Few outside the government would have been surprised that the clutch of states in north India plagued by a combination of relatively high illiteracy, high population growth rate and poor income generation potential, have shown brisk growth rates. Bihar, Rajasthan and Madhya Pradesh are no longer laggards. They have logged an average of 9.4 per cent growth since 2006-07, way above the national average. Their growth had picked up pace before the big ticket redistributive programmes launched by this government had time to make an impact. Except in Bihar and Uttar Pradesh, the distance between the worst performing district in each state and the best has actually declined in the last 10 years. This means growth has worked to reduce income inequality among the country’s regions.
A recognition of this reality by the UPA government would amount to a radical shift in its political and economic framework. An acknowledgement of this imperative can be found in the government’s renewed emphasis on growth as the best outcome for the economy. Prime Minister Manmohan Singh underlined this theme in his speech to the National Development Council on Thursday. He reminded everyone that this commitment would mean some hard choices, including a rise in the price of fuel. With the growth results of the Bimaru states before his government, however, it should not be difficult to convince the people that this route is what works best for the poor. Of course, this realisation within the government, framed in the template for the Twelfth Five Year Plan, has come eight years too late.
It also comes at a time when analysts and even sections within the government acknowledge that an eight per cent rate of growth per annum, as targeted in the Plan, is going to be difficult to log. In 2012-14, the first two years of the Plan, India is expected to grow at about six per cent each year, which means the economy will have to roar ahead at nine per cent for the three remaining years for the Plan to do better than the 7.9 per cent the Eleventh Plan has scored. With a general election in the middle, the time available for major corrections and initiatives is short, but this is also the reason why the measures to push growth have to come thick and fast.