Planning Commission says Maharashtra is a failed state
Maharashtra Series - 3
Planning Commission says Maharashtra is a failed state:
Compulsions of coalition politics, tug-of-war between 2 power sharing and power hungry groups and thanks to a combination of factors, primarily skewed priorities and insufficient attention to social and other infrastructure, Maharashtra has slipped even as neighbouring states like Gujarat have made rapid and spectacular progress on the economic and industrial fronts.
Once an industrial and economic powerhouse, known for its progressive social policies, Maharashtra has earned the tag of 'failed state', a dubious honour normally bestowed on states like Bihar or other BIMARU states.
An assessment of the performance of Indian states, carried out by the Planning Commission, shows that Maharashtra fared abysmally on almost all economic and social counts including social spending, power availability, fiscal health and implementation of key irrigation projects.
"Maharashtra is an example of a failed state," was the verdict of the Planning Commission, after meticulous examination of all the state's growth indices.
While its economic growth rate of 8% makes it one of the highest in India, this is counterbalanced by staggering debts of up to Rs 100,000 crore.
Development in the state has been accorded low priority, with bloated administrative expenses and debt servicing hogging a bulk of the state's economic resources, the Planning Commission observed. This has left a measly 9% for investment in plan schemes, and, in an example of gross fiscal mismanagement, the state has not even been able to spend this paltry sum.
The big story is growth in the services sector over the last decade, which now accounts for 66% of the state's GDP. In fact, it now accounts for an impressive 69% of all services in the Indian GDP.
On the other hand, the state's agricultural sector, once fairly vibrant, is faltering and now accounts for just 14% of Maharashtra's economy. Foodgrain production has dropped by an alarming 7.5% over the past decade, while the official poverty rate stands at 4.7%.
Disparities triggered by the services boom, the Commission says, could create imbalances between urban and rural areas of the state, something the administration must watch out for.
Although Maharashtra has grown at an average annual rate of about 7% in the past four years, there are huge regional disparities with the Vidarbha and Marathwada regions lagging considerably behind the rest of the state. And there is an exaggerated focus on the capital Mumbai, including much-hyped plans of turning it into another Shanghai.
Inadequate spending on infrastructure, has meant that Maharashtra's human development indicators are far from impressive, especially in parts that primarily depend on agriculture. The state still requires a whopping Rs 33,750 crore to complete 1,076 irrigation projects.
The Commission found it galling that the state, which once pioneered social welfare initiatives like the Employment Guarantee Scheme -- which is now a nationwide programme -- could, during the first 10 months of the current fiscal year, spend only 50% of its social and development sector allocations. While new schemes are being announced every so often, there is neither the will nor the administrative backing to fulfil their objectives.
On the economic front, Maharashtra, once a longstanding favourite with investors, is now lagging behind in attracting Foreign Direct Investment (FDI). Gujarat has taken the lead in FDI; even states like Andhra Pradesh and Tamil Nadu are now only marginally behind Maharashtra in this sphere.
In addition to all these negatives are the human tragedies of mounting farmer suicides and child malnutrition deaths in the state's impoverished tribal areas.
The country's top policymaking body said the state's development model needed a re-look, especially the cooperative sector, as its institutional framework was in a shambles and extension services like cooperative and credit finance were in shut-down mode.
The other major recommendation of the Commission is the need to speed up the privatisation process. According to the Commission, Maharashtra cannot afford government-sponsored projects in all sectors. It stresses accountability and delivery in publicly-financed projects if the state is serious about reaching the projected growth rate of 12% a year. The recipe for higher growth must focus, in particular, on privatisation of utilities and must be accompanied by a serious blueprint for agricultural revival, says the Commission.
Playing down the Planning Commission's indictment of his government's performance, Maharashtra Chief Minister Prithviraj Chavan says the remarks were a suggestion more than a rebuke. "They pointed out that there are certain grey areas such as power shortages, rise in cases of farmer suicides, growing poverty and quality of life in which there is scope for improvement."
The ruling Congress-NCP alliance has failed to develop Maharashtra in the last 10 years despite some key Central Ministers hailing from the state. The state has lagged behind on growth front under the present government though Union Ministers of energy and agriculture belong to Maharashtra. Despite Union Agriculture Minister Sharad Pawar hailing from Maharashtra, the state has seen large-scale farmer suicides.
So collosal is Maharashtra's failure in agriculture that it has failed to add a single acre to land under irrigation in the last 20 years and the results reflect that abysmal failure.
Planning Commission says Maharashtra is a failed state:
Compulsions of coalition politics, tug-of-war between 2 power sharing and power hungry groups and thanks to a combination of factors, primarily skewed priorities and insufficient attention to social and other infrastructure, Maharashtra has slipped even as neighbouring states like Gujarat have made rapid and spectacular progress on the economic and industrial fronts.
Once an industrial and economic powerhouse, known for its progressive social policies, Maharashtra has earned the tag of 'failed state', a dubious honour normally bestowed on states like Bihar or other BIMARU states.
An assessment of the performance of Indian states, carried out by the Planning Commission, shows that Maharashtra fared abysmally on almost all economic and social counts including social spending, power availability, fiscal health and implementation of key irrigation projects.
"Maharashtra is an example of a failed state," was the verdict of the Planning Commission, after meticulous examination of all the state's growth indices.
While its economic growth rate of 8% makes it one of the highest in India, this is counterbalanced by staggering debts of up to Rs 100,000 crore.
Development in the state has been accorded low priority, with bloated administrative expenses and debt servicing hogging a bulk of the state's economic resources, the Planning Commission observed. This has left a measly 9% for investment in plan schemes, and, in an example of gross fiscal mismanagement, the state has not even been able to spend this paltry sum.
The big story is growth in the services sector over the last decade, which now accounts for 66% of the state's GDP. In fact, it now accounts for an impressive 69% of all services in the Indian GDP.
On the other hand, the state's agricultural sector, once fairly vibrant, is faltering and now accounts for just 14% of Maharashtra's economy. Foodgrain production has dropped by an alarming 7.5% over the past decade, while the official poverty rate stands at 4.7%.
Disparities triggered by the services boom, the Commission says, could create imbalances between urban and rural areas of the state, something the administration must watch out for.
Although Maharashtra has grown at an average annual rate of about 7% in the past four years, there are huge regional disparities with the Vidarbha and Marathwada regions lagging considerably behind the rest of the state. And there is an exaggerated focus on the capital Mumbai, including much-hyped plans of turning it into another Shanghai.
Inadequate spending on infrastructure, has meant that Maharashtra's human development indicators are far from impressive, especially in parts that primarily depend on agriculture. The state still requires a whopping Rs 33,750 crore to complete 1,076 irrigation projects.
The Commission found it galling that the state, which once pioneered social welfare initiatives like the Employment Guarantee Scheme -- which is now a nationwide programme -- could, during the first 10 months of the current fiscal year, spend only 50% of its social and development sector allocations. While new schemes are being announced every so often, there is neither the will nor the administrative backing to fulfil their objectives.
On the economic front, Maharashtra, once a longstanding favourite with investors, is now lagging behind in attracting Foreign Direct Investment (FDI). Gujarat has taken the lead in FDI; even states like Andhra Pradesh and Tamil Nadu are now only marginally behind Maharashtra in this sphere.
In addition to all these negatives are the human tragedies of mounting farmer suicides and child malnutrition deaths in the state's impoverished tribal areas.
The country's top policymaking body said the state's development model needed a re-look, especially the cooperative sector, as its institutional framework was in a shambles and extension services like cooperative and credit finance were in shut-down mode.
The other major recommendation of the Commission is the need to speed up the privatisation process. According to the Commission, Maharashtra cannot afford government-sponsored projects in all sectors. It stresses accountability and delivery in publicly-financed projects if the state is serious about reaching the projected growth rate of 12% a year. The recipe for higher growth must focus, in particular, on privatisation of utilities and must be accompanied by a serious blueprint for agricultural revival, says the Commission.
Playing down the Planning Commission's indictment of his government's performance, Maharashtra Chief Minister Prithviraj Chavan says the remarks were a suggestion more than a rebuke. "They pointed out that there are certain grey areas such as power shortages, rise in cases of farmer suicides, growing poverty and quality of life in which there is scope for improvement."
The ruling Congress-NCP alliance has failed to develop Maharashtra in the last 10 years despite some key Central Ministers hailing from the state. The state has lagged behind on growth front under the present government though Union Ministers of energy and agriculture belong to Maharashtra. Despite Union Agriculture Minister Sharad Pawar hailing from Maharashtra, the state has seen large-scale farmer suicides.
So collosal is Maharashtra's failure in agriculture that it has failed to add a single acre to land under irrigation in the last 20 years and the results reflect that abysmal failure.
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