Mohan Guruswamy
April 30, 2004

The four southern Indian states of Andhra Pradesh, Karnataka, Kerala and Tamil Nadu after languishing behind the North and West in terms of economic growth in the 80's surged ahead in the 90's by posting a growth rate of 6.0%, ahead of the national GDP growth of 5.6%. While this higher GDP growth has given the South an aura of progress and good governance, it masks much diversity in performance. The CPAS undertook a detailed study of the progress made in the four South Indian states and analyzed data using several parameters to measure economic and social development. The results obtained were quite surprising. Contrary to generally held perceptions AP fared poorly and came out as the laggard in the South. Quite clearly Tamil Nadu has been the overall big performer, despite Kerala keeping its traditional lead in terms of human development.

Tamil Nadu has kept ahead of the national GDP growth rates for the 8th, 9th and 10th Plan periods. Andhra Pradesh's performance languishing last in the South, is also below the All India average. Tamil Nadu's per capita GDP of Rs. 14,592.90 is well ahead of AP's Rs. 11,293.40, which is also behind the All India per capita of Rs. 11,625.20. It would seem that this gap has only widened during the 9th Plan period (1997-2002) when AP went well behind the other southern states with a poor economic growth of just 4.60%, at a time when India's GDP grew at 5.50%.

The decline in the incidence of poverty truly reveals the poverty of results in AP. In 1983 the incidence of poverty in AP was the lowest in the South at 28.9%. However in 2001, AP (15.8%) lost its first position to Kerala (12.7%). But what should cause even more concern is the rate of change. AP's incidence of poverty changed by 13.1%, while that of Tamil Nadu dropped by 30.6% from 51.7% to 21.1%. Kerala changed from 40.4% to 12.7% while Karnataka improved from 38.2% to 20.0%. It's in terms of absolute numbers that the figures are more telling. The number of poor in Tamil Nadu shrank from 260.1 lakhs in 1983 to 130 lakhs in 2001, while the number of poor in AP that stood at 164.6 lakhs in 1983 dropped to 119.0 lakhs in 2001. Thus while 130.0 lakh people moved above the poverty line between 1983 to 2001 in Tamil Nadu the corresponding figure in AP was just 45.6 lakhs. Quite clearly this is nothing to feel good about?

Even in terms of change in yield of food grains, AP billed as the granary of the South, has not done as well as the other states during the last decade. Tamil Nadu's yield of 2,461 kgs./hectare was the highest with Kerala and AP following with 2,094 kgs./hectare and 2,089 kgs./hectare respectively. Karnataka with a yield of just 1,412 kgs./hectare was the lowest, but the improvement of 55.2% between 1990-2000 was the highest while the corresponding change for AP and Tamil Nadu was about 30% each.

AP's record on the industrial front seems just as poor. Of the four southern states AP registers the lowest gross industrial output of just Rs. 7,707.0. Not only is this lower than the All-India average (Rs. 8,965.0) it is less than half the figure recorded by the southern leader, Tamil Nadu (Rs. 15,523.0). Even in terms of value addition AP (Rs. 1,128.0) trails the rest. Though AP is only marginally behind Kerala (Rs. 1,162.0) it is well behind Karnataka (Rs. 1,668.0) and Tamil Nadu (Rs. 2,517.0).

However, AP (12.1%) has done well till 1998 in terms of annual growth in factory employment leading the South. Second placed Tamil Nadu is way behind at 6.1%. While Kerala registered a growth of 3.6% Karnataka witnessed a negative growth of 2.0%. The corresponding all India figure was just 2.3%.

But development is not just about economic growth. AP's performance in the critical areas generally accepted as the basic criteria to measure development has been patchy at best. The increase in literacy between 1991-2001 has been an impressive 38.5%, well over the 23.5% achieved during 1981-91. Still AP's literacy level is only 61.1%, below the All India level of 65.4%. But it would not be correct to judge AP's performance as better than the other three southern states for they started with higher levels and that influences the rate of growth. Kerala for instance had a literacy level of 81.6% in 1981 and that went up to 90.9% in 2001. Literacy in Tamil Nadu grew from 54.4% in 1981 to 73.5% in 2001. Karnataka has been the real poor performer here with change from 46.2% in 1981 to 67.0% in 2001. Thus we see that AP, which was a good 10.5% behind Karnataka in 1981, has closed the gap down to 5.9% in 2001. Here is the other big southern irony for Karnataka is often held up as the other big performer in the South.

In terms of population growth too Karnataka has fared poorly by registering the highest decennial growth of 17.3%. AP grew at 13.9% while Tamil Nadu (11.2%) and Kerala (9.4%) were well ahead. All the southern states were well below the All India population growth of 21.3% during 1991-2001.

But when it comes to Infant Mortality Rates (IMR) AP's performance is truly miserable. While the All India IMR dropped from 104/1000 to 66/ 1000 between 1981-2001, AP's IMR dropped from 86/1000 to 66/1000. Kerala by contrast achieved an IMR of just 11/1000 taking it close to developed country levels. Karnataka (58/1000) and Tamil Nadu (49/1000) too have fared much better than AP.

Life expectancy at birth is another determinant of development. Here also AP falls behind the other southern states. The performance of Tamil Nadu on this count has been the best with additions of 3.8% and 4.3% for males and females respectively while the corresponding increases for AP have been 1.2% and 1.1% respectively. AP that had a better life expectancy for men than the All India average (60.8 to 60.1) fell behind the national average for 1996-2001 of 62.4 years by achieving 61.5 years. In the case of women the All India average increased from 61.4 years to 63.4 years from 1991-2001 while that of AP increased slightly from 63 years to 63.7 for the same period. The national increase in the life expectancy for women at 3.3% was thrice the AP increase of 1.1%.

AP's poor performance on various development indices has meant that the state is relegated to the last spot in the human development index among the four southern states. In 1991 AP was ranked a low 23 among the 32 states and Union Territories ranked as per the index. While among the four states Kerala (3) took top honors Tamil Nadu (14) and Karnataka (19) also fared better than AP. While the four southern states have moved smartly up the national ladder, their order remains the same in 2001.

While AP's performance on various socio-economic indicators has been less than exemplary the state's political support to the NDA government has ensured that AP has benefited disproportionately in terms of central assistance. Of the four states AP received the highest (Rs. 1,292.8) cumulative per capita grants from the Centre for the period 2000-01 to 2002-03. While Karnataka (Rs. 1,127.2) was a close second, Kerala (Rs. 793.6) and Tamil Nadu (Rs. 777.9) were way behind.

Even in terms of cumulative per capita net loans from the Centre for the period 2000-01 to 2002-03, AP (Rs. 911.5) benefited more than the other southern states. While Karnataka (Rs. 755.7) still received somewhat comparable amounts from the Centre, the per capita amounts received by Kerala (Rs. 332.8) and Tamil Nadu (Rs. 264.8) were abysmally low when compared with AP.

While the Centre has little to do with devolution of central taxes as the Finance Commission determines it, AP has done well on this count as well. While Kerala (Rs. 1,760.4) received the highest share of per capita central taxes during 2000-01 to 2002-03 AP (Rs. 1,664.3) came a close second.

Even though AP has the biggest Tenth Five Year State Plan its luck runs out when we look at the per capita figures. AP (Rs. 6,155.5) registers the lowest per capita state plan of the four states with Karnataka topping the list with Rs. 8,260.0. However, AP's per capita tenth state plan was higher than the all India average of Rs. 5,817.7.

Due to the high assistance provided by the Central Government, AP and Karnataka were able to expend larger sums of money on development. While Karnataka (Rs. 8,195.9) spent the most per capita between 2000-01 and 2002-03 on development, AP was next with Rs. 7,982.9. While Tamil Nadu (Rs. 7,561.4) and Kerala (Rs. 7,377.6) were behind AP, they too were well ahead of the all India average of Rs. 6,748.5.

Despite this AP's spending on some of the key development indicators is not very impressive. AP's spending on Education for 2000-01 was the lowest (Rs. 493.9) among the four states. The All-India average (Rs. 586.8) for the corresponding period was also much higher. Kerala was the highest spender (Rs. 827.8) in the South. AP's (Rs. 140.1) spending on Medical and Public Health was only better than Karnataka (Rs. 64.2) and was below the All-India figure (Rs. 157.2). On the other hand Tamil Nadu (Rs. 160.8) and Kerala (Rs. 187.8) spent much higher sums of money.

Even though the Centre has been more than generous in doling out funds to AP, it is quite evident that the state is in fiscal distress. After Kerala (20.8%) AP (18.5%) had the second highest average interest payments as a proportion of revenue receipts for the period 1996-97 to 2000-01. Karnataka (14.9%) and Tamil Nadu (14.7%) registered much lower ratios over the corresponding period. If AP continues to expend ever-higher amounts on interest payments its ability to spend on development would be severely curtailed and its overall performance is only likely to slip further.

Finally in order to see AP's overall performance relative to the other southern states we constructed a simple ranking table based on the various socio-economic indicators we have considered in our study. Based on the average of the rankings for the various parameters Tamil Nadu comes first in the South. Andhra Pradesh has clearly been the southern laggard, but this seems not so if one were to go by the plaudits received by the state's political leadership. It would seem that the State's reputedly large expenditures on image building are paying off, even if the people of the state have yet to reap any meaningful benefits?