A K Bhattacharya: India's breakout states?

Welcome, Guest Login | Register
Wednesday, May 02, 2012
Home | Markets & Investing | Companies & Industry | Banking & Finance | Economy & Policy | Section Home | Editorials | Compass | BS People | Columnists | Lunch with BS Home > Opinion & Analysis Opinion

Advanced Search RSS Content Guide
Follow us on

| Life & Leisure | Mgmt & Mktg | Technology | BS Products

Live Markets | Commodities

Text or company name

Keyword Keyword


Email this




Print this

A K Bhattacharya: India's breakout states?
A K Bhattacharya / New Delhi May 02, 2012, 00:19 IST
Ads by Google

Map download : Search Maps, Get Driving Directions Instantly From Your Browser Free!
www.MapsGalaxy.com India’s average annual economic growth during the seven-year period since the United Progressive Alliance formed its government at the Centre in 2004-05 is estimated at 8.5 per cent. The growth figure for the eight-year period under UPA will be a bit lower after incorporating the 2011-12 performance, which is expected to be 6.9 per cent. That should be a cause for concern because with the growth prospects for the current year looking not too bright, analysts have every reason to wonder if the UPA’s good run with economic growth will fizzle out in the remaining two years of its second five-year tenure. That is one perspective. The other way of looking at the India growth story under the UPA regime would be to assess how the various states in India performed in this period and whether any one of them has the ability to continue with its good run in the coming years. An assessment of how different states performed in the seven-year period – from 2004-05 to 2010-11 – brings out interesting nuggets of information that seem to challenge the conventional wisdom on which states are growing fast and which are laggard. For instance, which are the states that clocked double-digit growth in its gross state domestic product during the seven-year period from 2004-05? Only six states will make that list. On top of that list is Uttarakhand at 13.2 per cent, followed, as expected, by Bihar at 10.9 per cent, Maharashtra at 10.7 per cent, Tamil Nadu at 10.4 per cent, Haryana at 10.1 per cent and Gujarat at 10.08 per cent. The real story here is not about Uttarakhand and Bihar with their relatively low bases (they grew by 4.6 per cent and 4.9 per cent, respectively in the previous ten years), but Maharashtra, Tamil Nadu and Haryana. Many analysts had virtually written off Maharashtra and Tamil Nadu and began extolling the virtues of fast-growing Gujarat and Karnataka. It would be interesting to compare these states on growth parameters. Maharashtra’s performance is significant. From average annual growth of five per cent in the ten-year period from 1994-95, Maharashtra doubled its performance to 10.7 per cent in the seven years under the UPA regime. Tamil Nadu’s is equally remarkable with almost the same base performance in ten years prior to 2004-05, which almost doubled to 10.4 per cent in the seven years of UPA. Haryana’s growth story is perhaps the most remarkable. In the ten-year period from 1994-95, it grew annually by over 6.5 per cent. So there was no low-base effect for Harayana to bank on for its 10.1 per cent annual average growth in the seven years from 2004-05. Its growth may be skewed and services sector-led (including construction), but Haryana will clearly emerge as the star performer among all the fast-growing states in India in the last few years. Gujarat’s story is well-known and shows what sustained growth-oriented policies can do to a state’s economic fortunes. There is a political angle to the states’ growth pattern as well. Of the six states with double-digit growth, three are ruled by the Congress. The remaining three – Bihar, Tamil Nadu and Gujarat– are ruled by Janata Dal (United) that is part of the Bharatiya Janata Party-led National Democratic Alliance, All India Anna Dravida Munnetra Kazhagam of J. Jayalalithaa and BJP. Table for Two Now available at Special price Rs.280/- Only Buy Now

Home Loan Rates-April2012
What is the current interest rate? Which bank gives the best rate?

WLC College India

UK Diploma, Paid Traineeship Industry Oriented,Better Placement

Also Read
Related Stories News Now

Citigroup upgrades Infosys to buy. Would you invest in the stock?
Yes No Can't say

- A K Bhattacharya: Behind the positive surprise - A K Bhattacharya: Moving away from coalitions? - A K Bhattacharya: All the govt's people - A K Bhattacharya: Time for some pragmatism - A K Bhattacharya: The Budget week of March - A K Bhattacharya: Get the diagnosis right

The performance of Karnataka is certainly below its potential. Karnataka had a high base of over six per cent average annual growth in the 1994-2003 period, but it could raise the growth level to 8.7 per cent in the seven years from 2004-05.

http://www.business-standard.com/india/news/a-k-bhattacharya-india/s-breakout-states/473113/[5/2/2012 8:58:13 PM]

A K Bhattacharya: India's breakout states? Harayana’s performance stands out even more when compared to that of Karnataka. Leaving Karnataka behind, it clocked double-digit growth in spite of having a high base growth of over six per cent in the previous ten-year period. Odisha, too, has done well in this period, although it had the advantage of a low base of less than four per cent average annual growth in the ten-year period ended 2003-04. But to have clocked 9.5 per cent growth in the following seven years is testimony to Odisha’s inherent economic potential and ability to grow fast. No clear conclusions can be drawn from these data. What does emerge is that states with stable governments have a better chance to grow fast. Bihar, Haryana, Tamil Nadu, Odisha, Gujarat and Uttarakhand will fall in that category. Maharashtra may be an exception as the state has seen changes in leadership and yet it has recorded double-digit growth in the last seven years. But is political stability the only factor that has led to sustained growth for these states? Or is there something more that helps in the emergence of what analysts would like to describe as the breakout states of India? This column has been modified to incorporate corrected data.

Most Popular
Read E-Mailed Commented

White-collar strike hits outsourcing company WNS

- Exports fall for the first time since 2009

New Ipad Application :Business Standard's all new IPad App Click here to download for free
Ads by Google

- A long-term growth story - More trouble for Adidas - April auto sales subdued

Senior Jobs in India :Hand Screened, High Quality Jobs inFinance/Accounting/Banking/HR/Sales

New uPVC Windows & Doors :European Quality. Made for India.Fenesta - Now in your City!

Other Stories
Markets end lower, auto shares drag VIP Industries to set up manufacturing unit in Bangladesh Birla Corp Q4 net down 8.85% to Rs 57.46 cr Moody's retains foreign currency rating of PFC, REC Banks must maintain 7% core capital: RBI

Tags : NEW DELHI DIARY | annual economic growth | UPA regime | Uttarakhand | Bihar | Maharashtra | Tamil Nadu | Haryana | fast-growing states | J Jayalalithaa |

Read Business news in

Advertisements - An exciting self drive holiday in Melbourne .. Know more ! - Watch The Film Here. Click here to know more.. - 8 days of fun and freedom .. Click to know more ! - Learn How One City is Running on FOOD SCRAPS.

Tax Shastra Now available at Special price Rs. 360/- Only Buy Now

Find us on Facebook

- Connects Thinkers, Dreams & Explore. Hello Tomorrow. - The Holiday You Take Home with You. Know more. - Protect your family with a Click. Know more. - Which is the best plan for your daughter - Protect your family with a Click. Know more. - One of the leading business schools in the world.Know More - Invest in Real Estate. Villas in B?lore starting @ Rs.66 lacs - Introducing the new 12th Generation Power Edge Servers. Ads by Google
Facebook social plugin

Business Standard
Like Confirm You like th Page · Ins You like th Page · Ins

13,950 people like Business Standard.13,949 people like Business Standard.

Map of India

India Map

Maps of India

India Shares

Share this Story
Print this del.icio.us orkut Email this digg

Hot Searches
Add to favorites newsVine Twitter Reddit Facebook

Akshaya Tritiya | Tech Mahindra | Aamir Khan | IPL | Apalya | Research In
Motion |


Vodafone | Imagine TV | Thomas Cook | Salman Khan | Transfer pricing | Rupee | Railway Budget |
Agni-5 |
Kingfisher Airlines |

IVRCL | Ertiga

| Sarfaesi Act |

Silver |


http://www.business-standard.com/india/news/a-k-bhattacharya-india/s-breakout-states/473113/[5/2/2012 8:58:13 PM]

A K Bhattacharya: India's breakout states?

Discussion Board/User Comments (1)
Display Name Post your comment Email-Id

Latest Messages
Posted by: ashok Gujarat seems to have the best PR set up.
May 02 , 2012, 00:25 IST

income tax refund | Budget iPhone | Reliance Industries | SEBI | BSNL | BSE | NSE | Mukesh Ambani | Anil Ambani | Infosys | Pranab Mukherjee | Sonia Gandhi | Rahul Gandhi | New Pension Scheme | Reliance | RBI | GDP | Gold | Ratan Tata | ICICI | B-School | Sensex | Tax calculator | Home Loan | Personal Finance | inflation | oil prices | Barack Obama |
Fund | 2012 |

Member Area Subscribe to BS Products

Write to the Editor BS print product BS Hindi

RSS BS e-paper BS Motoring

Archives Newsletter BS Books

Advanced Search Portfolio Tracker

Home | Markets & Investing | Companies & Industry | Banking & Finance | Economy & Policy | Opinion Life & Leisure | Management & Marketing | Tech World | General News About Us | Partner With Us | Code of Conduct | Careers | Advertise with us| Terms & Conditions | Disclaimer | Contact Us

http://www.business-standard.com/india/news/a-k-bhattacharya-india/s-breakout-states/473113/[5/2/2012 8:58:13 PM]