Indian Economy, 5th edition (105 page)

The second indicator is the
quintile income ratio
, which is a ‘measure of average income of the richest 20 per cent of the population to that of poorest 20 per cent’. The quintile income ratio for India was
5.6
in 2010-11. Countries like Australia (7.0), the USA (8.5), New Zealand (6.8), Singapore (9.8), the UK (7.8), Argentina (12.3), Mexico (14.4), Malaysia (11.4), Philippines (9.0), Vietnam (6.2) had higher ratios. This implies that the inequality between the top and bottom quintiles in India was lower than a large number of countries.

To estimate the
rural-urban gap
, the monthly per capita expenditure (MPCE) defined first at household level to assign a value that indicates the level of living to each individual or household is used. According to the provisional findings of the 68th round (2011-12) of the NSS, average MPCE (Uniform Reference Period based) is Rs. 1281.45 and Rs. 2401.68 respectively for rural and urban India indicating rural-urban income disparities.

However, monthly per capita rural consumption rose by
18
per cent in real terms in 2011-12 over 2009-10, while monthly per capita urban consumption rose by only
13.3
per cent. Thus, the rate of increase in the MPCE of rural areas is higher than that of urban areas, indicating a bridging of the rural-urban gap. Out of the MPCE, the share of food as per 66th round NSS data (2009-10) is Rs. 600 (57 per cent) and Rs. 881 (44 per cent) for rural and urban India, respectively, showing a higher share for food in rural compared to urban India [as per the latest
Economic Survey 2012-13
].

EMPLOYMENT

For growth to be inclusive, it must create adequate livelihood opportunities and add to decent employment commensurate with the expectations of a growing labour force. The Eleventh Five Year Plan (2007-12) aimed at generation of 58 million work opportunities. The NSSO quinquennial survey has reported an increase in work opportunities to the tune of 18 million under the current daily status (CDS) between 2004-05 and 2009-10. However, the overall labour force expanded by only 11.7 million. This was considerably lower than in comparable periods earlier, and can be attributed to the much larger retention of youth in education and also because of lower labour force participation among working-age women. As a result, unemployment in absolute terms came down by 6.3 million. The lower growth in the labour force is not expected to continue as educated youth are expected to join the labour force in increasing numbers during the Twelfth Plan and in the years beyond.

This means that the pace of job/ livelihood creation must be greatly accelerated. The Twelfth Plan Approach Paper therefore lays greater stress on skill building which can be viewed as an instrument for improving the effectiveness and contribution of labour to overall production. This will push the production possibility frontier outward and take the economy on to a higher growth trajectory and can also be viewed as a means of empowerment.

Unemployment

Unemployment was higher under both the UPSS and CWS but rural unemployment was higher under the CDS approach. This possibly indicates higher intermittent or seasonal unemployment in rural than urban areas, something that employment generation schemes like the MGNREGA need to pay attention to. However, overall unemployment rates were lower in 2009-10 under each approach vis-a-vis 2004-5. Labour force participation rates (LFPR) under all three approaches declined in 2009-10 as compared to 2004-5. However, the decline in female LFPRs was larger under each measure in comparison with male LFP which either declined marginally (UPSS), remained constant (CWS), or increased marginally (CDS).

Employment growth in the
organized sector
, public and private combined, has increased by 1.9 per cent in 2010, which is lower than the annual growth for the previous year. The annual growth rate for the private sector was much higher than that for the public sector. However, in respect of both sectors,
annual increase in employment had slowed down
in 2010 vis-à-vis 2009. The share of women in organised-sector employment was 20.4 per cent in 2010 March end and has remained nearly constant in recent years. Only 15.6 per cent of the total workforce had regular wage employment/salaried work during 2009-10 while 33.5 per cent was casual labour and 51 per cent was self-employed (
‘Employment Situation in 2010-11’
as
per Quarterly Survey Reports
). The
Labour Bureau
conducted twelve quarterly quick employment surveys to assess the impact of the economic slowdown on employment in India. These surveys indicate that the upward trend in employment since July 2009 has been maintained.

Comparative Human Development of States

One of the objectives of inclusive development is ‘narrowing inter-state and inter-regional disparities’. As per the latest
Economic Survey 2012-13
the ‘Inter-state comparisons of socio-economic development’ of selected major states based on available indicators from different sources show some interesting results –

Population Related

Bihar has the
highest
decadal (2001-11) growth rate of population (25.07 per cent), while Kerala has the lowest rate (4.86 per cent). Some big states like Gujarat, Haryana, Madhya Pradesh, Rajasthan, and Uttar Pradesh also have high decadal growth of population.

In 2011, Kerala has the
highest sex ratio
with 1084 females per 1000 males, followed by Tamil Nadu (995), while Haryana is at the bottom (877). Interestingly, the sex-ratios in some of the developed states like Gujarat and Maharashtra are also low at 918 and 925, respectively.

Growth Related

The
best performers
in terms of growth during 2011-12 are
Bihar
(
16.71
per cent) followed by Madhya Pradesh and Maharashtra. The growth of these states is much above the all India average. The
worst performers
are Rajasthan (5.41 per cent) followed by Punjab and Uttar Pradesh. States with the highest growth rate for the period 2005-06 to 2011-12 are
Bihar
(
10.17
per cent) followed by Gujarat and Maharashtra. In terms of growth in
per capita income
, the best performer is
Bihar
(
15.44
per cent) followed by Madhya Pradesh and Maharashtra due to high growth in gross state domestic product (GSDP) in 2011-12 and despite their high decadal growth in population. Per capita income growth is the lowest in Rajasthan (3.72 per cent), followed by Uttar Pradesh, Punjab, and Odisha which are all below the all India per capita income growth.

Poverty

The poverty estimates indicate that the
highest
poverty headcount ratio (HCR) exists in
Bihar
at 53.5 per cent as against the national average of 29.8 per cent. In 2009-10 compared to 2004-5, Bihar has displaced Odisha as the poorest state, Socio-Economic and Caste Census (SECC) with Odisha’s situation improving considerably in 2009-10. Lowest poverty is in Himachal Pradesh (9.5 per cent) followed by Kerala (12 per cent).

Rural-Urban Disparity

Bihar
has the lowest MPCE both in rural and urban areas at Rs. 780 (with 65 per cent food share) and Rs.1238 (with 53 per cent food share) respectively. In comparison, Kerala has the highest in both rural and urban areas at Rs.1835 (with 46 per cent food share) and Rs. 2413 (with 40 per cent food share), respectively. It is obvious that poorer states spend a greater proportion of income on food in total consumption expenditure.

Unemployment

As per usual status(adjusted) NSS 66th round 2009-10, the unemployment rate (per 1000) among the major states is the
lowest
in Gujarat (18) and
highest
in Kerala (73) and Bihar (73) in urban areas and the lowest in Rajasthan (4) and again highest in Kerala (75) in rural areas.

The low unemployment rate in rural areas in Rajasthan may partly be due to high absorption of MGNREGA funds in the state. Kerala, which has performed well in terms of most indicators, performs less in terms of unemployment (both rural and urban). This may be due to the higher level of education in Kerala resulting in people not opting for manual jobs as observed by some studies.

Health

Kerala is the
best
performer in terms of
life expectancy
at birth for both males (71.5 years) and females (76.9 years) whereas Assam is the worst performer for both males (61 years) and females (63.2 years) during 2006-10.
Infant mortality rate
(IMR) in 2011 is the lowest in Kerala (12) and highest in Madhya Pradesh (59) against the national average of 44.
Birth rate
is lowest in Kerala (15.2) and highest in Uttar Pradesh (27.8) against the national average of 21.8. Death rate is lowest in West Bengal (6.2) and highest in Odisha (8.5) against the national average of 7.1.

Education

Madhya Pradesh has the
highest
gross enrolment ratio (GER) (6-13 years) in 2010-11 while Assam has the lowest.
Pupil-teacher ratios
in primary and middle/basic schools are the lowest in Himachal Pradesh and high in states like Uttar Pradesh and Bihar.

Financial Inclusion

In terms of decadal growth rate in bank branches, Haryana (59.5 per cent) has the
highest
growth and Bihar the lowest (14.4 per cent). Among worth eastern states Assam is placed at 16.5 per cent. Himachal Pradesh (89.1 per cent) has the highest percentage households availing of banking services while Assam (44.1 per cent) is the lowest followed by Bihar (44.4 per cent). Thus, in terms of both these financial inclusion indicators, Bihar’s performance is
among the worst
.

Key Social Sector Programmes

While there are state-wise indicators for some social-sector programmes, it is not possible to evaluate the performance of states based just on numbers. The average persondays per household under the MGNREGA in 2011-12 is
the highest
in Andhra Pradesh (58 days) followed by Himachal Pradesh (53 days) and
lowest
in Assam and Punjab (both 26 days) against the
national average
of 43 days.

While the share of women’s employment under the MGNREGA is the highest in Kerala (92.76 per cent) followed by Tamil Nadu (73.36 per cent), it is the lowest in Uttar Pradesh (16.98 per cent). While the stipulation of one-third women’s participation has been maintained at the all India level, in states like Uttar Pradesh, Assam, and Bihar, it has been below the stipulated level.

Progress in terms of 24x7 primary health centres (PHCs), additional PHCs, CHCs and other subdistricts health facilities under the NRHM is the highest in Tamil Nadu and lowest in Himachal Pradesh. Under the Indira Awas Yojana (IAY), Bihar has the highest share followed by Uttar Pradesh and Andhra Pradesh, whereas Himachal Pradesh has the lowest.

Conclusive Remarks

(i)
Thus, the inter-state comparison of performance of states based on different indicators shows that while some states have performed well in terms of growth indicators, they have performed poorly in terms of other indicators like poverty, rural-urban disparity, unemployment, education, health and financial inclusion. This calls for a rethink on the criteria used for devolution of funds to states under Finance Commissions where criteria like
‘income distance’
(12th Finance Commission) or
‘fiscal capacity distance’
(13th Finance Commission) along with population are given high weightage and none of the human development indicators or financial inclusion indicators are used.

(ii)
Similarly, the criteria used for awarding ‘special category status to states’ (hilly and difficult terrain, low population density and/or sizable share of tribal population, strategic location along borders with neighbouring countries, economic and infrastructural backwardness, and non-viable nature of state finances) need to be revisited.

SOCIO-ECONOMIC AND CASTE
CENSUS

The identification of the real beneficiaries is of paramount importance, for the success of any targeted approach. In line with this approach the
Dr. N. C. Saxena Committee
was constituted to advise on the ‘methodology for a BPL census in rural areas’. Since June 2011, for the first time, a
Soci-Economic and Caste Census (SECC)
is being conducted – through a comprehensive door-to-door enumeration in both rural and urban India, authentic information is being made available on the socio-economic condition and educational status of various castes and sections through the SECC.

This exercise will help better target government schemes to the right beneficiaries and ensure that all eligible beneficiaries are covered, while all ineligible beneficiaries are excluded. Households identified as highly deprived will have the highest inclusion priority under government welfare schemes. Use of the
Aadhar
number in various beneficiary-oriented social–sector programmes will also check duplications.

The
SECC 2011
is being conducted simultaneously for rural and urban areas by the respective states, with technical and financial support from the GoI. Enumeration is to be done with the help of about 6 lakh enumerators, who are accompanied by an equal number of technically qualified and computer literate Data Entry Operators (DEO) selected by the country’s premier IT majors. The Ministry of Rural Development in association with the Ministry of Housing and Urban Poverty Alleviation, Office of the Registrar General of India (RGI) and the states have shouldered the responsibility of training the enumerators, supervisors, verifiers, and state officials engaged in the census operation. The SECC process ensured transparency and people’s participation.

Before finalising the outcomes, the household data, except caste data, will be placed in the public domain for scrutiny and go through a two-stage appeal procedure in the ‘claims and objections’ stage. In rural areas, the Gram Sabha will also mandatorily scrutinise the data in a specially convened meeting.