Break Up UP

Updated: Jul 30 2002, 05:30am hrs
A World Bank report argues that if reforms are not undertaken, Uttar Pradesh may slip even further into poverty. The main source of data on trends in poverty is the National Sample Survey Organisation, although there are problems of comparability between its surveys in 1993-94 and 1999-2000. Uncorrected NSS data thus show a fall in UP’s poverty ratio from 41 per cent in 1993-94 to 31 per cent in 1999-2000 — a not-inconsequential drop matching the decline at an all-India level. Using corrected NSS data (to make the methodology comparable) doesn’t change the picture radically as the state’s poverty ratio becomes 33 per cent. While focusing only on UP, one should not forget that its poverty estimate of 31 per cent or 33 per cent is a far cry from the plus 40 per cent registered for Bihar or Orissa. However, there is a problem in generalising about this diverse state. Given its heterogeneity, Western UP should not be clubbed with Bihar. But there is little difference between Eastern UP and Bihar. The fact that among the major states, plus 30 per cent poverty ratios in 1999-2000 can be found in Assam, Bihar, Madhya Pradesh, Orissa, Rajasthan and UP clearly indicates that these are the states one should concentrate on.

Incidentally, the Planning Commission’s National Human Development Report provided human development index values for 15 major States in 2001. UP is 13th, followed by Assam and Bihar. The World Bank report rightly argues that poverty alleviation requires growth. In the 1990s, state domestic product growth in UP slowed down when compared to the 1980s. Given the high rate of population growth, the disparity in per capita growth is even starker. Growth requires liberalisation in agriculture and the World Bank identifies rural infrastructure (irrigation, roads), the regulatory environment (such as controls on marketing) and credit flows to poor farmers and micro-entrepreneurs as areas requiring reform. Outside agriculture, improvements in the investment climate and social and physical infrastructure are identified. There can be no quarrel with this agenda and efficiency of government expenditure does need improvement, by reallocating expenditure from subsidies to loss-making public sector units to social and physical infrastructure. However, government delivery is linked to the overall issue of governance. An issue the World Bank report does not address directly is whether UP (despite the bifurcation) is simply too large to be governed efficiently. In the early 1950s, both UP and Bihar would probably have been described as well-governed states. Today, there will be near unanimity that these are among the worst-governed. While the Bank’s recommendations are sound and are also not new, their implementation seems unlikely as long as the present administrative system continues. Breaking up UP is a necessary pre-condition.