? For in recent years this supposed performance of South India has given rise to a sentiment among us South Indians that it is the “others” who are holding South India down. Many South Indians have come to believe that U.P. and Bihar have managed to corner much of the public expenditure and that often this has been at “our” expense. The reality is, this is not so.
Take the Tenth Plan as an instance. The quantum of allocation for U.P. was Rs.59,708 crore while it was Rs.21,000 crore for Bihar. Compared to this, Andhra Pradesh got Rs.46,614 crore; Karnataka Rs.43,558 crore; Tamil Nadu Rs.40,000 crore; and Kerala Rs.24,000 crore.
This is not bad going at all for a region whose total population was 223 million (2001 Census) as opposed to U.P. and Bihar which together accounted for 249 million. This trend is apparent from the very first Plan. The consequence of this is apparent in the average annual per capita development expenditure in U.P. and Bihar (2001-04), which was Rs.3,786 and Rs.3,206 respectively as opposed to the South where the average has been Rs.7,780.
So this notion that the South suffers U.P. and Bihar has to be thrown out lock, stock and barrel. If there is a basis for feeling aggrieved, it is the people of the Gangetic plains who have it.
Now let us get back to what exactly are the North, South, East and West in India. Conventional wisdom has the North to be U.P., Uttarakhand, Punjab, Haryana, Himachal Pradesh and Jammu & Kashmir. The East consists of Bihar, Jharkhand, Orissa, West Bengal, Assam and the assortment of small northeastern States. The West consists of Gujarat, Maharashtra, Goa and Rajasthan, while Madhya Pradesh and Chhattisgarh make up Central India. These are ethnically, culturally and linguistically diverse States and are only lumped together for visual convenience on the map. For instance, how can Rajasthan be in the West when it has more in common with the North? Or why is Bihar a part of the East when geographically and culturally it has more in common with Uttar Pradesh?
This manner of dividing India defies logic. Only the South is a geographically, ethnically, culturally and historically contiguous region, and therefore can be banded together as one zone. Likewise, the Hindi-speaking States of Bihar, M.P., Rajasthan and U.P., sometimes known as the Bimaru States, can be banded together. And who would not look good compared to them? But this is not the North.
Let us delve into this a bit further and see how the North gets weighed down by Uttar Pradesh. With the exception of Jammu and Kashmir all the other northern States have higher per capita incomes than each one of the southern States. Thus, take out Uttar Pradesh from the North and the South does not look too good. Take out Rajasthan from the West and once again the South does not look good.
For the purpose of useful analysis (from a southern perspective) it will make eminent sense to discard the conventional and bureaucratic division of India and break up India into High Income India (HII) consisting of Gujarat, Haryana, Himachal, Maharashtra and Punjab; and Low Income India (LII) consisting of Assam, Bihar, J&K, M.P., Orissa, Rajasthan and U.P. and see how the South compares with them.
This is exactly how this issue was approached in the study “Socio-Economic Security of Peninsular India” done jointly by the Centre for Security Analysis, Chennai and the Centre for Policy Alternatives, New Delhi. In this detailed analysis, all States with a per capita income higher than the national median (Rs.23,359 at current prices in 2003) are considered to be high-income and those below it are deemed to be low-income. Now when we compare the southern States with HII and LII we get a set of very different performances. While HII grew at 6 per cent for the decade 1993-2003, South India grew by 5.78 per cent. The worst-performing State in South India was Tamil Nadu, which clocked a growth of just 4.82 per cent as opposed to LII which grew at 4.59 per cent. South India, which accounts for 21.7 per cent of India’s population, accounts for 22.5 per cent of its GDP, while HII, which accounts for 27.2 per cent of the population, accounts for 34 per cent of the GDP. Not surprisingly, HII is more industrialised, deriving 27 per cent of its GDP from industry, as opposed to South India which derives just 21 per cent.
Consequently, the per capita industrial output of HII, at Rs.19,240, was well ahead of the South’s Rs.12,547. Not surprisingly, the per capita value addition in industries for HII was Rs.2,748 as opposed to Rs.1,850 for the South. In fact, HII contributes a huge 47.8 per cent to India’s total value addition while the South adds a mere 25.6 to it. And it is not as if there was a paucity of commercial funds to impede the South’s march ahead. The average credit/deposit ratio for the South was 66.5 while it was 49.2 for HII and only 39.8 for LII. Tamil Nadu enjoyed India’s highest CDR, which at 89.6 put it even ahead of Maharashtra, India’s most industrialised State.
South Indians have also generally internalised the notion that the South is better governed than the North. One finds it hard to see any difference in the abilities or proclivities of a Mayawati or a Jayalalithaa, or a Rajashekhar Reddy or a Prakash Singh Badal. There is little to pick between a Karunanidhi or an Amarinder Singh or a Mulayam Singh. But is the southern bureaucracy any better? The facts do not favour this notion. The Public Administration to NDSP ratio for the South is 4.60 as opposed to 4.22 for HII.
But the South spends less on salaries from its revenue expenditures, which at 34.2 per cent is less than the 37.2 per cent that HII earmarks for salaries. Consequently, South India spends more of its expenditure on development (63 per cent) as opposed to HII which spends 56.3 per cent. However, Punjab, Haryana and Himachal Pradesh spend more per capita on development than the southern States, which spend Rs.3,823 per capita. But then, South Indians get more per capita as grants from the Centre than all other Indians, with the exception of those in the special category States such as J&K, Assam and others in the northeast.
What would come as a surprise to all South Indians is that HII has a higher average literacy (71.2 per cent) when compared to South India (70 per cent). More surprisingly, in the critical 15-24 years cohort, HII (82.5 per cent) does far better than the South (75.5 per cent). But the silver lining lies in that South Indians live longer and have a far better infant mortality rate than all the others. What should cause South India most concern is the fact that it is fast getting crowded out in India as a whole because the South’s population growth will taper off the earliest. Its population growth started falling as early as 1961. Thus, by 2016 South India’s growth will drop to 0.84 per cent while India as a whole will grow by 1.4 per cent. This implies that South India’s population will start contracting and greying before the mid-century point while the rest of India will continue to grow well beyond that. There are several consequences possible. The most important is that while the population density of India has gone up by 43 to 417 in the decade 1991-2001, that of low income India has grown by 102 to 486. West Bengal (904), Bihar (745) and U.P. (663) that are now overcrowded will only get further crowded.
This suggests that large-scale internal migration is on the cards, if it is not already under way. Relate this to the indifferent economic performance of U.P. and Bihar and the earlier greying of South India, and we can forecast that this is almost a certainty. Should we not be losing some sleep over this instead of thumping our chests over unwarranted notions?
Dr. Mohan Guruswamy, economist, is Chairman, Centre for Policy Alternatives, New Delhi.
Independent India at 60