Post-liberalisation analysis shows southern States as leading performers, while Uttar Pradesh and Bihar regressed economically.

Passengers ride a train in Mumbai, India.
| Photo Credit: ABEER KHAN

Post-liberalisation in 1991, the per capita income of the southern States surged significantly and they emerged as “leading performers”, shows an analysis released by the Economic Advisory Council to the Prime Minister (EAC-PM). In contrast, the economic performances of Uttar Pradesh and Bihar regressed and worsened after bifurcation.

Among the western States, Maharashtra and Gujarat consistently performed well. Gujarat exhibited rapid growth from the beginning of the millennium. Among the northern States, Delhi and Haryana performed exceptionally well, though the latter’s economic might is mostly drawn from Gurugram and its adjoining areas.

Punjab had a head start due to the Green Revolution in the 1960s and ‘70s, but its performance has consistently declined thereafter. The EAC-PM’s paper questions whether this was a case of excessive focus on agriculture hindering a transition to industrialisation.

The eastern States continue to “remain a concern”, the paper notes. West Bengal, especially, which had the third best per capita income in the 1960s, regressed rapidly to become the 14th best among the major States. The report does not consider Goa, Himachal Pradesh, north-eastern States other than Assam, and Union Territories other than Delhi as major States.

Rajasthan and Odisha, which had recorded declines until liberalisation, saw a turnaround thereafter, though the degree of rise in income levels was minimal. The per capita income levels in Chhattisgarh and Madhya Pradesh have remained consistently low.

Chart 1 shows the relative per capita income levels. It is a percentage of per capita Net State Domestic Product of a State to the all-India per capita Net National Product or per capita Net National Income.

Chart 2 shows the State’s share in national GDP. It is defined as the ratio of a State’s Gross State Domestic Product to the sum of GSDP of all States. The darker the blue, higher the share in national GDP

Source: The Economic Advisory Council’s paper, “Relative Economic Performance of Indian States: 1960-61 to 2023-24”

Paper was authored by Sanjeev Sanyal and Aakanksha Arora