The Champion States

India Today|December 2, 2019

The Champion States
The latest edition of our annual SOS survey alters perceptions about achiever and laggard states and throws up surprises
Kaushik Deka

Competitiveness is a universal and time-tested idea to promote growth. Competition among states, to outdo each other in economic development and social welfare, could well be the trigger our country desperately needs to rev up the slowing economy. The Narendra Modi government has often advocated a growth model that blends cooperation between the Centre and the states with the inter-state competition. India today outlined this concept of mapping the performance of states way back in 2003, with the State of the States (SOS) study.

Sixteen years on, the SOS study not only remains the most comprehensive and credible benchmark for assessing a state’s socio-economic development, but it has also evolved in its scope and methodology. The study is based on objective data sourced from government bodies and credible agencies. To avoid giving undue advantage to states with a legacy of performance or under-achievement, the evaluation is done under two broad groups—best performing and most improved. The best performing category examines the absolute numbers for the latest year for which data is available. The most improved category examines states’ progress over the past five years.

The SOS study has gradually altered perceptions about achievers and laggards. Tamil Nadu, Kerala and Gujarat are three of the best performing states that have traditionally been among India’s high-growth achievers. In this year’s SOS rankings, they found place among the top five in many of the 12 categories. Yet, in terms of improvement in the past five years, they were among the bottom five in four to six categories.

Bihar, Assam and Uttar Pradesh, which have a poor record, have hit the growth lane in the past five years. While the three are among the bottom five of the best performing states across several categories, they are among the five most improved in six to nine categories. For the second year in a row, Tamil Nadu, better known for vote-catching doles, has emerged as the best performing big state, indicating that performance and populism can go together. Assam topped the list of most improved big states again. Perhaps the BJP government’s efforts to clean up the administration paid off.

Among the small states, Goa, aided by performance in economy, infrastructure, tourism and cleanliness, dethroned last year’s winner Puducherry, which maintained its superlative performance in other categories, but saw a sharp fall in tourism and education. Tripura, which moved from 25 years of Left rule to the first BJP government in 2018, retained last year’s position as the most improved small state.

The absence of Maharashtra, Karnataka and West Bengal, which together account for 28 per cent of India’s GDP, from the list of major winners is a worry. Among the best performing big states, Maharashtra slipped in the overall, economy, health, governance and tourism categories. While Karnataka marginally improved in some categories, political instability seems to have hit its overall performance. West Bengal, the most improved big state in environment, is an encouraging story. Bogged down by poor performance in the past, it ranked 12th among the 20 best performing big states despite better rankings than last year in 10 categories. Among the most improved states, though, it jumped from 13th position to eighth—the kind of rise the SOS study seeks to map. India’s march to a $5 trillion economy by 2025 could become a reality if such upward movements among states become the norm and not the exception.

How the states were ranked

The India Today State of the States (SOS) 2019 study was conducted by Marketing and Development Research Associates (MDRA), a Delhi-based premier research agency. The robust methodology is designed to rank the states on the basis of most relevant and exhaustive data, covering aspects crucial to foster inter-state competition and uphold the true spirit of India’s federal structure.

The states were ranked under two broad groups

Best-performing states

Indicates latest performance of the state specific to the category

Based on most recent data across multiple parameters

Most-improved states

Indicates improvement of the state in the past five years

Based on positive changes (outcome-based) in the past five years

The states were also divided into two broad groups based on geographical area and population—states with an area of over 35,000 sq. km and population of over 5 million were clubbed as the big states. Deliberations revealed that bigger states have their own advantages and disadvantages vis-à-vis the smaller states. So it was decided to have separate comparisons of the big and small states. Jammu & Kashmir was not considered due to the change in its status during the period of study.

Twelve categories were identified for comparing the performance of the states. In each category, several attributes, on which the states needed to be competitive, were fixed. Based on inputs from experts—academia, policymakers and policy influencers, such as representatives from the NITI Aayog, think-tanks, policy research organisations, sociologists and economists—105 attributes were finalised for evaluating the best-performing states and 80 attributes for the most-improved states. The relative weights of the parameters and attributes were finalised in consultation with the experts, India today editors and MDRA team.

To ensure fair comparisons, it was ensured that no state gets unfair advantage because of its size, population or any such aspect. Hence it was necessary to normalise the data based on population or geographical size, as the case required. Based on the weights determined for each attribute, sectoral rankings were arrived at. Parameter-level weights were used to arrive at overall best-performing and most-improved states.

A large MDRA team, led by Abhishek Agrawal (executive director), Abnish Jha (project director), Rajan Chauhan (senior research executive) and Manveer Singh (executive-EDP) and assisted by statisticians and econometricians, worked on this voluminous project from June to October 2019.

Parameters for Performance

For the best-performing state category, the latest available data for these indicators was considered; for the most-improved states, data from the past five years was examined

FOR BEST-PERFORMING STATES

Economy

Per capita income; % Above Poverty Line (APL); ratio of capital expenditure to population; GSDP for the services sector per population; GSDP for the manufacturing sector per population; Consumer Price Index (CPI); unemployment rate (%); no. of banks per 100,000 people; ratio of commercial bank credit per 100,000 people; urban labour force participation (15-59 years) (per 1,000 people); FDI inflow; actual IEM/ proposed IEM; proportion of state FDI inflow to total FDI in India; ratio of outstanding liabilities to population; ratio of gross capital formation to population

Infrastructure

Ratio of (surfaced + unsurfaced) road length to total area; ratio of length of national highways and state highways to total area; ratio of vehicles to road length; % of households with electricity; households with access to drinking water/ piped water; ratio of length of railway lines to total area; no. of flights to population; no. of stadiums per 100,000 people; JNNURM-related variables (share of no. of projects completed to total no. of approved projects); no. of post offices per 100,000 people; no. of mobile subscribers per 1,000 people; no. of telephone connections (landline) per 1,000 people; state-wise per capita availability of power; no. of internet subscribers per 1,000 people; no. of smart cities to total districts

Agriculture

Money spent on agriculture in the last budget compared with area of agriculture and population invested in agriculture; contribution of agriculture to GSDP; agriculture GSDP per rural population; % of area irrigated out of the total cultivated land; productivity—crop produced vs. land and population involved; loans extended to agriculture/ households cultivating land; % of cropped area under cash crops

Education

Total expenditure of the education department per population (6-14 years); literacy rate (%); ratio of girls to boys enrolled in primary and middle school; pupil-teacher ratio (all institutions); dropout rate in primary and middle education; no. of colleges per population in 15-19 age group; no. of schools per population in 10-14 age group; institutes with national importance per 100,000 people; central universities and national law universities per 100,000 people; higher educational institutions per 100,000 people

Healthcare

Expenditure on health per person; Infant Mortality Rate (IMR); Maternal Mortality Ratio (MMR); registered doctors per 100,000 people; government hospitals per 100,000 people; average patients served per government hospital; no. of beds per government hospital; life expectancy

Law & Order

Civil policemen per 100,000 people; cases (under IPC) per 100,000 people; Murders per 100,000 people; kidnappings per 100,000 people; rapes per 100,000 people; molestation cases per 100,000 people; riots per 100,000 people; pending cases per 100,000 people

Inclusive Development

% of Below Poverty Line (BPL) population; progress in poverty alleviation; accounts under Pradhan Mantri Jan Dhan Yojana per population; ratio of domestic LPG consumers to total households; persons who benefitted from NREGA; progress of Pradhan Mantri Awas Yojana; % of households with any usual member covered by health scheme; % of PDS offtake; average days of wage provided per household; women in 20-24 age group married before 18 (%); % of children engaged in labour

Governance

Criminal records of MLAs; % of women panchayat representatives; panchayat devolution index; e-services rolled out by states for citizens; operational common service centres per population; panchayats providing e-services to total panchayats; ease of doing business index (DIPP and World Bank); progress of Digital India

Entrepreneurship

Ease of doing business index (%); Startup India progress; Skill India progress; Mudra Bank credit fund progress; Start-ups (new companies registered) in the state per 1,000 people

Tourism

No. of domestic tourists; no. of foreign tourists; funds spent on tourism promotion to tourist population; airports per 100,000 people; railway stations per 100,000 people; crimes against tourists per 100,000 tourists; registered hotels per 100,000 tourists; five-star hotels per 100,000 tourists

Environment

SO2 concentration (residential + industrial); NO2 (residential + industrial); PM10 (residential + industrial); PM2.5 (residential + industrial); tree cover to total area; forest cover to total area

Cleanliness

% of households with improved sanitation facility; % of schools with separate toilets for girls; % of households using improved drinking water source; % of households using clean fuel for cooking; Individual Household Latrine (IHHL) coverage

FOR MOST-IMPROVED STATES (DATA FROM PAST FIVE YEARS)

Economy

Per capita income; % APL; ratio of capital expenditure to population; GSDP for the services sector per population; GSDP for the manufacturing sector per population; CPI; unemployment rate (%); number of banks per 100,000 people; ratio of commercial bank credit per 100,000 people; FDI inflow; proportion of state FDI inflow to total FDI in India; actual IEM/ proposed IEM; ratio of outstanding liabilities to population; gross capital formation to population

Infrastructure

Ratio of (surfaced + unsurfaced) road length to total area; ratio of length of national highways and state highways to total area; ratio of vehicles to road length; % of households with electricity; households with access to drinking water/ piped water; ratio of length of railway lines to total area; post offices per population; no. of mobile subscribers per 1,000 people; telephone connections (landline) per 1,000 people; state-wise per capita availability of power

Education

Total expenditure of the education department per population (6-14 years); literacy rate (%); ratio of girls to boys enrolled in primary and middle school; pupil-teacher ratio (all institutions); dropout rate in primary and middle education; no. of colleges per population in 15-19 age group; no. of schools per population in 10-14 age group; no. of higher educational institutions per population

Agriculture

Money spent on agriculture in the last budget compared with area of agriculture and population invested in agriculture; contribution of agriculture to GSDP; agriculture GSDP per rural population; % of area irrigated out of the total cultivated land; productivity—crop produced vs. land and population involved; loans extended to agriculture/ households cultivating land; % of cropped area under cash crops

Healthcare

IMR; MMR; registered doctors per 100,000 people; government hospitals per 100,000 people; average patients served per government hospital; no. of beds per government hospital; life expectancy

Law & Order

Civil policemen per 100,000 people; total cases (under IPC) per 100,000 people; murders per 100,000 people; kidnappings per 100,000 people; rapes per 100,000 people; molestation cases per 100,000 people; riots per 100,000 people; pending court cases per 100,000 people

Governance

% of women representatives in panchayats; panchayat devolution index; ease of doing business index BRAP (Business Reforms Action Plan) implementation (%) (DIPP and World Bank); progress on Digital India programme (online transactions done per 1,000 people)

Inclusive Development

% of BPL population; ratio of domestic LPG consumers to total households; persons who benefitted from NREGA (households provided work under NREGA per total households); progress in Pradhan Mantri Awas Yojana (target fixed by states/ completed)

Entrepreneurship

Ease of doing business index (%); progress on Startup India programme; number of start-ups (new companies registered) in the state per 1,000 people; state-wise details of candidates trained under Pradhan Mantri Kaushal Vikas Yojana—total training completed per population; amount disbursed under Pradhan Mantri Mudra Yojana/ no. of registered companies

Tourism

No. of domestic tourists; no. of foreign tourists; funds spent on tourism promotion to tourist population; crimes against tourists per 100,000 tourists; no. of registered hotels per 100,000 tourists; no. of five-star hotels per 100,000 tourists

Environment

SO2 concentration (residential + industrial); NO2 concentration (residential + industrial); PM10 concentration (residential + industrial); tree cover to total area; forest cover to total area

Cleanliness

% of households with improved sanitation facility; % of households using improved source of drinking water; % of households using clean fuel for cooking; IHHL coverage; % of schools with separate toilets for girls

A Gleaming Trajectory

A 10-year vision plan has helped the state maintain exacting standards in development. Tamil Nadu has emerged as the best as well as the most improved state in law and order

By Amarnath K. Menon

In Tamil Nadu, policy support has always fast-tracked reforms. The political uncertainties after ex-chief minister J. Jayalalithaa’s death are now behind it, and the ruling AIADMK government steered by Chief Minister E.K. Palaniswami has kept the state focused on development and growth.

The impressive growth over the years has been backed by excellent social indicators. A skilled workforce is an added advantage. Earlier, investments came without the state chasing them, but now with intense competition from states like Telangana, Tamil Nadu has had to go in for a makeover. Palaniswami has set an example for leaders in working to raise the state’s profile globally. This year, he went on a two-week tour of the US, UK and UAE to woo investments and help kickstart new businesses. And it came at an apt time, when FDI flow, according to the Department for Promotion of Industry and Internal Trade data, has dropped 25 per cent and competition increased.

The ‘Vision for Tamil Nadu 2023’ statement aims to make the state India’s most prosperous with zero poverty, and where its people enjoy all the basic services of a modern society and live in harmonious engagement with the environment. Tamil Nadu is the second largest contributor to India’s GDP and only one of eight states that has a higher poverty reduction rate than the all-India average. The state’s per capita income at current prices is Rs 1,50,036 (2016-17), the third highest among large states. The human development index is second among large states and its socioeconomic development status is much higher than the national average. In a population of 72 million, 80 per cent are literate and 48.5 per cent urbanised. Tamil Nadu is an innovation-based economy with a strong presence in manufacturing and services.

Much of this springs from ex-CM Jayalalithaa’s vision. The Vision Tamil Nadu 2023 document was drafted during her tenure. Among the ambitious outcomes listed in it are ensuring health for all, developing world-class infrastructure, cultivating a healthy investment climate, creating a knowledge capital and innovation hub, nurturing the state’s rich heritage and preserving its ecology, and improving the quality of institutions and governance.

To achieve these aims, Tamil Nadu has adopted multiple strategies. This involves increasing the share of manufacturing in the state’s economy, making MSMEs dynamic, enhancing productivity and innovation in the manufacturing and services sectors, focusing on skill development, improving agricultural productivity, transforming 10 cities into world-class models that become nodes of growth, ensuring inclusive growth through social welfare programmes, undertaking signature projects in education and skill development, improving facilities connected to health, water and sanitation, power, connectivity, and encouraging publicprivate partnerships in infrastructure projects. The state has already initiated work in over 100 of the 217 projects— spread across 13 sectors—identified in the Vision 2023 document. The project has been on since 2012 and involves a decadal investment of Rs 15 lakh crore.

The state police has been given a free hand to ensure maintenance of law and order. Increased financial allocations have helped improve the staffing, infrastructure and mobility of the force. Welfare measures to ensure better working conditions have led to higher morale.

The highest importance has been accorded to safety of women. Tamil Nadu was the first state to pioneer all-women police stations. The state has the distinction of having the highest proportion of women in the force (30 per cent jobs are reserved for them). It has also introduced ‘Amma patrols’ to ensure women’s safety.

Tamil Nadu is also a popular healthcare destination (reckoned as the best in the country in cadaver organ transplants). In tourism, the state has succeeded in showcasing its rich heritage. The increasing stream of visitors from all over the world is testimony to this.

‘Tamil Nadu is a strong, silent performer’

Chief Minister E.K. Palani­ swami explains how the state has consistently fared well in an interview to Amarnath K. Menon. Excerpts:

Q. How has Tamil Nadu performed so well overall?

Tamil Nadu was set on a high growth trajectory by our late CM, J. Jayalalithaa. My cabinet has focused on an economic strategy where industries oriented towards generation of jobs are encouraged. We invest in human resources, focusing on quality outcomes in health and education sectors. Tourism has flourished because of our solid investments in infrastructure and because the state is a haven of peace. Law and order is a top priority for us. Tamil Nadu is a strong, silent performer; it’s no surprise we have emerged on top.

Q. What are the challenges before Tamil Nadu?

Natural calamities, job creation, improving economic growth and bringing stability to the primary sector.

Q. What are the key factors that attract business here?

Building trust and confidence among investors, a robust infrastructure with excellent port and road connectivity, a skilled work force, an excellent ecosystem for industrial development and a huge market. Along with this, uninterrupted, quality power supply.

Q. Is the state losing out in any sector?

No, it is not. Tamil Nadu was No. 2 in the NITI Aayog innovation index. We have seen fresh investments in all sectors including IT, electronics, automobiles and sunrise sectors like elec tric vehicle manufacturing, particularly after the Global Investors Meet in January. Recently, I visited the UK, US and UAE. There was overwhelming response from investors there.

Q. Is the government under any pressure from environ­ mental lobbies?

There is no such thing. We are focused on sustainable industrialisation. Tamil Nadu is the ‘yarn bowl’ and ‘leather capital’ of India, and also a leading producer of chemical products. Thousands of industries are successfully operating in these sectors after adhering to environmental standards.

Q. You are travelling again soon to get investments.

I will go to Israel next year to see new technologies for recycling and conservation of water, use of high tech in agriculture and to promote investment in Tamil Nadu.

Q. What does the two recent AIADMK assembly byelection wins signify?

It shows the people’s faith in the AIADMK and our government, and the success of our many welfare schemes.

Leading the Charge

Despite the insecurity triggered by the NRC and a host of legacy issues, the state is striving towards all-round development. Assam also won the most improved award for economy

By Kaushik Deka

Among all Indian states, Assam has the highest share of Muslims in its population—about 35 per cent. Monitored by the Supreme Court, the state published a National Register of Citizens (NRC) in August this year to detect illegal immigrants from Bangladesh, which caused massive insecurity among a large section of the Muslim population as many of them are popularly perceived to be immigrants from Bangladesh. At the same time, the BJP-ruled governments at the Centre and in the state insisted on bringing a Citizenship (Amendment) Bill that aims at giving citizenship to people from non-Muslim communities who faced religious persecution in Bangladesh, Afghanistan and Pakistan. This move antagonised the indigenous population of Assam, who believed that this new bill will ensure citizenship for a large number of Hindu illegal immigrants from Bangladesh, posing a serious threat to the cultural and linguistic identities of the state’s original inhabitants.

Yet, since 2014, the BJP has been sweeping almost every poll held in the state—from parliamentary to panchayat. The explanation for this electoral outcome can perhaps be found in the people’s desperation for development in the state seen as the gateway to India’s Northeast. As the government numbers suggest, the Sarbananda Sonowal led state government has been gradually putting the state back on the path of development. In terms of absolute performance, the state is still among the laggards, but is making efforts to catch up. The proof of this comes from the fact that in the India Today State of the States study, Assam is among the top five most improved states in six out of 12 categories.

That’s significant in a state saddled with multiple legacy issues. Take this example: at a time when electricity is available in the open market at a round-the-clock average price of Rs 3 per unit, the Assam government is forced to buy the same from NTPC Bongaigaon at Rs 5.6 per unit. This is because in 2006 Assam convinced NTPC to set up a power plant, replacing a state government utility that never worked at more than 25 per cent capacity. Because it was a take-or-pay deal, it has now become an economic liability. The state government has now pleaded with the Centre to give NTPC a Rs 1,000 crore largesse to save the state from this mess.

The economic progression in the state is triggered primarily by focusing on the basics— building infrastructure that can help the state take advantage of its geographical and strategic location. With its abundant natural beauty, Assam has immense tourism potential, while borders with Bhutan, China, Myanmar and Bangladesh offer unmatched trade opportunities. While Prime Minister Narendra Modi has inaugurated two new bridges on the Brahmaputra in the past two years, at least five new ones are coming up on the river in the next decade at strategic locations. The state government has also sought a loan of $110 million from the World Bank to develop an efficient river transport system in the state.

The recently launched export policy of the state says that Assam’s proximity to the South Asian Association for Regional Cooperation (SAARC) and the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) countries and its own large domestic market will create a huge market with 400 million households. “Assam is rapidly emerging as India’s trade corridor with Southeast Asia. Even among the eight Northeastern states, its trade potential has increased several notches. With the guidance of Prime Minister Narendra Modi, the region is truly realising his vision of Asta Lakshmi,” says Chief Minister Sonowal.

Efforts are also going on to strengthen the rural economy in the primarily agricultural state. The National Bank for Agriculture and Rural Development (NABARD) has sanctioned around 3,520 projects worth Rs 7,019.47 crore in the agriculture and related activities sector, the social sector and rural connectivity.

High on Enterprise

Gujarat continues to be an industrial powerhouse with impressive GSDP and FDI figures

By Uday Mahurkar

Gujarat always had strong fundamentals, so it is no surprise that it is India’s leading state in economic terms. It contributes 7.7 percent to the country’s GDP, even though it comprises only 5 percent of India’s population. Poverty reduction has been one of the state’s biggest achievements: only 5 percent of its people are below the poverty line. The state also saw a record Rs 18,325 crore in FDI in the first quarter of FY20. With a 17 percent share of the country’s industrial output, Gujarat is second only to Maharashtra.

Among the state’s pro-business initiatives are the Gujarat MSME (Facilitation) Ordinance of 2019, the Gujarat Single Window Clearance Act, a revamped investor facilitation portal (online applications have doubled this year) and the new Gujarat Shops and Establishments Act, which allows businesses to stay open 365 days a year.

Gujarat is blessed in having an efficient bureaucracy, an enterprising business class, excellent infrastructure, including roads, urban and rural development and a robust agriculture infrastructure. The industrial sector and water management in the state had improved vastly when Narendra Modi was chief minister. Even after he left for Delhi, the development momentum did not flag, particularly under current chief minister Vijay Rupani.

The MandalViramgam-Becharaji region is an instructive example of Gujarat’s growth model. The region, encompassing Ahmedabad and Mehsana districts, had been so backward that people would not take the roads here at night for fear of being robbed. Today, the entire region is thriving due to industrialisation and the irrigation canal network. So much so there is a school which offers Japanese language classes near Detroj, a backward taluka, thanks to the increasing presence of the Japanese.

Under Rupani, the state’s port sector, too, has been doing well. Large, medium and small ports dot the state’s 1,600 km coastline.

As principal secretary to th e CM, M.K. Das, says, “The government plays facilitator in Gujarat’s economic success with an accent on all-round development.”

The Land of Plenty

Punjab continues to be the bread basket of the country and the state government hopes its infrastructure push can help its farmers become free of debt

By Anilesh S. Mahajan

These days, Punjab’s farmers are in a burning hurry. They have to clear their fields of paddy stubble to prepare for the sowing of their rabi crops. A delay at this time is something they can ill afford—winter is setting in, and this is when they must till their farms. Their fields, which make up about 3 per cent of the country’s land, produce about 19 per cent of the nation’s wheat and 12 per cent of its paddy.

Though many criticise these farmers for their methods—stubble burning most certainly does cause pollution and fill the region’s air with persistent smog—that does not change their contribution to India’s food supply. Every hectare of Punjab’s fertile farms contributes about 52 quintals of wheat and nearly 45 quintals of rice.

Though there are some stretches of the state where cash crops like cotton, sugarcane and maize are grown, such crops form only about 15 percent of the state’s total agricultural yield.

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December 2, 2019