Infrastructure and India’s rich-poor gap

Infrastructure appears to be the secret sauce that separates the growth engines from the laggards in India

One of the most striking features of India’s growth trajectory has been its uneven spread, with different states at different stages of development. One big difference between poorer and richer states lies in their state of infrastructure, aMint analysis shows.

States that rank high on the Mint state infra index are also among the top states ranked according to per capita incomes (see chart). The Mint state infra index is a proprietary index of this newspaper that provides a summary measure of the level of infrastructural facilities in a state.

The Mint state infra index is a composite index based on five sub-indices that capture the spread of roads, railways, airways, power and telecom networks in a state. Higher the spread of these networks, higher will be the index value, which has been normalized to take values between 0 and 1.

The analysis is restricted to the 18 largest state economies for which comparable data is available for the past decade. The roads and railway sub-indices capture the density of roads and railway lines, respectively. The airways sub-index is based on air traffic data. The power and telecom indices are based on data on power consumption and telecom penetration.

As the chart shows, states such as Delhi and Goa, which rank high on Mint’s state infra index, are also among India’s top states when ranked according to per capita incomes. States such as Madhya Pradesh and Odisha, which rank low on Mint’s state infra index, are among India’s bottom-rung states ranked according to per capita incomes. Infrastructure appears to be the secret sauce that separates the growth engines from the laggards in India.

The roads sub-index, which measures the road density of a state, shows that Delhi has the highest road density among all states, followed by Kerala and Assam. When it comes to rail density, Delhi still tops the list, followed by West Bengal and Punjab. The airways sub-index, which measures air traffic through a state, shows that Goa leads the race, followed by Delhi and Maharashtra. The power sub-index, which captures the average power usage in a state, shows that Goa is the top state, followed by Delhi and Punjab.

Over the past decade, some of the laggard states such as Bihar and Uttar Pradesh have made impressive strides in improving infrastructural facilities but given how far they lagged behind most other states, their score on Mint’s state infra index is still far below those of the top-rung states.

Source: LM
Advertisements

#2015, #august