 "Shaibal Gupta")
An underdevelopment index proposed by the Raghuram Rajan panel has drawn much controversy, particularly for categorising Gujarat as less developed state. The panel's report was however, not unanimous. There is a dissent note, given by Shaibal Gupta, who is founder member-secretary of Patna-based Asian Development Research Institute. Gupta tells Indivjal Dhasmana his points of disagreement with the panel's index. He, however, does not find any political agenda behind the index. Edited interview:
Your point of difference with the panel's index was primarily on the use of monthly per capita consumption expenditure as one of the components. You rather wanted per capita income as the index. When you offered your arguments, what was the reaction of majority of members?
They thought that monthly per capita consumption expenditure will be more representative of well being of the people. My point was that since we are measuring development of state, we should use per capita income as the component. Well being of the state is better reflected through per capita income. Per capita income is taken as an indicator for this purpose by a number of institutions, including the Planning Commission and Finance Commissions. We deliberated on the issue. When they did not agree to my point, I gave a dissent note.
The index has drawn much criticism from certain quarters for keeping Gujarat so low in the ranking of development. As many as eleven states are ahead of the state in terms of development. You mentioned about Gujarat, but your table does not show the state in terms of ranking. Why?
I have made the table for only those states which have per capita income below national average. I have shown that Odisha which is the least developed state, according to the panel, has double per capita income over Bihar's. As many as five states are in between. Gujarat is one of the developed states but because of the use of monthly per capita consumption expenditure, it was clubbed in the less developed state. So these are absurd situations and should be corrected.
The panel gave some parameters based on net state domestic product. You recommended the use of gross state domestic product. What was the point of disagreement here?
As depreciation is not included in the net state domestic product, the position of developed states gets marginalised. In developed states, you have industry and lots of wear and tear is there. So if you use net state domestic product, you are not exactly evaluating the development of developed states.
Gujarat is shown as less developed state compared to even Uttarakhand? What could have been the explanation of the panel members to this?
These are some fallacy of variables. That is why I said outcome variables should be used while framing an index of this type, nationally or globally. We should not use historical or process variables like percentage of scheduled caste, scheduled tribe population. And then one cannot ignore per capita income. Conditions of poor states get increased using monthly per capita consumption expenditure. That is why you get this absurdity.
Was there any political agenda behind the Rajan committee's recommendations as media has interpreted the index that way?
I don't think so. Some of the states like Madhya Pradesh and Chattisgarh are ruled by parties which is not going to join the United Progressive Alliance Government. These are hardcore BJP states. These are ranked least developed states and will get larger devolution of funds, if proposals are accepted. My differences were purely technical.
This is the whole point of contention that Madya Pradesh and Chattisgarh, whose development model are tom-tommed by BJP has been shown in such poor light. Your take?
From per capita income point of view as well, these are the least developed states. These are really underdeveloped states. May be ranking would have changed, using my parameters. Politics was not a consideration behind the index. At least, I am not aware of that.
