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Have Gujarat and Bihar Outperformed the Rest of India ?

 

In the popular and media imagination, fed by economists and columnists, Gujarat and Bihar
have both recorded an extraordinary economic performance in the past decade.
But a careful analysis shows that , always one of the richest states, has done no better than
before. In neither industry nor agriculture has its position radically changed.

The only dramatic difference has been the emergence of import-dependent
and export-oriented petroleum refi ning, which has few linkages with the state economy. As in the
past decades, Gujarat’s social development continues to lag behind its economic development.
Likewise, Bihar’s position at the bottom of the league has not changed dramatically. Change
seems to take place

 

R Nagaraj, Shruti Pandey examined the economic  performance of Gujarat and Bihar (relative to the national average) for the

period 1993-94 to 2011-12.  tHey  found  that there has been no change in their  national ranking. Gujarat has remained  roughly the ninth richest state. Its manufacturing sector is the second largest
(after Maharashtra), though its share in  national manufacturing value added has  steadily gone up in the last two decades.

However, the incremental output has  come mainly from export-oriented petroleum refi ning, accounting now for
about a quarter of gross value added in  registered manufacturing. This implies  that the contribution of the other industries to Gujarat’s industrial output has  declined. Its position in social development is only marginally better than the
national average, ranking seventh in  PQLI among the major states in 2001 and  2011. Contrary to popular and political
perceptions, in none of the indicators  has there been a measurable improvement in Gujarat in the last decade relative to the national average.

 

Bihar, at the other end of the spectrum, remains the poorest state in terms  of per capita income. Faster growth
during the last decade has made little  difference to its ranking. Its rank in
social development, marginally lower  than the national average, is somewhere in the bottom.

 

Contrary to popular and political  discourse then, there is not much to
write home about the economic performance of the two states during the last
decade. The one difference is perhaps  the rising contribution of the importdependent and export-oriented petroleum
refi neries on Gujarat’s coast to that state’s manufacturing.
What then could account for the seeming “changelessness” of the relative
position of these states? For perceptive observers of India’s development in a
regional or spatial context, these fi ndings may be neither new nor surprising. They
perhaps reinforce the view of the relative stability of the regional economies –
pointing to deeper social and political factors at work, impervious to electoral
competition and personal charisma of the leaders at the helm.

 

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