Quite A Few Red Flags In Jharkhand Economic Survey of 2017-18

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I was studying the latest Economic Survey of our Jharkhand state recently and I came across these Macro-Economic indicators that should have raised the warning signals for all the denizens of Jharkhand. So, let me share few of these red flags in Jharkhand state’s economy in this blog-piece, and let us try to  honestly assess the performance of our state few of the economic parameters:

  • In November 2000, Jharkhand state’s Gross State Domestic Product (GSDP) was only 1.6% of that of the whole country and its per capita income was about 40% less than that of India’s. And Jharkhand lagged behind the all India average in most of the development indicators.
  • In 2015-16, the share of income of Jharkhand has marginally gone up 1.84% and its Per Capita Income (PCI) is about 30% less than that of India’s. There is little bit of improvement, only.

So, on both GSDP and PCI, our state has lot of work to do to catch with the rest of country, especially with respect to the developed states of India. Seventeen years have gone by since the creation of separate Jharkhand state, yet its Economy is in sorry state. One of the worrying aspects of our state’s economy is the widespread inequality, which is only getting wider with each passing day:

  • There exist a regional, inter and intra-district disparity in Jharkhand. There are undeveloped blocks even in the developed districts and vice-versa. Generally, the blocks having the district headquarters are more developed than the rest. This means fruits of development have failed to reach the remote locations of our state.

I live in capital city Ranchi, but I spend fair bit of time in rural areas of Ranchi, Gumla and Lohardaga too. And this economic disparity of urban-rural areas cannot be denied. It is a harsh reality of our state. One of the disturbing aspect is that our democratic Government continue to turn blind-eye towards the rural folks and even ignore their basic needs.

  • The overall level of the urbanization in the state of Jharkhand is 24.05% according to the 2011 Census, when compared to national average of 31.14%; it remains below the level of urbanization of the country.

The fact remains that the Jharkhand resides in its rural areas. More than 75% of our state’s population still live in its rural and semi-urban areas. However, in the recent years, we have seen that the Districts with extremely low levels of the urbanization have recorded massive absolute urban growth. Our state is moving towards greater urbanization.

In fact our Jharkhand faces the prospective situation of a snowballing urban population during the forthcoming decades. The Urban housing is one of the key challenges that the expanding urban population face from the provisions of other basic housing amenities and this going to be another challenge for the Government in power.

Now, if take a closer look at the Macro-Economic pictures, then we will come across these Sectoral Variations in Jharkhand’s Growth Rate, and these should alarm our Government:

  • Primary Sectors (Agriculture, Forestry, Fishing, Mining & Quarrying) are performing badly and are growing only at CAGR of 4.6% in the last 6 years from 2011 to 2017.
  • Secondary Sectors (Manufacturing, Electricity, Gas, Water Supply & Construction) are doing marginally better and are growing only at CAGR of 5.3% in the last 6 years from 2011 to 2017.
  • Tertiary Sectors (Trade, Hotels, Restaurants, Transport, Storage, Communications, Railways, Road Transports, Air Transports, Financial services, Real estate, Public Administrations and Other services) are performing much better than other two sectors; it is growing at the compounded annual growth rate of 9.3% in the last 6 years from 2011 to 2017.

As we can see, that the performances of these two sectors, namely the Primary Sectors and the Secondary Sectors are well below average. While Tertiary Sectors are doing better than these two sectors. Our Government should try to have a healthy balance among the different sectors of the economy so as to minimize the widening imbalances and the inequalities.

Last week, I was in travelling deep into the rural area of South Chotanagpur areas of Jharkhand and I could see the sorry state of Agriculture, Forestry and Livestock sectors. The absence of the basic infrastructure and the lack of irrigation facilities in rural areas was disturbing to say the least. The rural folks are forced to live in distressful conditions and the Government is not doing enough to help them out. While I was talking to the villagers, they were deeply concerned about the “Jobs”; some of them even wanted my help in migrating to other states and metropolitan cities for the “Jobs”. I assured them of helping them out. But I do wonder, what is Government doing for past 17 long years in Jharkhand.

And all of these lackadaisical approach of the government get reflected in the following Sectoral Contributions figures to Jharkhand’s Growth Rate:

  • The contributions of the Primary Sectors and the Secondary Sectors have been only about 18% and 26% respectively. The contribution of the ‘Agriculture, Forestry and Fishing’ to the Jharkhand’s growth rate is disproportionately low, only about 5%.
  • Consequently, the Tertiary Sectors has been major contributor to the growth of Jharkhand’s economy. Its contribution to the average annual growth rate of the economy has been about 56% in the last 6 years from 2011 to 2017.

We cannot have a lop-sided economic growth model here, as it is a cause of distress among the local Jharkhandi natives and result is well-entrenched left-wing extremism.

Here in lies the paradox. Lots of Jharkhandi native-folks living in predominantly rural areas want much greater emphasis on the Primary and Secondary Sectors of the state’s economy while many other urban folks demand higher attention to the growth of the Tertiary Sectors of the economy. Let’s see how Government balances these three sectors to attain all-round development and to accelerate the growth rate of our state’s economy.

Given these inconsistent economic scenario, we cannot deny the Sectoral Imbalance in Income and Employment that indicates prevailing inequality in Jharkhand state:

  • About 10% of the workers engaged in mining and manufacturing have about 34% of Gross State Value Added (GSVA) in their command.
  • About half the workers engaged in Agriculture sector get only 16% of the income of the state.

All these data and the information discussed above clearly show that there is a high incidence of disguised unemployment in agriculture sector on one hand and very low labour absorptive capacity of mining and manufacturing sectors on the other hand. All of these red-flags mentioned here should not be brushed under the carpet; instead the Government should try to tackle them in an honest and a time bound way. Only then our Jharkhand state will be able to catch up with the rest of the country with respect to the various development parameters of the economy.

Although the reality is that the time is passing by for Jharkhand’s economy and not much is happening.

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Sameer Bhagat

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Social-Activist. Author of SALVAGING ADIDWEEP.


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