REGIONAL DISPARITIES AND DEVELOPMENT IN INDIA

REGIONAL DISPARITIES AND DEVELOPMENT IN INDIA Dr. (Mrs) HEMLATA RAO ASH ISH PUBLISHING HOUSE 8 / 8 1, P U N JA B I BAGH N E W D E L H I - 1 1 0 0 2 6

Published by S.B. N angia fo r A sliish Publishing H ouse, 8/81, P unjabi Bagh, New D e lh i-110026 Tel. 500581 I.S.E.C. B angalore 1984 P rim ed at N atio n al Prim ers 20/3, W est Patel N agar, N ew D elh i-110008 ^ Tel. 582828

PREFACE In view o f the grow ing em phasis on the objective o f equalisation and o f reducing regional disparities in India through the process of m ulti-level planning, the present study W as designed and carried on. It is increasingly being recognised th a t identification o f regions according to their differential levels o f developm ent, typology and dim ensions o f backw ardness, is crucial for im plem enting ctveclive regional plans. Based on this notion, the study is designed to exam ine the regional disparities in K arn ataka and to identify differentially developed regions, and delineate hom ogeneous regions in term s of both levels o f developm ent and typology o f developtnent so as to have different gro u p s o f regions requiring different plan strategies at the micro-level. In the execution o f the project, data as available on L and U tilisation P attern, C ropping P attern, Industrial Structure and 85 developm ent indicators fo r 175 talukas o f K arnataka fo r the period betw een 1975-76 to 1979-80, were collected and the 85 indicators were eventually reduced to 10 sectoral indices o f developm ent and finally to one com posite index o f developm ent. Inter-relationship o f various sectoral indices w ere exam ined the structural variations and typology o f backw ardness w ere studied intensively. A s a q u an titativ e enquiry, this project w as subjected to the lim itation o f available d ata, w'hich call fo r judicious use and caution in the interpretation. has A n over-riding problem been th e incom pleteness and w eakness o f the basic- q uantitative data. som e definitive results. N evertheless, th e study could bring out H ow ever, m ore than the results and conclusions, th e study may be relevant in suggesting a m ethodology for identification o f differentially developed

(<v) regions, analysis of dimensions and typology o f backwardness, causes of backw ardness and form ation o f homogeneous groups o f rcgjons fo r purposes of planning at the micro-level The project on which the present study is based was funded by the Indian Council of Social Science Research. However, the responsibility for the facts stated, opinion expressed and conclusion reached is entirely mine and not o f the I.C.S.S.R. I am grateful to the I.C.S.S.R. fo r providing me an opportunity to fulfil my long cherished desire to w ork on the present theme. I express my deep sense o f gratitude to Prof, L.S. V enkataram anan, D irector o f this Institute for perm itting me to undertake this project and also for providing me various facilities at the Institute. T hanks are also due to Prof. G. Thim m aiah, H ead of the Economics U nit, for giving me constant support and encouragem ent. I am highly' grateful to Prof. V.M. R ao for his keen interest, guidance and encouragem ent. In fact, I have freely encroached on his precious time at every stage o f my w ork and sought his advice and constructive criticism on an earlier draft o f this manuscript. Thanks are also due to Prof. A.R. R ajpurohit who readily offered to go through the C hapter on agricultural sector and offered very useful and constructive suggestions and criticisms. I gratefully acknowledge the efficient functioning M r. K.L. D iw akarm urthy and Miss. A. Nagaveni, the C om putational Assistants in the Project. Because o f their constant and untiring w ork and the spirit o f co-operation, I could complete the study welt in tim e and to the expectation. I am thankful to D r. D.M. N anjundappa, M r. M B. N anjappa and M r. R.G. B hat fo r giving me access to useful o f

(^) d a la available in the p la n tin g departm ent and in the B ureau o f E conom ics and Statistics, K arn atak a. I am also thankful to M r. M.B. G o u d for his co-operatioii in m aking me available the inform ation I needed. T hanks are acknow ledged to the H ealth D epartm ent, A gricultural D epartm ent, S.I.S.I., R ajajinagar, E ducation D epartm ent, K.E.B. Office, T ran sp o rt D epartm ent and various district offices fo r their timely supply o f data. T hanks are also due to the M anagem ent o f the C om puter C entre a t the Indian Institute o f Science, where the d ata was processed. D ue acknow ledgem ent is recorded fo r M rs Padm asini, who also assisted in tab u latin g a p a rt o f my d a ta on Spectrum -7 at I.S.E.C. T hanks are due to the A ccounts and A dm inistration Section o f the I.S.E.C. fo r th eir tim ely help and co-operation. Finally, special acknow ledgem ent is due to M r. H.K. L ingaraju, for the patience and extra care w ith which he typed the earlier d rafts and stenciled the final report. But fo r his constant and untirin g w ork, it w ould have been Jifficult to present the study in the final fo rm w ithin the stipulated tim e. Insti tute fo r Social and E conom ic C hange, B angalore. H em lata R ao P roject D irector

CONTENTS Page N o. Preface L ist o f Tables L ist o f M aps (i'») (viii) (.vfij C h ap ter 1 : R egional D isparities and R egional P lanning 1 C hapter I I : M easures and Indicators o f D evelopm ent 20 C hapter H I : R egional V ariations in K arn atak a 48 C hapter IV : D elineation o f H om ogeneous Regions and Identification o f A griculturally Backw ard T alukas in K a rn a ta k a 68 C hapter V : In dustrial D evelopm ent and D isparities in K arnatalca 142 C h ap ter V I: C hapter V I I : Inter-R egional D isparities in In fra-stru clu ral Facilities in K arn atak a 194 R egional D isparities ; Strategy fo r D evelopm ent 302 A ppendix C h art 339 A ppendix Table I 346 B ibliography 356 Index 361

LIST OF TABLES Table Title Page No. No. 3.1 D istribution of rainfall, forest area and Density o f Population 53 3.2 C om posite index of developm ent o f different districts 58 3.3 Selected indicators o f developm ent-1971-75 60 3.4 District-wise per capita incom e 64 3.5 D istribution of talukas in various class intervals with respect to electrification, literacy, agricultural worker to non-agricultural workers and urban population 65 3.6 D istribution o f talukas according to the percentage o f irrigation 66 4.1 C orrelation m atrix 72 4.2 Land utilisation pattern 73 4.3 D istribution o f talukas am ong various ranges of factor scores 76 4.4A Identification of talukas based on factor Scores land utilisation Factor I 77 4.4B Identification o f talukas based on factor scores land utilisation F actor IT 81 4.4C Identification o f talukas based on factor scores land utilisation F actor III 85

Cfiv) Table Title Page No. No. 4.5 C rops arranged according to ascending factor loadings F actor M atrix 93 4.6(A) Cropping pattern distribution of talu k as F actor I 99 4.6(B) 4.6(C) Cropping pattern distribution of talukas F actor II 104 Cropping pattern distribution of talukas - F a c to r III 108 4.7 Factor m atrix : typology o f agricultural developm ent 121 4.8 Factor scores and class symbols on agricultural index Factor I, Factor II and Combined Index 124 4.9 D istribution o f taluka according to developm ent levels 137 4.10 Inter-correlation m atrix 140 5.1 District-wise distribution of industrial units, employment and investment 150 5.2 Industry-wise distribution of employment investm ent and electricity consum ption 152 5.3 District-wise distribution o f industrial units 156 5.4 Industrial factor m atrix 161 5.5 Index of industrial development (General) 164 5.6 Indicators o f industrial development (Selected Talukas) 170 5.7 Classification o f talukas general industrial developm ent 173 5.S Factor scores small scale industries 175 5.9 Composite index of industrial development (Small Scale Sector) 176

(^) Table Title Page No. No. 5.10 C lassification o f talukas sm all scale industries 182 5.11 Taiuka-w ise d istribution o f industrial units, em ploym ent, investm ent and electricity consum ption 184 5.12 In d u strial p attern in selected talukas 186 6.1 F acto r m atrix 201 6.2 E ducation general developm ent index 202 6.3 D istribution o f talukas am ong different classes o f levels o f developm ent (E ducation) 208 6.4 G eneral indicators o f education 210 6.5 F acto r m atrix 222 6.6 H e a lth -G e n e ra l developm ent index 223 6.7 H ealth T alukas nam es in an ascending. o rder 229 6.8 D istribution o f talukas am ong different classes o f levels of developm ent (H ealth) 233 6.9 R oad length d istrib u tio n (district-w ise) 235 6 10 F acto r scores 238 6.11 T ran sp o rt G eneral developm ent index 239 6.12 C lassification o f talukas according to levels o f tran sp o rt developm ent 245 6.13 In d icato rs o f tran sp o rt 248 6.14 F actor m atrix 253 6.15 C om m u n icatio n G eneral developm ent index 254 6.16 C lassification o f talukas 260

(. V. ) Table Title Page N o. N o. 6.17 C lass d istribution o f talukas as regards num ber o f bank offices per lakh o f population and per 100 Sq. K in. 264 6.18 C lass-distribution o f talukas o f K arn atak a as regards per capita b an k deposit and credit 265 6.19 B anking G eneral developm ent index 267 6.20 C lass-distribution o f talukas 273 6.21 F acto r m atrix 275 6.22 C o-operatives G eneral developm ent index 278 6.23 C lass-distribution o f talukas according to their levels o f developm ent co-opcrative sector 285 6.24 F acto r m atrix 288 6.25 Pow er G eneral developm ent index 290 6.26 C lass-distribution o f talukas 296 6.27 tn te r-ta lu k a variation in pow er consum ption and connections 298 7.1 Inter-correlation m atrix developm ent indicators 307 7.2 F acto r m atrix 308 7.3 Identification and classification o f talukas according to the levels of developm ent (talukas) and groups arranged in dccending o rder 310 7.4 C lassification o f talukas according to levels o f developm ent 317 7.5 D istribution o f talukas according to dim ensions and levels o f developm ent 320 7.6 Typology o f backw ardness 324 7.7 Selected talukas w ith levels o f developm ent and typology o f developm ent 327

LIST OF MAPS M ap N o. 1 : A gricultural level of developm ent 136 (a) M ap N o, 2 : Industrial level of developm ent 172 {a) M ap No. 3. Com posite index o f developm ent 316 (a)

C H A PT E R I REGIONAL DISPARITIES AND REGIONAL PLANNING Regional Disparities The process o f econom ic grow th involves a significant change in the econom ic activities over different regions along- w ith a change in the structure o f the econom y. This process reflects a spatial dim ension in the process o f grow th. The policy im plications o f planning for econom ic developm ent necessarily involves certain policy decisions relating to location o f activities, flow o f benefits and spatial functional linkages o f econom ic activities. Even so it has to be conceded th at the whole gam ut o f econom ic activities cannot be viewed in the context o f overall socio-political consideration. Therefore, when developm ent over different regions occurs unequally, it becomes politically im perative to resort to corrective policy m easures. This is crucial from all angles political, econom ic, social and ethical considerations. A n unchecked and uncontrolled process o f growth- leading to regional disparities, results in num erous economic, social and cultural problem s. These problem s take a serious shape and subsequently becom e h a rd to elim inate. The

LIST OF MAPS M a p N o. 1 : A g ric u ltu ra l level o f d ev elo p m en t 136 (a) M ap N o. 2 : In d u strial level o f developm ent 172 (a) M a p N o. 3 : C o m p o site index o f d ev elo p m en t 316 (o)

CHAPTER I REGIONAL DISPARITIES AND REGIONAL PLANNING Regional Disparities The process o f econom ic grow th involves a significant change in the econom ic activities over different regions along- w ith a change in the structure o f the econom y. This process reflects a spatial dim ension in the process o f grow th. The policy im plications o f planning for econom ic developm ent necessarily involves certain policy decisions relating to location o f activities, flow o f benefits and spatial functional linkages o f econom ic activities. Even so it has to be conceded th a t the whole gam ut o f econom ic activities cannot be viewed in the context o f overall socio-political consideration. T herefore, when developm ent over different regions occurs unequally, it becom es politically im perative to resort to corrective policy m easures. This is crucial from all angles political, econom ic, social and ethical considerations. A n unchecked and uncontrolled process o f grow th- leading to regional disparities, results in num erous econom ic, social and cultural problem s. These problem s take a serious shape a n d subsequently becom e hard to elim inate. The

2 Regional D isparities and Development in India inequalities, lead to incom plete utilisation o f resources and to a grow th o f public costs involved in functioning of its economy. Tn regard to developing countries the regional factors underlie many o f the pressing economic and socioproblem s being faced by them. Regional imbalances lead to undcr-utilisation or even to non-utilisadon o f economic resource both natural and hum an and in that process individuals are discrim inated. In countries like Pakistan (East vs West) and Indonesia (Java vs other Islands) regional econom ic and political problem s proved too critical and in fact resulted in the bifurcation o f Pakistan in 1971. T hus there are fa r reaching effects o f regional disparities. Prof. A darkar rightly puts it. Hence, there is a case for supporting the backw ard parts o f the country at the expense o f advanced, even though the form er did not prom ise rapid developm ent into industrial or wealthy localities. F or if these are not thus protected they might rapidly become nurseries fo r the bacilli o f countless social evils, diseases, crime and lawlessness whose pestilential effects on the advanced areas may cost the latter much m ore... The need for reducing regional gaps has been argued from various angles. The first argum ent is in term s o f social justice. It is believed that income inequalities can be reduced by way of reducing regional disparities. The social justice dem ands that all citizens are treated alike and given an equal opportunity in life. For this purpose, it is im portant to bear it in mind that an individual should not be m ade worse off one area and better off in another. This is possible only when inter-regional disparities in the levels o f developm ent are ironed off. R eduction in regional disparities is crucial even from the point o f accelerating the grow th o f the economy. There is a sort o f complementarity between reduction in regional 1. B.P. A Jarkar, P rindpks amj Problems o f Federal Finance, P,S, King and Sons Ltd,, London, 1933. Ch, XII, p. 215,

Regional Disparities and Regional Planning 3 disparities and accelerated economic grow th. It is empirically tested that the poor countries are characterised by large and growing regional disparities and the rich countries are generally characterised by small and diminishing gaps.^ It is being increasingly realised that the national income can be increased manifold only by proper utilisation, exploitation and organisation o f resources available in the relatively backward regions. It is also understood that the resources at the local level are highly elastic and th at it can be m ade use of by proper method of regional planning. Reduction o f regional disparities is essential from the point of m aintaining national integration, political stability and unity also. If neglected and unchecked, these disparities are capable of assuming serious dimensions, and threatening the very existence of a nation. 2. Factors Leading to Regional Disparities An analysis o f the problems o f regional disparities, reveal three im portant underlying factors that lead to inter-regional disparities. These factors are ; {a) Historical factors : The existing regional disparities in the under-developed countries can largely be due to historical factors and may be attributed to either the initial advantages enjoyed by some regions o r to the ill conceived public investment program m es effected under colonial rule. The regions which attracted the attention o f various rulers and adm inistrators, grew at a faster rate, thus becoming developed regions. The development of m etropolitan regions like Bombay, Calcutta, M adras and Delhi can largely be attributed to the historical factor. (b) Non-uniform distribution o f natural resources : Some regions are bestowed w ith rich natural resources like water, fertile soil, forest, minerals, etc. Because of the natural advantages, with a little effort the areas can be developed at 2, J, W illiamson, Regional Inequality and the Process of N ational Development, Economic Development and Cultural Change (EDCC), 1965.

4 P e sio m l D isparities and Development in India a fast rate. Prosperity o f Punjab can largely be attributed to this factor. O f course, hum an efforts along with natural bounty is a pre-requisite. Punjab State is in an advantageous position w'ith respect to both the factors, (c) The Third Factor is M a n -m a d e: The social, political and economic factors are responsible for causing regional gaps to emerge. Even if a region is rich in natural resources, due to lack o f conscious efforts at developm ent, regions languish and w ithout an initial im petus tow ards econom ic grow th they continue to stagnate. Lack o f entrepreneurship, lack of efforts at acquiring skill and lack o f motivation lead to regional disparities, as some regions continue to rem ain backward due to lack of hum an efforts. In addition, socio-economic factors, which are also m an-m ade, arc responsible fo r the inter-regional disparities. Once the disparities arc established they get accentuated. It is a well known fact that the regions which are already developed attract m ore activities on account o f the obvious advantages, and natural attraction, which the activities wilt receive by virtue of their location in developed areas. T his leads to unequal growth. Once the unequal rates o f growth develop, they will tend to perpetuate themselves due to the economies of concentration. Thus even though regions get developed initially due to natural advantages or historical reasons, the regions will keep on growing because o f the advantage o f concentration. D uring the process o f grow th due to concentration effect, the growing region also spreads some o f its dynamism to other area and leads to centrifugal effects. B ut such effects are rare. M ore often than not such regions exert centripetal forces and drain the m arginal areas o f any grow th potential they might have had. Thus the developed areas grow faster at the cost o f less developed areas. If the situation is such th at centripetal forces are getting accentuated, equity considerations dem and governm ent intervention and governm ent action to reduce regional disparities and to check th e o entripetal forces exerted by the developed regions.

Regional D isparities an d R egional Planning S 3, RegioD A concept B efore discussing the strategies fo r developm ent o f backw ard region and to m inim ise regional disparities, it w ould be ap p ro p riate to understand the concept o f region. We have been using the term reg io n, regional d isp arity, balanced regional developm ent etc., w hat is m eant by this term region is crucial to exam ine. T he term R egion is closely associated w ith th e concept o f area or space. spatial units by different persons. The term region is used to m ean different T hus it has been used to m ean a resource region, program m e reg io n, m etropolitan region, depressed region, planning region and so on. The region can also m ean an agronom ic region, drought prone region and likewise depending upon the p articu lar feature o f the area. T raditionally, there are three ways to define a region. O ne deals w ith th e hom ogeneous characteristic, usually a com bination o f spatial and econom ic aspects o f a region, second analyses the p o larisatio n aro u n d som e m arket o r urban place w ithin a region ; and the third w orks out a coherent relationship betw een the existing adm inistrative and political set up and the policy decisions. These attem pts to identify a region are respectively based on hom ogenity, nodal and program m ing criteria, A careful exam ination o f the above concepts reveal th a t they are not com pletely independent. In fact, som e so rt o f inter-dependency is there. T he program m ing regions do have hom ogeneity and also possess som e nodal p oints. F o r policy purposes and fo r planning purposes it is the third definition w hich appears to be m ore acceptable. one w ith th e follow ing c h a ra c te ristic s: A n ideal region is (a) G eographically, it should be a contiguous unit though it could be sub-divided into natural boundaries like p lain, hilly track, etc. 3. Boudeville, J.R., A Survey o f Recent Techniques for Regional Econom ic A nalysis in Regional Economic Planning (eds.) W allar Isard and J.H. C um berland, 1960, pp. 377-398.