Topic Of The Day:-“The Gap Within: On Inter-State Disparities”
We Need To Address The Issue Of Slower Growth In Our Poorer States
India, as the world’s fastest-growing major economy, may well be catching up with the richer economies in terms of absolute size. But economic convergence within the country remains a distant dream as poorer States continue to lag behind the richer ones in economic growth. A report from the rating agency Crisil found that the inter-State disparities have widened in recent years even as the larger economy grows in size and influence on the global stage. Many low-income States have experienced isolated years of strong economic growth above the national average. Bihar, in fact, was the fastest-growing State this year among the 17 non-special category Statesevaluated by the report. But they have still failed to bridge their widening gap with the richer States since they have simply not been able to maintain a healthy growth rate over a sustainedperiod of time. Richer States like Gujarat, for instance, have been able to achieve sustained economic growth and increase their gap over other States. The report found that there was a slight, albeit weak, convergence in the per capita income levels of the poorer and richer States between fiscal years 2008 and 2013, but the trend was reversed in the subsequent years. Between fiscal years 2013 and 2018, there has been a significant divergence rather than convergence in the economic fortunes of the poorer and richer States. This was the result of richer States continuing to show strong growth while the poorer States fell behind. In fact, only two of the eight low-income States in 2013 had growth rates above the national average over the next five years. On the other hand, six out of the nine high-income States recorded rates higher than the national average during 2013-18.
What explains the divergence in the economic fortunes of States? The report suggests that, at least during fiscal year 2018, government spending may be what boosted gross domestic product growth in the top-performing States, particularly in Bihar and Andhra Pradesh whose double-digit growth rates have come along with a burgeoning fiscal deficit. The impact of greater spending was that 10 of the 17 States breached the 3% fiscal deficit limit set by the Fiscal Responsibility and Budget Management Act. Many other big-spending States, however, have not managed to achieve growth above the national average. Punjab and Kerala, which are at the bottom of the growth table, are ranked as profligates by the report. This suggests that the size of public spending is probably not what differentiates the richer States from the poorer ones. Other variables like the strength of State-level institutions, as gauged by their ability to uphold the rule of law and create a free, competitive marketplace for businesses to thrive, and the quality of public spending could becrucial determinants of the long-run growth prospects of States.
MEANINGS AND WORDS
1) convergence
Meaning : the process or state of converging.
Synonyms : mingle
Antonyms : disperse
Example : “the convergence of lines in the distance”
2) disparities
Meaning : a great difference.
Synonyms : distinction
Antonyms : agreement
Example : “economic disparities between different regions of the country”
3) evaluated
Meaning : form an idea of the amount, number, or value of; assess.
Synonyms : calculate
Antonyms : neglect
Example : “the study will assist in evaluating the impact of recent changes”
4) sustained
Meaning : continuing for an extended period or without interruption.
Synonyms : constant
Antonyms : ending
Example : “several years of sustained economic growth”
5) instance
Meaning : an example or single occurrence of something.
Synonyms : precedent
Antonyms : hide
Example : “a serious instance of corruption”
6) subsequent
Meaning : coming after something in time; following.
Synonyms : ensuing
Antonyms : anteceent
Example : “the theory was developed subsequent to the earthquake of 1906″
7) divergence
Meaning : the process or state of diverging.
Synonyms : disparity
Antonyms : sameness
Example : “the divergence between primates and other groups”
8) rather
Meaning : used to indicate one’s preference in a particular matter.
Synonyms : relatively
Antonyms : extremely
Example : “would you like some wine or would you rather stick to sherry?”
9) burgeoning
Meaning : begin to grow or increase rapidly; flourish.
Synonyms : sprout
Antonyms : decrease
Example : “manufacturers are keen to cash in on the burgeoning demand”
10) breached
Meaning : make a gap in and break through (a wall, barrier, or defence).
Synonyms : contravene
Antonyms : give
Example : “the river breached its bank”
11) deficit
Meaning : an excess of expenditure or liabilities over income or assets in a given period.
Synonyms : shortfall
Antonyms : enough
Example : “an annual operating deficit”
12) impact
Meaning : the action of one object coming forcibly into contact with another.
Synonyms : brunt
Antonyms : avoidance
Example : “there was the sound of a third impact”
13) profligates
Meaning : a licentious, dissolute person.
Synonyms : operator
Antonyms : uprights
Example : “he is a drunkard and a profligate”
14) gauged
Meaning : estimate or determine the amount, level, or volume of.
Synonyms : degenerate
Antonyms : innocents
Example : “astronomers can gauge the star’s intrinsic brightness”
15) thrive
Meaning : (of a child, animal, or plant) grow or develop well or vigorously.
Synonyms : develop
Antonyms : decrease
Example : “the new baby thrived”
16) crucial
Meaning : decisive or critical, especially in the success or failure of something.
Synonyms : decisive
Antonyms : inessential
Example : “negotiations were at a crucial stage”
17) determinants
Meaning : a factor which decisively affects the nature or outcome of something.
Synonyms : impetus
Antonyms : hindrance
Example : “pure force of will was the main determinant of his success”
