Understanding India’s Regional Economic Diversity

Shruti Rajagopalan does a podcast with Poornima Dore of Tata Trusts who has written this recent book: Regional Economic Diversity: Lessons from an Emergent India.

In this episode, Shruti speaks with Poornima Dore about using regions rather than states as the unit of analysis, the importance of the construction sector, diversification, balanced regional development planning and much more. Dore is the director of analytics, insights and impact at Tata Trusts. She teaches at some of India’s premier management and technical institutes and is also an active musician. Her research covers macro-regional growth, smart cities and local economy insights. She co-authored “Regional Economic Diversity: Lessons from an Emergent India,” a comprehensive study at the National Sample Survey regional level that quantifies regional output and talks about what kind of diversification can help India.

One needs to break down geographical unit of analysis as much as possible to get a sense of Indian economy:

RAJAGOPALAN: In India, for all policy matters, we usually use the state as the unit of analysis or the unit of policymaking. But in India, even states are too large. Can you just walk us through what is left uncaptured when we think about the state as a unit and don’t delve deeper into specific regions within each state?

DORE: I also realized that if we take a step back, a lot of the narrative for many of these things is a country narrative. How are we doing in terms of GDP? Where are we on our SDG goals? How are we performing when it comes to COP? There is this large country-level narrative, not just in India, but even globally. Whether it’s a comparison or whether it’s even stand-alone, we talk country. And at best, as you said, we go to state. In India, we’re talking about Maharashtra. We are showcasing Andhra Pradesh or Telangana at Davos.

While all of that is very important, the fact is that each of our states itself are so huge, and by virtue of our population size and population density, there is just so much happening within each state that we are in danger of missing the wood for the trees when we are talking at that level of aggregation. What I have increasingly found in the course of the book, in the course of travel, is that each of these states is like a collection of subregions. That’s one of the arguments I try to make through the book, is that we need to look at regions that are contiguous, that are similar in nature, and often that is happening at a substate level.

That level of granularity, at least, is going to be important whether we are thinking about it as business leaders or investors or development practitioners or government, because that unit has so much happening. For example, one of the things that I tried to do was to look at output or value-added, regional value-added, and most of our metrics stop at states. We have state-level GDP that we’ve been reporting for so many years. In recent times, some amount of district GDP numbers have started coming up, but we don’t capture it for all states and at that same frequency.

If I have to say something at a substate level, I actually had to construct an indicator of regional value-added and then compare. The hypothesis was this: that probably we are going to find that at a state level, we have increased in terms of our output in absolute terms, but in relative terms, probably the narrative is similar. If you go at the regional level, the relative narrative has changed so much.

There are some regions that, say, in 2004 or ’05 were not in the top 10 at all, and suddenly, for example, southern Gujarat is at No. 2 now. There is that variation that gets masked when we are talking at state level. Part of the effort of the book was to uncover some of this and unpack it, so that we are all talking a little more about the region and thinking about it more, both from a policy or a decision-making standpoint.

The entire podcast is full of insights. Look forward to reading the book soon.

Thanks Shruti for the amazing podcasts and introducing us to very different sets of schoalrs and researchers.

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One Response to “Understanding India’s Regional Economic Diversity”

  1. Comprensione della diversità economica regionale dell'India - KiteKu Says:

    […] Source link […]

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