Passengers ride a train in Mumbai, India. | Photo Credit: ABEER KHAN
Following the economic liberalization in 1991, the per capita income in Southern States of India saw significant growth, positioning them as “leading performers,” according to a report by the Economic Advisory Council to the Prime Minister (EAC-PM). Conversely, the economic conditions in Uttar Pradesh and Bihar deteriorated after the bifurcation.
Among the Western States, Maharashtra and Gujarat consistently showcased strong economic performances. Gujarat has particularly displayed impressive growth since the early 2000s. In the North, Delhi and Haryana have thrived economically, with much of Haryana’s strength stemming from Gurugram and its neighboring regions.
Punjab initially gained a competitive edge due to the Green Revolution of the 1960s and 1970s, yet its performance has notably declined since then. The EAC-PM report raises questions about whether an overemphasis on agriculture has impeded Punjab’s transition to industrialization.
The report highlights ongoing concerns regarding the Eastern States. West Bengal, which ranked third in per capita income during the 1960s, has since fallen to 14th place among major States. It’s important to note that Goa, Himachal Pradesh, most of the northeastern States apart from Assam, and Union Territories other than Delhi are not classified as major States in this analysis.
Rajasthan and Odisha, which faced economic declines prior to liberalization, experienced some recovery afterward, although the increase in income levels has been marginal. Per capita income in Chhattisgarh and Madhya Pradesh remains consistently low.
Chart 1 illustrates the relative per capita income levels across States, expressed as a percentage of each State’s Net State Domestic Product compared to the all-India per capita Net National Product or per capita Net National Income.
Chart 2 presents the share of each State in the national GDP, defined as the ratio of a State’s Gross State Domestic Product to the total GSDP of all States. The darker hues of blue indicate a higher share in national GDP.
Source: The Economic Advisory Council’s paper, “Relative Economic Performance of Indian States: 1960-61 to 2023-24”
Authored by Sanjeev Sanyal and Aakanksha Arora
Published – September 20, 2024, 08:00 AM IST
