July 08, 2017

Has 70 Years Of Redistribution From Rich States to Poor States Worked?

Praveen Chakravarty, Visiting Senior Fellow at IDFC Institute, in this piece for Bloomberg Quint explores the data on per capita income, literacy rate, median age and life expectancy, to see if redistribution from richer to poorer states has helped in reducing the gap between the state's socio-economic outcomes. It seems that the gap continues to widen. Excerpts from the article can be read below:


"In 1960, the average Bihari earned Rs 215 a year while the average Maharashtrian earned roughly twice, Rs 400. By 2014, the Bihari earned Rs 35,000 while the Maharashtrian earned nearly four times more – Rs 1.35 lakh. 


The gap between Bihar and Maharashtra in per capita income has increased and not decreased. Overall, the four richer states earned 1.5 times as much as the four poorer states in 1960. Today, they earn three times more, indicating that the gap has widened. Clearly, the economic gap between rich and poor states has more than doubled since 1960."


"How about social progress? One very good indicator is the average age of the population. As societies get richer, people tend to live longer, have fewer children and fewer children die at birth. This manifests itself in the average age of the population rising over time. In 1961, the average UPite and the Tamilian were roughly 21 years old.


The average age of people in Uttar Pradesh, Bihar, and Madhya Pradesh has remained roughly the same over five decades while the average age of people in Maharashtra, Tamil Nadu, Karnataka, and Gujarat has increased by six to nine years. Clearly, the gap between states in the average age of their population has increased dramatically. The contrast in the chart is very striking. The average Bihari is 19 years old while the average Tamilian is 30 years old, almost a generation older. For all that talk about India being a young country, it depends on which India one refers to."


Read full article here

Topic : Transitions / In : OP-EDS
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