Thursday 31 October 2013

Rajan panel report on backwardness of States of India

Dr. Devendra Kothari
Population and Development Analyst,
Forum for Population Action

As per the Rajan Panel Report around 50% of total population of India is residing in the least developed States after 60 years of the planned development. So what kind of achievement did we achieve?

A panel headed by Raghuram Rajan, an economist respected not just in India but across the (financial) world especially for his work on recession, has recommended a new index of backwardness to determine which States need special assistance.[1] It has developed an index of backwardness composed of 10 equally weighted indicators for monthly per capita consumption expenditure, education, health, household amenities, poverty rate, level of female literacy, percentage of the Scheduled Caste/Scheduled Tribe population, urbanization rate, financial inclusion and physical connectivity. The 10 States that score above 0.6 (out of 1) on the composite index have been classified as “Least Developed,” the 11 States that scored from 0.4 to 0.6 are “Less Developed” and the seven States that scored less than 0.4 are “Relatively Developed”. The panel reco0mmended that less developed states rank higher on the index and would get larger allocations based on the need criteria.

The least developed states include, apart from Odisha and Bihar, Madhya Pradesh, Chhattisgarh, Jharkhand, Arunachal Pradesh, Assam, Meghalaya, Uttar Pradesh and Rajasthan. The relatively developed states according to the index are Haryana, Uttarakhand, Maharashtra, Punjab, Tamil Nadu, Kerala and Goa, as shown in Table 1.

Table 1: Three tier ranking of States of India
Category
States
% of total population
Least Developed States (10)
Odisha, Bihar, Madhya Pradesh, Chhattisgarh, Jharkhand, Arunachal, Assam, Meghalaya, Uttar Pradesh,  and Rajasthan
48.0
Less  Developed States  (11)
Manipur, West Bengal, Nagaland, Andhra Pradesh, Jammu & Kashmir, Mizoram, Gujarat, Tripura, Karnataka, Sikkim and Himachal Pradesh
27.0
Relatively Developed States (7)
Haryana, Uttarakhand, Kerala, Maharashtra, Punjab, Tamil Nadu and Goa
23.0
Union Territories  (7)
-
2.0
Total
100.0

The table indicates that 50% of total population of India was enumerated in the Least Developed States even after 60 years of the planned development.  So what kind of achievement did we achieve? In the battle that is more backward, the post discusses the Rajan panel report and its implications.

The panel was set up after persistent demand from Bihar Chief Minister who insisted a “special category” status to get more funds for its development. This sparked off a demand from several other States such Odisha and West Bengal for a special category status. While the proposed index will ensure more funds for such States from the central kitty, it has stopped short of conferring the "special category" tag on the States.

There may be some disagreement with the panel’s decision to use certain indicators.[2] In its report, the panel, however, defended its choice of indicators: “Since we are interested in measuring the State population’s well-being”. Further, rejecting the Raghuram Rajan Committee report for "skewed" allocation formula, Tamil Nadu Chief Minister in a letter to Prime Minister said that it was a "thinly disguised attempt to provide an intellectual justification to deliver resources to a potential political ally." It is also argued that the skewed allocation formula which the committee has recommended severely penalizes States which have consistently worked towards national goals of development and welfare, like population stabilization and higher level of literacy and women empowerment. It pushes resource allocation to populous States which have historically underperformed.It is not as if the Least Developed States like UP and Bihar are not getting anything from the Centre right now. These states are getting more funds than other deserving States like Maharashtra. What has this led to in the last 3-4 decades? 

However, it is a reasonably good report, reflecting the prevailing situation. For example, it recognizes that Bihar (Jharkand), Madhya Pradesh (Chhattisgarh), Uttar Pradesh and Rajasthan    are among the most backward States of India.  In eighties, Prof. Ashish Bose called them “Bimaru” (Hindi for sick) States because of their poor reproductive health indicators like high fertility, high maternal and infant mortality, low contraceptive prevalence, low female literacy and a poor sex ratio amid poor socio economic development. The term - “Bimaru”-, however, is a derogatory one; it's come to mean chronic backwardness and sickness. Such connotation can only demoralize people in the places it refers to. Why not give the nametag a timely burial? No doubt, these Four Large North Indian (FLNI) States are still far behind and needs special attention.[3] But simply providing the fund is not going to solve the problem. Reasons being backwardness in the LD States should be studied as well as the progressiveness of Relative Developed States of Kerala and Tamil Nadu.
  
What is holding back growth story of the Least Developed States? The human development related variables are very crucial[4], which are not given due importance in the development planning of these States. These States are growing slowing not because of low per capita consumption expenditure, high level of poverty, low level of urbanization and poor connectivity, but mainly due to failure to give importance to human resource development variables in the development planning like reproductive health; literacy especially female literacy; household amenities among others. And that explain why some States should grow faster than others, as shown in Table 2.Population Stabilization and female education were given more importance by the Relatively Developed States. Investment on education by families is higher in these states. Public health system is always affordable to common man.


Table 2:   Human Development indicators and level of development, some selected States, 2011.
Indicators
Relatively Developed States
Least Developed States
1
2
3
4
5
6
7
8
9
TN
Punjab
M’sthra
Kerala
Bihar
MP
UP
Raj.
A. Reproductive health:
·         Decadal population growth (%) 2001-11
15.6
13.7
16.0
04.9
25.1
20.3
20.1
21.4
·         Total Fertility Rate
1.7
1.8
1.8
1.8
3.6
3.1
3.4
3.0
·         Unwanted births per
woman  (2005-06)
0.4
0.5
0.4
0.1
1.6
1.0
1.5
1.0
·         Infant Mortality Rate
22
30
25
12
44
59
57
52
·         Maternal Mortality Rate (2007-08)
97
172
104
81
261
269
359
318
B. Literacy level
·         Female literacy (%)
74
71
76
92
53
60
59
53
·         Male literacy (%)
87
82
90
96
73
80
79
80
·         % of school compiling pupil-teacher  ratio
53
40
63
94
5
21
16
4
C. Household with  amenities like:
·         Tap water
80
51
70
77
04
23
27
41
·         Flush latrine
42
59
43
65
20
26
30
28
·         No latrine
52
21
47
5
77
71
64
65
·         Electricity
93
97
84
94
16
67
37
67
·         LPG as cooking fuel
48
54
43
36
08
18
20
23
Source: Census of India 2011 – Tables on Houses, Household Amenities and Assets and   SRS Bulletin, Registrar General & Census Commissioner, India’ and National Family Health Survey-3, Mumbai, IIPS, 2007.

The main reason of slow pace of development in the Less Developed States is high rate of population growth mainly fueled by unwanted fertility, as shown in Table 2. Total Fertility Rate (TFR) indicates the average number of children expected to be born per woman during her entire span of reproductive period. On an average, a woman in India produces 2.4 children during her lifetime; however, there is a wide diversity of fertility levels among States. It ranges from 1.7 in Tamil Nadu to 3.6 in Bihar, as per the SRS-2011. The replacement level fertility of 2.1 children per woman, required to initiate the process of population stabilization, has already been attained by the Relatively Developed States   of Tamil Nadu (1.7), Punjab (1.8), Kerala (1.8) and Maharashtra (1.8).  On the other hand, the least developed States of Bihar (3.6), Uttar Pradesh (3.4), Madhya Pradesh (TFR 3.1) and Rajasthan (3.0) have a long way to go before they achieve this level.  At the same time total unwanted fertility was the highest in Bihar and lowest in Kerala. The total unwanted fertility ranges from 0.1 children per women in Kerala to 1.6 children in Bihar. Aside from Bihar, the difference is one child or more in Uttar Pradesh (1.5), and Madhya Pradesh and Rajasthan (1.0 each).  What are the implications of such scenario? The emerging demographic peculiarity could have major ramifications as India attempts to continue its high growth rate over the coming decades and future development of the Least Developed States. The level of unwanted fertility is an indicator of imperfect control over the reproductive process. Thus, in order to bring Least Developed States into main stream, one has to improve the availability of reproductive health services looking to the needs of clients.[5]  

Another issue which needs equal attention is quality of education, especially female education. Unless education is rescued from quagmire of mediocrity, all talk about developing a skilled human resource pool and realizing the country`s demographic dividend will be without substance; and the country would be inching closer to demographic disaster.[6] Living conditions are equally important in producing an enabling environment for development, as shown in Table 2. Any improvement in access to toilet facilities, water, electricity and LPG is likely to result in a considerable reduction in domestic drudgery especially for girls/women, freeing up their time for other activities including schooling. [7] 

In conclusion,  the Rajan Panel Report better captures the stage of development in a State, how backward it is or how relatively less backward it is and is a good measure for planning and devolution of funds. But simply providing the fund is not going to solve the problem, unless it is linked with the performance of certain variables, as shown in Table 2.  Maximum focus in improving the human resources will bring highest dividends in terms of all round development.  




[1] Refer: Government of India, Report of the Committee for evolving a composite index of States, Ministry of Finance, Government of India, September, 2013.

[2] Refer article by, “Rajan panel report: A quickie and it shows”, Times of India, October 23, 2013.


[3] “Emerging demographic divide: A dilemma for India”, Blog Entries by Devendra K Kothari at kotharionindia.blogspot.com, posted February 29, 2012.

[4] “India: Why pace of development is slow?” Blog Entries by Devendra K Kothari at kotharionindia.blogspot.com, posted September 25, 2013..

[5] Kothari, Devendra  and Sudha Tewari. 2009. Slowing Population Growth in India: Challenges, Opportunities and the Way Forward. MIPD Policy Brief No. 2, Management Institute of Population and Development, (Parivar Seva Sanstha, New Delhi).

[6] How India is managing its ‘Demographic Dividend”, Blog Entries by Devendra K Kothari at kotharionindia.blogspot.com, posted June 26, 2011.

[7] “Quality of life and living environment in India”, Blog Entries by Devendra K Kothari at kotharionindia.blogspot.com, posted September 9, 2012.