According to a report released on Tuesday by the Economic Advisory Council to the Prime Minister (EAC-PM), Southern states have pushed forward since liberalization, adding significantly to India's GDP and having higher-than-average per capita incomes. While these five states - Karnataka, Andhra Pradesh, Telangana, Kerala, and Tamil Nadu - now account for 30% of India's GDP, other regions, particularly the eastern states, have struggled to stay up.
One of the most intriguing situations in the research is West Bengal, which has experienced a persistent and perplexing fall despite its early economic prowess. West Bengal was once one of India's leading contributors, accounting for 10.5% of national GDP in 1960-61, but its proportion has since dropped to 5.6%.
The state's per capita income, which was formerly 127.5% of the national average, has fallen to 83.7%, below even typically lagging states like Rajasthan and Odisha. This decline, despite its historical advantages and important maritime location, raises concerns about the policies and reasons that have contributed to its ongoing underperformance.
"West Bengal has experienced a continuous decline in its relative economic performance over several decades," the paper observes, distinguishing it as an outlier among maritime states that have generally performed better. While Bihar's status has stabilized in recent decades, it still lags significantly behind neighboring states in terms of growth, demanding a greater rate of catch-up. In contrast, Odisha has made significant progress, discarding its reputation as a laggard.
The report also mentions Maharashtra, which remains India's largest contributor to GDP, although falling from more than 15% to 13.3% in recent years. Despite this, Maharashtra's per capita income will have climbed to 150.7% of the national average by March 2024.
In the north, Haryana and Delhi have continuously performed well, with Delhi boasting one of the highest per capita incomes. The contrast between Punjab and Haryana is significant, as Punjab, once a beneficiary of the Green Revolution, has seen its relative per capita income fall since 2000, whilst Haryana has grown economically.
The paper recommends more investigation into this disparity, emphasizing how Haryana, which was once behind Punjab, has now surpassed it in key economic indicators. The poorest states, such as Uttar Pradesh and Bihar, have seen their contributions to India's GDP decline. Uttar Pradesh's share has decreased from 14% in 1960-61 to 9.5%, while Bihar, despite being the third most populous state, contributes only 4.3%.
