International Statistical Education Centre (ISEC)

This paper explores the role played by infrastructure in determining the level of economic development across the states over different time spans during the past quarter century. A comparative static framework is developed in order to test the movement of the development trajectory of the states in the infrastructure-income plane. The findings of the paper are statistically significant and have serious implications for future regional policies. It shows that, interstate disparities in physical, social and economic infrastructure facilities have remained at an alarmingly high level. There are
also indications that interstate differences in infrastructure are responsible for a growing regional income disparities.

The current literature on regional convergence has centred on the empirical relationship between initial income and its long run growth rate found among the regions in the developed countries. The fundamental basis of the 'converging' outcome is the neo-classical assumption of the law of diminishing returns to capital In contrast to the conventional results of the developed countries, the present paper has found that Indian states have been diverging over the period of last 35 years, Moreover, this result does not nullify the role of planning through disbursement of development funds across the states. The Indian scenario exhibits interesting relationship between private and public capital in the regional context- Later a simple model is developed to highlight the relationship between growth and public investment.

Qualitative differentials labour productivities between private and public sector industries are responsible for retardation in Indian manufacturing sector particularly Sunrise and Traditional industries. Urgent steps are needed for skill and productivity improvement measures under a globalized market.

Various statistical tests have proved that Indian districts have been diverging apart from 1991 to 2001 and onwards in terms of social development index, education index, health index, communication index. This is responsible for rising insurgent groups in Central, Eastern and other regions.

We need to wait and see how the new Government in 2014 will coordinate both public and private sector allocation across the ‘districts’ as opposed to ‘states’ in order to minimise the differences in key infrastructure facilities between the waning and the accelerating regions within a state. Therein lies our success, writes Dr. Buddhadeb Ghosh.

The purpose of the present paper is to understand the broad changes in the relationship between state level poverty, inequality, income and purchasing power from the pre-reform to the post-reform period. It investigates the inter- and intra-state purchasing power differentials in rural and urban areas corresponding to the proportion of people thereof in each of the states in a comparable set up and over time from 1987-88 to 2004-05 up to which latest large sample consumer expenditure data are available. To start with, we have tested the robustness between expenditure date (NSSO, GOI) and product data (CSO, GOI) across the states over the same period. The significance of rural urban divide becomes all too important in view of the fact that rural and urban balance is a necessary condition for overall development of any constituent region. We have estimated the Lorenz ratios for both rural and urban areas of the states for the pre- and post-reform period. We have also estimated the share of state population corresponding to all India lowest 30 percentile class (‘poorest of the poor’), middle 50% class (‘vulnerable middle class’) and top 20% class (‘the rich’) in both rural and urban areas of the major states over the last four large sample survey rounds of NSSO-1987-88, 1993-94, 1999-2000 and 2004-05. This has helped us to understand the intra-state disparity between population and their endowment share. It is found that while overall poverty and inequality are marginally on the decline in rural areas, slow reduction in urban poverty and rising urban inequality in almost all the states have marked India’s latest pattern of development under fast rising trade openness and unprecedented foreign exchange reserves. The results are highly significant to warrant urgent steps by all concerned in the event of rising failure of the ‘trickle down’ process in Indian states in recent period. The question of vertical mobility of limited group of people versus horizontal rift across different expenditure classes within a state has come out as a dominant feature of post-reform India where rural urban divergence within each of the states has been intensified. It is conjectured that this is more a government failure rather than market failure, given the fact that market in India is pervasively imperfect across regions. The widespread rise in intense regional disharmonies in recent period across rural areas of the states is a pointer to the statistical significance of our results. Under such intense intra-state spatial disparity, market may fail to deliver the ‘good’ for the ‘excluded’ people because of corruption, administrative inefficiency, informalization, faulty labour laws and low quality infrastructure facilities. There is urgent need to review the existing strategies to tackle rural and urban poverty and inequality syndrome in a simultaneous framework, and not in isolation from each other.

The purpose of the present paper is to understand the broad changes in the relationship between state level poverty, inequality, income and purchasing power from the pre-reform to the post-reform period. It investigates the inter- and intra-state purchasing power differentials in rural and urban areas corresponding to the proportion of people thereof in each of the states in a comparable set up and over time from 1987-88 to 2004-05 up to which latest large sample consumer expenditure data are available. To start with, we have tested the robustness between expenditure date (NSSO, GOI) and product data (CSO, GOI) across the states over the same period. The significance of rural urban divide becomes all too important in view of the fact that rural and urban balance is a necessary condition for overall development of any constituent region. We have estimated the Lorenz ratios for both rural and urban areas of the states for the pre- and post-reform period. We have also estimated the share of state population corresponding to all India lowest 30 percentile class (‘poorest of the poor’), middle 50% class (‘vulnerable middle class’) and top 20% class (‘the rich’) in both rural and urban areas of the major states over the last four large sample survey rounds of NSSO-1987-88, 1993-94, 1999-2000 and 2004-05. This has helped us to understand the intra-state disparity between population and their endowment share. It is found that while overall poverty and inequality are marginally on the decline in rural areas, slow reduction in urban poverty and rising urban inequality in almost all the states have marked India’s latest pattern of development under fast rising trade openness and unprecedented foreign exchange reserves. The results are highly significant to warrant urgent steps by all concerned in the event of rising failure of the ‘trickle down’ process in Indian states in recent period. The question of vertical mobility of limited group of people versus horizontal rift across different expenditure classes within a state has come out as a dominant feature of post-reform India where rural urban divergence within each of the states has been intensified. It is conjectured that this is more a government failure rather than market failure, given the fact that market in India is pervasively imperfect across regions. The widespread rise in intense regional disharmonies in recent period across rural areas of the states is a pointer to the statistical significance of our results. Under such intense intra-state spatial disparity, market may fail to deliver the ‘good’ for the ‘excluded’ people because of corruption, administrative inefficiency, informalization, faulty labour laws and low quality infrastructure facilities. There is urgent need to review the existing strategies to tackle rural and urban poverty and inequality syndrome in a simultaneous framework, and not in isolation from each other.

This paper attempts to find out causal relationship between port performance and port traffic by using Indian data.
The use of cointegration analysis has come out with the result that performance precedes traffic in most of the ports
of India. Hence, government policy towards performance augmenting facilities should be given priority so that higher
efficiency induces higher traffic.

The nineties of the last century have witnessed the emergence of a new role the port infrastructure can play. Governments around the world have undertaken drastic measures for improving the operational efficiency of national ports through institutional reforms. Billions of private capital have been pledged for capacity expansion and service modernization in the world port system during 1991-1998. although India has recently opened this sector for private investments, the performance of the post system is not up to the mark. This paper
attempts to find out the role played by port performance indicators (derived from principal component analysis) and labour endowment in determining port traffic ina comparative static framework. Even the use of OLS regression has come out with very satisfactory results. Both explanatory variables have been found to exert positive and significant impact upon port traffic. Finally, the use of a time
dummy indicates some sort of stagnancy in Indian ports since liberalization in 1991.