Jharkhand at 25: Unfulfilled potential of tribal heartland remains

Twenty-five years after its creation, Jharkhand continues to struggle with slow economic growth, high multidimensional poverty and persistent tribal welfare gaps despite fiscal improvements

A protracted socio-political struggle for tribal identity, autonomy and welfare, led by tribal leaders like Jaipal Singh since India’s independence and later by Shibu Soren, culminated into the creation of the state of Jharkhand at the turn of the century. 

Formed on November 15, 2000 — the birth anniversary of renowned tribal leader Bhagwan Birsa Munda — by carving out the southern regions of the original Bihar state, Jharkhand became India’s 28th state, after the Bihar Reorganization Act of 2000 was tabled and passed in parliament under the then National Democratic Alliance (NDA) government, led by Atal Bihari Vajpayee. 

 Over 26 per cent of Jharkhand’s population belonged to the scheduled tribe (ST) category according to the 2011 census, with 28 of the 81 state assembly constituencies reserved for them. Jharkhand has had only one non-tribal chief minister — Raghubar Das of Bharatiya Janata Party. Incidentally, he was the only one to complete a full term of five years from 2014-19. 

Although abundant in mineral resources, the state economy has failed to keep pace with the national economic growth since its inception. In fiscal 2002 (FY02), the year after Jharkhand’s formation, the state per capita income was 62.05 per cent of the national per capita income. Over the next decade, this share increased before dropping to a sub-60 per cent share, reaching at 56.82 per cent in FY25.  

On similar lines, Jharkhand’s gross state domestic product (GSDP) as a percentage share of the Indian gross domestic product (GDP) has dipped from 1.67 per cent in FY02 to 1.56 per cent in FY25, underscoring sluggish economic growth in nominal terms.

In FY06 and FY16, Jharkhand’s real GSDP contracted, while India’s real GDP grew at a rate of 9.5 per cent and 8 per cent, respectively. After the Covid-19 pandemic, the GSDP growth rate has remained below the GDP growth rate in FY23 and FY24, before surpassing it in FY25. 

On the budgetary front, the state’s own tax revenue as a share of its revenue receipts has also seen a marginal fall from 34.03 per cent in FY02 to 30.66 per cent in FY25 (revised estimates). The FY26 budget estimates project a further decline in such share, signifying Jharkhand’s dependence on devolution, grants-in-aid from the union government and other avenues for its revenue receipts. 

The capital outlay, as a percentage of total expenditure and GSDP, has largely remained constant with occasional ups and downs. Barring the pandemic year of FY21, Jharkhand’s outstanding liabilities as a percentage of GSDP has hovered around 27-29 per cent in the past decade. 

On a positive note, Jharkhand’s fiscal performance has improved considerably. In FY02 and FY06, Jharkhand’s fiscal deficit was 4.68 per cent and 8.08 per cent of the state GSDP, which came down to 5.58 per cent in FY16. After the pandemic, the fiscal deficit has narrowed down to 1.4 per cent in FY24 and 2.3 per cent in FY25 (revised estimates). In the recent years, Jharkhand has enjoyed a revenue surplus, reaching 2.4 per cent of GSDP in FY24. 

Further, Jharkhand is one of the laggards in socio-economic indicators too. Jharkhand had the highest share of population being multidimensionally poor, behind Bihar, at 28.81 per cent in 2019-21 — nearly double of the national level. The numbers were even starker in 2015-16 with Jharkhand’s multidimensional poverty rate at 42.1 per cent. 

Every district of Jharkhand with three to five ST-reserved assembly constituencies, except the district of Ranchi (Jharkhand’s capital city), had a higher multidimensional poverty rate during 2019-21 than the state average. This is precisely two-thirds of tribal districts that had higher multidimensional poverty than average in the state during 2019-21. 

The socio-economic caste census of 2011 showed that only 7 per cent of tribal households in Jharkhand had a member earning more than ₹10,000 a month that year. Further, there were around 13 per cent of tribal households with members owning vehicles or fishing boats. Only around 5 per cent of households had members paying income tax in 2011, indicating the low earnings of the people or their dependence on agriculture or forestry for livelihood.   

The unemployment rate for Jharkhand in 2023-24 (July-June) was just 1.3 per cent, well below the national average of 3.2 per cent and the all-India unemployment rate for STs (1.9 per cent). Meanwhile, both male and female literacy rates of Jharkhand were below the national average in 2023-24. 

As Jharkhand celebrates its silver jubilee this year, it is still a long way away from ensuring the welfare of its citizens in social and economic parameters, especially the tribals, whose identity and autonomy was part of the state’s founding struggle.