Transcript Dalbir_Singh_Presentation_2013

CHALLENGES FOR REGIONAL DEVELOPMENT
BY
DALBIR SINGH
INTRODUCTION
•India - Federal Democratic Republic – 1.2 billion people, 28 states & 7 centrally
administered territories.
• Diversity – 4635 communities / sub communities , 2100 languages and dialects ,
12 ethnic and several religious groups fragmented into large number of castes and
60 socio – cultural sub regions,
• 7 Geographical Zones with 5200 towns, 7 mega cities, 53 metropolitan cities and
6,50,000 villages covering 3.28 million sq kms.
•Fiscal policy in India evolved in Quasi-Federal System to meet requirements of
centralized planning in Mixed Economy Framework as a result of centripetal bias at
the time of independence.
•With radical economic liberalization and reforms post 1991, intergovernmental
policies and institutions reoriented to meet new challenges of competitive market
economy.
INTRODUCTION
• Asymmetrical federalism to accommodate diverse, social, religious, linguistic
and ethnic groups besides protection of tribals and minorities.
• Separation of powers between Legislative, Executive and Judicial arms at both
Federal and State Levels.
• Central Finance Commission appointed every 5 years to review finances of
Centre and States and recommend devolution of taxes and grant-in-aid.
• Planning Commission allocates resources according to envisaged priorities. It
also gives assistance to States based on formula given by National Development
Council (NDC)
• NDC which is headed by the Prime Minister meets the elected heads of the SubNational Govts. periodically alongwith the Planning Commission’s Dy. Chairperson
to review the States’ performance and formulate the inter-governmental policies.
DECENTRALIZATION AND FISCAL FADERALISM
•Nineties-Emergence of liberalization and globalization led to greater
fiscal decentralization
•End of single party rule era , emergence of coalition of parties, rise of
regionalism and sub-regionalism
•Indian Federation moved from 2 tier to 3 tier in 1992 with 73rd and 74th
Constitutional Amendments
•Statutory recognition to rural and urban local self governments. 3.2 million
Representatives elected every five years to constitute 2,50,000 local
governments at District, Block and Village levels.
•The rural and Urban Local Bodies empowered in respect of 29 and 18
activities respectively as per Article 243G of the Constitution. Urban Local
Bodies have municipalities and Corporations under them.
•States share revenue and give grant to local Governments and empower
them to collect levy of certain taxes.
DECENTRALIZATION AND FISCAL FADERALISM
Tax and Expenditure Assignment
•For Macroeconomic stability, international relations and activities having scale
economics assignment exclusively for the Federal Govt. or carried concurrently with the
States.
•Functions State Jurisdiction assigned to States but the Federal Govt. has residual tax
powers.
•For revenue productivity, State levies are Sales Tax, Stamp Duty cum registration
charges, excise on alchol and Motor vehicle tax.
•Tax on agriculture income is state’s domain whereas power to tax Non-Agriculture
income is with Federal Govt.
•The revenue capacities of States to meet their expenditure needs are invariably
adequate. The Federal Govt. shares the revenue with the State Govts to meet their
targets.
•Criteria for tax Devolution includes indicators: Population, Per capita Income (SDP),
Area, Index of Infrastructure, tax efforts and fiscal discipline.
•Additional provisions are made for backward regions and special category states of
North eastern India.
MATTERS (29) PERTAINING TO LOCAL SELF GOVERNMENTS (PRIs)
ELEVENTH SCHEDULE (ARTICLE 243G)
•Agriculture, including agricultural extension.
•Poverty alleviation programme.
•Land improvement, implementation of land
reforms, land consolidation and soil conservation.
•Education, including primary and secondary
schools.
•Minor Irrigation, water management and
watershed development.
•Technical training and vocational education.
•Adult and non formal education.
•Animal husbandry, dairying and poultry.
•Libraries
•Fisheries
•Cultural activities
•Social forestry and farm forestry.
•Markets and fairs
•Minor Forest Produce.
•Small Scale Industries, including food processing
industries
•Health and sanitation, including hospitals,
primary health centres and dispensaries.
•Family welfare
•Khadi, village and cottage industries
•Women and child development
•Rural Housing
•Drinking Water.
•Fuel and Fodder.
•Roads, culverts, bridges, ferries,
waterways and other means of communication
•Rural Electrification, including distribution of
electricity
•Non-conventional Energy sources
•Social welfare, including welfare of the
handicapped and mentally retarded.
•Welfare of the weaker sections, and in particulars
of the Scheduled Castes and the Scheduled Tribes.
•Public distribution system
•Maintenance of community assets
REGIONAL PLANNING AND DEVELOPMENT
•Objective of planning was to remove regional backwardness, meet regional
aspirations and demands, make optimum and judicious use of regional resources
• It aimed to solve regional problems and involve local people in plan formulation &
implementation and for conservation of Environment & Cultural Heritage of a
particular region.
•1st and 2nd Five Year Plan(1950’s ), special attention given to develop backward
areas. Number of new Industrial Centres located there to boost regional economy
and create employment opportunities for local people.
•3rd Plan, it was decided to accelerate manufacturing and agriculture to achieve
goal of balanced development-not considerable progress achieved.
•4th Plan: watershed in planning – spelt out distinct regional policies to reach
social and economic goals. Some attempts to decentralize planning process at
Sub-National and Sub-State Levels.
REGIONAL PLANNING AND DEVELOPMENT
•Compulsion which stimulated regional thinking was widening inter-regional
disparities. Between 1960-70, difference in per capita SDP shifted from 1.9:1
to 2.6:1.
•5th Plan: Target areas and groups covered tribals, small and marginal
farmers .
•6th Plan: Technology upgradation, research focus on crops, introduction of
high yield varieties, enhancement of irrigation facilities, use of Chemical
Fertilizers, additional supply of agricultural credit, consolidation of land
holdings & land reforms led to green revolution.
•Average GDP (1950-80): Only 3.6%. Since 1980 accelerated to 5.6% and
after reforms in 1990s rose to 6%.
•Reforms led to structural changes in economy, deregulation of investment,
liberalization of trade, capital flows and prices. Between 2004 and 2010, GDP
jumped to 8%.
DISPARITIES IN REGIONAL GROWTH
•Regional equality has been the core objective of national plans but India has witnessed
vast regional disparities in the last four decades, because of wide variation in economic
performances of States.
•Per capita Income in all the states has increased in the last 4 decades. Disparities in
income higher within rural areas across states compared to urban counterparts. Maybe
reflection of converging trend in terms of opportunities in cities and towns.
•Data shows definite divergence in regional state products. SDP has converged for the
special category states.
•Speed of convergence has been faster during the period 1992-2008 when economy
embarked on massive structural reforms.
•While share of agriculture in SDP declined in all States but it did not result in decline in
income gap across States.
•Observed converging trend of various Human Development indices across States. Gaps
between States declined in terms of literacy, enrolment ration and life expectancy at birth.
•There is a healthy competition between the States endowed with better location,
infrastructure and governance to attract investment. Normally, the low income States rarely
compete with the highly developed States. Bihar in the recent past has been rare exception
largely relying on improved governance and better fiscal management.
Per capita SDP at Constant Prices
1980-81
1990-91
2000-01
2009-10
Andhra
Pradesh
1380
2060
2994
4993
Assam
1284
1544
1635
2786
Bihar
917
1197
1205
1621
Gujarat
1940
2641
3905
6736
Haryana
2370
3509
4385
7585
Karnataka
1520
2039
3564
5167
Kerala
1508
1815
2673
6390
Madhya
Pradesh
1358
1693
1965
2711
Maharasht
ra
2435
3483
5026
7893
Orissa
1314
1383
1778
3311
Punjab
2674
3730
4788
5935
Rajasthan
1222
1942
2233
3249
Tamil
Nadu
1498
2237
3597
6414
Uttar
Pradesh
1278
1652
1796
2255
West
Bengal
1773
2145
3524
4130
India
1630
2223
3234
4634
CV %
31.09
36.00
40.55
42.78
Median household income and per capita income by states and rural urban disparities (2010)
States
Household Income
Per Capita Income
R/U(H)
R/U(I)
Rural
Urban
Total
Rural
Urban
Total
A.P.
20642
48000
25600
5250
11250
6241
0.430
0.467
Assam
22750
48000
25000
5567
10342
6000
0.474
0.538
Bihar
19235
39600
20185
3339
6857
3530
0.486
0.487
Chhattisgarh
21900
59000
23848
4800
12000
5306
0.371
0.400
Delhi
88350
66400
68250
NA
15000
15000
1.331
NA
Gujarat
21000
56500
30000
4494
12240
6300
0.372
0.367
Haryana
44000
72000
49942
8000
14647
9443
0.611
0.546
H.P.
43124
72000
46684
9440
15662
9942
0.599
0.603
J&K
47325
75000
51458
7407
13460
8699
0.631
0.550
Jharkhand
20700
70000
24000
4175
13654
4833
0.296
0.306
Karnataka
18900
54000
25600
4333
12000
5964
0.350
0.361
Kerala
40500
48000
43494
9563
10413
9987
0.844
0.918
M.P.
18025
33700
20649
3530
6328
4125
0.535
0.558
Maharashtra
24700
64600
38300
5337
14000
7975
0.382
0.381
North-East
49000
90000
60000
11153
22700
13352
0.544
0.491
Orissa
15000
42000
16500
3096
9000
3450
0.357
0.344
Punjab
42021
60000
48150
7622
12120
9125
0.700
0.629
Rajasthan
29084
45600
32131
5732
9000
6260
0.638
0.637
Tamil Nadu
20081
35000
26000
5297
9000
7000
0.574
0.589
Uttarakhand
28896
60000
48150
7622
12120
9125
0.482
0.629
Uttar Pradesh
20544
46000
24000
3605
8285
4300
0.447
0.435
West Bengal
21600
59700
28051
4928
14571
6250
0.362
0.338
India
22400
51200
27857
4712
11444
5999
0.438
0.412
Mean
30789.9
56595.5
35272.4
5918.6
12029.5
7373.0
0.537
0.504
CV %
54.64
25.17
40.86
38.20
29.51
40.77
41.53
28.42
Dimension Indexes and Human Development Index, 2009-10
Income Dimension
Index
Life Expectancy
Index
Education Index
HDI
Rank
Andhra Pradesh
0.665
0.571
0.649
0.627
10
Assam
0.454
0.326
0.734
0.477
14
Bihar
0.258
0.446
0.637
0.419
19
Chhattisgarh
0.542
0.286
0.671
0.470
15
Gujarat
0.774
0.558
0.754
0.688
7
Haryana
0.817
0.652
0.809
0.755
4
Himachal Pradesh
0.706
0.688
0.877
0.752
5
Jharkhand
0.461.
0.286
0.677
0.447
17
Karnataka
0.678
0.612
0.741
0.675
8
Kerala
0.755
1.000
1.000
0.910
1
Madhya Pradesh
0.444
0.286
0.665
0.439
18
Maharashtra
0.831
0.696
0.848
0.789
2
Orissa
0.517
0.357
0.645
0.492
13
Punjab
0.728
0.795
0.846
0.788
3
Rajasthan
0.510
0.464
0.623
0.528
12
Tamil Nadu
0.756
0.652
0.850
0.748
6
Uttar Pradesh
0.377
0.375
0.683
0.459
16
Uttarakhand
0.722
0.375
0.851
0.613
11
West Bengal
0.597
0.594
0.743
0.641
9
Trends in CV of PCY (Weighted at 1999-00 Prices)
CHALLENGES IN REGIONAL DEVELOPMENT
•Globalization and liberalization of economy appear to be co-related with rising
spatial inequality.
• Global integration leads to sharper expression of comparative advantage and
regions well placed in terms of location, education, governance and other conducive
conditions which tend to surge ahead as global opportunities are accesses while
others lag behind.
•This is a case both for China and India where sharply rising regional disparities
have coincided with period of external liberalization.
•High and rising inequality in general dissipates the impact of growth on poverty
reduction. Spatial inequality contributes to overall inequality but it is critical where
location aligns with differences between group identities. The deepening North
South divide in small country like Ghana became a major concern as North is
primarily Islamic while South is Christian dominated. Plural Societies like India can
not ignore such sensitivities
CHALLENGES IN REGIONAL DEVELOPMENT
•Spatial disparities in India align with other cleavages which threaten the national
unity and peace, whether it is the Maoist corridor that matches the corridor of
deprivation or whether it is fissiparous tendencies within the States, some of which
may have been addressed but others which continue to fester.
•Location blind policies may be preferable from economic perspective but can be
problematic in multi ethnic and multi religious societies like ours. Our strong
regional policies lead to redistribution of gains of growth with investment in lagging
regions. We have launched ambitious programmes like ‘National Rural Employment
Guarantee Scheme’ and ‘Bharat Nirman’ successfully to address the needs of the
lagging rural segments.
•Flushed with growth success for the last two decades, there is an argument from
analysts that balanced regional development is a concept of the past and that
lagging regions should essentially send the population to fast growing areas. It is
our national commitment to reduce overall rising inequalities, alleviate poverty and
address larger issues of social inclusion. However, if hypothesis of divergence in
regional incomes has stronger ground, some growth may have to be sacrificed to
achieve balanced regional growth.
REVIVAL OF REGIONAL POLICY
•Since 2002, our policy aim is also to bring poor regions up to a minimum level of
social and physical infrastructure through large “flag ship” programmes.
•These have been launched to provide resources to build capacities of local
bodies to plan locally and to provide resources to plug “critical gaps”.
•The new strategy is built on the premise that once these critical gaps can be
filled and minimum infrastructure created, the states will be better equipped to
integrate with the markets and take advantage of globalization.
•The role of the state is seen as facilitator for the creation of a market friendly
environment.
•This strategy is expected to offset the cumulative advantage conferred by the
market on the already developed regions
• India spends nearly USD125 billion annually on about 150 Centrally sponsored
schemes conceived by Federal Govt. and implemented by States.
SCHEMES SPONSORED BY FEDERAL GOVERNMENT
(Allocation : USD 120 BILLION ANNUALLY)
Name of Ministry
Schemes
Ministry of Rural Development
Mahatma Gandhi National Rural Employment Guarantee Programme
Rural Housing / Indira AwasYojana
Golden Jubilee Rural Self Employment Scheme
Complete Rural Employment Scheme
Prime Minister Rural Road Scheme (GraminSadakYojana)
National Social Assistance Programme & Scheme for preparing Young Professionals
 Integrated water shed Management Programme (DPAP, DDP, IWDP)
Ministry of Agriculture
National Horticulture Mission
Macro Management of Agriculture (MMA) Scheme & Micro Irrigation
Ministry of Drinking Water and Sanitation
Accelerated rural Water Supply Programme (ARWS)
Total SanitationProgramme (Niramal Bharat Abhiyan)
Central Rural Sanitation Programme (CRSP)
Rajiv Gandhi National Drinking Water Mission-National
Rural Drinking Water Programme
Ministry of Health and Family Welfare
National Rural Health Mission (NRHM)
Women Safety Scheme
Accredited Social Health Activist
Ministry of Women and Child Development
Integrated Child development Service (ICDS) including Training and Rajiv Gandhi Scheme
for Empowerment of Adolescent Girls (KSY and NPAG)
Kishori Shakti Yojana (Adolescent Girls Scheme) a computer under centrally sponsored ICDS
Scheme
Integrated Child Protection Scheme
Ministry of Social Justice & Empowerment
Prime Minister Adarsh Gram Yojana
Ministry of Human Resource Development
Education for All Scheme (SarvaShikshaAbhiyan )
Mid-Day Meal - National Programme of Nutritional Support to Primary Education
Ministry of Power
Rajiv Gandhi Rural Electrification Programme
Ministry of Panchayati Raj
Backward Regions Grant Fund
e-Panchayats & Rajiv Gandhi Panchayat Empowerment Programme
National Rural Self Governance Scheme
Panchayat Women and Youth Empowerment Programme
PESA
REDRESSAL OF REGIONAL IMBALANCES
BACKWARD REGION GRANT
•Provides financial resources for supplementing existing inflows into 272 districts so as
to:
•Bridge Critical gaps in local infrastructure
•To strengthen Panchayat and Municipal level governance with more appropriate
capacity building to reflect local needs,
• To provide professional support to local bodies for planning, implementation and
monitoring & improve the performance and delivery of critical functions assigned to
panchayats.
•PANCHAYATS (EXT. TO THE SCHEDULED AREAS) ACT, 1999 (PESA)
•Applicable in 9 States. Gram Sabha is competent to safeguard and preserve traditions
and customs of people, their cultural identity, community resources and customary
mode of dispute resolution.
•Provides for 50% reservation of seats and 100 % Chairpersons of Local Bodies from
scheduled Tribes .
•Gram Sabhas also entrusted with management of minor water bodies & forest produce
and power of recommendation for licences for mining of minerals.
•Gram Sabha to be consulted before land acquisition or rehabilitation of displaced
persons.
•DECENTRALIZED GOVERNANCE IN THE NORTH EASTERN STATES.
• Appropriate amendments are being brought for setting up Autonomous District Councils
and Village Councils to deepen the process of democracy
BRICS COOPERATION
•Important features of BRICS economies include their robust macroeconomic
fundamentals, large geographical dimensions and the size of population that represents
an enormous potential consumer market complemented by access to regional markets.
The number of people at middle income threshold in BRICS is expected to grow several
times during the next decade. BRICS markets have great potential for establishing the
most stabilizing of forces that is a prosperous middle class which will broaden and
deepen, providing a solid base for the growth and development of these economies.
•A common challenge that the BRICS economies face is the need of institutional
development without which sustainable development cannot be ensured. Public-private
participation can boost infrastructure growth .In the next decade how the challenges such
as high fiscal deficits ,high global uncertainty leading to weak demand for exports, trade
protectionism ,high unemployment levels ,poverty and inadequate public health and
education facilities and environmental degradation and climate change are met would be
crucial in determining the development trajectory of BRICS economies.
•Towards this endeavor BRIC countries will have to rely heavily on the sub national
governments economic policies. The areas for cooperation among the BRIC economies
may include infrastructure financing, industrial development, transportation, food security,
technical education, energy security, institution building and setting up international
development bank for south-south investment .The BRICS have remarkable opportunity
to work on strategic agenda to coordinate their economic policies and diplomatic
strategies to play significant role in global affairs.