The Hindu Business Line : Metaphor for India's backwardness

Instead of being focussed on the politics of allocation, the leaders of UP and Bihar seem distracted by the politics of caste and clan loyalties. These competitions are inevitable in large and heterogonous societies, but when they become the main focus of political competition the economic costs can be enormous.

THIS country might bear a name derived from the river Indus, but it is the Ganga that has nurtured our civilisation. This is why the Ganga is the holiest of India's rivers, revered not just for its bountiful waters, but also for the rich history it nourished. Rising high up in the Himalayas in Uttaranchal, the course of the Ganga lies mainly in Uttar Pradesh and Bihar.

Even as it races down the mountains, the Ganga gathers tributaries, but when it enters the plains it gains great width and volume from such mighty tributaries as the Yamuna, Gomti, Ghagra, Sone, and Gandhak. Thus, Bharat took root amidst this great river system and hence we consider the people of the Gangetic plain as the mother lode of Indian nationhood. But today it is the children of the Ganga that are the most distressed in the country. Such is their condition that they have become the metaphor for India's backwardness.

When the people of UP and Bihar are referred to, big numbers come to mind. The population of UP is 16.6 crore and it is by far the most populous State in the country. Maharashtra the next biggest State has a population of only 9.7 crore. The population of Bihar, now shorn of Jharkhand, is 8.3 crore and it is the third most populous State in India.

These large numbers give these two socio-culturally akin States a very important position in national politics. Of the total 543 MPs in the Lok Sabha, UP and Bihar account for as many as 120 MPs. Thus, any political party or alliance aspiring to win power at the Centre has to do well in the two States.

The political clout of UP is seen from the fact that eight of India's dozen Prime Ministers hailed from the State. Bihar does not lag in political clout either. That it has 13 ministers in the present council of ministers, accounting for about 20 per cent of the cabinet is testimony to that.

But neither the richness of the land nor the dominant political position of these two Gangetic States has given them any economic advantages in relation to the rest of the country. Theorists have long held that politics is mostly about the allocation of resources.

This does not seem to hold true for these two States, for neither their strength in numbers nor in political representation is reflected in the resource allocations to these two States.

Let us consider some facts to put matters in perspective. UP's real per capita income, at Rs 6,573.60, is the third lowest in India. On the other hand, with an income of just Rs 3,649.80, Bihar has the dubious distinction of having the lowest per capita income in the country. Compared to these, the all-India per capita income is Rs 11,625.20.

It is no surprise, then, that Bihar and UP show some of the highest poverty levels in the country. In 1999-2000, Bihar is the second poorest State — behind Orissa — with 42.60 per cent of its population living below the poverty line. UP is fifth from the bottom, with 31.20 per cent of its population below the poverty line. The all-India average over the corresponding period was just 26.1 per cent.

Despite their relatively extensive irrigation systems, agriculture in both Bihar and UP is characterised by low productivity when compared with Punjab (4,040 kg per hectare) and Haryana (3,127 kg per hectare). One reason for this is fertiliser consumption, but there is a more important contributory factor — the atomisation of land-holdings.

The majority (68.8 per cent in Bihar and 68.3 per cent in UP) of land-holdings are marginal (less than one hectare) or small (one to two hectares). This small size of the average holding militates against higher productivity. It also means that much of the cultivation is subsistence farming, resulting in very little saleable surplus.

One inference is inescapable. India's economic problems are concentrated in UP and Bihar and reason demands that the national development focus be on these two States. Yet we find that is not so. The per capita allocations of Tenth Plan funds vividly portray this.

Compared to the per capita Plan allocations of Rs 9,289.10 for Gujarat and Rs 8,260.00 for Karnataka, Bihar and UP received just Rs 2,533.80 and Rs 3,595.70 respectively.

But what is more informative is that the increase in the State outlays from the Ninth Plan to the Tenth Plan has been the lowest for Bihar (11.9 per cent), while such States as AP (28.8 per cent), Gujarat (16.2 per cent), Karnataka (109.6 per cent) and Orissa (58.2 per cent) are quite clearly more favoured. But UP has been seen with kinder favour by the Planning Commission as its Tenth Plan outlay grew by 36.2 per cent over the previous plan.

The logic of keeping Bihar so low in its priorities escapes us for it only accelerates the State's relative backwardness. But if the oft-stated reasoning that applies to keeping funds to Bihar on a very tight leash were true, then, clearly, it should have applied to UP as well.

This squeeze is not a recent one. The historical trend of increase over the past 25 years tells the full story. The annualised growth of the Plan allocations to Bihar (28.5 per cent) and UP (56.5. per cent) are the lowest in the country, while States such as Karnataka (118.2 per cent), AP (83.1 per cent), Gujarat (80.5 per cent) and Orissa (72.9 per cent) posted impressive annualised growths in Central Government benevolence.

While UP (Rs 59,708.00 crore) may have done better than such States as AP (Rs 46,614.00 crore) and Gujarat (Rs 47,000.00 crore) in getting funds from the Centre for the Tenth Plan, when these allocations are seen in per capita terms, another picture emerges.

Compared with the All-India average per capita allocation of Rs 5,817.70, Bihar and UP only received Rs 2,533.80 and Rs 3,595.70 respectively. On the other hand, AP and Gujarat did much better with per capita allocations of Rs 6,155.50 and Rs 9,289.10 respectively.

Bihar and UP have also been neglected as far as loans from the Centre are concerned. They received just Rs 343.80 and Rs 344.00 respectively per capita as against Rs 911.50 per capita received by AP from 2000-02.

It is only in terms of per capita share of central taxes that we see Bihar and UP getting their due but, then, the Central Government has little discretion over this. Where it has discretion we see little even-handedness, reflected in the low per capita Central assistance (total of additional assistance, grants and net loans from the Centre) received by these two States in 2001. While AP received Rs 625.60 per capita, Bihar and UP got only Rs 276.70 and Rs 343.80 respectively.

The lower per capita levels of Plan allocations and Central assistance provided to UP and Bihar has naturally impacted their development expenditure. Thus, as opposed to the All-India per capita developmental expenditure (from 2000 to 2002) of Rs 6,748.50, Bihar's is less than half, at Rs 3,206.00, and UP is only marginally better at Rs 3,786.30.

These low development expenditures get amply reflected in the amounts spent by the State governments on four major development thrusts. Bihar's and UP's per capita spending on roads, at Rs 44.60 and Rs 67.30, is way below the national average of Rs 117.80.

Similarly, for irrigation and flood control, Bihar and UP spend just Rs 104.40 and Rs 117.40 on a per capita basis, as opposed to the national average of Rs 199.20.

Yet Bihar's per capita spending, at Rs 484.10, on education is as good as that of AP, which spends Rs 493.90 against the national average is Rs 586.80. However, with a per capita spending of only Rs 371.70, UP falls behind on this count too. But, in terms, of per capita expenditure on medical and public health, both Bihar and UP fall well behind, with Rs 86.20 and Rs 71.80 respectively, against the national average of Rs 157.20.

Now the question of how much did Bihar and UP "forego". If Bihar and UP got just the all-India per capita average for the Tenth Five Year Plan, they would have got Rs 48,216.66 crore and Rs 96,604.57 crore respectively for the Tenth Plan instead of the niggardly Rs 21,000.00 crore and Rs 59,708.00 crore they have been allocated.

If politics were mostly about the allocation of resources, surely Bihar and UP should have done better in terms of what they have got so far. One explanation could be that the States with aggressive regional parties at the helm with a tradition of strong regional sentiments, such as Tamil Nadu or Andhra Pradesh or Gujarat, have done better at attracting the Central Government's concerns and winning a larger share of resources. Clearly, then, numbers either in parliament or in the government have not served the people of the two States.

Instead of being focused on the politics of allocation, the leaders of both States seem distracted by the politics of caste and clan loyalties. These competitions are inevitable in large and heterogonous societies, but when they become the main focus of political competition the economic costs can be enormous.

The change in the allocations can only come about when the intra-regional disparities and inequities become the dominant political issues. Only time can tell if this will happen? But time is the one thing the children of the Ganga can least afford!

(The author is with Centre for Policy Alternatives, New Delhi. For a full copy of this study e-mail cpasind@yahoo.co.in)