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Are we really among the laggards?

Many economists have concluded that Punjab has become a laggard state. It is continuously sliding down in the GDP per capita ranking among Indian states. Is this a right indicator to arrive at this assessment? Has Punjab really fallen behind other states? Perhaps, not.

chandigarh Updated: Jan 28, 2015 13:08 IST
Prof-HS-Shergill
Prof-HS-Shergill

Many economists have concluded that Punjab has become a laggard state. It is continuously sliding down in the GDP per capita ranking among Indian states. Is this a right indicator to arrive at this assessment? Has Punjab really fallen behind other states? Perhaps, not.


The GDP per capita is a statistical construct created by economists to have a single numerical indicator of level of development. It does not have any real existence at the ground level. What exists at the ground level is the goods and services produced and consumed by people. It is per capita consumption of goods and services that determines standards of living and well-being of people.

The need is to look beneath the GDP per capita figures by focusing on actual amount of goods and services produced and consumed by its people. Not only this, it is also relevant to see how far it has been inclusive? Even with high growth, a large section of population like Dalits and women are excluded from benefits of development.

8 high-income states

We have selected eight high-income states, that is, Punjab, Gujarat, Kerala, Haryana, Tamil Nadu, Maharashtra, Himachal Pradesh and Uttarakhand, to measure the real level of development and degree of inclusiveness. Among the eight high income states on GDP per capita income, Punjab ranks at the bottom (eighth rank) and Maharashtra at the top. The per capita income of Maharashtra, Haryana, Gujarat and Tamil Nadu is significantly higher than Punjab. The per capita income of Kerala, Himachal Pradesh and Uttarakhand is, however, only marginally higher than Punjab. On the basis of per capita income ranking, the prevailing impression that Punjab has fallen considerably behind other higher income states in level of development looks quite valid and justified. But, in terms of well-being of people on the basis of the per capita consumption of non-durable and durable goods and facilities enjoyed by people, the picture is reversed.

The ranking of Maharashtra, Gujarat, Tamil Nadu and Haryana (given by per capita income), worsens; and of Kerala, Punjab and Himachal Pradesh improves. If one takes per capita consumption expenditure as the indicator of level of development, Kerala is at the top, and Punjab at number two; Gujarat and Tamil Nadu sink to the bottom with eighth and seventh ranks, respectively.

Punjab ahead in facilities

On the basis of proportion of households owning and using consumer durable goods and enjoying housing and living facilities, the ranking of Punjab rises to the top and Gujarat and Maharashtra sink to the bottom ranks. The proportion of households owning and using consumer durable goods and living facilities is higher in Punjab as compared to Maharashtra, Gujarat, Tamil Nadu, Himachal Pradesh and Uttarakhand. Even compared to Haryana and Kerala, Punjab has a clear edge in most of these consumer durable goods and living facilities; Kerala has a small edge over Punjab in the availability of latrines in house premises and ownership of phones and mobiles, and Haryana in drain outlet connectivity.

On the basis of available information, one can easily make two statements, one definitive and one highly plausible. One can be sure that Punjab has not slided down in ranking compared to states like Maharashtra and Gujarat in level of development. One can also be almost certain that in terms of actual consumption standard and living conditions of people, Punjab is better than these other seven states, particularly compared to Maharashtra, Gujarat and Tamil Nadu.

Development much more inclusive

The development process in Punjab has also been much more inclusive, than these other high-income states. In Punjab, 93% of rural households are living in pucca houses, compared to only about 58% in Maharashtra. In Punjab 82% of rural households have the drinking water source within the house premises itself, in Maharashtra only 43% rural households are in that situation. In composite ranking on the basis of proportion of rural households owning and using consumer durable goods and enjoying housing and living facilities, Punjab is at the top and Maharashtra at the bottom of this set of eight high-income states. Gujarat and Tamil Nadu also fare badly, being at the seventh and sixth ranks, respectively. The comparison clearly indicates that benefits of economic growth have percolated to the rural population in Punjab to a greater extent, compared to Maharashtra, Gujarat, Tamil Nadu and other high-income states.

The rural scheduled caste and tribe households, the most excluded group, owning and using various consumer durable goods and living facilities in Punjab is higher as compared to those in Maharashtra, Gujarat and Tamil Nadu. In Punjab, 89% of rural scheduled caste/tribe households are living in pucca houses, compared to only 48% in Maharashtra; in Punjab, 26% rural scheduled caste and tribe households own motorcycle/scooter, compared to only 8% in Maharashtra; and in Punjab 64% rural scheduled caste/tribe households own a bicycle, but in Maharashtra only 23% have it. In the composite ranking, Punjab is again at the top and Maharashtra at the bottom in terms of benefits of development percolating to the rural scheduled castes and tribes. It is not difficult to conclude that development in Punjab has been more inclusive across the scheduled caste/tribe caste barrier, than in Maharashtra, Gujarat, Tamil Nadu and other high income states.

So when one looks beneath the per capita states’ income figures it is found that both in terms of level of development as well as inclusiveness of growth Punjab ranks number one among Indian states.

The writer is professor emeritus, Panjab University, and director, research, at Institute for Development and Communication, Chandigarh. The views expressed are personal.

Tomorrow:
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