Most north Indian states have turned in growth performances lower than the national average this decade. Despite the huge population advantage, these states have lost out to the west and the south, which have led India’s economic growth.
While Chandigarh tops the chart with high growth and the highest per capita income in the country, Madhya Pradesh (MP) is at the bottom of the pile, with less than 5% growth this decade. In recent years, growth in Punjab has slowed as diversification of economic activity has not been sufficient and farm productivity has been stagnating. On the other hand, Haryana has made full use of being partially included in the National Capital Region (NCR) to move into the manufacturing and service sectors.
Also See Left Behind (Graphics)
Two smaller states have done extremely well in recent years. One is Uttarakhand, which has gone ahead of its parent state Uttar Pradesh (UP) to grow at levels higher than the national average. The other is Himachal Pradesh, which has become the Kerala of north India. Despite a predominantly rural population and limitations of topography, it has improved connectivity and social indicators. Unfortunately, the low-income states of UP, MP, and to a lesser extent Rajasthan are still to get their act together.
According to market size, Delhi leads the cities in the north with its large population and a large middle class. Though Chandigarh has a per capita income twice that of Delhi, the smaller population gives it second place in northern urban markets. Though the large urban markets come from all the large states in the north, if we look at clusters of commercial activity, only two stand out—the NCR and the cluster formed by Chandigarh, Ludhiana, Rupnagar and Ambala.
Looking at two interlinked parameters, unemployment rates for 2008-09 and the employment growth rate from 2006-07 to 2008-09, the top cities are Panipat, Gurgaon, Faridabad, Noida, Delhi, Jaipur, Hisar, Chandigarh, Ludhiana and Ghaziabad.
The geography of growth and opportunities in the north appears to be fairly clear—take the route from Delhi to Jaipur and whatever comes along the way is where opportunities are improving. Next, visit Chandigarh and its vicinity and growth along the route is more than anywhere else. UP and MP, however, have not been able to build such an urban network.
Kanpur, north India’s industrial hub at one point, has now become a garbage dump with high pollution levels. Lucknow, despite having the best infrastructure in the state, hasn’t been able to emerge from political intrigue. Varanasi and Allahabad could have become great knowledge and educational centres but did not.
It is the same story in MP—Indore and Bhopal were unable to cash in on the opportunities that came from liberalization, and Gwalior and Jabalpur have retained their sluggishness.
The cities of Rajasthan, however, are changing more rapidly. With the Delhi-Mumbai corridor going through some of the major cities in the state, Jaipur is the biggest gainer, and with the availability of water in Jodhpur and its vicinity thanks to a canal bringing in water from Punjab, and a relatively proactive government, both incomes and prospects appear better than MP or UP.
Graphics by Ahmed Raza Khan / Mint
Demand Curve is a weekly column by research firm Indicus Analytics Pvt. Ltd on consumer trends and markets. Your comments are welcome at email@example.com