REGIONAL DISPARITIES IN CHHATTISGARH

Project submitted to
Professor Hanumant Yadav

(Faculty Economics)

Project submitted by
Puneet Sameeksha Xalxo

Secc

Roll no.118

Semester 2
18/02/15

Hidayatullah National Law University

Raipur,chattisgarh
 REGIONAL DISPARITIES IN CHHATTISGARH

DECLARATION

I , Puneet Sameeksha Xalxo , hereby declare that , the project work entitled ,
REGIONAL DISPARITIES submitted to H.N.L.U ., Raipur is record of an
original work done by me under the able guidance of Mr. Hanumant yadav ,
Faculty Member of economics , H.N.L.U., Raipur.

PUNEET SAMEEKSHA XALXO

ROLL NO 118
18/02/15

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TABLE OF CONTENS

DECLARATION1

ACKNOWLEGEMENT.3

REAEARCH METHODOLOGY.4

OBJECTIVE5

1.INTRODUCTION 6

2.METHODOLOGY.7-8

3.RURAL AND URBAN DISCRIMINATION IN CG9-10

4.SOCIAL DISCRIMINATION11-12

5. CONCLUSION13-14

6.REFRENCES.15

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RESEARCH METHODOLOGY

The research methodology used in this project is analytical and descriptive. It is

largely based on electronic and secondary sources of data . Data has been collected
from various articles and web sources. This project is based upon non-doctrinal
method of research. This project has been done after a through research based upon
intrinsic and extrinsic aspects of the project

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ACKNOWLEDGEMENTS

I would like to take this opportunity to express my deep sense of gratitude

towards my course teacher, Mr. Hanumant yadav for giving me constant
guidance and encouragement throughout the course of the project.

I would also like to thank the University for providing me the internet and
library facilities which were indispensable for getting relevant content on the
subject, as well as subscriptions to online databases and journals, which were
instrumental in writing relevant text.

Special thanks goes out to my seniors who have been relentless in their
help and supporting providing any material whenever required and my
colleagues, who always stood by me, irrespective of the decisions taken by
me. Without their support this project would not have seen the light of the
day.

PUNEET SAMEEKSHA XALXO

SECOND SEMESTER
B.A. L.L.B(HONS.)

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OBJECTIVES

1. To understand what is regional disparities.

2. To know the methodolgy.
3. To get the information about rural and urban discrimination in cg.
4. To know what is social discrimination.

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Introduction

The regional disparity in India is now a matter of serious concern. It is well known that in
a large economy, different regions with different resource bases and endowments would
have a dissimilar growth path over time. One of the reasons why centralised planning was
advocated earlier was that it could restrain the regional disparity. In spite of planning,
however, the regional disparity remained a serious problem in India. A new controversy
in this respect is whether growth rates and standard of living in different regions would
eventually converge or not. The convergence theorem (Barro, 1991) postulates that when
the growth rate of an economy accelerates, initially some regions with better resources
would grow faster than others. But after sometime, when the law of diminishing marginal
returns set in, first growth rates would converge, due to differential marginal productivity
of capital (higher in poorer regions and lower in richer regions), and this in turn would
bridge the gaps in the levels of income across regions. The empirical evidence on this is
however very controversial. It has also been observed that when an economy is liberated,
especially after controls on investment are lifted, then regions with better infrastructure
would attract more investment, especially foreign capital, through market mechanism,
and this in turn would lead to regional inequity, at least in the early phase of reforms. The
regional disparity in China after economic reform is a classic example of this.

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Methodology
Methodology of Extending 1993-94 SDP Series Backwards The Central Statistical
Organisation (CSO) has revised the GDP series with base 1993-94. The SDP series for
states have also been revised accordingly. The revised series based on SNA 1993 alter
relative growth rates across states, sectors and periods. For a proper comparison of
regional growth and disparity over time, the revised series of SDP should be extended
backwards. When we began our analysis the revised series SDP data were available only
from 1993-94. Since then, CSO has extended the 1993-94 SDP series backwards.
However, the CSO has combined the 1980-81 and 1993-94 SDP series by simple splicing
method. We have used a slightly more sophisticated method. For this purpose, we first
compute the price correction factor (defined as the ratio of implicit deflator for 1993-94
series to the 1980-81 series for the year 1993-94). The price correction factor is computed
for each state and sector (13 sub-sectors in national accounts) separately. The aggregate
and major sub-sectors primary, secondary and tertiary - SDP deflators for the years
1980-81 through 1992-93 are then calculated as weighted averages of appropriate sub-
sectors indices. The weights for the period 1980-81 through 1992-93 are assumed to be
the same as in 1993-94 series. As mentioned before, the database and definition of
production sectors have changed in 1993-94 SDP series. We shall incorporate these
changes in the earlier SDP series (1980-81) in the following manner. We first compute
the average ratio of 1993-94 series data to 1980-81 series data at current prices for the
common period (1993-94 through 1996-97) for which data on both the series are
available. Unlike in the case of price correction, the quantum correction is computed
from data for a number of years because changes in production may not be adequately
captured by a single year data. Similar to price correction, the quantum correction factor
is computed for each sector (13 in all) and each state separately. In the next stage, we

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slide down the quantum correction factor for production change by a geometrically
declining rate to unity for the year 1980- 81. It is assumed that all production changes
have become significant since 1981-82 (otherwise it would have been incorporated in
1980-81 SDP series) and the quantum correction factor has increased geometrically since
then till it is officially accounted in 1993-94 series. In this manner, we extend the 1993-
94 SDP current price series backwards up to 1980-81. Dividing the computed current
price series (corrected for production changes) by the computed price deflator (corrected
for price changes) we get the computed constant price SDP series for each sector and
state for the period 1980-81 through 1992-93 that are consistent with the 1993-94 series
data. It may be noted that this method is an improved version over the CSO conventional
splicing method of combining two series of GDP or SDP. In our method the value of
correction factor for production changes declines as the series is extended backwards,
whereas in the CSO method it remains fixed. We assume that all production changes do
not occur at the same rate over time, so the correction factor should decline as the new
series is extended backwards.

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Rural urban discrimination in cg

Rural urban divide There always existed a rural-urban divide in terms of economic and
social development. But this divide has also been widening in the recent past. Ratio of
urban income to rural income which was just about 1.6 in 1951 and continued to remain
within reasonable limit during the first three decades of development planning to reach
2.1 in 1980-1981, worsened during the last two decades to record a level close to 4.5.
While large and medium cities are experiencing unprecedented economic prosperity, the
rural areas have been experiencing economic stagnation. While the share of agriculture in
the national income declined from about 30 per cent to almost half, the share of
population dependent on agriculture remains almost the same over the last two
decades12. With the withdrawal of the State from critical support services for agriculture,
global competition and higher risk of commercial cultivation, farmers especially those
with small holdings, have been experiencing unmitigated misery. The reports of rampant
farmers suicide from various States, is only one of the symptoms of the current rural
distress. A manifestation of the increasing rural distress is the growing influence of
Naxalites in different parts of the country especially in the backward regions. More than
one-fourth of the districts in the country have been declared as naxalite affected by the
Ministry of Home Affairs13. Naxalism is not just a law and order problem; it is basically
a development problem. Oppressive and exploitative behaviour on the part of the rural
powerelite and the un-helpful government machinery drive the powerless, especially the
tribals and the dalits to the naxilite camp. An effective land reform could be the most
powerful antidote against naxalism. Another trend worth mentioning is the increasing
inequities within the urban areas. While metros and mini-metros, in the developed parts
of the country are growing faster, several industrial centers and small towns in backward
regions of the country have been experiencing stagnation and even retrogression. Further,
even within the fast-growing cities and towns most of the emerging jobs are in the

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informal sector with low levels of wages and hardly any social security. Another aspect
of the economic disparities within the urban areas is that majority of the slum dwellers in
big cities are migrants from rural areas who are eking out a living in the informal urban
sector. Several studies in the recent past indicate that wealth and incomes have been
getting concentrated in the hands of the rich in a fast globalizing world14. This is true
whether it is USA, UK, China or India. While corporate profits in the national incomes
have been soaring, the wage share has been declining. Even within the total wages the
share of the top management and high skilled professionals has been increasing at the
cost of others. Most of the returns to capital are accruing to the urban rich. Similarly the
rapid increase in the salaries of the English-speaking graduates in India in the recent past
has bolstered the prosperity of the urban middle class. According to the Asian
Development Bank (ADB) study widening differentials in earnings of the college
educated vis--vis less educated individuals appear to be the single most important
observable factor accounting for increasing inequality in India. The ADB study further
indicates that both relative and absolute inequality have increased in most parts of
developing Asia. This picture is somewhat at odds with the earlier East Asian experience
when countries like Japan, South Korea, Taiwan and Thailand experienced fast growth
which was much more inclusive in nature. The reason attributed to such equitable sharing
of the benefits of growth was the universal human development in terms of better
education and skills as well as better health achieved by these countries before embarking
on the fast growth path. The extremely non inclusive nature of the recent economic
growth in India can be attributed to the very poor human development, especially in the
rural areas.

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Social discrimination
Indian society has been traditionally highly hierarchical in nature. The caste system
practiced by the Hindu society did not allow social mobility across the classes. Though
other religions are supposed to be casteless, in the Indian context all religious groups
covertly practice caste-based discrimination. Dalits who are outcastes are the worst
victims of caste discrimination followed by the adivasis who are outside the caste
hierarchy. Our Constitution has special provisions to protect the interests of these groups
who are characterized as scheduled castes (SCs) and scheduled tribes (STs). All the
affirmative action in favour of them so far has helped only a small proportion of them.
The SCs who account for over 16 per cent of the population, remain backward in
economic and social development. Mostly landless and assetless being largely
agricultural labour in rural areas, their living conditions and access to basic amenities of
life are pathetic. As a result, the incidence of poverty, illiteracy and ill health among the
SCs is significantly higher compared to the rest of the population. Though untouchability
has been abolished by the Constitution more than 50 yr ago, still they continue to be
victims of various forms of discrimination. According to the National Crime Records
Bureau of the Ministry of Home Affairs the incidence of crime against the SCs has been
on the increase in recent years. Three States viz. Uttar Pradesh, Rajasthan and Madhya
Pradesh together account for almost two third of such reported cases15, 16. A sad aspect
of such crimes and civil rights violations is the fact that they are often perpetrated by
other backward castes and communities who themselves are victims of various forms of
discrimination by higher castes. Scheduled tribes account for about 8 per cent of the
population of the country17. But their share among the poor and illiterates is more than
double their population share. The STs are concentrated in the central and north - eastern
parts of the country. Unlike SCs, landlessness is not a major problem for the STs. But

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most of the land owned by them is of inferior quality and less productive. Another
important problem is their isolation from the mainstream on account of geographical
location. This is especially true of the north-east where STs are in a majority in several
small States. Most of the mineral wealth of the country is in the tribal belt. Mining and
other developmental activities like power and irrigation projects often lead to large scale
displacement of tribals from their habitats. Often they are not properly rehabilitated
economically, socially and culturally. Indeed, they have been often victims of the
development process. There is a qualitative difference between the development
experience of STs in the north-east and in the central regions. In the north-east where
they are in a majority and have the freedom to shape their destiny the outcome in terms of
economic, social and human development has been better. In other parts of the country
where tribals are dominated by others, their living conditions have not significantly
improved. Often they become victims of exploitation by non-tribals in various ways.
They are often alienated from their own land and made to work as bonded agricultural
labour by usurious money lenders. The fate of the tribals has not realty improved even in
the two newly created tribal States of Chhattisgarh and Jharkand. In both States the real
economic and political power is wielded by the non-tribal majority.

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Conclusions
An analysis of the growth performance and structural changes in domestic product of Indian
states in the last two decades reveals that the development process has been uneven across states.
While the advanced industrial states have tended to leapfrog in the reform years, other states
have lagged behind. The regional disparity in the growth rates becomes sharper in terms of per
capita income. The poorer states have not only performed poorly but their failure to stem
population growth has left them in even worse position. We also note that the tertiary, rather than
the industry, has become the engine of growth in the last two decades. The growing regional
disparity in the post reform period is now a matter of serious concern. With deregulation of
private investment, faster growth in turn would induce more investment, and this in turn would
further accentuate regional disparity. The problem is compounded by the negative relationship
between population growth and income growth during the 1990s. Unfortunately, backward states
with higher population growth are not able to attract investment both public and private due
to a variety of reasons, like poor income and infrastructure and probably also poor governance.
Our results support the view that there is a strong case for pro-active public policy to induce
more investment in backward states either through public investment or through fiscal
incentives. Simultaneously, efforts should be made to restrain population growth, especially in
backward states. Finally, the quality of governance and in particular the efficiency of investment
should be given more attention at the state level. The inverse relationship between population
growth and income growth at the state level in the recent years can become an explosive issue
not only economically but also politically. States with higher population growth and lower
income growth would tend to have higher unemployment rate. Migration can only partially
mitigate this thorny problem. Besides, large-scale migration in a country with wide diversities in
religion, language, caste and education levels can create socio-political problems. It is already
evident in some states and regions. In China, the social discontent of rising regional disparity and

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consequent migration is contained by a strict communist party dictatorship. In India, the

democracy is very vibrant. If the inverse relationship between income and population growth
persist longer then sooner or later there would be a serious conflict between states in terms of
sharing of resources. It is already evident in the allocation of resources through the Planning
Commission and the Finance Commission. The social consequences of migration could become
an additional source of conflict. The solution, however, does not lie in curbing growth in fast
growing and market friendly states, but in accelerating reforms in backward states to attain a
balanced regional growth.

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REFERENCES

WWW.WIKIPEDIA.COM
http://medind.nic.in/iby/t07/i10/ibyt07i10p374.pdf
http://isidev.nic.in/pdf/WP1205.pdf
http://www.indiaonline.in/about/Profile/Economy/EconomicIssues/Econo
mic-Disparities.aspx

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