Of inclusive growth....

India’s growth story over the last five years has been far more inclusive than in the past, with the bottom five states growing faster than the national average, according to government data released ahead of the National Development Council meeting to approve the XIIth Five Year Plan. The government’s assertion assumes significance as several states have been seeking special treatment citing their backwardness and financial constraints.
Bihar chief minister Nitish Kumar, for instance, wants the Centre to accord special status to the state to get financial benefits granted currently to Jammu and Kashmir and North-eastern states. Mamata Banerjee has also persistently sought special consideration to help shore up West Bengal’s fragile finances.
“The country’s average GDP growth in the Eleventh Five Year Plan period was 7.90%. But the bottom five states grew faster at 8.58%, just about half a percent slower than the top five states who recorded 9.1% growth,” said a senior government official on Wednesday.
“Historically, the Bimaru states (Bihar, Madhya Pradesh, Rajasthan and Uttar Pradesh) grew the slowest. But this trend has reversed and these states are now growing close to or even higher than the national average,” the official said. “Bihar, which was for quite some time a cause of worry for planners, has been able to record growth rate of 12.11% in the Eleventh Plan. Similarly, MP, UP and Rajasthan have all recorded growth rates of 7% or more. This is an encouraging and positive trend,” the XIIth Plan notes, acknowledging that human development indices have also improved in these states.
Pointing to a reversal in fortunes for the states of Gujarat and Bihar in the last decade, an official said that between 2001 and 2005, Gujarat was the fastest growing state and Bihar the slowest. “But Bihar became the fastest growing state from 2006 to 2010, while five other states grew faster than Gujarat,” he said.
Prime Minister Manmohan Singh had recently summoned a special meeting of the Planning Commission to discuss issues that may be flagged by backward and financially weak states like Bihar and West Bengal.
“The PM wanted to understand how the Plan addresses the concerns of regional disparity and its treatment of states that lag behind,” said a senior government official who attended the meeting in the third week of December.
The XIIth Five Year Plan aims to double the Plan assistance to states for special area programmes such as the Backward Region Grants Fund (BRGF), the Hill Areas Development Programme (HADP) and the Border Areas Development Programme (BADP).
Funding for the state component of BRGF, which includes funds earmarked for Bihar, West Bengal and Bundelkhand, will go up from Rs 11, 568 crore in the Eleventh Plan to Rs 33,332 crore in the Twelfth Plan period of 2012-2017. The Plan has called for restructuring the BRGF with a special focus on the sub-district level for effective realization of outcomes. “Even states with high per capita incomes have backward areas such as Kutch, North Karnataka and Vidarbha. Such intra-state disparity is high in Haryana, Bihar and Uttar Pradesh, but low in Punjab,” an official said to illustrate that the challenge has now shifted to fixing intra-state inequality that occurs when growth and development gets concentrated in a few pockets.