Purvodaya for eastern revival

The Budget's plan for eastern India's growth is crucial, but this isn't going to be a sprint-it's a marathon

From the solar chakras of Konark to the tea-scented breezes of Darjeeling, from Nalanda's phoenix-like resurgence to the Brahmaputra’s life-giving pulse, eastern India ascends not as a lone star but as the lodestar in India’s competitiveness odyssey.

Budget 2024 amplifies this strategic pivot through the Purvodaya initiative, a plan for the all-round development of the eastern part of India. It recognises that unlocking the East’s diverse factor endowments — from Odisha’s mineral wealth to Andhra’s coastal corridors, from Bihar’s agricultural heartland to Jharkhand’s industrial potential, and from West Bengal’s dynamic services sector to its strategic trade gateways — is paramount for charting India’s course towards becoming a developed country by 2047.

Eastern states collectively hold a substantial portion of India’s natural resources, including around 80 per cent of the country’s iron ore and 100 per cent of its coking coal, along with significant reserves of chromite, bauxite, and dolomite. Their strategic advantages include major ports such as Paradip, Haldia, Vizag, and Kolkata, which account for over 30 per cent of India’s major port capacity, as well as three major national waterways and robust road and rail connectivity to most parts of the country. Despite these strengths, these states contributed only around 17.26 per cent to India’s gross domestic product (GDP) in 2022–23. This is because these states significantly lag behind other Indian states in both economic development and social progress.

The combined population of these states is approximately 350 million, representing nearly 27 per cent of India’s total population. Despite this, the GDP per capita in these states has shown minimal growth over the past 11 years, with a compound annual growth rate (CAGR) below the national average, except for Odisha and Andhra Pradesh, which have achieved 5.5 per cent and 6 per cent growth, respectively. The GDP per capita in these states is lower than India’s average per capita level.

Indian states, with their large population and diverse economies, often surpass many countries in terms of size. When viewed through the lens of these countries, the economic disparities among the eastern states become strikingly clear. For instance, let us look at Bihar. Not only does it have the lowest per capita income in India, but it also ranks among the lowest globally, even below countries like Somalia and Sudan. On the other hand, while Japan—a country with a similar population size —boasts a per capita income around $33,000, Bihar’s per capita income is around $420 in exchange rate terms. Similarly, West Bengal faces its own economic challenges. With a GDP per capita of approximately $967, West Bengal’s GDP per capita level is markedly lower compared to countries with similar population sizes, such as Vietnam, which has a GDP per capita of around $4,623.

When examining these states through a microscopic lens, the stagnation over the past 11 years becomes evident. While direct comparisons between states and countries have limitations because they are at different stages of development, they highlight the need for targeted development strategies. These figures not only highlight limited economic advancement but also underscore persistent socio-economic challenges. The lower social progress rankings for these and other eastern states further illustrate the need for focused development strategies. Bridging these gaps is essential for enabling these regions to contribute more effectively to India's overall prosperity.

Overall, despite their vast mineral wealth and locational advantages, the eastern states remain economically underdeveloped compared to other regions in India. Addressing these disparities is critical to achieving balanced national development and fully realising these states’ economic potential. The Purvodaya plan, as outlined in the 2024 Budget, aims to tackle these critical issues by focusing on human resource development, infrastructure enhancement, and the creation of economic opportunities. This regional renaissance holds the promise of balancing inclusive growth with competitive advantage, orchestrating a harmonious progress that reverberates across India’s diverse economic landscape. If implemented effectively, it could serve as a transformative force, symbolising a commitment that as the sun rises in the east, so too will India’s prominence on the global stage.

As we advance towards our goal of becoming a developed economy by 2047, it is essential to extend similar efforts to the north-eastern part of the country. The Northeast, which contributes around 2.9 per cent to India’s GDP, faces unique challenges that inhibit its growth and development. These include geographical isolation, infrastructure deficits, and socio-political issues that create barriers to economic integration and development. However, the region also possesses unique strengths, such as rich natural resources, a vibrant cultural heritage, and a strategic geographical location bordering several Southeast Asian countries. These attributes offer significant opportunities for economic growth if harnessed effectively.

Advancing economic and social development in the eastern part of India is not a sprint but a marathon, demanding sustained effort and commitment from all stakeholders, particularly state governments and private players. By tackling hurdles head-on and harnessing its unique assets, the eastern part of India can be a catalyst and play a pivotal role in advancing India towards a more prosperous and equitable future.

The writers are, respectively, chair and research manager at Institute for Competitiveness