Yes, there are two Indias, and they are not getting any closer together

News: Ministry of Health and Family Welfare (MOHFW) has released the 2019-21 National Family Health Survey (NFHS-5).

Why it is called two India?

There is a stark contrast of development that exist between better performing Indian states and less performing Indian states. The fifth National Family Health Survey’s findings make it clear yet again that there are indeed two Indias. For example,

In social development: Tamil Nadu has less than a third of the diarrhoea cases when compares to Bihar. Similarly, Bihar has only two-thirds of Tamil Nadu’s ratio of literate women or doctors per 1,000 population, but a 50% higher ratio of stunted and wasted children.

In economy: State’s comprising most of Southern and Western India and states like Haryana have an annual net income per head of about $3,000. Their per capita income is closer to the Philippines.

Bihar with barely a third of India’s net income per head might get bracketed with Niger. UP might get clubbed with Niger’s neighbour in the Sahel, Mali.

So economically, Africa’s Sahel region and the Philippines co-exist in India.

Note: Niger is ranked 204th out of 215 countries and territories on per capita income.

What are the impacts of these two India?

Private investment will go to India that might catch up with the Philippines, not the India that compares with the Sahel.

Poorer states’ own tax resources are much lower when compares to the better-off states.

Are these two India’s getting closer?

Even though there is a difference when the gap is smaller than for some other metrics. For example, on metrics like households that have electricity, women with bank accounts and drinking water, the difference is less.

Progressively, these two India’s have to get closer. But that is not the reality for two reasons.

1. Infrastructure does not reap enough benefits: For instance, UP claimed that it will have Asia’s largest airport at Jewar. But the real catchment area for that airport is not in the hinterland of Western UP but in the urban and industrial areas like the National Capital Region.

2. State’s Policies against migration: Migration to more prosperous places will create a level playing field. The Covid lockdown showed how migrants are spread across India. But, states like Haryana are creating laws that favour locals in employment, even though people from other states are willing to work for low wages.

This will hamper 1. The creation of enough jobs in India, 2. Less-educated Indians are forced to leave the state, 3. Make less competition between states, 4. Hamper the economy.

Source: This post is based on the article ”Yes, there are two Indias, and they are not getting any closer together” published in Business Standard on 26th November 2021.