Consequences of the widening economic gap among states

The increasing economic gap between states could lead to provincialism and, worse, attraction for ultra-leftism

India, the most economically developed region of the world for thousands of years before the British rule, was left in a poor state when the British left. But after independence, mainly since P V Narasimha Rao initiated economic reforms in 1991, India has again started a journey towards prosperity.

With poverty reduction, people have seen incremental better days (except for periods like during the ongoing pandemic). However, the geographic spread of such betterment is quite uneven. Some states have gone far ahead, while others have fallen behind to different degrees.

This has happened, particularly since 1991, primarily due to the successes or shortcomings of the states themselves. But common people do not understand the reasons for such failures or successes. So, the consequences of this unevenness may be dangerous, as it may trigger a sense of alienation which can manifest in various disruptive forms ranging from the rise of provincialism to ultra-leftism.

Before further elaborating on this point, we must look at the nature of unevenness. We could peg the narrative on the per capita income of a state to understand the situation.

According to the Reserve Bank of India, in 2020-21, two small states had their per capita nominal state domestic product, or in simple terms, per capita income, above Rs 4 lakh (Goa and Sikkim), and another two states/UTs above Rs 3 lakh (Delhi and Chandigarh), We can treat them as exceptions.

Nine other states/UTs had per capita incomes above Rs 2 lakh, including bigger states like Telangana, Tamil Nadu, Karnataka, Kerala, and Gujarat. While Maharashtra was slightly above Rs two lakh in 2019-20, it fell below that mark in 2020-21. Twelve other states/UTs were between per capita incomes of Rs 1 and 2 lakh, including Punjab and West Bengal, while seven states/UTs had theirs below Rs one lakh per capita income.

Interestingly, according to the Handbook of RBI), Bengal's per capita income was Rs 9,657 in 1996-97, and that of Karnataka and Tamil Nadu was respectively Rs 11,202 and Rs11,670. They were ahead of Bengal by just 15-20 per cent then. After 25 years, Bengal's per capita income is Rs 1,21,463, Karnataka's is Rs 2,26,175, and Tamil Nadu's is Rs 2,25,396. The per capita income of these two states is 80 per cent more than that of Bengal, and this gap is widening.

According to the Annual Survey of Industries by the Union Ministry of Statistics and Programme Implementation, from 2018-19 to 2019-20, in Bengal, the number of factories increased by 230. In contrast, in Tamil Nadu, Karnataka and Gujarat, the numbers increased, ranging from 700 to 1400, generating employment and income for many more people than in Bengal.

But why have Karnataka and Tamil Nadu gone so far ahead of Bengal? These states are industry-friendly and, despite regular political shifts, have taken advantage of the new liberalised era. In contrast, Bengal failed abysmally both during the long years that the Left Front ruled and more than a decade of the Trinamool Congress governments, thanks to its continuing anti-industry image. Bengal has slipped further after a decade of the TMC rule.

Maharashtra, which was ahead of Karnataka and Tamil Nadu earlier, has now slipped below them due to various factors. On the other hand, states like Bihar and Uttar Pradesh were at the bottom 25 years ago and are still at the bottom with per capita incomes of just Rs 46,292 and Rs 65,431, respectively, in 2020-21.

So, not only do we have three categories of states now (having high, middle and low incomes), but in a decade or two, the gap could widen precipitously as liberalisation has reached a stage when the onus has shifted to the states. With the spread of social media, people will also become much more conscious of the divide.

But human beings are prone to blame others for misfortunes they create. So the people of poorer states will also try to find an imaginary 'enemy', and the local political formations will instigate them by citing 'deprivation' as the reason, camouflaging the fact that it is the market economy which now reigns in India.

Bengal is already witnessing such a phenomenon, where the failures of the state's successive ruling parties are being covered by slogans that the Centre is to blame for its deprivation, giving birth to provincialism. This slogan of blaming the Centre for Bengal's deprivation was raised initially by Jyoti Basu in the early 1980s when the economy was socialistic. Though the slogan has become almost irrelevant in the market regime, a substantial segment of Bengal's population is still swayed by it.

Even within the poorer states, there are less developed areas, and the people of such sub-regions may turn to Maoists again if the situation does not improve. So, it is incumbent upon the Centre to consider all these factors while rolling out the outlines of the latest trends development.

(Diptendra Raychaudhuri is a journalist and author based in Kolkata)

Disclaimer: The views expressed above are the author's own. They do not necessarily reflect the views of DH.