Commentary on Disparity in Economic Performance Regions of India (1998–2024)

Commentary on Disparity in Economic Performance Regions of India (1998–2024)

The economic performance of India’s South, West, and Rest of India blocks from 1998 to 2024 reveals stark regional disparities. The South (34.0% of 2024 GDP) and West (26.1%) blocks, driven by states like Karnataka, Tamil Nadu, and Maharashtra, consistently outperform All India in per capita GDP ($3947 and $4516 vs. $2937 in 2024). Their GDP/NSDP grew 15.9- and 15.0-fold, respectively, compared to Rest of India’s 6.0-fold, reflecting rapid industrialization and IT growth. Rest of India, despite a 39.9% GDP share, lags with per capita GDP 42.4% below All India ($1693). Population growth was steady (41.3% nationally), with South and West maintaining smaller shares. CAGR data shows South and West leading in per capita growth (1998–2011: 12.27%, 12.33%; 2011–2024: 7.02%, 6.55%) against Rest of India’s slower pace. India’s economy grew 9.5-fold, but regional inequalities highlight the need for better development policies.

 

The table provides a comprehensive view of the economic performance of three regional blocks in India—South (Andhra Pradesh, Telangana, Tamil Nadu, Kerala, Puducherry, Karnataka, Goa), West (Gujarat, Maharashtra, Dadra and Nagar Haveli), and Rest of India—alongside All India aggregates for the years 1998, 2011, and 2024 (FY 2023-24). The parameters analyzed are GDP/NSDP in current USD and USD PPP, per capita GDP/NSDP in current USD and USD PPP, population, and Compound Annual Growth Rates (CAGR) for per capita GDP/NSDP over 1998–2011 and 2011–2024. Below, we discuss each block’s performance relative to All India and the changes over the 26-year period from 1998 to 2024.

Parameter

South Block

West Block

Rest of India

All India

2024

GDP/NSDP (Current USD, Billions)

1344.2

1030.7

1580.0

3954.9

GDP/NSDP (USD PPP, Billions)

5874.2

4504.2

6904.7

17283.2

Per Capita GDP/NSDP (Current USD)

3947

4516

1693

2937

Per Capita GDP/NSDP (USD PPP)

17244

19734

7399

11938

Population (Millions)

340.7

228.3

933.2

1424.2

2011

GDP/NSDP (Current USD, Billions)

496.7

418.7

908.9

1824.2

GDP/NSDP (USD PPP, Billions)

1529.8

1289.2

2799.4

5618.5

Per Capita GDP/NSDP (Current USD)

1642

1990

1113

1450

Per Capita GDP/NSDP (USD PPP)

5059

6129

3429

4467

Population (Millions)

302.5

210.4

816.5

1229.4

1998

GDP/NSDP (Current USD, Billions)

84.7

68.8

263.8

417.3

GDP/NSDP (USD PPP, Billions)

378.6

307.5

1178.9

1865.0

Per Capita GDP/NSDP (Current USD)

374

459

418

413

Per Capita GDP/NSDP (USD PPP)

1671

2052

1869

1847

Population (Millions)

226.5

149.8

631.2

1007.5

CAGR (1998–2011)

Per Capita GDP/NSDP (Current USD, %)

12.27

12.33

7.83

10.27

Per Capita GDP/NSDP (USD PPP, %)

8.87

8.83

4.79

7.01

CAGR (2011–2024)

Per Capita GDP/NSDP (Current USD, %)

7.02

6.55

3.29

5.58

Per Capita GDP/NSDP (USD PPP, %)

9.83

9.42

6.12

7.85

 

1. GDP/NSDP in Current USD

  • 2024:
    • South Block (34.0% of All India): Contributes $1344.2 billion, a significant share driven by economic powerhouses like Karnataka and Tamil Nadu. Its contribution is disproportionate to its 23.9% population share, reflecting higher productivity.
    • West Block (26.1% of All India): Accounts for $1030.7 billion, with Maharashtra’s industrial and financial hubs (e.g., Mumbai) playing a key role. It is also disproportionate to its 16.0% population share.
    • Rest of India (39.9% of All India): Contributes $1580.0 billion, the largest share, but this is expected given its 65.5% population share. Its contribution per capita is lower, indicating less economic intensity.
    • All India: $3954.9 billion, reflecting India’s rise as a global economic power.
  • 2011:
    • South (27.2%): $496.7 billion, showing a smaller but still significant share compared to 2024, with strong growth in IT and services in Karnataka and Tamil Nadu.
    • West (23.0%): $418.7 billion, driven by Maharashtra and Gujarat’s industrial base.
    • Rest of India (49.8%): $908.9 billion, a larger share than in 2024, reflecting slower growth in less industrialized states.
    • All India: $1824.2 billion, nearly half of 2024’s value due to inflation and economic expansion.
  • 1998:
    • South (20.3%): $84.7 billion, a modest share, reflecting early stages of economic liberalization.
    • West (16.5%): $68.8 billion, with Maharashtra already a key contributor.
    • Rest of India (63.2%): $263.8 billion, dominating due to its large population and less developed economic structure.
    • All India: $417.3 billion, a fraction of 2024’s economy.
  • Changes (1998–2024):
    • All blocks show substantial growth, with All India’s GDP/NSDP growing 9.5-fold. South Block’s growth is remarkable (15.9-fold), outpacing West (15.0-fold) and Rest of India (6.0-fold). This reflects the South’s rapid industrialization and IT sector growth, followed by the West’s manufacturing and financial strength. Rest of India’s slower growth highlights regional disparities, with states like Bihar and Uttar Pradesh lagging.

2. GDP/NSDP in USD PPP

  • 2024:
    • South (34.0%): $5874.2 billion, mirroring its current USD share, boosted by high productivity in states like Goa and Karnataka.
    • West (26.1%): $4504.2 billion, reflecting strong purchasing power in Maharashtra and Gujarat.
    • Rest of India (39.9%): $6904.7 billion, the largest share but lower per capita due to population size.
    • All India: $17283.2 billion, showcasing India’s global economic weight in PPP terms.
  • 2011:
    • South (27.2%): $1529.8 billion, a strong contributor relative to its population.
    • West (23.0%): $1289.2 billion, competitive with South.
    • Rest of India (49.8%): $2799.4 billion, a larger share than in 2024.
    • All India: $5618.5 billion, about one-third of 2024’s value.
  • 1998:
    • South (20.3%): $378.6 billion, a smaller share reflecting early economic development.
    • West (16.5%): $307.5 billion, with Maharashtra leading.
    • Rest of India (63.2%): $1178.9 billion, dominant due to population.
    • All India: $1865.0 billion, a modest base.
  • Changes (1998–2024):
    • PPP GDP/NSDP mirrors current USD trends, with All India growing 9.3-fold. South (15.5-fold) and West (14.6-fold) grow faster than Rest of India (5.9-fold), driven by higher productivity and global integration. The PPP growth amplifies nominal gains due to favorable conversion ratios.

3. Per Capita GDP/NSDP in Current USD

  • 2024:
    • South ($3947): 34.4% above All India ($2937), reflecting wealthier states like Goa and Karnataka.
    • West ($4516): 53.7% above All India, driven by Maharashtra’s economic hubs.
    • Rest of India ($1693): 42.4% below All India, indicating lower productivity.
    • All India: $2937, a significant rise from earlier years.
  • 2011:
    • South ($1642): 13.2% above All India ($1450), showing early signs of outperformance.
    • West ($1990): 37.2% above All India, a strong lead.
    • Rest of India ($1113): 23.2% below All India, a consistent lag.
    • All India: $1450, reflecting moderate growth.
  • 1998:
    • South ($374): Slightly below All India ($413), as southern states were still developing.
    • West ($459): 11.1% above All India, an early lead.
    • Rest of India ($418): Nearly equal to All India, reflecting a more uniform economic landscape.
    • All India: $413, a low base.
  • Changes (1998–2024):
    • All India’s per capita GDP/NSDP grew 7.1-fold. South (10.6-fold) and West (9.8-fold) outpaced Rest of India (4.1-fold), widening regional disparities. South and West’s higher growth reflects urbanization, IT, and industrial development, while Rest of India’s slower growth points to agrarian and less industrialized economies.

4. Per Capita GDP/NSDP in USD PPP

  • 2024:
    • South ($17244): 44.4% above All India ($11938), a strong performance.
    • West ($19734): 65.3% above All India, the highest among blocks.
    • Rest of India ($7399): 38.0% below All India, highlighting economic gaps.
    • All India: $11938, reflecting improved living standards.
  • 2011:
    • South ($5059): 13.2% above All India ($4467), consistent with current USD trends.
    • West ($6129): 37.2% above All India, a significant lead.
    • Rest of India ($3429): 23.2% below All India, a persistent gap.
    • All India: $4467, a moderate base.
  • 1998:
    • South ($1671): Slightly below All India ($1847), as in current USD.
    • West ($2052): 11.1% above All India, an early advantage.
    • Rest of India ($1869): Nearly equal to All India, reflecting less disparity.
    • All India: $1847, a low starting point.
  • Changes (1998–2024):
    • All India’s PPP per capita grew 6.5-fold. South (10.3-fold) and West (9.6-fold) again outpaced Rest of India (4.0-fold), mirroring current USD trends but amplified by PPP ratios, which better reflect purchasing power improvements in wealthier states.

5. Population

  • 2024:
    • South (340.7M, 23.9%): A moderate share, growing slowly due to lower fertility rates.
    • West (228.3M, 16.0%): Smaller share, stable growth.
    • Rest of India (933.2M, 65.5%): Dominant due to populous states like Uttar Pradesh and Bihar.
    • All India: 1424.2 million, a 41.3% increase from 1998.
  • 2011:
    • South (302.5M, 24.6%): Slightly higher share than 2024.
    • West (210.4M, 17.1%): Consistent with 2024 trends.
    • Rest of India (816.5M, 66.4%): Large but slightly smaller share than 2024.
    • All India: 1229.4 million, a 22.0% increase from 1998.
  • 1998:
    • South (226.5M, 22.5%): Smaller share, pre-Telangana bifurcation.
    • West (149.8M, 14.9%): Smaller but growing.
    • Rest of India (631.2M, 62.6%): Large share, less dominant than later years.
    • All India: 1007.5 million, a lower base.
  • Changes (1998–2024):
    • All India’s population grew by 41.3%. South (50.4%) and West (52.4%) grew faster than Rest of India (47.8%), but their lower fertility rates kept population shares stable. Rest of India’s large population continues to drive its economic weight despite lower per capita metrics.

6. CAGR in Per Capita GDP/NSDP

  • 1998–2011:
    • Current USD:
      • South (12.27%) and West (12.33%): Outperformed All India (10.27%), driven by rapid liberalization and industrial growth.
      • Rest of India (7.83%): Lagged, reflecting slower development in agrarian states.
      • All India: 10.27%, a strong national growth phase.
    • USD PPP:
      • South (8.87%) and West (8.83%): Strong but lower than current USD due to stable PPP ratios.
      • Rest of India (4.79%): Significantly lower, highlighting regional gaps.
      • All India: 7.01%, robust but below South and West.
  • 2011–2024:
    • Current USD:
      • South (7.02%) and West (6.55%): Continued to outperform All India (5.58%), though growth slowed due to global economic challenges and rupee depreciation.
      • Rest of India (3.29%): Much slower, widening disparities.
      • All India: 5.58%, reflecting steady but slower growth.
    • USD PPP:
      • South (9.83%) and West (9.42%): Higher than current USD, driven by favorable PPP ratio changes.
      • Rest of India (6.12%): Improved but still lagging.
      • All India: 7.85%, strong growth in purchasing power terms.
  • Changes (1998–2024):
    • The 1998–2011 period saw faster growth across all blocks, especially in South and West, due to post-liberalization reforms. The 2011–2024 period shows slower nominal growth but stronger PPP growth, reflecting currency dynamics and cost-of-living adjustments. Rest of India consistently lags, underscoring persistent regional inequalities.

Key Observations

  • South and West Outperformance: Both blocks consistently outperform All India in per capita metrics, with West leading in 2024 ($4516 vs. $3947 in current USD). Their high growth rates (1998–2024: South 10.6-fold, West 9.8-fold in per capita USD) reflect strong industrial, IT, and service sectors.
  • Rest of India’s Lag: Despite its large GDP/NSDP share (39.9% in 2024), Rest of India’s per capita metrics are 38–42% below All India, with slower growth (4.1-fold in per capita USD). This highlights challenges in less developed states.
  • All India Growth: India’s economy grew 9.5-fold in current USD and 7.1-fold in per capita USD, but regional disparities persist, with South and West driving disproportionate growth.
  • 1998–2024 Transformation: The South and West blocks’ shares of GDP/NSDP rose significantly (South: 20.3% to 34.0%; West: 16.5% to 26.1%), while Rest of India’s share fell (63.2% to 39.9%), reflecting a shift toward southern and western economic dominance.

Conclusion

The South and West blocks have emerged as India’s economic engines, leveraging industrialization, urbanization, and global integration to achieve higher per capita incomes and faster growth. The Rest of India, while significant in aggregate due to its population, lags in per capita metrics, underscoring the need for targeted development policies. Over 1998–2024, India’s economic rise is evident, but addressing regional disparities remains a critical challenge for balanced growth.

The Rest of India, comprising states like Uttar Pradesh, Bihar, and others outside the South and West blocks, has lagged economically behind the South and West from 1998 to 2024, as evidenced by its lower per capita GDP/NSDP ($1693 vs. $3947 South, $4516 West in 2024) and slower growth (4.1-fold vs. 10.6-fold South, 9.8-fold West in per capita current USD). Below are the key reasons for this lag, based on the data and broader economic context:

1. Economic Structure and Industrialization

  • Agrarian Dominance: States in Rest of India, such as Bihar, Uttar Pradesh, and Madhya Pradesh, rely heavily on agriculture, which has lower productivity and value addition compared to the industrial and service-driven economies of South (e.g., IT in Karnataka) and West (e.g., manufacturing in Gujarat). In 2024, Rest of India’s GDP/NSDP share (39.9%) is large due to population, but its per capita output is 42.4% below the national average.
  • Limited Industrial Base: Unlike Maharashtra’s financial hubs or Tamil Nadu’s manufacturing centers, many Rest of India states lack diversified industrial ecosystems, hindering economic growth.

2. Urbanization and Infrastructure

  • Lower Urbanization: Rest of India has lower urbanization rates (e.g., Bihar: ~11% urban in 2011 vs. Tamil Nadu: ~48%). Urban centers drive economic activity, and South/West states benefit from cities like Bangalore, Mumbai, and Chennai.
  • Infrastructure Gaps: Inadequate transport, power, and digital infrastructure in states like Uttar Pradesh and Bihar limits investment and productivity. South and West have better-developed ports, roads, and IT infrastructure, boosting their GDP growth (15.9- and 15.0-fold vs. 6.0-fold for Rest of India).

3. Human Capital and Education

  • Lower Literacy and Skills: Rest of India states, particularly Bihar (61.8% literacy in 2011) and Uttar Pradesh (67.7%), lag behind South (e.g., Kerala: 94%) and West (e.g., Maharashtra: 82.3%). Lower education levels limit workforce productivity and access to high-skill jobs in IT and services, key drivers in South/West.
  • Health and Demographics: Higher fertility rates and poorer health outcomes in Rest of India (e.g., Bihar’s total fertility rate: ~3.4 in 2011) contribute to population pressure (65.5% of India’s 2024 population), diluting per capita gains compared to South (23.9%) and West (16.0%).

4. Policy and Investment

  • Investment Disparities: South and West states attract more foreign direct investment (FDI) due to business-friendly policies and established industrial clusters. For example, Karnataka and Maharashtra accounted for significant FDI inflows, while Bihar and Uttar Pradesh struggle with bureaucratic hurdles and lower investor confidence.
  • State-Level Reforms: South and West states implemented economic reforms earlier, fostering private sector growth. Rest of India states have been slower to adopt reforms, impacting their economic dynamism.

5. Historical and Institutional Factors

  • Historical Lag: In 1998, Rest of India’s per capita GDP ($418) was near the national average ($413), but its growth was slower (CAGR 1998–2011: 7.83%; 2011–2024: 3.29%) compared to South (12.27%, 7.02%) and West (12.33%, 6.55%). This reflects a historical lack of industrial momentum.
  • Governance Challenges: Corruption, political instability, and weaker governance in some Rest of India states have hindered development compared to the more stable and reform-oriented administrations in South and West.

Conclusion

The Rest of India’s economic lag stems from its agrarian focus, limited urbanization, weaker human capital, lower investment, and historical/governance challenges. South and West blocks, with diversified economies, better infrastructure, and skilled workforces, have capitalized on liberalization and global integration. Addressing these gaps requires targeted investments in education, infrastructure, and industrial diversification to bridge the growing disparity.

 

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