South moving ahead of North in socio-economic parameters

According to the study, the total poverty rates in the south had declined to 19% in 2009-10, much below those of the north

The widening gulf in terms of per capita income and poverty between the south and the north seems to have occurred only after 1987. By 2010, the gap in the weighted per capita income of the south and the north had grown by over 118 per cent compared to the 39 per cent gap that had existed in prior decades.

These and many other intriguing aspects are the findings of a study by Samuel Paul and Kala S Sridhar of the Public Affairs Centre (PAC) in Bangalore. According to the study, the total poverty rates in the south had declined to 19 per cent in 2009-10, much below those of the north (where it declined to 38 per cent). Presently, the migration of southerners to the north has declined while northerners are moving in large numbers to the south in search of work. There is thus a clear evidence of a significant turnaround.
 

What explains this transformation of the southern states? According to the study, from the time of Independence, the south has been ahead of the north in literacy, infant mortality, life expectancy, fertility rate and other factors that contribute to greater productivity. There is also evidence that the quality of governance and leadership was somewhat better in the south as is clear from the longer tenure of chief ministers (political stability), and better law and order (police firings, the proportion of civil police, ratio of pending cases in court). The South was also ahead in terms of technical education, tele-density, power and urbanisation. More than half of all engineering colleges in the country are in the South.

The study by the PAC has some important lessons for our leaders.

What is often reported is that per capita incomes in the south (Tamil Nadu, Karnataka, Andhra Pradesh and Kerala) have risen faster and poverty has declined faster in recent years. As of 2009-10, on an average, the weighted per capita income in the southern states [in constant (1993-94) prices] was Rs 19,531 whereas it was only Rs 8,951 in the northern states (Bihar, Madhya Pradesh, Rajasthan, Uttar Pradesh, Uttarakhand, Jharkhand and Chhattisgarh). In 2009-10, the average (weighted) poverty rate (combined for rural and urban areas) in the four southern states was 19 per cent, but 38 per cent in the northern states.

The study points out what only a few are aware only 50 years ago the South had higher rural poverty rates (66 per cent in 1960) than in the Hindi heartland (55 per cent in 1960). Young people from the south were migrating to the North in search of employment. Economic growth rates of the southern region were not very different from those of the north, though in terms of per capita income, the south was somewhat ahead of the north.

However, there is no room for complacency here. The southern region's per capita income is still low by international standards, says the study, though it's higher than that of North. Better governance facilitated these factors and enabled the state to more efficiently utilise scarce resources.

Surprisingly, what happened in the south was not merely a supply side miracle. Social movements too made people more aware of the need to demand better and more equitable governance. Strong movements in Kerala and Tamil Nadu, a century ago, began to mobilise vast segments, especially the lower castes, to push for education and job reservation in government. Governments there responded and the result was the increased spread of education, awareness, networking and entrepreneurship in the southern states. This laid the foundation for a more inclusive growth pattern. When the demand side was missing, the pressure on the supply side remained weak too.

The authors claim it is this mix of factors that led the south moving ahead. But then, why did the big surge of growth take place only from 1990? The answer, according to them, is even when the pre-conditions exist, if the policies are restrictive or unfavourable, their potential cannot be achieved. It is only after the mid-1980s that government policies began to loosen restrictions and the external environment also became more favourable. The south was more ready to take advantage of these policy changes, attract investments and new industries, and export services when liberalisation was ushered in.