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Presentation on India at Canadian High Commission Event Presentation on India at Canadian High Commission Event Presentation Transcript

  •   Assessing  India’s  Compe00veness     Professor  Amit  Kapoor   Honorary  Chairman  of  Ins0tute  for  Compe00veness,  India  &     Professor  of  Strategy  &  Industrial  Economics  at  MDI,  Gurgaon,  India  Ins$tute   for   Compe$$veness   (IFC),   India   is   an   independent,   interna0onal   ini0a0ve   centred   in   India,   dedicated   to   enlarging   and   dissemina0ng   the   body   of  research   and   knowledge   on   compe00on   and   strategy,   pioneered   over   the   last   25   years   by   Professor   M.E.   Porter   of   the   Ins0tute   for   Strategy   and  Compe00veness,  Harvard  Business  School  (ISC,  HBS),  USA.    IFC,  India  works  in  affilia0on  with  ISC,  HBS,  USA  to  offer  academic  &  execu0ve  courses,  conduct  indigenous  research  and  provide  advisory  services  to  corporate  and  Government  within  the  country.  The  ins0tute  studies  compe00on  and  its  implica0ons  for  company   strategy;   the   compe00veness   of   na0ons,   regions   &   ci0es;   suggests   and   provides   solu0ons   for   social   problems.     IFC,   India   brings   out   India   City  Compe00veness  Report,  India  State  Compe00veness  Report,  India  Economic  Quarterly,  Journal  of  Compe00veness  and  funds  academic  research  in  the  area  of  strategy  &  compe00veness.  To  know  more  about  the  ins0tute  write  to  us  at  info@compe00veness.in.     1  
  • Natural Endowments Population and GDP’s of the world 3%  of  the  Land  area,   7%  of  the  Popula0on,    26%   7%  of  the  Land  area,   of  the  GDP  5%  of  the  Popula0on,    23%   7%  of  the  Land  area,   of  the  GDP   20%  of  the  Popula0on,    9%   European Union of  the  GDP   USA China 2%  of  the  Land  area,   India 17%  of  the  Popula0on,    3%   of  the  GDP  
  • GDP over the years100%90% 39%  in   2010  80%70%60% 23%  in   2010  50%40% 9%  in   2010  30% 3%  in  20% 2010  10% 26%  in   2010   0% 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 European Union India China United States Rest of the World Source: WDI and Institute for Competitiveness Analysis
  • Structural shift in Indian Economy (1994-2000) Services 10 8 6% Change in the Contribution to GDP (1994-2000) Community and Personal Services 4 Finance, Business & Real Estate Services Transport, Storage & Communication Construction 2 Industry 0 Manufacturing -10 0 10 20 30 40 50 60 -2 Agriculture and Allied -4 -6 -8 -10 Percentage Contribution in GDP (2000) Ins0tute  for  compe00veness  Analysis  
  • Structural shift in Indian Economy (2000-2010) 15 Services% change in contribution 2000-2010) 10 Industry Transport, Storage & Communication Finance, Business & Real Estate Services Construction 5 Manufacturing Electricity, Gas and Water Supply Community and Personal Services 0 -10 0 10 20 30 40 50 60 70 Agriculture and Allied -5 -10 -15 Percenatge Contribution in GDP (2010) Ins0tute  for  compe00veness  Analysis  
  • Geographic  Influence  on  Compe00veness   World  Economy   Broad  Economic  Areas   The  business  environment  at  a  given   Group  of  Neighboring  Na0ons   loca0on  is  the  cumula0ve  outcome     of  policy  at  all  levels  of  geography   Microeconomic  Compe00veness   Na0on   raises  the  importance  of  lower   levels  of  geography   The  alloca$on  of  responsibili$es   State,  Provinces   across  levels  of  geography  is  a   crucial  policy  challenge   Metropolitan  Areas   Rural  Areas  Ins0tute  for  Compe00veness,  India   6  
  • Microeconomic  Compe00veness:  The  Diamond     (Understanding  Business  Environment)   Context  for   Firm  Strategy   and  Rivalry   Local  rules  and  incen$ves  that   encourage  investment  and  produc0vity   e.g.  salaries,  incen0ves  for  capital   Factor   investments,  intellectual  property   Demand   Condi0ons   protec0on   Condi0ons   Vigorous  local  compe$$on  i.e.,     openness  to  foreign  and  local    Access  to  high  quality  business  inputs   compe00on;  sophis0ca0on  of  company   Sophis0ca0on  of  local  customers  and  i.e.,  natural  endowments,  human   opera0ons   needs  i.e.,  strict  quality,  safety,  and  resources,  capital  availability,  physical   environment  standards  infrastructure,  administra0ve   Related  and  infrastructure,  informa0on   Suppor0ng  infrastructure,  scien0fic  and  technological  infrastructure   Industries   Availability  of  suppliers  and  suppor$ng   industries   Presence  of  clusters  instead  of  isolated   firms   Successful  economic  development  is  a  process  of  successive  upgrading,  in  which  the  business   environment  improves  to  enable  increasingly  sophis0cated  ways  of  compe0ng   Ins0tute  for  Compe00veness,  India   7  
  • Decoding manufacturing competitiveness The  State  of  Manufacturing  in  India   India needs state-specific approaches to consolidate and attract investment op a strategic policy framework to idenMIT KAPOOR & and develop innovative clusters that hav SHUL PACHOURI great potential in exports and can gener more employment. There is a need develop investment mechanisms to fosI ndia and China are the future drivers public-private partnerships that can inv of the world economy though the two , in sick clusters and focus on improving economies look very different in latter’s productivity . terms of their development patterns There is a need for state-specific economic structure. China has proaches. After all, each state is at a dif rged as the manufacturing power- ent stage of development in the manu seinthelast20yearswhileIndiahasbe- turing industry and, therefore, ne e the major player in services. differentstrategiestoimproveitsmanu hina’s share in world manufacturing turing competitiveness. witnessed tremendous elevation from I Strong manufacturing states (Guja%in1991to13.7%in2011.Theincrement Maharashtra, Tamil Nadu, Karnatahe Chinese economy’s contribution to Andhra Pradesh, Goa, Haryana and Jha ld manufacturing has come at the cost hand) need an innovation-driven strate he European Union, whose share had These states need to move towards m inedto20.9%in2010from33%in1991.It technological advancement to impromes much more pronounced when we their production efficiency These sta .k at the fact that per capita manufactur- should invest in developing advanced sk GDP of China has increased by 8 times sets for manufacturing and become m pared to 1991, reaching $806 in 2010 export competitive. le India’s is just $122 (see figure). The I Weaker manufacturing states (Tripu re of India in world manufacturing is a Sikkim, Nagaland, Kerala, Jammu a e 1.8% and has increased by just 1% Kashmir, Delhi, Bihar, Assam, and Wr the past 20 years. Bengal) need an investments-driven strAt the same time, the US contribution gy They need to give more incentives to . remainednearlystagnant,whichisdue dustry in terms of taxes, power costs a eirspecialisationincapitalgoodsman- logistics, and try to facilitate more privcturing, while Chinese manufacturing investments in the sector. ominated by consumer goods. China I Medium manufacturing states (Chhaty have succeeded in capturing a bigger garh,HimachalPradesh,MadhyaPrade nk of world manufacturing, but its per Orissa, Punjab, Rajasthan, Uttar Prad tamanufacturingGDPisstillfarbelow and Uttarakhand) need a factors-driv of the US, which was $6,147 as of 2010. strategy These states need to focus in l .ndia’s growth is presumed to be driven ering the costs of inputs of production, he services sector, which contributes a veloping the right set of skills and taleximum 65.2% to its GDP However, the . and removing the barriers to doing bu of manufacturing in India’s develop- ness. These states should initiate pubnt can’t be discounted considering the private partnership mechanisms to attr that it contributed 16% to the country’s investments and improve productivity . lGDPin2010.Totalworkforceemployed Before devising policies for cluster dehe manufacturing sector is estimated to opment, it should be understood that mamore than 40 million, which amounts to facturingclustersneedtobemoreintegraof thetotalworkingpopulationof India. and deeper than service clusters. How c interesting to note that the share of ters that are not export-oriented fit intonufacturing to GDP in India hasn’t Ins0tute  for  Compe00veness,  India   9   global value chain of manufacturing ne nged much over the past 20 years, due to and Jharkhand, manufacturing con- map the manufacturing sector’s perfor- times their fixed investments. tobeanalysed.Indiahasabigpotentialofhtheincreaseintheshareof theservices tributes nearly 27% of the total GDP which , mance at both the state and firm levels to Today manufacturing in India requires , coming a good manufacturing-outsourc
  • Near  Term  State  Prosperity  Performance   140000   High  but  declining  versus  India     High  and  rising  versus  India     Goa   Highly  Produc0ve  and  Prosperity   Rising  versus  India   120000  Gross  Domes$c  Product  per  Capita,  2010   Points   57.28   Index   Avera India   All  India  GSDP  /Capita   100000   Delhi   rate  (CAGR)  of  8.36  %   All   ge   Haryana   80000   Maharashtra   All  India  Average   Punjab   of  46,836  Rupees/ Gujarat   Himachal  Pradesh   60000   capita   Karnataka   Kerala   Tamil  Nadu   Andhra  Pradesh   Sikkim   Chhagsgarh   Ukarakhand   West  Bengal   Orissa   Meghalaya   Arunachal  Pradesh   Mizoram   Tripura   40000   Rajasthan   Assam   Nagaland   Manipur  Madhya  Pradesh   Jammu  &  Kashmir   Jharkhand   Ukar  Pradesh   Bihar   20000   Low  and  declining  versus  India     Low  but  rising  versus  India     0   0   2   4   6   8   10   12   14   16   Gross  Domes$c  Product  per  Capita  CAGR  rate,  2008-­‐2010  
  • Composi0on  of  Haryana’s  Economy  in  Greater  Depth   8   Average  of  Change  in   Strong  and  Growing  Posi0on     contribu0on  of  (Haryana  / 7   Na0onal  sectoral),  CAGR  is  Haryana  /Na$onal  GSDP  share  (Percent)  ,2010   15.26%      Transport  by  other  means     6   Railways     Real  states,  ownership  of  dwellings   and  business  services   5   Agricuture      Construc0on     Electricity,  gas  and  water  supply    Manufacturing      Trade,  hotel  and  restaurant     4   Other  services      Forestry  and  logging   3   Storage   Average  of  (Haryana/   Public  sdministra0on  and  defence     Banking  and  insurance     Na0onal  sectoral  )GSDP   2   share  is  3.5%   Communica0on     1   Fishing     Mining  and  quarrying   0   0   5   10   15   20   25   30   -­‐1   Change  in  contribu$on  of  GSDP  of  Haryana  to  total  Indian  GSDP,  CAGR  (2000-­‐2010)  
  • State  Private  Sector  Wage  Performance   160000   Jharkhand   Wage  Growth   Highly  and  rising  wages  rela0ve  to     140000   India   rate  4.53%  Average  Wages  in  Rupees  ,2008   High  but  declining  versus  India     120000   Ukaranchal   Orissa   100000   Maharashtra   Goa   Average  Wage  :   Rupees  64,741   80000   Chagsgarh   West  Bengal   Haryana  Karnataka   Madhya  Pradesh   Gujarat   Meghalaya   Delhi   Himachal  Pradesh   Ukar  Pradesh   60000   Andhra  Pradesh   Punjub   Tamil  Nadu   Kerala   Rajasthan   Jammu  &  Kashmir   Bihar   Assam   40000   Manipur   Tripura   Nagaland   20000   Low  and  declining  versus  India     Low  but  rising  versus  India     0   0   2   4   6   8   10   12   14   Wage  Growth  (CAGR),  2001  to  2008  
  • Long  Term  State  Labour  Produc0vity   400000  GSDP  at  Current  Prices  per  labour  force  par$cipant,2010     High  but  declining  versus  India   Highly  produc0ve  and  Produc0vity   rising  versus  India   350000   Goa   All  India  Average  of     300000   11.37  %   250000   Delhi   Haryana   200000   All  India  Average  of  of   Maharashtra   1,18,112  Rupees/Labour   Punjab   force  par0cipant   Himachal  Pradesh   150000   Kerala   Gujarat   Karnataka   Tamil  Nadu   Andhra  Pradesh   Sikkim   Nagaland   Chhagsgarh   Ukarakhand   100000   Mizoram   West  Bengal   Orissa   Tripura   Meghalaya   Jammu  &  Kashmir   Rajasthan   Arunachal  Pradesh   Assam   Manipur   Ukar  Pradesh   Low  and  rising  versus  India   50000   Low  and  declining  versus  India   Madhya  Pradesh   Jharkhand   Bihar   0   0   2   4   6   8   10   12   14   16   18   20   GSDP  /Labor  force  par$cipant  growth  rate(CAGR)  
  • Short  Term  State  Labour  Produc0vity   400000  GSDP  at  Current  Prices  per  labour  force  par$cipant,2010     High  but  declining  versus  India   Highly  produc0ve  and  Produc0vity   rising  versus  India   350000   Goa   Points   Index   57.28   e   Averag India   All   300000   All  India  Average  of     15.11%   Delhi   250000   200000   All  India  Average  of  of   Haryana   1,18,112  Rupees/Labour   Maharashtra   force  par0cipant   Kerala   Himachal  Pradesh   Punjab   150000   Gujarat   Tamil  Nadu   Andhra  Pradesh   Karnataka   Sikkim   Chhagsgarh   Ukarakhand   Nagaland   Mizoram   West  Bengal   Orissa   100000   Tripura   Meghalaya   Rajasthan   Arunachal  Pradesh   Assam   Jammu  &  Kashmir   Ukar  Pradesh   Jharkhand   Madhya  Pradesh   Manipur   50000   Low  and  declining  versus  India     Bihar   Low  but  rising  versus  India     0   0   5   10   15   20   25   30   GSDP  /Labor  force  par$cipant  growth  rate(CAGR)  
  • Long  Term  State  Job  Growth   90000000   Ukar  Pradesh   80000000   s   Point Index   57.28   ge   Avera India   All   70000000   All  India  Average  of     2.05%    Number  of  Jobs,  2010   60000000   50000000   Maharashtra   Bihar   40000000   West  Bengal   Andhra  Pradesh   All  India  average  of   Madhya  Pradesh   30000000   1,62,99,464  Jobs  / Tamil  Nadu   Rajasthan   Karnataka   State   Gujarat   20000000   Orissa   Kerala   Assam   Jharkhand   Punjab   Haryana   Chhagsgarh   10000000   Delhi   Ukarakhand   Jammu  &  Kashmir   Nagaland   Himachal  Pradesh   Tripura   Mizoram   Manipur   Arunachal  Pradesh   Meghalaya   Goa   0   Sikkim   0   0.5   1   1.5   2   2.5   3   3.5   Losing  Jobs   Job  growth  rate  CAGR,  2001-­‐2010   Gaining  Jobs  
  • Near  Term  Unemployment  Rate     30   Goa   jharkhand   Points   57.28   Index   Avera 25   India   Below  average  Unemployment   All  India  Average  of     -­‐6.55%   All   ge  Unemployment  rate  2010   20   Rajasthan   Unemployment  Rising   Bihar   15   All  India  Average  of   9.39%   Meghalaya   Punjab   West  Bengal   Gujarat   kerala   Orissa   Haryana   10   Ukar  Pradesh   Manipur   Madhya  Pradesh     Above  Average  Unemployment   Mizoram   Nagaland   Tripura   Andhra  Pradesh   Arunachal  Pradesh   Sikkim   Assam   Himachal  Pradesh   Maharashtra     Tamil  Nadu   Jammu   Ukarakhand   5   Chagsgarh   Karnataka   Delhi   0   -­‐30   -­‐25   -­‐20   -­‐15   -­‐10   -­‐5   0   5   10   Change  in  Employment  rate  2008  to  2010    
  • Healthcare     9  Percentage  of  Total  government  Expenditure  on  Medical,  Health     8   Delhi   7   Mizoram   6   All  India  Average   3.95%     Goa   and  Sanita$on   5   Jammu  &  Kashmir   Meghalaya   Jharkhand   Ukar  Pradesh   Himachal  Pradesh   Kerala   Arunachal  Pradesh   Assam   Tamil  Nadu   4   Tripura   Rajasthan   Chhagsgarh   West  Bengal   Ukarakhand   Orissa   Manipur   Karnataka   Andhra  Pradesh   Punjab   Bihar   Maharashtra   3   Nagaland   Gujarat   Haryana   Madhya  Pradesh   Sikkim   India   All   2   All  India  Average   1407.59  Crores   1   0   0   1000   2000   3000   4000   5000   6000   Total  Government  Expenditure  on  Medical,  Health  and  Sanita$on  in  Crores    
  • Debt  to  GDP  ra0o     Debt  to  GDP  Ra$o  of  States   West  Bengal   42.8   41.1   Prescribed  limit  according  to  the   Ukar  Pradesh   43.5   growth  and  stability  Pact  of  EU   42.2   Tamil  Nadu   25.5   80.6   Rajasthan   41.1   35.2   Orissa   30.6   59.4   Mizoram   109.1   37.3   Manipur   77.4   25.1   Madhya  Pradesh   34.4   34.3   Karnataka   24.3   33.6  Jammu  &  Kashmir   70.1   55.7   Haryana   19   32.1   Goa   35.5   13.8   Prescribed  limit  according   Chagsgarh   15.2   to  WTO  for  developing   39.7   economies   Assam   28   115.9   Andhra   30.1   0   20   40   60   80   100   120  
  • ifferent levels of debt and growth call for different strategies for long-term sustainability No U economic crisis has Debt and Growth: The Road Ahead for Stateserns over high sovere-d its harmful effect on for Interest payment/Revenues receipts growth rate (CAGR) s left Greece and Portu- 15 70 heory of debt says that NA 60 NA t becomes very large,nable to generate pri- 10 Not all c MZ epay the debt, causing Debt-to-GDP growth rate (CAGR) 50n and adverse shocks. AP MYTHILI BHU bal impact of debt, we 5 TN 40 The world e tate of affairs in India. JK MZ AP TR MN of the wood SKexternal debt of $305.9 WB ME wrought by 0 30 JK nts for 17.3% of GDP ME of the last d public debt on India as MN KA JH SK JH there is no t TR AN 20 The gross public debt MP AS on financial -5 GJ UK BHhan 70% of GDP, as per KE HP RJ However, r nding 2011. The coun- UP AS DL 10 KA KE in the Westt has grown at the rate RJ HR CH WB MH an effusive -10 HP MP HRy during 2006-11 while 0 TN OR CH openness an PB GJ grown at an annual GO UP more nuanc MH OR BH GO PB DL t 7.3%, which is alarm- -10 AN nguishes be -15 UK future generations un- nancial libeurden. This month, the 2 4 6 8 10 12 14 2 4 6 8 10 12 14 is now seen GDP growth rate (CAGR) GDP growth rate (CAGR)petitiveness’ state per- mic growth ter looks at the condi- bring more the states and assesses Investment Strategy (High Industrial Development Strategy Infrastructure Restructuring Strategy (Low The good t anaging their finances growth, low-debt states) (Low growth, high-debt states) Development Strategy growth, low-debt states) sight is thathe lens of fiscal deficit, Need to invest in developing Need to bring a revolution in their (High growth, Need to invest and give nt researchnterest payment share more advanced factor development by identifying and high-debt states) more loans to the industrial fying types s of the government. conditions such as human developing the industrial clusters Need to develop sector for their expansion, tion; disting ficit makes debt bubble that enhan capital, physical communication that have the potential of advance infrastructure which increase the mises with growth: Ut- and those and administrative support to generating more economic value for industries such as economic output and help in ry high fiscal deficit of and harmfu generate better economic and employment. Investment by tourism to increase lashing the growth. These hat demands for more the previou the markets, and the output and become the government has to be more revenues that help in states need to restructure to pay suffi eached `2,34,581 crore . self-sustainable over the responsible and effective. repaying debt as their systems and make differential The debt on Uttar Pra- coming years. Himachal Pradesh (HP), Jammu & tourism is the main them more effective in types of captutes 12.9% of the out- Andhra Pradesh (AN), Bihar (BH), Kashmir (JK), Manipur (MN), driving factor for their policy implementation. Needless toes of all state govern- Chhattisgarh (CH), Delhi (DL), Mizoram (MZ), Nagaland (NA), regional economic Assam (AS), Goa (GO), widely in th ebt-to-GDP ratio has Gujarat (GJ), Haryana (HR), Punjab (PB), Sikkim (SK), Tamil Nadu growth. Karnataka (KA), Madhya pact of fina 1. The high debt leaves Jharkhand JH), Kerala (KE), (TN), Tripura (TR), Uttar Pradesh Arunachal Pradesh (AP) Pradesh (MP), Maharashtra growth. Somo option but cutting ex- Orissa (OR) and Rajasthan (RJ) (UP) and West Bengal (WB) and Uttaranchal (UK) (MH) and Meghalaya (ME) of asset pricsing subsidies and rais- sult of exceonomy, which also incr- demand fond slows real growth stocks, bond rregularities are resp- of the European Central Bank and EU. nancial crises: The total outstanding lia- track. We need more fiscal reforms and financial asgrowth of the state that Robust GDP growth in states makes bilities of West Bengal are nearly `2 lakh . proper credit rating for states to assess surges in ca lly in the last five years debt sustainable: Orissa experienced tre- crorein 2011, as per RBI, for which inter- their repaying capacity. The rating sho- ancial and mdia growth rate of 7.3%. mendous growth rate of nearly 10.02% in Ins0tute  for  accounts for nearly 60% of est payments Compe00veness,  India   uld consider government debt, fiscal defi- 21   increased p kkim have very high the past five years, enabling the state to government revenues, which means that cit, gross savings, demand, economic especially inof 98.1 and 82.2, respec- bring the debt-to-GDP ratio from nearly after paying interest on debt, West Ben- growth of all primary, secondary and ter- to lending b
  • Fiscal  Deficit  versus  GDP   16   Bihar 14   Strong  posi0on  GSDP  Growth  rates  (CAGR  2006-­‐10)   Stable  growth   Chhattisgarh All  India  Average  of     ex   Ind 28   57. age   12   23.93%   Orissa Haryana 10   Delhi Gujarat GSDP  growth  rate   Jharkhand Andhra Pradesh Kerala Uttaranchal (CAGR)  of  7.15%   8   Arunachal Pradesh Rajasthan Karnataka Punjab Maharashtra Sikkim Meghalaya West Bengal Himachal Tamil Nadu Goa Assam 6   Manipur Uttar Pradesh Nagaland Tripura Mizoram Jammu & Kashmir Madhya Pradesh 4   2   0   0   10   20   30   40   50   60   70   80   Fiscal  deficit/  Revenues  in  %  terms  
  • Urban  Popula0on  versus  Urban     Popula0on  Growth  rates   12   All  India  Average  of   India   All   Sikkim   10   20950320  people/ state  Growth  rate  (CAGR  2001-­‐2011)   8   Kerala   Tripura   6   Nagaland   All  India  Average  3.35%   Manipur  Ukarakhand   Chhagsgarh   Haryana   CAGR       4   Arunachal  Pradesh   Goa   Jammu  &  Kashmir   Bihar   Gujarat   Andhra  Pradesh   Meghalaya   Jharkhand   Karnataka   Rajasthan   West  Bengal   Ukar  Pradesh   Mizoram   Assam   Orissa   Delhi   Tamil  Nadu   Punjab   Madhya  Pradesh   Maharashtra   2   Himachal  Pradesh   0   0   10000   20000   30000   40000   50000   60000   Thousands   Popula$on  in  Urban  areas  as  per  census  (provisional  Data)  in  Thousands  
  • Rural  and  Urban  Popula0on  in  India   Rural  16,00,00,000   Urban  14,00,00,000  12,00,00,000   10,00,00,000   8,00,00,000   6,00,00,000   4,00,00,000   2,00,00,000   0   Urban   Rural  
  • Rural,  Urban  and  Total  Popula0on     120  Urban  Popula$on  as  a  percentage  of  total  Popula$on   Delhi   India   100   All  India  Average   67.02%   All   80   Goa   Tamil  Maharashtra   Nadu   60   Kerala   Mizoram   Gujarat   Karnataka   All  India  Average   Andhra  Pradesh   Punjab   West  Bengal   Haryana   40   32.98%   Ukar  Pradesh   Madhya  Pradesh   Ukarakhand  Rajasthan   Manipur  &  Kashmir   Jammu   Jharkhand   Nagaland   Chhagsgarh   Tripura   Sikkim   Orissa   Arunachal  Pradesh   Bihar   Meghalaya   Assam   20   Himachal  Pradesh   0   -­‐20   0   20   40   60   80   100   120   -­‐20   Rural  Popula$on  as  a  percentage  of  total  Popula$on  
  • Data Drive Urbanisation1. Top 10 states with high density cities 8. Cost of renting a houseClass A cities (Pop > 1 lakh) Mega-Cities (Pop > 10 lakh) In Karnataka, Sikkim and Meghalaya, a household pays an average monthly rent of R1,600 0 20 40 60 80 0 2 4 6 8 % of households living in rented dwellings Average rent paid by each household Uttar Pradesh 64 Uttar Pradesh 7 0 20 40 60 80 R 0 600 1,200 1,800 2,400 in India West-Bengal 61 Kerela 7 Sikkim 60.50 Karnataka 1,997 Maharashtra 44 Maharashtra 6 Nagaland 52.90 Sikkim 1,720Andhra Pradesh 42 Madhya Pradesh 4 Andhra Pradesh 47.00 Meghalaya 1,639 Tamil Nadu 41 Gujarat 4 Tamil Nadu 46.70 Delhi 1,502Madhya Pradesh 32 Tamil Nadu 4 Meghalaya 45.50 Goa 1,388 Gujarat 30 Rajasthan 3 Karnataka 44.20 Kerala 1,371 Rajasthan 29 Jharkhand 3 Delhi 36.40 Maharashtra 1,225 Bihar 26 Andhra Pradesh 3 Himachal Pradesh 31.60 Andhra Pradesh 1,209 Karnataka 26 Punjab 2 Mizoram 31.00 Uttarakhand 1,204Source: Census of India 2011 Arunachal Pradesh 29.80 Mizoram 1,141 Source: NSSO2. Smaller states have higher proportion of urban population Dr Amit Kapoor & Anshul Pachouri According to UN projections, 70% of the total urbanised areas. Delhi and Goa have more than world population will live in urban areas by 2050 90% and 60% of their respective populations re- CStates like Delhi and Goa have the largest share of urban population ities are a major source of economic activi- as compared to 50% in 2010. The percentage of ur- siding in urban areas, which makes them the% share of urban population % decadal growth (urban) ty employment generation and prosperity , ban population to total population in the US, Eu- most urbanised states in India. Sikkim, on the 0 30 60 90 120 0 50 100 150 200 in an economy With rising income levels, . rope and China is 83%, 73% and 47%, respective- other side, has witnessed the highest decadal Delhi 97.50 Sikkim 153.43 people demand more goods and services, which ly which is much higher compared to India, , growth rate in urban population (150%), which Goa 62.17 Kerala 92.72 51.51 76.08 becomes an important factor for them to live in which is just 32%. implies that a lot of people migrated to Mizoram Tripura Tamil Nadu 48.45 Nagaland 67.38 cities. The cities attract more skilled labour, The states of Uttar Pradesh and Kerala have urban areas in the state in the past 10 years. Kerala 47.72 Haryana 44.25 which, in turn, facilitates investments to open the highest number of mega-cities existing in one Maharashtra 45.23 Manipur 42.74 new firms and foster industrial development in state, with populations of more than 1 million. It’s Dr Amit Kapoor is the honorary chairman Gujarat 42.58 Uttarakhand 41.86 38.57 41.83 the cities. Cities are the reflection of global inte- very interesting to note that except mega-cities, of Institute for Competitiveness, India, and Karnataka Chhattisgarh Punjab 37.49 Arunachal Pradesh 37.55 gration of an economy as a majority of foreign other cities existing in Kerala have populations of professor of Strategy at MDI, Gurgaon, and Haryana 34.79 Andhra Pradesh 36.26 firms operate their businesses in big cities and less than 1 lakh, which shows that the state has Anshul Pachouri is senior researcher atData Source: Census of India 2011 attract expats to live and work there. clearly differentiated between high and low Institute for Competitiveness, India3. Urban poverty and slums continue to be a problemStates like Delhi and Maharashtra have the highest slum-dwellersPoverty Ratio-Urban % of slum population to total population 0 15 30 45 60 0 5 10 15 20 Orissa 44.30 Delhi 17.47Madhya Pradesh 42.10 Maharashtra 16.26 Chattisgarh 41.20 Haryana 13.07 Uttaranchal 36.50 Tamil Nadu 12.87 Bihar 34.60 Mizoram 10.60 Rajasthan 32.90 Punjab 10.18 Karnataka 32.60 Andhra 9.72 Maharashtra 32.20 West Bengal 9.61 Uttar Pradesh 30.60 Madhya Pradesh 8.95 Andhra 28.00 Goa 8.92Data Source: Ministry of Poverty Alleviation & Urban Development4. Water availability is still low, even in top 10 statesAlmost 75% of households in Nagaland do not have tap water% of households with drinking-water outside % of households without tapwaterpremises (distance more than 200 metres) 0 15 30 45 60 0 20 40 60 80 Manipur 52.20 Nagaland 74.30 Chhattisgarh 47.70 Bihar 71.00 West Bengal 44.80 Assam 63.40 Orissa 43.30 Kerala 58.40Madhya Pradesh 39.40 Uttar Pradesh 52.70 Nagaland 37.30 Jharkhand 50.90 Tamil Nadu 37.10 Chhattisgarh 39.50 Jharkhand 34.40 Tripura 39.40 Andhra Pradesh 30.20 Orissa 36.40 Mizoram 28.50 Manipur 34.40Data Source: NSSO5. Sanitation is poor across the board 6. While power coverage is good, drainage still suffers 7. Urban housing shortage needs to be addressedHalf the households in Manipur and Tripura don’t have bathrooms North eastern states have almost 100% power coverage Maharashtra has the highest shortage of urban houses, followed by Tamil Nadu% of households with no bathroom % of households with no sanitation % of households with power connections % of households with no drainage Per capita floor area (sq m) Urban housing shortage (In millions) 0 15 30 45 60 0 10 20 30 40 97 98 99 100 101 0 20 40 60 80 0 4 8 12 16 0 1 2 3 4 Manipur 54.50 Chhattisgarh 31.50 Nagaland 100.00 Tripura 68.10 Kerala 15.01 Maharashtra 3.72 Tripura 52.80 Orissa 29.10 Mizoram 99.80 Kerala 54.00 Assam 13.65 Tamil Nadu 2.82 Bihar 48.20 Bihar 27.70 Manipur 99.50 Orissa 36.70 Manipur 13.63 Uttarakhand 2.38 Chhattisgarh 42.90 Jharkhand 24.50 Himachal Pradesh 99.40 Goa 30.30 Himachal Pradesh 12.83 West Bengal 2.04 Orissa 39.20 Madhya Pradesh 24.30 Sikkim 99.40 Mizoram 30.30 Goa 12.62 Andhra Pradesh 1.95 Maharashtra 31.10 Tamil Nadu 16.00 Meghalaya 99.30 Manipur 29.30 Sikkim 12.12 Gujarat 1.66 Uttar Pradesh 27.40 Uttar Pradesh 14.20 Punjab 99.30 Nagaland 29.00 Rajasthan 11.96 Karnataka 1.63 JharkhandMadhya Pradesh 27.10 25.60 Rajasthan Jammu & Kashmir 12.60 11.80 Ins0tute  for  Compe00veness,  India   Gujarat Delhi 99.00 Chhattisgarh 98.60 Bihar 26.30 22.80 Jammu & Kashmir Punjab 11.24 Madhya Pradesh 10.99 Delhi 26   1.29 1.13 West Bengal 21.90 Karnataka 11.30 Uttarakhand 98.60 Assam 22.60 Mizoram 10.43 Rajasthan 1.00Data Source: NSSO Data Source: NSSO Data Source: Ministry of Housing & Urban Poverty Alleviation All graphics by SURENDER
  • Ins0tute  for  Compe00veness,  India   27  
  • Urbaniza$on  
  • INDIA’S MOST COMPETITIVE CITIES 2011 RANK RANK CITY OVERALL INFRASTRUCTURE DEMAND CONDITIONS COMPETITION INSTITUTIONAL INFRASTRUCTURE 2011 2010 COMPETI- TIVENESS FINANCIAL PHYSICAL COMMUNI- ADMINIS- HUMAN INNOVATION SCORE RANK BASIC INCOME SCORE RANK INTENSITY BUSINESS SCORE RANK SUPPLIER INSTITU- SCORE RANK SCORE CATION TRATIVE CAPACITY DEMO- DISTRI- & DIVERSITY INCENTIVES SOPHISTI- TIONAL GRAPHICS BUTION OF FIRMS CATION SUPPORT 1 1 Delhi 78.02 70.03 95.45 73.43 59.99 71.25 62.97 72.19 1 101.00 65.03 83.01 1 91.92 76.97 84.44 1 92.59 59.74 72.88 1 2 3 Mumbai 72.93 83.38 63.77 72.19 63.53 68.19 70.64 70.28 2 91.20 65.77 78.49 2 72.28 87.21 79.74 2 63.24 60.73 61.74 6 3 4 Bangalore 65.28 62.15 64.46 67.53 62.76 64.04 59.99 63.49 5 76.06 67.94 72.00 3 61.33 63.77 62.55 8 61.98 59.70 60.61 8 4 8 Pune 64.27 54.50 62.03 61.86 54.25 68.51 64.21 60.89 10 81.32 61.49 71.40 4 67.76 57.11 62.43 9 62.72 58.94 60.45 9 5 2 Chennai 62.75 65.90 62.37 58.63 56.20 64.35 67.45 62.48 7 56.53 60.73 58.63 12 62.53 69.74 66.13 5 75.09 59.82 65.93 3 6 13 Gurgaon 62.30 65.29 57.94 68.65 69.51 61.32 62.63 64.23 3 46.04 67.49 56.77 23 61.22 78.91 70.07 4 62.88 57.95 59.92 11 7 5 Kolkata 61.99 66.64 64.02 66.28 57.93 63.29 59.61 62.96 6 55.81 58.71 57.26 16 57.50 70.93 64.22 6 66.35 64.79 65.41 4 8 6 Hyderabad 61.76 67.16 62.55 61.36 66.51 60.56 64.86 63.83 4 54.09 60.00 57.05 19 62.73 57.67 60.20 14 84.45 55.82 67.28 2 9 7 Ahmedabad 60.86 61.56 58.18 54.64 54.77 63.13 57.81 58.35 13 68.03 59.48 63.76 6 62.46 55.49 58.97 16 64.07 60.88 62.15 5 10 10 Jaipur 59.72 60.02 57.21 65.37 58.74 52.53 52.23 57.68 17 70.68 59.01 64.85 5 59.12 54.69 56.91 20 58.34 57.63 57.91 15 11 17 Noida 59.33 56.17 56.57 58.10 78.52 57.98 57.34 60.78 11 47.05 53.95 50.50 49 63.83 79.19 71.51 3 58.12 58.29 58.22 13 12 12 Surat 58.85 56.73 57.55 53.87 51.15 60.50 57.92 56.29 27 64.10 61.52 62.81 8 62.33 53.23 57.78 19 58.18 57.55 57.80 16 13 9 Nagpur 58.48 56.83 50.05 63.91 55.99 59.56 58.91 57.54 18 59.48 58.87 59.17 10 66.57 58.66 62.62 7 48.98 58.56 54.73 36 14 16 Kochi 58.06 58.45 61.57 47.85 53.85 61.61 64.51 57.97 16 53.63 59.61 56.62 24 61.73 58.75 60.24 13 61.41 56.02 58.18 14 15 11 Chandigarh 58.01 60.90 56.89 61.68 61.38 60.94 65.64 61.24 8 43.46 67.79 55.63 12 54.35 52.89 53.62 33 66.56 57.52 61.14 7 16 24 Vadodara 57.38 57.12 58.95 59.20 49.75 57.66 58.28 56.83 22 58.98 55.51 57.25 17 62.43 54.18 58.31 17 57.57 57.44 57.49 17 17 29 Thiruvananthapuram 57.31 60.59 60.61 44.07 56.05 61.56 61.56 57.41 19 54.74 59.26 57.00 21 62.37 55.82 59.09 15 56.30 55.55 55.85 30 18 38 Nashik 57.14 57.98 54.85 50.11 50.77 53.06 51.90 53.11 42 68.96 57.86 63.41 7 53.41 56.29 54.85 25 53.68 57.65 56.06 28 19 32 Rajkot 57.07 55.88 55.93 56.87 51.33 60.02 58.33 56.39 25 56.63 59.01 57.82 15 62.25 53.31 57.78 18 58.18 55.00 56.27 27 20 14 Indore 57.04 63.27 57.09 69.14 62.62 59.29 54.16 60.93 9 53.18 52.55 52.87 34 52.48 56.44 54.46 27 61.13 59.36 60.06 10 21 33 Kozhikode 56.62 48.75 59.20 46.45 54.41 61.48 64.76 55.84 30 52.89 58.84 55.86 26 60.81 62.79 61.80 10 50.96 55.61 53.75 42 22 15 Coimbatore 56.51 53.52 60.10 57.90 54.09 63.38 60.93 58.32 14 53.90 48.95 51.42 43 61.57 61.53 61.55 11 56.34 56.41 56.38 25 23 28 Lucknow 56.17 60.78 51.54 55.52 59.70 57.19 47.81 55.42 34 59.40 57.39 58.39 13 56.07 51.66 53.87 30 57.61 55.39 56.28 26 24 36 Mysore 55.57 51.83 60.86 55.95 57.60 56.25 58.53 56.84 21 54.07 51.31 52.69 35 54.88 52.60 53.74 31 62.62 57.95 59.81 12 25 18 Goa 55.51 49.74 61.19 52.85 56.18 58.51 63.05 56.92 20 44.85 66.81 55.83 27 49.64 53.98 51.81 40 55.72 57.23 56.63 21 26 41 Visakhapatnam 55.48 62.06 58.77 54.31 52.29 53.35 59.86 56.77 23 59.78 54.26 57.02 20 50.52 53.22 51.87 39 56.28 53.93 54.87 34 27 20 Kanpur 55.48 55.37 56.44 61.15 58.73 56.05 49.60 56.22 28 59.34 50.46 54.90 31 56.29 52.34 54.32 28 55.64 56.92 56.41 24 28 27 Bhopal 55.45 59.22 58.07 65.23 65.95 52.81 56.57 59.64 12 49.09 54.18 51.64 42 51.29 54.53 52.91 34 56.01 58.35 57.41 18 29 25 Madurai 55.44 48.43 58.05 50.91 50.99 58.97 60.93 54.71 37 53.08 52.17 52.62 36 61.09 60.65 60.87 12 54.59 55.82 55.33 32 30 22 Ludhiana 55.35 59.04 54.90 55.17 51.49 55.45 51.94 54.66 38 55.15 58.82 56.99 22 58.77 53.91 56.34 21 48.61 55.80 52.93 47 31 39 Vijayawada 55.32 51.57 56.40 55.30 54.39 53.86 61.77 55.55 32 61.52 54.31 57.92 14 50.52 53.72 52.12 36 56.28 52.98 54.30 41 32 26 Agra 55.12 53.21 56.15 56.26 54.16 58.51 48.75 54.51 39 60.34 53.94 57.14 18 56.29 51.09 53.69 32 52.97 55.39 54.42 37 33 47 Patna 54.87 57.02 57.92 54.31 57.66 43.49 47.35 52.96 44 67.23 50.97 59.10 11 48.97 51.69 50.33 45 54.49 56.92 55.95 29 34 46 Allahabad 54.62 50.56 55.37 52.98 48.60 59.39 47.74 52.44 46 70.44 48.24 59.34 9 49.53 52.46 51.00 42 52.97 55.39 54.42 38 35 35 Bhubaneswar 54.59 59.72 51.03 65.78 53.92 50.22 54.49 55.86 29 50.13 52.16 51.14 47 58.98 52.02 55.50 24 55.72 57.76 56.95 20 36 43 Amritsar 54.46 56.13 55.41 53.80 51.47 53.07 49.89 53.29 41 50.99 61.16 56.07 25 58.64 53.12 55.88 22 48.61 54.88 52.37 48 37 45 Meerut 54.06 51.09 55.69 53.32 52.30 53.79 50.26 52.74 45 55.55 54.73 55.14 30 56.02 52.11 54.07 29 52.97 55.39 54.42 39 38 23 Varanasi 53.91 53.52 55.09 54.85 50.19 55.77 49.08 53.08 43 57.22 50.10 53.66 32 56.33 52.89 54.61 26 52.97 56.02 54.80 35 39 50 Puducherry 53.84 50.73 57.31 47.63 62.11 56.65 58.50 55.49 33 44.91 57.84 51.37 44 59.37 51.88 55.63 23 47.86 56.86 53.26 46 40 34 Guwahati 53.65 60.89 58.37 53.40 72.27 47.00 57.85 58.30 15 44.60 55.62 50.11 50 48.32 55.71 52.02 38 47.86 57.47 53.63 44 41 49 Asansol 53.63 57.11 57.13 59.28 49.33 53.55 52.64 54.84 36 55.20 55.85 55.52 29 49.25 51.97 50.61 44 44.33 57.13 52.01 49 42 37 Jammu 53.62 54.21 57.52 52.20 64.19 48.63 56.79 55.59 31 47.01 57.11 52.06 39 47.81 52.48 50.15 46 55.72 56.97 56.47 23 43 19 Shimla 53.59 56.23 57.38 61.03 54.43 47.77 63.69 56.76 24 43.80 58.34 51.07 48 52.03 53.04 52.53 35 47.86 57.51 53.65 43 44 31 Dehradun 53.58 51.25 52.13 52.52 55.97 54.97 53.83 53.45 40 47.28 58.78 53.03 33 50.84 52.62 51.73 41 55.72 56.97 56.47 22 45 40 Srinagar 53.09 56.14 60.30 52.20 59.56 48.62 61.32 56.36 26 45.76 57.66 51.71 40 47.82 52.14 49.98 47 47.86 57.07 53.38 45 46 44 Jabalpur 52.72 47.85 50.36 63.61 60.74 50.98 56.76 55.05 35 50.61 52.00 51.31 45 51.03 53.15 52.09 37 49.48 53.66 51.99 50 47 48 Ranchi 51.97 51.87 46.97 49.05 57.59 49.91 49.11 50.75 47 53.56 51.50 52.53 37 48.02 51.56 49.79 50 51.98 57.28 55.16 33 48 30 Faridabad 51.66 54.30 16.82 60.02 57.68 52.23 52.35 48.90 49 46.86 57.90 52.38 38 49.71 51.81 50.76 43 56.50 55.00 55.60 31 49 42 Jamshedpur 51.66 45.97 52.28 45.92 54.38 49.75 50.15 49.74 48 49.99 52.40 51.19 46 48.08 51.60 49.84 48 56.73 57.24 57.04 19 50 21 Dhanbad 50.97 48.50 51.74 43.52 49.18 49.88 49.91 48.79 50 51.62 51.75 51.69 41 48.03 51.60 49.82 49 50.52 56.89 54.34 40For methodology, see page 43 Source: Institute For Competitiveness 19 DECEMBER 2011 44 BUSINESSWORLD Ins0tute  for  Compe00veness,  India   19 DECEMBER 2011 45 BUSINESSWORLD 29  
  • Literacy  Rates  versus  GDP   16   India   All   14   Bihar   All  India  Average  GDP  growth  rate  (CAGR  2006-­‐2010)   77.12%   Chagsgarh   12   Orissa   10   All  India  Average   Haryana   7.14%   Delhi   Gujarat   Andhra  Pradesh   Kerala   Ukarakhand   8   Jharkhand   Punjab   Arunachal  Pradesh   Rajasthan   Karnataka   Sikkim   Maharashtra   Tamil  Nadu   Meghalaya   West  Bengal   Goa   Assam   6   Nagaland   Himachal  Pradesh   Manipur   Ukar  Pradesh   Tripura   Mizoram   Jammu  &  Kashmir   Madhya  Pradesh   4   2   0   0   10   20   30   40   50   60   70   80   90   100   Literacy    rates  in  percentage  terms  
  • Literacy  Rates  versus  Popula0on   250000000   Ukar  Pradesh   200000000   All  India  Average   India   All   Literacy  level  of   77.12%  Popula$on   150000000   Maharashtra   Bihar   100000000   All  India  Average   West  Bengal   67232968  People/state   Andhra  Pradesh   Madhya  Pradesh   Tamil  Nadu   Rajasthan   Karnataka   Gujarat   50000000   Orissa   Jharkhand  Assam   Kerela   Punjab   Chagsgarh   Haryana   Delhi   Jammu  and  Kashmir   Ukarakhand   Himachal  Pradesh   Arunachal  Pradesh   Meghalaya  Manipur   Nagaland   Tripura   Goa   Mizoram   Sikkim   0   0   10   20   30   40   50   60   70   80   90   100   Literacy  rates  in  Percentage  terms  
  • THE ECONOMIC TIMES ON SATURDAY MUMBAI 27 NOVEMBER 2010 * CH POLICY 9 e 12 UK DL HR GJ DEBT BURDE population to grow BR INDIA 10 NL SK CG KR OR States can harness their 8 GOTR 6 MZ AR HP MG JH PJ KA RJ TN AP WB MH UP Gross debt to GDPu n a ( population to grow Gross debt 4 JK AS MP l (US dollars in billions Gross debt per MN capita (US dollars) f 2 AN Gross debt per PD working-age mPOLICIES THAT MAKE MAKE PRODUCTIVE USE OF AVAILABLE RESOURCES ARE CRITICAL 2500AR2 PRODUCTIVE USE OF AVAILABLE RESOURCES 0 person (US dollars) Source: IMF Fiscal Monitor, POLICIES THAT 0 500 1000 1500 2000 ILO Economically-Active Pop Population size in lakhs u PEOPLE POWER PEOPLE POWER States contributing to India’s GDP growth Comparison of state population growth and GDP growth b O S States contributing to India’s GDP growth national average) (GDP growth higher than (GDP growth higher than national average) GDP Population growth rate (India avg 7.99) (India avg 1.55) 14 UK HR DL CH d ind State Chandigarh Population 13.12 5.05 12 GJ BR THE EXPLOS GDP Delhi growth rate 11.86 3.11 10 AP SK CG NL SERIOUS LO B State Uttarakhand 11.8 (India avg 7.99) (India avg 1.55) 1.59 KR OR HP Haryana 11.69 1.98 Population TR KR AR MH GO u P Chandigarh 13.12 Gujarat Bihar 5.05 10.8 10.83 1.64 1.86 growth rates are HIGHER 8 MG RJ MZ li g w than national TN WB JH G Delhi 11.86 Chhattisgarh 3.11 Sikkim 9.78 9.6 1.76 1.58 average 6 PJ UP AN s d fo Uttarakhand 11.8 Nagaland 1.59 9.54 4.89 AS JK MN PD m Haryana 11.69 Himachal Pradesh 8.88 1.98 Population 1.59 4 MP t n 10.8 Andhra Pradesh1.64 9.52 growth rates h Gujarat Orissa 9.37 0.99 1.07 Population are HIGHER rates growth 2 gate net government de trillion — 44% of world Bihar 10.83 Meghalaya 1.86 8.05 1.39 — in 2015. Advanced ec Tripura 8.4 are LOWER than nationalnational 0.99 0 Prasad estimates the r Chhattisgarh Sikkim 9.78 Arunachal Pradesh 8.79 9.6 Kerala 1.76 1.58 9.55 1.27 average average 0.77 than 0 1 2 3 4 vanced economies will r 5 ther to 85% in 2015. In better. The correspondi RARINDAM Nagaland 9.54 14 Population size vs GDP growth rate 4.89 Population growth (%) er chunk of working-age people, who can among several others, that is dragging force, which are also correspondingly far contribute to the GDP and generate high- down the economic growth of relatively more productive. 26% respectively. In 20 gross domestic product I CH Himachal Pradesh 8.88 12 1.59 UK DL HR GJ er output per capita. affluent states like Maharashtra, Kar- Group 2: States with healthy GDP and In fact, the International Labour Orga- nataka and Tamil Nadu. Yet, a few states population growth rates, such as Chandi- debt. By 2015, they are account for just 14% of d nization (ILO) has stated that India will such as Bihar, Andhra Pradesh and Gu- Nadu DL: Delhi AS: Assam TN: Tamil garh, Delhi, HaryanaUttar Pradesh UP: and Bihar must fo- BR 10 NL SK CG KR OR AP share in world GDP, thei 8 AR HP GO TR MG KA RJ TN WB MH account for the highest working age pop- jarat with large populations are exhibit- cus on sectors AP: Andhra Pradesh CH: Chandigarh NL: Nagaland BR: Bihar competitive because they arepresence of where inherently To put that more graphi o Andhra Pradesh 9.52 6 0.99 MZ JH PJ MP ulation in the next 10 years, in a report re- ing high GDP growth. leased recently. In the document prepared Uttarakhand KR: Kerala UP UK: of the nal rather than borrowe RJ: Rajasthan resources orArunachal Pradesh This has two majorw natural AR: traditional skills and c Orissa 9.37 2 4 1.07 JK AS Population for the G-20 Summit held earlier this No burden on economic growth AN MN HP: Himachal Pradesh they will be ablethan for TR:Seoul, the ILO says that the HR:Sixteen states in India have a GDP growth knowledge. These states of a large work- Tripura Haryana GO: Goa to turn the availability should find ways to use m PD growth rates month in G- 20 nations will see their working age pop- higher than the national MZ: Mizoram in their favour by offering suitable MG: Meghalaya GJ: Gujarat purposes rather JK: Jammu & Kashmir or repayment. Two, the g Meghalaya 8.05 0 0 500 1.39 1000 1500 2000 2500 average. Of force Population size in lakhs are LOWER ulation between 15 and 64 years increase PD: Puducherry CG:these, ten higher than thePJ: Punjab education policies and opportunities. Set- Chattisgarh show a national av- ting the right MP: Madhya Pradesh where succeeding gene states population Tripura 8.4 0.99 by 212 million in the period 2010-2020. growth rate priorities is critical to en- lier generations will be than national Comparison of state population growth and GDP growth KA: Karnataka SK: erage, while six other statesMN: popu- hance competitiveness for this band of In- Over 64% of this increase will occur in In- Sikkim have a Manipur AN: Andaman & Nicobar Islands advanced economies. A Arunachal Pradesh 8.79 14 1.27 average dia alone! lation growth rate lower than the nation- dian states. pendency ratio — read: s 12 UK HR DL CH WB: West Bengal JH: al average. This month’s IFCIndia State Development Jharkhand OR: OrissaGroup 3: A number ofMaharashtra MH: states such as Kar- group — and clearly, the Kerala 9.55 AP 0.77 GJ BR 10 KR SK CG OR HP TR KR AR MH GO NL Barometer takes a sharp look at what pop- ulation really means to the economic Population growth, considered a bur- den to economic growth, seems to have nataka, West Bengal, Rajasthan, Tamil Nadu and Mizoram are performing only er chunk of working-age people,correlation with GDP growth (corre- slightlyothers, thataverage GDP This is graphically bro with the rise in GDP. EM a Population size vs GDP growth rate 8 RJ MZ growth of India’s states and analyses how little who can among several below India’s is dragging levels from which a force, 2007 to 201 6 TN WB MG JH PJ UP AN lation = 0.24). Large down the growth rate. growth of relatively 2010 to 2015. In contra contribute to the GDP and generate high- statessustained GDPeconomicThese states can quicklyacat- states can use their demographic situation such as Bihar, JAYEETA g more product 14 CH 4 AS JK MP MN PD to improve their competitiveness, and for instance, have showed apult themselves into Group 2 with fo- over these two periods a 12 UK DL HR GJ 2 er output per capita. hence, enhance their prosperity. growth over the decade along with states effort onMaharashtra, Kar- Average debt2: Stat affluent a cused like productivity. Group per capita g BR 0 0 In fact, the International Labour Orga- Manipur with slower TamilANadu. for enhancing com- Rising stars among states steadily rising population, whereas states Group 4: roadmap nataka and petitiveness is criticalYet, a few states rose to $29,100 in 201 $41,000 in 2015. By gr population 201 nization accepted that growth among In- population increase lower is atGDP ing states. AmongMadhya population-versus- inH NDIA as the centre of Pradesh and Gu- $48,000 per person. Th such the na- tar Pradesh and the Pradesh with garh, Delhi, f 1 2 3 4 5 such as Punjab and for poorly perform- 10 NL SK CG KR OR AP Population growth (%) It is widely (ILO) has stated that India will are showing Bihar, Andhra these, states such as Ut- AR HP dian states is skewed, with some prosper- growth rates that are than $75,900, the highest t 8 GOTR MG KA RJ MH Delhi ous states bearing the burden of working average.growth debate. With the world’s second-largest 2015.r DL: AS: Assam TN: Tamil Nadu UP: Uttar Pradesh WB CH: Chandigarh NL: Nagaland BR: Bihar AP: Andhra Pradesh account for the highestgrowth, tionalage pop- jarat with largeand growing populations must con- cus on sectors large populations are exhibit- be just $1,200 in I TN KR: Kerala UK: Uttarakhand RJ: Rajasthan AR: Arunachal Pradesh while several other lag in terms of GDP trol the rate of population growth Among advanced eco
  • the one widely seen to have a big impact on of labour that would be required by the in- Educating a large population is a challenge for Focus on higher education to leverageeconomic growth. Many small states fare wellin this regard. Kerala clearly stands out withexemplary female literacy rate (87.72%). Thestate also shows healthy school enrolment dustries the state is promoting as well as by those industries that already exist, and then focus on developing institutions that can train people who can be placed in these industries. big states. If we look at the figures for govern- ment expenditure, this is evident. Large states do not figure among the top 10 spenders per lakh population. Yet, West Bengal spends moreDEMOGRAPHIC ADVANTAGEfigures, good government expenditure and This is the key to enable people to avail of the on education, arts and culture than Tamil Naduadequate infrastructure. opportunities within their home state, instead and Maharashtra that show good enrolment fig- The fact that these states are small — both in of being forced to migrate to other states or ures. Madhya Pradesh and Uttar Pradesh spendgeographical area and population — requires metros for employment. the least per capita on education. F Ironically, these large states have the best infra- HOW INDIAN STATES PRIORITISE EDUCATION structure in the country. Uttar Pradesh has the largest number of universities (29), followed byStates need to improve Maharashtra (27), Tamil Nadu (22), Andhra Small states: Surging ahead; need focus Large states: Daunted, need to Pradesh (20), Madhya Pradesh (19), Bihar (17), leverage infrastructure High the efficiency of GDP No ofspending ongrowth universities Enrolment^ State education Female Expenditure on literacy* education# GDP Karnataka (16) and West Bengal (14). However, Female Expenditure on No of the quality of education imparted by these institu- growth universities Enrolment^ literacy* education# tions is a matter of concern. States such as Madhya Pradesh and Uttar Pradesh are neither able to ad- 14 12 c Uttarakhand 11.80 and the quality3of Himachal P at schools teaching 8.88 Meghalaya 8.05 3 1 7.62 5.71 3.17 59.63 67.42 59.61 18.72 27.61 7.31 Two performers Tamil N M’rashtra 7.03 7.85 22 27 equately fund their educational institutions, nor 4.53 4.38 64.43 retain quality faculty. Inadequate 13.85 67.03 employment opportunities for graduates further strengthen the cycle of out-migration, leaving such24.50 of states bereft 10 8 d and universities Tripura 8.40 1 3.51 64.91 17.56 their knowledge workers and lowering the moti- Most daunted by educationvation for profit-making corporations to invest in 6 Haryana 11.69 4 3.57 55.73 13.63 WB 7.49 14 2.90 59.61 14.00 these locations. This has, however, been changing U in specific cities where centres of learning, corpo- Pr GoaHE global marketplace and indeed 7.81 1 3.82 75.37 Karnataka 7.76 16 3.62 56.87 4T 28.29 14.65 rate will and attractive location factors are fuelling the world economy is changing rap- clusters of industry in specific verticals. Bangalore Delhi and these changes are impacting idly 11.86 12 4.01 74.71 20.81 Bihar 10.83 17 1.05 33.12 7.63 in Karnataka has emerged as a hub for the IT in- 2 Kerala the way we do business, earn a 8 9.55 living 3.35 87.72 16.27 Andhra P 9.52 20 1.84 50.43 12.70 dustry and so has Hyderabad in Andhra Pradesh. and grow within India as well. About Uttar Pradesh has world-class institutions like the 0 ^ Per lakh population less than 2551% of India’s population is (in ‘000) in years # State govt revenue expenditure in ` ‘000 cr Madhya P 4.70 19 Indian Institute 50.29 3.16 of Technology at Kanpur, Indian 16.91 0 aold. While this gives India a large demographic lakh population in education, sports, arts & culture higher secondary per Uttar Pradesh 5.80 29 Institute of Management at Lucknow and the Ba- 0.32 42.22 madvantage, states in India need to focus on edu- 6.53 naras Hindu University at Varanasi, but has been Hi c Source: Institute for Competitivenesscation to ensure that an educated and appropri- *% unable to develop industries around these to har- bately trained/skilled workforce is ready to tap ness the resident knowledge from these placesthe opportunities of the time. However, in- and employ the graduates. The standards of state- fecreased government spending on education level universities that attract local students must wsince 2007 notwithstanding, 142 million chil- also be simultaneously raised while local employ- lydren in India are denied primary and secondary ment opportunities are created. toReal estate sector needs FDI filleducation and a third of the nation’s population bcannot read. Clearly, with the Indian economy Low-performing states need urgent inter- ggrowing rapidly, fuelled by the rise of knowl- vention to progress eedge-intensive and hi-tech sectors like ICT, au- Some of the small and mid-sized states that do atomotives, pharmaceuticals and others, states not fare so well need specific intervention. amust ensure quality education to enable Indians Chhattisgarh, Orissa, Gujarat and Nagaland hreap the benefits of economic growth. have poor higher secondary school enrolments c In order to understand which states in India despite moderate and high GDP growth. Jhark- inT HE real estate sector is extremely capital-inten-are prioritising education, we considered fourindicators — higherits growth, to a large extent, depends sive and secondary school enrol-ment, government revenue expenditure on ed-ucation, on the of universities and low-cost funds. Tradition- number availability of women’sliteracy rates. These indicators funded projects from domes- ally, Indian developers serve as goodpointers to the condition of education in a state Ins0tute  for  Compe00veness,  India   hand, Punjab and Assamthere isGDP growth Further, have low no denying that sa rates andcomplex sector and for any project to low school enrolment. Other than Na- galand, Punjab and Gujarat, these are also the states with low female literacy. from multiple gove ances are needed agencies. And both GDP growth 33   and school enrolment. However, Rajasthan has e r to Rajasthan is on the cusp of so, coordination betw w cand impact on economic growth. and family, customer tic sources such as friends venture partners becomes extremely surprisingly high government expenditure on e
  • Data Drive1. Contribution to world populationIndia will become the most populous country inthe world, surpassing China by 2025 (%) 2011 2025 0.0 7.0 14.0 21.0 28.0 India 17.8 21.7 19.3 China 20.2 10.6 Europe 10.5 Latin America 8.6 & Caribbean 10.0 4.5 USA 5.0 Data Source: UN Projections2. Population group-wise projectionThe demographic profile raises serious concerns ofan ageing population and declining sex ratio (mn) Working population (19-59 Years) Old population (Above 60 years) Children population (0-14 Years) 0 250 500 750 1,000 673.92011 98.5 346.9 Demographic mathematics 740.32016 118.1 340.3 792.52021 143.2 336.9 832.22026 173.2 327.03. Male-female ratio across ages 3.83% annually, while the working years) of 50% in 2011. Delhi, Rajasthan, more people are moving towards notThe male-female ratio gets less skewed towards Amit Kapoor population will increase by 1.42% and Uttar Pradesh and Bihar will see the max- having children in the early years ofmales in the higher age groups I ndia will become the most populous children population will decrease by imum increment, of more than 30%, in their marriage.2011 Male (%) Female (%) country in the world surpassing Chi- 0.33% annually till 2026. their working population by 2016. Kerala As far as the sex ratio goes, Tamil Nadu -6 -3 0 3 6 na by 2025, contributing 21.7% to total The old population (>60 years) of and Tamil Nadu will experience a & Karnataka will have more women in 0-4 years -5.1 4.5 India had seen a continuous upward decline in the share of the workforce in the region by 2026, which should balance world population. The contribution of 5-9 years -5.0 4.5 trend since 2001. It is expected that the the total population in the coming 15 the declining sex ratio in the northern10-14 years -5.1 4.8 Europe to the global population will decrease slightly to 10.5% by 2025. percentage of old people in the total years. India needs to focus on improving states. The states of Punjab, Haryana15-19 years -5.3 4.920-24 years -5.2 4.7 The huge population of Indian states population will be 12.4%, at an the quality of higher education and invest and Gujarat are expected to suffer from25-29 years -4.5 4.0 gives them a big demographic advantage estimated173.1 million, in 2026. India in developing vocational training centres gender imbalances due to a decreasing30-34 years -3.9 3.6 due to a larger workforce and consumer needs to invest in providing adequate to supply a skilled workforce to the sex ratio.35-39 years -3.4 3.4 healthcare facilities for increasing ageing industry to maximise the advantage of base, which are vital for their growth. But40-44 years -3.1 3.1 population which will boost the growth of upcoming opportunities. The author is professor of Strategy45-49 years -2.8 2.7 their demographic profile also raises seri- ous concerns of an ageing population and insurance sector in the country . All the states, except Delhi and Uttar and Industrial Economics at50-54 years -2.4 2.255-59 years -1.9 1.7 declining sex ratio, which is affecting the Apart from that, India has a big demo- Pradesh, are expected to see a reduction Management Development Institute60-64 years -1.4 1.3 demographic dividend. The old age popu- graphic advantage, as nearly all the states in their population of children in the and honorary chairman at the65-69 years -1.0 1.0 lation is expected to grow highest, by had a working population (between 19-59 coming 15 years. This implies that Institute for Competitiveness70-74 years -0.7 0.875-79 years -0.5 0.6 80+ years -0.4 0.44. Ageing population of India 5. Increment in total old population 6. Increment in working population 7. Decline in children population 8. Sex ratio needs to be addressedThe proportion of the population above 60 years of The top 5 states where the old age population has Most states will see an increase in their already The number of children will decline in most states, The sex ratio in almost all the states will becomeage is increasing increased the most considerable working populations, especially Delhi although at differing rates worse by 2026 % of % of Old population in total (2011) % of working population to total (1959)-2011 % of Population (0-14) years to total Sex Ratio (2011) Sex Ratio (2026) population % Increment in potal old population % Increment in working population (2011-2026) % decline in population of 0 50 100 150 200 above 60 0 300 600 900 1,200 0 25 50 75 100 age group 0-14 (2011-2016) 0 20 40 60 80 9742001 70.68 6.9 12.3 -18 0 18 36 54 Himachal Pradesh 942 Kerala 59.9 63.32006 83.58 7.5 Delhi 51.7 35.0 893 11.2 61.3 Uttar Pradesh 2.1 Punjab 8402011 98.47 8.3 Tamil Nadu 62.0 Tamil Nadu 4.6 34.0 963 10.3 60.4 Bihar -14.6 Uttarakhand 9532016 118.09 9.3 Himachal Pradesh 59.9 Kerela 5.2 32.8 877 9.7 Madhya Pradesh Haryana20212026 143.24 173.18 10.7 12.4 Punjab 9.2 69.4 Ins0tute  for  Compe00veness,  India   West-Bengal 14.5 60.3 Rajasthan -4.4 -10.0 32.7 Delhi 34   839 866 Karnataka NE States 60.3 789 77.2 19.2 31.3 Source: Census Projections (ex Assam) Chhatisgarh Source: Census Projections -6.0
  • ttar Pradesh spend th on. Institute for Competitiveness ea no pa see Higher secondary enrolment vs GDP tio penditure on 14 Uttarakhand naeducation# Haryana Delhi 12 Bihar Gujarat lia Sikkim w 13.85 10 Nagaland Ch’garh AP Kerala an 24.50 Andhra Orissa Meg Tripura Goa M’rashtra Himachal Pradesh cy 8 Raj WB K’taka pl Jharkhand Punjab Mizoram Tamil Nadu 6 Assam Manipur cr 14.00 Uttar J&K Madhya 14.65 4 Pradesh clu Pradesh 7.63 2 12.70 0 16.91 0 1 2 3 4 5 6 7 8 6.53 Higher secondary enrolment per lakh population (‘000) Ins0tute  for  Compe00veness,  India   36  
  • Percentage  of  factories  in  opera0on     versus  total  number  of  factories   16   Bihar   Nagaland   Tripura   Jharkhand   India   All   Manipur   14   All  India  Average  of  Percentage  of  factories  not  in  opera$on   6198  Factories/state   12   10   Kerala   Andhra  Pradesh   8   Delhi   All  India  Average  of     Orissa   Assam   4.1%  Tamil  Nadu   factories  not  in   Chhagsgarh   opera0on/state     6   average   Karnataka   Himachal  Pradesh   Maharashtra   Ukarakhand   Ukar  Pradesh   4   Jammu  &  Kashmir   Madhya  Pradesh   Rajasthan   West  Bengal   Gujarat   Punjab   Haryana   Meghalaya   2   Goa   0   0   5000   10000   15000   20000   25000   Total  number  of  factories    
  • Energy  Usage  Sta0s0cs   1800   Goa   1600  Per  Capita  Energy  Usage  (  Units)   1400   Punjab   1200   Gujarat   Delhi   1000     Tamil  Nadu   Haryana   Average  Energy   Average  Per  capita   800   Himachal   Deficit  is  9.8%   energy  usage  is  564   Maharashtra   Chagsgarh   Andhra   Karnataka   units.   600   Orissa   Ukaranchal   Jharkhand     Rajasthan   Sikkim   Meghalya   Madhya  Pradesh   Kerala   400   West  Bengal   Jammu  &  Kashmir   Ukar  Pradesh   Mizoram   200   Assam   Tripura   Arunachal   Nagaland   Manipur   Bihar   0   0.00%   5.00%   10.00%   15.00%   20.00%   25.00%   30.00%   Energy  Deficit  
  • Poverty  and  Rural  Development   1400.00   Goa   Mizoram  Per  Capita  Revenue  Expenditute  on  Rural   Arunachal   1200.00   Meghalya   Sikkim   India’s  poverty   ra0o  in  rural  is   1000.00   28.3%   Average  per   Development   800.00   capita  rural   Ukaranchal   expenditure  is   Rs  564   Haryana   Rajasthan   Nagaland   Madhya  Pradesh   Chagsgarh   600.00     Himachal   Maharashtra   Gujarat   Orissa   Manipur   Jharkhand   West  Bengal   Tripura   Assam   Andhra   Bihar   400.00   Karnataka   Jammu  &  Kashmir   Ukar  Pradesh   Tamil  Nadu   Kerala   200.00   Delhi   Punjab   0.00   0   5   10   15   20   25   30   35   40   45   50   Poverty  Ra$o  –  Number  of  people  in  the  state  of  Poverty/100  People  in  2004-­‐05  in     Rural  areas  
  • The  Compe00veness  Ranking  Assessment   Ins0tute  for  Compe00veness,  India   40  
  • State  Compe00veness  Report  2011   © Institute for Competitiveness, India