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Comparative Study of Economic Growth in Bihar, Gujarat, Maharashtra and Uttar Pradesh | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Paper Id :
17680 Submission Date :
2023-05-12 Acceptance Date :
2023-05-20 Publication Date :
2023-05-25
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Abstract |
In the year2021, India became the fifth largest economy in the world. India and China are two fast growing economies in the world.Due to large population, domestic demand for goods and services in these two countries is high and hence, the two countries have enormous growth potential.High percentage of savings and investments in these two countries is another factor which keep their economies grow at faster rate as compared to other countries of the world.However, the representationof different Indian states has not been uniform towards the robust performance of Indian economy at international level.In the present study, an attempt has been made to analyse the growth performance of four big states (big in geography and demography): Bihar, Gujarat, Maharashtra and Uttar Pradesh. Gujarat and Maharashtra are the leading states in growth performance, whereas UP and Bihar lag behind other states in economic growth. Secondary data related to Net State Domestic Product and other socio-economic parameters of the four states were obtained from Economic Survey of India 2023 and other related websites. Simple tabular analysis was done to analyse the data and draw conclusions about the comparative economic performance of the four states. Results of the study show that Maharashtra is the largest economy with high Net State Domestic Product. However, Gujarat leads other states in Per Capita State Domestic Product. UP and Bihar have considerably low Per Capita Net State Domestic Product as compared to Gujarat and Maharashtra.Maharashtra leads other three states in Life Expectancy at Birth and Human Development Index, whereas Gujarat occupies second rank in these two indicators.UPis the state with maximum population followed by Maharashtra, Bihar and Gujarat.Decadal growth rate of population is lower in Gujarat and Maharashtra as compared to UP and Bihar. Sex ratio also goes in favour of females in Gujarat and Maharashtra. UP has the highest number of educational institutions as compared to other three states. Drop-out rate of children in secondary school education is also minimum in UP state.However, UP and Bihar lag behind Gujarat and Maharashtra states in other socio-economic parameters like poverty ratio, unemployment rate and child mortality rate. Overall results of the study reveal Gujarat and Maharashtra states perform better as compared to UP and Bihar in most of the socio-economic parameters of economic growth and development. Hence, itis suggested that health and education facilities must be developed in UP and Bihar to uplift the socio-economic parameters of the two states.
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Keywords | Gross Domestic Product (GDP), Net State Domestic Product (NSDP), Per Capita Net State Domestic Product (PCNSDP),Growth Rate in Per Capita Net State Domestic Product (GRPCNSDP) and Human Development Index (HDI). | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Introduction |
India has become fifth largest economyin the year 2021 after surpassing the United Kingdom in terms of Gross Domestic Product (GDP) at current Prices (Table-1). India and China are the most populous countries in the world andhave tremendous growth potential owing to vast domestic demand for goods and services. Even during the covid-19 period, China sustained more than 7 percent annual growth rate in GDP, whereas India achieved more than 6 percent growth rate. Investment is another growth engine which makes the economy of a country to grow faster. Total investment and savings in China remained more than 40 percent of GDP throughout the observed period. India ranked second with around 30 percent of GDP being saved and invested in the economy during same period. However, there are 28 states and 8 Union Territories (UTs) in India and the growth performance of all the states and union territories have not been same. All these states and UTs differ fromeach other on availability of natural resources and their demographic, geographic and climatic conditions are also different. Gujarat is a leading state in India when overalleconomic performance of the Indian states is considered (Hitesh Gujarati 2014). Maharashtra has the highest Net State Domestic Product in India and also a big state in terms of demography and geography. Uttar Pradesh and Bihar are highly populated states and per capita Net State Domestic Products of the two states are low among other Indian states.Labour from these two states usually migrate to other developed states in search of employment opportunities(Mahmood Ansari 2001 and Khanet. al. 2015). Therefore, in the present study, an attempt has been made to analyse thegrowthperformance of four Indian states: Bihar, Gujarat, Maharashtra and Uttar Pradesh, so that remedial measures may be adopted to improve the economic performance of least developed states in India.
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Objective of study | 1. To compare the economic growth of Bihar, Gujarat, Maharashtra and Uttar Pradesh States.
2. To assess the impact of economic growth on various socio-economic parameters of the four states.
3. To suggest policy measures to improve the economic performance of the least developed states. |
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Review of Literature | A study by Mahmood Ansari (2001) indicated most of the Bihari labourers out-migrated to Punjab in seventies and eighties for employment opportunities as they were able to bargain high real wages in Punjab as compared to Bihar itself. It was also due to the reason that Punjabis themselves out-migrated to other places in search of better opportunities.Khanet. al.(2015) made another attempt to analyse trends and reasons of migration in Uttar Pradesh for a period from 1971 to 2001. The study revealed that employment for males and marriage for females were the major reasons behind migration in Uttar Pradesh. Hitesh Gujarati (2014) examined economic growth of Indian states, their efficiency and productivity considering population and geographical area. The states and union territories were ranked based on their performance. The study revealed that Gujarat, Delhi and Maharashtra ranked first, second and third respectively, on their economic performance. S. S. Jha and J. K. Tandan (2019) attempted to study growth models of Kerala and Gujarat states and assess the role of transportation and power in economic development of these states. The study revealed that hard-infrastructural variables played important role in the development of Gujarat, whereas Kerala model of growth mostly relied on social change (soft-infrastructural variables like Human Development Indicators). Sainiet. al. (2021)studied the socio-economic conditions of the farmers in Vidarbh region.The study concluded with the result that although governmental policies significantly affected the socio-economic conditions of the farmers, but not to the expected level.Samridhi Narula (2022) attempted to establish causal relationship between economic growth and socio-economic and environmental variables in India on the basis of time-series data for a period of 1991-2018. The study revealed a strong correlation among the variables. Most of the variables exhibited unidirectional relationship. However, school enrolment and life expectancy displayed a bi-directional relationship between the variables. |
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Main Text |
Table-1: Gross Domestic Product
(GDP) of top 9 countries in the world
Source: IMF World Outlook Database, April 2023. Table-2: Total
investment and Gross National Saving as precent of Gross Domestic Product (GDP)
of top 9 countries in the world
Source: IMF World Outlook Database, April 2023 |
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Methodology | Present study is based on secondary data. Secondary data related to Net State Domestic Product, population, Human Development Index, Life Expectancy at birth, Sex ratio and other socio-economic parameters were obtained from Economic Survey Report of 2023 and other related websites. Simple tabular and graphical analysis were followed to draw conclusions about the study and based on these conclusions, policy implications were suggested to improve the overall economic performance of the least developed states in India. |
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Result and Discussion |
Year-wise data on Net State
Domestic Product (NSDP), Per Capita Net State Domestic Product (PCNSDP) and
Growth Rate in Per Capita Net State Domestic Product (GRPCNSDP) at current
prices for Bihar, Gujarat, Maharashtra and Uttar Pradesh are shown in table-1.
It is evident from the table that Table-3: NSDP,
PCNSDP and GRPCNSDP (at current prices) of the Statesselected for study (NSDP in ‘000 crores of Rs, PCNSDP in ‘000 Rs. and
GRPCNSDP in percent) Source: State Domestic Product and other Aggregates,
2011-12 Series, MoS & PI Growth Rate in Per Capita Net State Domestic
Product of Gujarat state remained higher than the other three states during the
study period. Maharashtra ranked first in Per Capita Net State Domestic
Productamong four states under study in the year 2016-17. However, Gujarat
occupied first position in Per Capita Net State Domestic Product in succeeding
years due to higher growth rate in per capita income (Figure-2). Uttar Pradesh
and Bihar are densely populated states and demand plays crucial role in growth
of these two economies. However, maximum growth rate in per capita income of
Gujarat state was observed possibly due to high investment. Therefore, it is
recommended that opportunities for Foreign Direct Investment (FDI) must be
developed especially in UP and Bihar to realize full potential of the resources
available in these states. Maharashtra had maximum NSDP all through the years
(Figure-1).Socio-economic parameters of Bihar, Gujarat, Maharashtra and Uttar
Pradesh states were also studied for comparative analysis. Life expectancy at
birth and Human Development Index of the four states are shown in table-4.
Maharashtra has the highest life expectancy at birth followed by Gujarat, Bihar
and Uttar Pradesh. Human Development Index is also maximum in Maharashtra
state. Gujarat, UP and Biharoccupy II, III and IV rank, respectively
in terms of HDI. Maharashtra has the highest Net State Domestic Product and a
lot of investment especially by the private sectorhas been done in the state to
improve health and educational facilities. It is evident from the
figure-3 that UP state lags much behind the other three states asfar as life
Figure-1: Net State Domestic
Product of the states under study
expectancy at birth is concerned. It means, health
facilities available in the state is not enough to serve large population of
the state. Therefore, more investment is required in Uttar Pradesh to develop
health infrastructure. Human Development Index is constructed considering
various health and educational parameters of the population and indicate that
Maharashtra is the leading state in HDI (Figure-4). However, both the figures
(3 & 4) reveal that Life expectancy at birth and HDI have increased consistently
for all the states from 2010 to 2019. Table-4: Life Expectancy at Birth
(LEB) and Human Development Index (HDI) of the four Statesselected for study
(Life expectancy at
birth in years and HDI in percent) Source: Office of the Registrar General of India,
Ministry of Home Affairs. HDI figures are calculated by National Commission of
India. Figure-3: Comparison of Life Expectancy at Birth in
four States Figure-4: Comparison of Human Development
Index (HDI) in four States Table-5: Number of Recognised
Educational Institutions in the Statesselected for study
Source: Economic Survey 2022-23 (Statistical
Appendix) Number of educational institutions in a state is
another indicator of economicprogress of the state. Table-5 indicates number of
recognised schools, colleges and universities in four states. UP state has
significantly higher number of primary schools, higher secondary schools and
colleges as compared to the other three states. This so because basic education
is a primary need for younger generation and large number of educational
institutions are required to serve large population of a state like Uttar Pradesh.Demographic
features of the four states are shown in table-6. The table Table-6: Demographic features of
the states
Source: Economic Survey 2022-23 (Statistical
Appendix)
Figure-5: Population of the
States (in crores) shows that Uttar Pradesh has the maximum
population. Decadal growth rate of population is declining in all the states.
However, higher growth rate in population was observed in case of Bihar state.
Although sex ratio dipped below 900 in 2001 in Uttar Pradesh, yet its sex ratio
recovered considerably in 2011. Other socio-economic indicators of the four
states are shown in table-7. It is evident from the table that Bihar and Uttar
Pradesh have high poverty ratio as compared to other two states.However, poverty
is declining for all the states in the succeedingyear (Figure-6).Unemployment
rates are also higher in Bihar and Uttar Pradesh as compared to the other two
statesMaximum unemployment rate (4.6 %) is observed in Bihar state. Gujarat has
least unemployment rate (2.2%). Due to low rate of unemployment, poverty
percent is minimum in Gujarat followed by Maharashtra, UP and Bihar. Child
mortality rate is Table-7: Socio-EconomicIndicators of the states
Source: Economic Survey 2022-23 (Statistical
Appendix)&Press Note on Poverty Estimates, 2011-12 Figure-6: Persons living below
Poverty Line (in percent) minimum in Maharashtra as compared to other three states. This is due to the fact that considerable investment has been made in Maharashtra to develop health infrastructure in the state. This investment is large because it has brought down child mortality rate to minimum in a state which has second largest population out of the four states. Obviously, Bihar and UP rank third and fourth respectively, in child mortality ratio. However, child mortality rate has declined from 2019 to 2020 for all four states selected for the study (Figure-6). Drop-out rate of children from secondary schools for
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Conclusion |
In the present study, an attempt has been made to compare the economic growth of four Indian states: Bihar, Gujarat, Maharashtra and Uttar Pradesh.The study shows that Maharashtra has the highest Net State Domestic Product as compared to other three states, whereas Gujarat state ranks first in Per Capita Net State Domestic Product. Gujarat and Maharashtra out-perform UP and Bihar states in all socio-economic parameters related to health and educationexcept for the Drop-out rate of children in secondary schools, where UP has the minimum drop-out rate. More emphasis has been given in Uttar Pradesh to improve school education.However, overall health and education infrastructureis not sufficient to serve large population of UP and Bihar states. Hence, it is suggested in the study to invest heavily on health and education in the two states so thattheir overall performance on economic front may be improved. |
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References | 1. Ansari, Mahmood (2001). “Migration from the Rural Region: A Study from Bihar in India”, Journal of Assam University,6(1).
2. Economic Survey of India (Statistical Appendix) 2022-23
3. IMF World Outlook Database, April 2023.
4. Gujarati Hitesh (2014). “Study on Economic Growth, Efficiency and Productivity of Indian States: A Comparative Analysis”, A Research Paper Presented and Published at International Conference on ‘Role of Financial Industry in Accelerating Economic Growth’ held on 26th and 27th September, 2014 and Organised by Centre for Financial Services, Gujarat Technological University.
5. Jha, Sanjeev Sushil and J. K. Tandon (2019). “A Comparative Study of Economic Development of Gujarat and Kerala (A study with special reference to role ofinfrastructure in economic development)”,Journal of Management,6(1): pp. 39-54.
6. Khan, Jabir Hasan; Shajia and Tarique Hassan (2015). “Migration Streamsin Uttar Pradesh: Trends and Reasons”, International Journal of Advanced Research in Management and Social Sciences,4(8).
7. Narula Samridhi (2022). “Causal Relationship between Economic Growth and Socio-Economic and Environmental Variables in India: A Time Series Analysis”, Journal of Emerging Technologies and Innovative Research,9(7).
Office of Registrar General of India, Ministry of Home Affairs.
8. Press Note on Poverty Estimates: 2011-12, Government of India 2013.
9. Saini Sandeep Singh, Jay Paranjape Kshitij Patil and Savya Sachi Pandey (2021). “Constructing Indices Using Socio-Economic Parameters: A Study of Farmers in Vidarbha”, Journal of Humanities and Social Science”,26(11) Series 6, pp. 16-34.
10. State Domestic Product and other Aggregates: 2011-12 Series, Ministry of Statistics and Programme Implementation, Government of India. |