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Intra-Regional Disparities, Inequality and Poverty in Uttar Pradesh

Uttar Pradesh has suffered from regional disparities and inequality and even six decades after independence, some of the regions of this state are very backward and the abode of the largest proportion of poor in the country. The challenges raised by intra-regional disparities and their compounding implications on living conditions and governance are enormous. This study identifies the dimensions of intra-regional disparities, inequality and deprivation in poor households of the state. Its basic objective is to examine whether micro-level disparities and deprivations are much wider and more alarming than at the aggregate level and whether region-specific, district-level planning needs to address these issues on a priority basis.

INTER AND INTRA STATE DISPARITIES

Intra-Regional Disparities, Inequality and Poverty in Uttar Pradesh

D M Diwakar

Uttar Pradesh has suffered from regional disparities and inequality and even six decades after independence, some of the regions of this state are very backward and the abode of the largest proportion of poor in the country. The challenges raised by intra-regional disparities and their compounding implications on living conditions and governance are enormous. This study identifies the dimensions of intra-regional disparities, inequality and deprivation in poor households of the state. Its basic objective is to examine whether micro-level disparities and deprivations are much wider and more alarming than at the aggregate level and whether region-specific, district-level planning needs to address these issues on a priority basis.

D M Diwakar (dmdiwakar@gmail.com) is at the Giri Institute of Development Studies, Lucknow.

A
fter transfer of power from the British, India adopted a decentralised process of planning with guarded optimism, and a community development approach with mixed initiatives and the coexistence of the public and private sectors to address the challenges of reconstructing its economy, polity and society. A process of transforming the colonial agrarian structure through abolition of the zamindari system, and acquisition and redistribution of surplus land to the poor was initiated, and institutions of delivery and development were put in place. But these agrarian reforms failed to take off, accentuating disparities and inequalities. However, the rising discontent of marginalisation alongside a growing economy forced the ruling class to address development gaps at the micro-level. This was sharpened in due course by democratic pressure. Many target-specific development programmes were initiated to address intra-regional disparities through district development agencies such as the Rashtriya Sam Vikas Yojana (RSVY), Backward R egions Grant Funds (BRGF) and National Food for Work (NFW), National Rural Employment Guarantee Scheme (NREGS), in addition to many social security measures for p overty eradication.

India has been growing from the status of an undeveloped to developing nation, acquiring higher capabilities in terms of food security, social overhead capital, technology, human development and overall growth. However, the benefits of growth were cornered by a small influential section of society having patronage from the polity and the challenge of disseminating the benefits of growth with distributive justice continued growing amidst widening horizontal and vertical disparities. The experiences of advanced nations of the world suggest that they could transform and shift their labour force from the primary sector to the secondary and tertiary sectors along with increasing contributions in gross domestic product (GDP). But this did not happen in developing nations like India, which perpetuated structural and intersectoral imbalances (Papola 2005).

Uttar Pradesh (UP) is one of the largest and most backward states in India with a diverse composition. UP has suffered from regional disparities and inequality despite many prime ministers representing the state in Parliament. Even more than six decades after independence, some of the regions of this state are very backward and the abode of the largest proportion of poor in the country. The challenges raised by intra-regional disparities and their compounding implications on living conditions and governance are enormous. This exercise is intended to identify the dimensions of intra-regional disparities, inequality and

june 27, 2009 vol xliv nos 26 & 27

Sector/FYP 1st 2nd 3rd 4th 5th 6th 7th 8th 9th 10th Av GR

Total UP 2.0 1.9 1.6 2.3 5.7 8.7 5.7 3.2 2.0 5.3 3.84

All India 3.6 4.0 2.2 3.3 5.3 5.3 5.8 6.8 5.6 7.7 4.96

PCI-UP 0.5 0.3 (-)0.2 0.4 3.3 6.3 3.3 1.4 (-)0.4 3.3 1.82

PCI- India 1.7 1.9 0.0 1.1 2.9 3.1 3.6 4.9 3.6 6.0 2.88

SDP-UP/India 0.56 0.48 0.73 0.70 1.08 1.38 0.98 0.47 0.36 0.69

PCI-UP/India 0.29 0.16 ά 0.36 1.14 2.03 0.92 0.29 -0.11 0.55

Source: GoUP (2007): Eleventh Five-Year Plan, Vol I, Part I, 5.

Table 2: Intra-Regional Distribution of Coefficient of Variations of Per Capita Income among the Districts of Uttar Pradesh

Regions TE 1993-94 TE 2003-04

Western 0.658922 0.351971

Central 0.260658 0.560746

Bundelkhand 0.503084 0.26898

Eastern 0.737584 0.445788

Uttar Pradesh 0.531616 0.406104

Source: Calculated from district-level data published in Uttar Pradesh Statistical Diary 1997 and 2006.

d eprivation in poor households of the state. The basic objective is to examine whether micro-level disparities and deprivations are much wider and alarming than the aggregate level and whether region-specific, district-level planning needs to address these i ssues on a priority basis. To capture intra-regional disparity and deprivation, the official classification of four economic regions, western, central, eastern and Bundelkhand, and 17 administrative divisions have been considered. The western region has five divisions and 26 districts, the central covers two divisions and 10 districts, Bundelkhand has two divisions and seven districts, and the eastern encompasses eight divisions and 27 districts. This study is based mainly on data published by the UP government and State Sample Unit Level National Sample Survey Organisation (NSSO) data of the 61st round. It is divided into four parts besides the introduction. Section 1 deals with the theoretical framework, section 2 discusses intra-regional disparities in development and section 3 focuses on inter-regional inequality and poverty, followed by conclusions in the last section.

1 Theoretical Framework

To understand disparity, development perspectives and processes need to be analysed. Development has inter alia three important determinants – the resource base, levels of technological applications, and economic relations and their corresponding s uperstructure in a given time and space. Variations in these elements have not been uniform across the globe for historical reasons and horizontal and vertical disparities in resources, relations of production and productive forces, and hegemonic roles were inevitable outcomes. Dominance and subordination made a significant difference in the region-specific status of an economy and its implications on quality of life. The basis of uneven distribution has been examined with different contours of theoretical currents and perspectives. Classical economists relied mainly on supply side theories and natural endowment was identified as one of the major resources for absolute advantage and development. However, Ricardo treated differentials in distribution of endowment as a niggardliness of nature and therefore, comparative advantage for the movement of goods and services. This continued until productive forces acquired the capacity of mobility through inventions and discoveries, culminating in the industrial revolution as one of the dominant factors rejecting space constraints for location-specific development. The dominant forces of development exploited resources, technologies and labour for their benefit. The state was not involved in development directly until the Keynesian theory of effective demand emerged as a guiding principle to get rid of the great depression of the 1930s. The great depression gave the state a proactive role, that of facilitating industry through enhancing the purchasing power of the common people and generating effective demand for large-scale industrial production. Regional perspectives of the development discourse were seen in the writings of Myrdal (1957) and H irschman (1958), suggesting cumulative causation and core p eriphery models, which were elaborated upon by Kaldor (1960), Friedmann (1966, 1973), Perroux (1950) and Bouderville (1966). They were of the view that regional imbalances were likely to widen in the absence of state intervention and narrow with p olitically necessary interventions, till finally the periphery b ecomes a beneficiary of the external economies of the core ( Williamson 1965). Thus the state assumed a significant role in development strategies and public investment occupied i mportant place.

Unlike this stream of analysis, Karl Marx and Marxists analysed development through modes of surplus generation and appropriation towards linear transformation from one mode of

Table 3: Percentage Plan Expenditure in Uttar Pradesh (1951-52 to 2006-07) and Outlay (2007-12)

Major Heads Five-Year Plans Three Five-Year Plans Annual Five-Year Plans Two Five-Year Plans Total
I II III Annual Plans IV V Plan VI VII Annual Plans VIII IX X XI* I to X
Agriculture and allied 16 12 10 7 9 6 7 7 10 10 10 10 8 10.6 9
Rural development 6 12 9 5 3 4 5 7 9 7 11 14 9 4.2 10
Economic infrastructure 45 48 54 71 71 72 68 61 46 60 49 44 38 64 45
Power 15 24 28 39 39 39 30 29 23 40 27 17 10 14.6 19
Irrigation 25 18 21 29 25 25 27 22 18 11 11 13 12 9 13
Transport 4 7 5 4 7 8 10 11 5 9 12 14 16 15.1 13
Social infrastructure 21 13 16 10 10 9 10 12 15 12 16 15 21 35.8 17
Education 13 7 9 4 6 4 2 4 5 6 9 7 9 10.4 8
Medical and health 9 4 4 3 3 1 2 3 4 3 3 2 7 7.3 5
Water supply and sanitation 0 1 2 2 2 4 6 5 4 3 4 6 4 3 5
Others 12 15 11 7 8 9 10 13 22 11 15 17 24 7.7 19
Total 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100
*Proposed Outlay.
Source: Eleventh Five-Year Plan (2007-12) and Annual Plan 2007-08, Vol I, Part I, 85-86.
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Table 4: Brief Fiscal Profile as Percentage of GSDP in Uttar Pradesh
Item\Year 1987-88 INTER AND INTRA-STATE DISPARITIES 1990-91 1999-2000 2002-03
Own tax revenue 5.18 5.10 5.34 6.29
Own non-tax revenue 1.02 0.62 0.92 0.72
Central transfer fund 7.06 7.04 5.73 6.47
Interest payment 1.81 2.09 3.72 3.48
Capital expenditure 3.56 3.55 2.34 2.27
Revenue deficit (-)0.66 1.98 4.12 2.52
Fiscal deficit 2.64 4.94 6.31 4.68
Outstanding debt* 29.53 31.26 45.68 50.04

*Includes Reserved Funds and Deposits. Source: Finance accounts of UP and Budget Document 2004-05 cited in UP HDR 2003.

p roduction to another, that is, primitive to feudal, capitalist, s ocialist and communist. Here, productive forces and relations of production change, determining the dimensions of horizontal and vertical equity and disparities. However, the linear basis of transformation was contested later by western Marxists on the basis of empirical evidence which suggested multiple layers of sub-structures within structure, which were not necessarily consistent with the broader outer layer of structure. Therefore, r egion-specific relations of production and development of productive forces assumed significance in understanding modes of surplus generation and appropriation towards advanced modes of production. This had an important bearing on locating an individual in the process of production, exchange, distribution and consumption, where poor nations, regions and households were left deprived. The political economy of regional development thus took a critical view of the bourgeois state as a development actor. In the discourse of dependency theorists (Baran 1957; Frank 1967; Santos 1979; Timberlake 1987), the development of the centre at the cost of the periphery occupied significant place. Lipton (1982) identified urban biases in the development a pproach as the main actor in widening regional disparities. They argued that industrially advanced nations and regions of the world developed and consumed at the cost of resources and s urpluses exploited from many developing and underdeveloped nations and regions. It was also argued that the capitalist path of development had inherent characteristics of uneven growth b ecause it followed the principles of profit-biased investment to exploit resources.

Adapting this framework of analysis to the Indian scenario suggests that regional disparities widened under British colonial rule as investment was focused on developing an infrastructure to create markets for industrial production, to carry out raw m aterial from India, and to maintain military control over the colonial administration. A pioneering exercise by Dadabhai Naoroji provided a systematic account of draining of resources from India that caused deprivation and poverty among the masses. Another account by Dutt (1940) provided a sharper analysis of colonial exploitation. Even after independence, horizontal and vertical disparity have been concerns of development experts and policymakers, which led to the introduction of the concept of micro planning in development strategies and many initiatives to reduce disparities and inequalities.

Recent studies suggest that there is little evidence of any convergence taking place among the states in India in the post-reform period. The evidence points at divergence rather than c onvergence (Noorbakhsh 2003). Dreze and Sen (1995) found remarkable diversity in economic and social development among the Indian states. Referring to major states in India, Datt and Ravallion (1998: 34) concluded that endowment of physical infrastructure and human resources appeared to have played a major role in poverty reduction, and in another study (Datt and Ravallion 1993: 91) found that disparities in living standards among regions and between the urban and rural sectors had long raised concern in India. Another cross-state study (Ravallion and Datt 2002) of poverty in 15 major states in India concluded that the substantial difference of the elasticity of poverty index to non-farm output between the state with the lowest elasticity, B ihar, and the state with the highest, Kerala, was due to the difference in literacy rates between these states.

2 Intra-Regional Development Disparities

Intra-regional disparities in development can be identified through macro indicators of development, allocation of resources and quality of governance. The overall growth rate of the net d omestic product (NDP) of the country, which was 5.52% during 1980-81 to 1990-91, came down to 5.02% between 1993-94 and 2003-04. Studies suggest that interstate regional inequalities in India in terms of state domestic product (SDP) and per capita income increased significantly between the 1980s and 1990s (Bhattacharya and Sakthivel 2004). In the case of UP, the growth rate of NSDP has come down from 4.95% to 3.76%. Its position among

Table 5: Party-wise Tenure of Chief Ministers and President’s Rule in UP

(Between 15 August 1947 and 31 July 2008)

Party Year No of CM Av Tenure of CM
Congress 36.1 16 (12) 2.26
Bharatiya Lok Dal 1.5 2 (1) 0.75
Janata Party 2.6 2 (2) 1.3
Janata Dal 1.5 1 (1) 1.5
Bharatiya Janata Party 5.8 5 (3) 1.16
Samajwadi Party 5.2 3 (1) 1.73
Bahujan Samaj Party 3.5 4 (1) 0.88$
Total 56.6 33 (21) 1.72 (2.7)
President’s Rule 4.6 9* NA

*Denotes frequency of President’s Rules and $ indicates up to 31 July 2008. Figures in parentheses indicate actual number of leaders.

the states in terms of growth rates was seventh in the 1980s but it has now come down to 12th. The plan-wise annual compound growth rates at constant prices calculated by the planning d epartment of the government suggest that the economy of the state grew by 3.84% against a national average of 4.96% and per capita income by 1.82% against a national average of 2.88% ( Table 1, p 265). Barring the Fifth and Sixth Plans, UP’s economy has lagged behind the national average. During the Sixth Plan, the state achieved its highest growth rate of 8.7%. However, this could not be sustained in subsequent plans. Similarly, the rate of growth of per capita NSDP registered 6.3% during the Sixth Plan, which rolled back and turned negative during the Ninth Plan. The average growth rate of state income during the 10th Plan was higher than that of the Eighth and Ninth Plans, but still lower than the national growth rate. Agriculture in UP could grew only 2.71% and manufacturing by 5.2% while the tertiary sector could grow by only 4.5% (GoUP 2007:5). The sectoral contribution to

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SDP has been d isproportionate to the size of the sectoral labour force. The share of the primary sector has gradually declined to 33%. The share of agriculture in SDP has declined to 31% though about 66% of the workforce is dependent on agriculture. Nonagricultural sectors contributed 64% of SDP but could hardly accommodate 34% of the workforce. This implies a widening ruralurban gap and regional disparities within the state.

The coefficient of variation for triennium ending (TE) average per capita income among the districts during TE 1993-94 at c onstant prices for UP as a whole was 0.532. The variation for TE 2003-04 came down to 0.406. Examining intra-regional variations in the TE average of district-level per capita income suggest high inequality in distribution of income among different regions (Table 2, p 265). During TE 1993-94, the highest variation was found in the eastern region followed by the western and B undelkhand regions. The central region had the lowest variation. During TE 2003-04, disparities among the districts in distribution of income came down in all the regions except the central region, where disparities increased from 0.261 in TE 1993-94 to

0.561 in TE 2003-04.

The per capita plan expenditure in UP increased significantly from Rs 25 in the First Plan to Rs 3,595 in the 10th Plan but Punjab spent Rs 7,678. The sector-wise plan expenditure suggests that allocation for rural reconstruction could not be continued uniformly (GoUP 2007: 85-86). Agriculture lost ground from the s econd plan and received a stagnant proportion from the Seventh to Ninth Plans, with a decline in the 10th Plan (Table 3, p 265). Similarly irrigation received a declining proportion of allocation since the Sixth Plan with a few exceptions. The power sector received an increasing share in plan expenditure up to the Fifth Plan but it later declined. During the 10th Plan, except economic and social infrastructure, the proportion of expenditure for all other sectors has declined as the fiscal health of the state is stagnating.

The fiscal profile is one of the most crucial determinants of growth initiatives. The state receives financial resources from its own tax and non-tax revenues and transfers from the centre. An examination of the last one and a half decades suggests that the own tax revenue of UP was almost stagnant in the 1990s and that there was a marginal increase in 2002-03. The non-tax revenue was very small and that witnessed a declining share. The proportion of interest payment went up and capital expenditure d eclined. Revenue and fiscal deficit increased during the 1990s and outstanding debt reached 50% of the GSDP (Table 4, p 266). The central transfer ratio to GSDP declined significantly. Although there was a sign of recovery in the ratio of central transfer in 2002-03, it was still lower than that of 1987-88. Moreover, central plan assistance as a percentage of total plan expenditure declined sharply in 2002-03. The ratio marginally improved in subsequent years. The Twelfth Finance Commission (TFC) recommended a 19.26% share of central taxes, which was marginally different from the recommendation of the Eleventh Finance Commission (EFC), 19.14%. However, the overall share of low income states, that is, UP, Rajasthan, Madhya Pradesh, Orissa, West Bengal, and Bihar turned negative due to a change in the formula between the EFC and TFC (Das and Mishra 2009: 15).

Resources aside, quality governance is important for faster growth with justice. The failure of land reforms is one of the crucial indicators of the quality of governance, which has reflected the class character of administrations. Political will and transparency in the delivery mechanisms of various development programmes are the basic requirements of quality governance. In a democratic state with a multiparty system, the stability of the

Table 6: Region and Division-wise Distribution of Districts of Uttar Pradesh by Composite Development Index (CDI)

Region Division Most Developed (CDI 125+) High Medium Developed Medium Developed Low Medium Developed Most Backward
(CDI=105-125) (CDI=86-105) (CDI=75-86) (CDI below 75)
Western Moradabad - Bijnor, Moradabad, Rampur - -
J P Nagar
Meerut Meerut, Gaziabad, Bagpat, Bulandshahar - - -
Gautam Budhanagar
Saharanpur - Saharanpur, Mujaffarnagar - - -
Agra Agra Mathura Aligarh, Firozabad, Etah$ -
Mainpuri, Hathras
Bareli - Bareli Pilibhit,Shahjahanpur Badayun$ -
Central Lucknow Lucknow - Sitapur*£ Unnao*£ Khiri$£ Rae Bareli*£ Hardoi*£
Kanpur Kanpur Nagar Kanpur Dehat, Kannoj Farukhabad$ Etawah Auraiya -
Bundelkhand Jhansi - Jhansi Jalaun* Lalitpur*£
Chitrakootdham - - Hamirpur*£ Mahoba*£ - Banda*£ Chitrakoot*£
Eastern Allahabad - - - Fatehpur*£ -
Pratapgarh* Kaushambi*
Devipatan - - - Gonda$ Behraich$ Shravasti$
Balrampur$
Faizabad - - Barabanki*£ Faizabad, - Ambedkarnagar$
Sultanpur
Basti - - Basti$ - Siddharthnagar,Sant
Kabirnagar$
Gorakhpur - - Gorakhpur* - Mahrajganj$ Kusinagar*£
Azamgarh - - - Mau Azamgarh* Balia
Varanasi Varanasi - - Jaunpur,* Chandauli* Gazipur
Vindhyachal - - Sant Ravidas Nagar, Sonebhadra*£ Mirzapur*£ -
Total 17 7 (10.4%) 12 (17.9%) 21 (29.8%) 14 (28.9%) 14 (28.9%)
* indicates district identified for RSVY, $ for BRGF and £ for NFFW schemes.
Source: GoUP (2007): Eleventh Five-Year Plan, Vol I, Part II, Ch 6, 484-85.
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INTER AND INTRA-STATE DISPARITIES

Year Ownership Holdings Operational Holdings

1953-54 0.6403 0.6138

1961-62 0.6169 0.5997

1971-72 0.6253 0.6129

1982 0.6302 0.6416

2003-04 0.6503 0.6506

Source: (i) Sharma, H R (1994) up to 1982 and for 2003-04 value was calculated from NSSO data of 61st Round.

Table 8: Intra-Regional Gini Ratio for Ownership and Operational Holdings in UP in

Holdings Western Central Eastern Bundelkhand Total
Ownership 0.6476 0.62 0.6487 0.6371 0.65
Operational 0.6604 0.6176 0.6351 0.6425 0.6506

Source: Calculated from NSSO, 61st Round data, Government of India, 2004-05.

government, political will and effective pressure from conscious masses makes the bureaucracy work efficiently. But when the government lacks stability and political will, the bureaucracy prevails while the leaders remain extra-sensitive towards the danger of losing power. Indian democracy has witnessed

o verconfident and insensitive governments without checks and balance from the conscious masses, as in the case of Congress rule until the early 1970s. Frequent changes of gov

d ecennial growth, regional share, urbanisation, and proportion of scheduled castes (SCs), different indicators of health infrastructure, literacy and educational infrastructure, and intensity of physical and economic infrastructure. Districts have been placed in five ranges – most developed, high medium developed, medium developed, low medium developed and most backward. The region and division-wise distribution of these districts ( Table 6, p 267) suggests that there is no most backward district in the western region. Of five divisions, three do not even have low medium developed districts. On the contrary, most of the districts in the eastern and Bundelkhand regions are most backward or low medium developed. This indicates significant gaps and a neglect of backward regions in the state, which has an important bearing on quality of life. However, the central government has initiated the RSVY, BRFG, and NFW in the most backward and lower middle d eveloped districts and the NREGS in all districts of the state.

Another deprivation index using similar methodology but with a different choice of indicators dictated by availability of appropriate data at the district level captured deprivation in basic amenities of quality of habitat from Census 1991 and 2001 (Tyagi 2007). The variables considered were deprivation in quality of housing, access to drinking water, good sanitation, and domestic electricity

ernment have a significant impact on development Chart 1: Intra-Regional Distribution of Ownership of Holdings in UP 2003-04

priorities and programmes. Moreover, election ex

0 50 100

penditure and involvement of the bureaucratic m achinery at the mass level have implications on the

No

allocation of resources and completion of projects.

Since independence, UP has had 33 terms of chief ministers, with 21 leaders enjoying an average of Area

1.72 years in power (Table 5, p 266). The Congress ruled the state for two decades after independence, then intermittently for six years and again about No nine and a half years from 9 June 1980 to 5 December 1989. Thus the Congress ruled over UP for 36 years under 12 leaders. But land reforms remained Area an unfinished item on the agenda. The Bharatiya Janata Party was next, followed by the Samajwadi Party and the Bahujan Samaj Party. The Bharatiya No Lok Dal got two chances under one leader for about a year and five months. The Janata Party ruled for two years and seven months and the Janata Dal for a Area year and five months. Each change has had an effect on the transfer of bureaucrats from one region to a nother. Alongside, regional and constituency biases No of the leadership in selecting programmes and projects have led to regional disparity in development. Most of the chief ministers and prime minis-Area ters have been from the central and western regions. The eastern region has not been adequately represented in this regard and only recently did No B undelkhand get a dalit chief minister.

The UP government has prepared a composite i ndex of development by ranking 36 horizontal and

Area

vertical development indicators (GoUP 2007). The indicators include density of population, its

Landless Marginal farmer Small farmer Semi medium Medium Large

Chart 2: Percentage Distribution of Operational Holdings in UP in 2003-04

0 20 40 60 80

No

Area

No

Area

No

Area

No

Area

No

Area

Landless Marginal farmer Small farmer Semi medium Medium Large

june 27, 2009 vol xliv nos 26 & 27

Food Non-Food Total MPCE Index CPIAL Index

27th 32.16 (72.9) 12.01 (27.1) 44.17 (100) 100 100

32nd 44.33 (64.3) 24.56 (35.7) 68.89 (100) 156 144

38th 73.63 (65.6) 38.68 (34.4) 112.31 (100) 255 277

43rd 100.82 (64.0) 57.28 (36.0) 158.10 (100) 358 289

50th 177.80 (63.2) 103.60 (36.8) 281.40 (100) 637 520

55th 288.80 (59.4) 197.36 (40.6) 486.16 (100) 1100 833

61st 307.60 (55.0) 251.19 (45.0) 558.78 (100) 1265 922

Figures in parentheses indicate percentage of total expenditure. Source: NSS 61st Round, Report No 508, 66.

Table 10: Regional Variation in Average MPCE (Rs) in Uttar Pradesh by Mixed and Uniform Recall Period

Region Linearised over 95% Confidence Interval
Mean Std Err
Rural MPCE 365 days
Western 538.65 6.282477 526.32 550.98
Central 529.71 8.119872 513.77 545.64
Eastern 471.52 3.684795 464.29 478.75
Bundelkand 681.02 22.70204 636.48 725.56
Rural MPCE 30 days
Western 539.93 6.863582 526.47 553.40
Central 524.06 9.035583 506.33 541.79
Eastern 461.90 4.634912 452.80 470.99
Bundelkand 687.40 23.96877 640.37 734.42
Urban MPCE 365
Western 822.41 38.58417 746.60 898.21
Central 945.75 63.07462 821.83 1069.67
Eastern 738.35 35.11305 669.37 807.34
Bundelkand 964.45 75.00713 817.08 1111.81
Urban MPCE 30
Western 818.74 39.07027 741.98 895.50
Central 887.38 49.72921 789.68 985.09
Eastern 702.91 36.4646 631.27 774.56
Bundelkand 1109.48 235.4472 646.90 1572.06

Source: Calculated from Unit Level Data of NSS, Round 61.

lighting. The data suggests that many districts are moving from a higher level of deprivation to lower level except Kanpur Nagar, for which the index has increased from 28% to over 30%. All the districts which had a deprivation index ranging from 71% to 84% during 1991 were transformed to a higher level of development in 2001. Sixteen districts were found in the range of 50% while the remaining 54 districts were still above 50%. Although the 2001 situation may have changed by now, the challenges of providing basic amenities are still alarming and require substantial investment. However, none of these indicators reflect consumption disparities linked to inequality and poverty. The object of this exercise is to identify intra-regional inequality and disparities in UP.

3 Inequality and Poverty

Intra-regional inequality in UP can be examined through three indicators, agrarian structure, particularly ownership and operational distribution of landholdings, income and consumption patterns and estimates of poverty. This section attempts to deal with these three indicators at the regional and sub-regional levels.

(a) Agrarian Structure

The agrarian structure in India was reshaped for revenue farming during the Mughal rule. With the coming of the British, a grarian relations were further recast for better revenue

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c ollection (Raychoudhuri and Habib 1982). Broadly three experiments were introduced – permanent settlement in Bihar, Bengal, Orissa and the eastern part of UP, ryotwari in Madras province and later Bombay and the central provinces, and mahalwari in Agra and Oudh, which was later extended to Punjab (Sharma 1992). Thus UP had a mixture of permanent settlement and m ahalwari land revenue system during the British rule. These horizontal institutional arrangements had a significant impact on the vertical distribution of land in India. To maximise revenue collection, intermediaries were given a free hand, which led to aggressive exploitation of the people, aggravating vertical i nequality of land resources.

To address the issues of inequality and poverty, post-independent India initiated many steps such as abolition of the zamindari system, imposition of ceilings and acquisition of surplus land and their redistribution. However, in the absence of effective political will, land reforms could not be implemented to bring about the required changes in property relations. An analysis of the latest data suggests that interstate inequality in ownership of land is still very high (Rawal 2008). The interstate Gini ratio varied from

0.43 to 0.84. Punjab, Haryana, Tamil Nadu, and Andhra Pradesh were above 0.8. The second highest states were Gujarat, Karnataka, Kerala, West Bengal, Bihar and Tripura scoring above 0.7. The Gini ratio for all India was 0.761. UP falls in the third highest level of inequality with a Gini ratio of 0.65 (Table 7, p 268). The Gini ratio of ownership and operational holdings since 1953-54 suggests that the initial decline in inequality because of the abolition of the zamindari system could not be sustained after 1960-61. Vertical inequality in the distribution of ownership holdings in UP is very high. Above 74% of marginal holders have only about 28.7% of the land. The majority of them were below 0.4 hectare, whereas only about 2% of medium and large holders possessed over 19% of the land area.

Table 11: Percentage Distribution of Poverty in India and Uttar Pradesh

Year Percentage of Poverty in UP

Percentage of Poverty in India

Total Poverty Rural %Poverty Total Poverty Rural %Poverty

1957-58 52.3 -53.4

1963-64 56.6 -49.1

1967-68 60.2 -57.9

1973-74 57.07 84.0 54.65 81.31

1977-78 49.05 80.78 51.82 62.10

1983 47.07 80.62 44.40 76.03

1987-88 41.40 79.91 35.80 75.52

1993-94 40.85 98.16 36.0 76.17

1999-2000 31.15 77.75 26.10 74.25

2004-05 30.07 80.54 27.5 73.65

Source: Planning Commission, Government of India, New Delhi.

Table 12: Intra-Regional Percentage Distribution of Official Estimates of Rural Poor Households by Ownership of Land in UP

Occupation/Region Western Central Eastern Bundelkhand UP

Landless 9.71 41.00 39.16 17.74 23.05

Marginal farmer 28.95 32.11 44.05 26.02 36.52

Small farmer 17.72 19.69 21.81 8.57 19.12

Semi-medium 13.24 15.75 12.42 7.07 12.94

Medium 1.51 14.46 15.22 8.64 9.03

Large 0.00 0.00 13.72 17.97 9.07

Total 24.68 27.76 37.96 16.83 30.74

Source: Calculated from 61st Round of NSS data on Consumption.

INTER AND INTRA-STATE DISPARITIES

Farm Size\Region West Central East Bundelkhand Total UP

Landless 32.09 40.62 54.33 30.16 40.62

Marginal 25.60 29.30 40.68 20.53 34.03

Small 17.64 17.53 22.99 11.23 19.33

Semi -Medium 13.33 17.65 10.49 8.87 12.79

Medium 1.65 1.69 14.88 3.01 5.41

Large 0.00 0.00 16.92 17.44 10.07

Total 24.68 27.76 37.97 16.83 30.74

Source: Calculated from 61st Round of NSS data on Consumption, 2004-05.

Table 14: Intra-Regional Percentage Distribution of Poor Households by Sector and Social Groups in UP

Sector Rural

Urban

Region SC/ST OBC Others Total SC/ST OBC Others Total

Western 33.74 24.87 15.3 24.68 38.98 38.4 16.81 30.92

Central 37.33 25.07 18.8 27.76 44.99 37.92 18.98 30.55

Eastern 52.51 36.8 16.9 37.97 57.8 50.35 16.94 41.68

Bundelkhand 20.92 16.04 11.54 16.83 41.34 32.72 13.92 27.28

Total 42.47 29.99 16.37 30.74 44.03 40.94 17.25 32.88

Source: Calculated from 61st Round of NSS data on Consumption, 2004-05.

Table 15: Intra-Regional Distribution of Poor Households by Sector and Religion in UP

Rural Urban

Region Hindu Muslim Others Total Hindu Muslim Others Total

Western 25.04 23.51 15.95 24.68 24.72 45.1 37.75 30.92

Central 27.25 33.21 0 27.76 29.24 35.44 32.01 30.55

Eastern 37.91 38.32 44.09 37.97 36.72 58.08 14.28 41.68

Bundelkhand 17.07 12.63 17.18 16.83 28.48 23.38 13.17 27.28

Total 30.91 30.01 20.88 30.74 28.6 44.95 32.85 32.88

Source: Calculated from 61st Round of NSS data on Consumption, 2004-05.

The intra-regional variation in distribution of marginal holdings shows a similar pattern except in Bundelkhand and the Eastern region, which had a higher number and area of medium and large holdings (Chart 1, p 268). However, the regional Gini ratio was lower in the central (0.62) and Bundelkhand (0.6371) regions. In terms of operational holdings, intra-regional variations were sharper. The western and Bundelkhand regions were more iniquitous than the central and eastern regions as reflected in their Gini ratios (Table 8, p 268). So far as distribution of operational holdings is concerned, it is more iniquitous than ownership of holdings, as reflected in the Gini ratios on the distribution of ownership holdings and operational holdings (Chart 2, p 268). Households of landless were highest (31.95%) in the western region, f ollowed by B undelkhand. They were lowest in the eastern region. The i nequality in distribution of o perational holdings was highest in the western r egion, even higher than that of the state level. The Gini ratio for the other regions was lower than that of the state level. Among them, Bundelkhand was h ighest, followed by the eastern and c entral regions.

(b) Consumption Patterns

The latest NSSO data on distribution of households’ monthly per capita consumption expenditure (MPCE) suggest that 55% is on food items and 45% on non-food items in rural areas (Table 9, p 269). The consumption pattern in rural India has changed considerably from about 73% on food items and 27% on non-food items in the 27th round, and in urban areas, expenditure on food has fallen from 64% to 42%. Figure 1 suggests that the average MPCE d eclines with the increasing size of households in urban areas. However, the distribution of the MPCE shows no big difference with the size of the household in rural areas. Figures 2R and 2U indicate that more than 60% of the rural population survives b elow the average MPCE level.

Region-wise, the average MPCE suggests that one of the most backward regions, Bundelkhand, irrespective of rural and urban sectors, spent the highest amount, much above the western region followed by the central and eastern regions. An explanation could be that pulses, one of the main staples in the Bundelkhand region, have a higher market value than other cereals. However, variations reflected through values of sd and cv are very high in the Eastern and Bundelkhand regions, which indicate non- significance of their high value of MPCE. These were further verified through linearisation over mean and standard error of MPCE (Table 10, p 269).

(c) Incidence of Poverty

Horizontal disparity aggravates vertical disparity, which is reflected in consumption deficiency and deprivation, and incidence

Figure 1: Average MPCE for Households of Sizes 1 to 8 (in Rs) 2000

1600

1200

Urban

Rural

800

400

0

1 2 3 4 5 6 7 8 Household size

Source: NSS Round 61, Report No 508.

Figure 2R: Percentage of Rural Population below Different MPCE Levels

100 ♦♦ 80 ♦ ♦ 60 ♦ ♦ 40 ♦ ♦ 20 ♦ ♦

0

♦| | | | | | | |

0 200 400 600 800 1000 12000 1400 MPCE (Rs)

Source: NSS Round 61, Report No 508.

Figure 2U: Percentage of Urban Population below Different MPCE Levels

100 ♦♦ 80 ♦ ♦ 60 ♦ ♦ 40 ♦ ♦ 20 ♦ ♦

0♦

| | | | | | |

0 500 1000 1500 2000 2500 3000 MPCE (Rs)

Source: NSS Round 61, Report No 508.

june 27, 2009 vol xliv nos 26 & 27

60 40 20 0

Western Central Eastern Bundelkhand UP

Official estimates of poor households rural 1993-94

Official estimates of poor households rural 2003-04

Official estimates of poor households urban 1993-94

Official estimates of

poor households urban 2003-04 Source: Prepared from calculated data on Consumption of 61st Round of NSSO, 2004-05.

Chart 4: Intra-Regional Distribution of Rural Poverty by Occupation in UP

80

60

40

20

0

West Central East Bundelkhand Uttar Pradesh Self-employed in non-agriculture

Agricultural labour

Other labours

Self-employed in agriculture

Others

Total

Chart 5: Intra-Regional Distribution of Urban Poverty by Occupation in UP

80

60

40

20

0

West Central East Bundelkhand Uttar Pradesh Self-employed

Regular wage/salary earning

Casual labour

Others

Total

of poverty. This section tries to comprehend intra-regional variations in official estimates of poverty in UP through different d imensions. Data suggest that poverty in UP was over 57% in 1973-74, of which 84% was in rural areas. Overall poverty has declined from 41% in 1993-94 to 30.07% in 2004-05 (Table 11, p 269) but 80% of them still reside in rural areas. The official poverty line for the state in 2004-05 in terms of the MPCE based on 30 days as defined by the planning commission is Rs 365.84 for rural areas and Rs 483.26 for urban areas. The decline in rural poverty was sharp but urban poverty declined marginally. In rural areas, the highest decline was noticed in Bundelkhand, followed by the central region. However, a significant decline across the regions was also witnessed (Chart 3). Intra-regional decline in urban poverty has been slow in the western, central and Bundelkhand regions but it has gone up in the eastern region.

The distribution of the poor by occupational category suggests that in rural areas about 50% of the households in agricultural labour and 46% in other labour were poor in the state as a whole

Economic & Political Weekly

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june 27, 2009 vol xliv nos 26 & 27

(Chart 4). The intra-regional variation was very sharp. The e astern region had the highest incidence; above 60% poverty in rural labour households, followed by the central, western and Bundelkhand regions, the last with the lowest of 39%. In urban areas, casual labour households had the highest incidence of p overty. The intra-regional distribution suggests that the highest incidence of poverty among casual labour was in the eastern r egion, followed by Bundelkhand. The distribution of poverty by ownership of land suggests the highest concentration of poor was among the marginal landholders, followed by the landless ( Table 12, p 269). Although poverty was found among all categories of farmers because of increasing risk and non-viability of holdings irrespective of size, among the marginal holders, the eastern r egion was poorer than the other regions. Poverty among the landless was highest in the central region.

While examining poverty by distribution of operational holdings it was found that the highest percentage of poor was from the landless category, followed by small and marginal famers (Table 13, p 270). With landholdings increasing in size, poverty declined except in the eastern and Bundelkhand regions where large f armers were also trapped in poverty. These results suggest that policy initiatives are needed to address the crisis in all the regions. However, the landless and marginal and small farmers should receive priority. Data by a social group suggests that irrespective of regions and sectors, the highest intensity of poverty was among SCs/STs followed by other backward communities (OBCs) and others (Table 14, p 270). Here also, among the regions, the maximum poverty was found in the eastern region.

Official estimates of poverty by religion suggest that there was no difference in the distribution of poverty with respect to r eligion in rural areas. It was almost equally distributed (Table 15, p 270). However intra-regional variations were different. In the eastern region, other minorities were poorer than Hindus and Muslims, and in the central region, Muslims were poorer than Hindus. Unlike rural areas, in urban areas a higher degree of poverty was found among Muslim households, followed by other

Table 16: Division-Wise Intra-Regional Variation in Poverty Estimates in UP

Rural

Urban

Mandal Poverty SD CV% Poverty SD CV%
1 Saharanpur 14.93 35.64 238.71 39.3 48.84 124.27
2 Moradabad 16.05 36.71 228.72 42.98 49.5 115.17
3 Meerut 9.99 29.99 300.20 27.12 44.46 163.94
4 Agra 18.85 39.11 207.48 47.38 49.93 105.38
5 Bareilly 40.01 48.99 122.44 63.89 48.03 75.18
6 Lucknow 28.01 44.91 160.34 52.88 49.92 94.40
7 Kanpur 25.85 43.78 169.36 51.4 49.98 97.24
8 Jhansi 3.75 19 506.67 17.07 37.62 220.39
9 Chitrakootdham 28.41 45.1 158.75 55.13 49.74 90.22
10 Allahabad 31.12 46.3 148.78 61.42 48.68 79.26
11 Faizabad 26.28 44.02 167.50 54.96 49.75 90.52
12 Devipatan 31.32 46.38 148.08 62.97 48.29 76.69
13 Basti 40.65 49.12 120.84 63.53 48.14 75.78
14 Gorakhpur 36.6 48.17 131.61 63.49 48.14 75.82
15 Azamgarh 51.45 49.98 97.14 78.44 41.12 52.42
16 Varanasi 23.5 42.4 180.43 55.3 49.72 89.91
17 Vindhyachal 54.14 49.83 92.04 77.74 41.6 53.51
Source: Calculated from 61st Round of NSS data on Consumption 2004-05.
271
INTER AND INTRA-STATE DISPARITIES

minorities. Again, poverty among Muslims in urban areas was M aharajganj, B ehraich, Sultanpur, Ambedkarnagar, Allahabad, highest in the eastern region, followed by the western region. Fatehpur, Banda, Mahoba, Hardoi, Unnao, Khiri, Etah, F irozabad, This exercise intends to further disaggregate estimates at the 17 Hathras, Aligarh, Kannoj and Bijnor. The 19 districts between

Source: Calculated from 61st Round of NSS data

division levels of the state. Since a separate poverty line was not available for the division level, Table 17: Percentage Distribution of Poor Households by Districts with Range of 10% and 20% were Gazipur, Jaunpur, S iddharthnagar, Shravasti, Pratapgarh,
the state-level poverty line was applied. There- Poverty in Uttar Pradesh B arabanki, Hamirpur, Kanpur Nagar, Kanpur
fore the macro average may underestimate pov- Percentage Poor HHs Rural No of District Urban No of District Dehat, Lucknow, Bareilly, Agra, Bulandshahar,
erty at the division level. However, indicative 70-80 2 3 Meerut, JP Nagar, Rampur, Moradabad,
estimates are useful in focusing on poor divi 60-70 2 4 M ujaffarnagar and Saharanpur. The cluster of
sions among the economic regions. Division 50-60 8 9 eight districts up to 10% poverty included
level distribution of rural poverty ( Table 16, p 271) 40-50 5 20 L alitpur, Jhansi, Jalaun, Mainpuri, Mathura,
suggests that Vindhyachal had the highest de 30-40 12 12 Gautambuddhanagar, Gaziabad and Bagpat.
gree of poverty (54%) followed by Azamgarh 20-30 20 10 Identifying districts for poverty alleviation
(51.45%), Basti (40.65%) and B areilly (40.01%). 10-20 11 10 need to be prioritised accordingly and special
Poverty ranging from 30% to 40% was found in Up to 10 10 2 packages designed according to the intensity of

Gorakhpur, Allahabad, and Devipatan. Between on Consumption, 2004-05. poverty. Urban poverty in six districts was in

20% and 30% poverty was seen in Lucknow, Kanpur, Faizabad, Chitrakootdham and Varanasi and below 20% but above 10% in Saharanpur, Moradabad, and Agra. The distribution was below 10% in Meerut and Jhansi divisions. Estimates of urban poverty in divisions suggest the highest poverty was in Azamgarh (78.4%) and Vindhyachal (77.7%). Divisions having 60% and above poverty were Bareilly, Allahabad, Devipatan, Basti and Gorakhpur, between 50% and 60% were Lucknow, Kanpur, Chitrakootdham, Faizabad and Varanasi, between 40% and 50% were Agra and Moradabad, followed by Saharanpur (39.3%), and the lowest was Jhansi (17.1%).

Since district-level estimates of poverty are based on smaller samples, they might not be stable. However, the state sample of UP is helpful to understand the level of exclusion of households below the prescribed threshold consumption norms. A decline in calorie consumption has been questioned on the basis of lower nutritional requirement with rising expenditure (Deaton and Drez 2009). But taking the cumulative percentage of households below poverty norms calorie consumption with MPCE distribution does not confirm this argument, as it has deficiently lower consumption expenditure. Estimates suggest four districts experience acute rural poverty, namely, Sonbhadra (67.38%), Kaushambi (67.13%) Shahjahanpur (65.44%) and Mirzapur (63.49%) ( Table 17). Between the range of 50% and 60% were Azamgarh, Deoria, Sant Kabir Nagar, and Basti. The seven districts between 40% and 50% were Balia, Mau, Kushinagar, Faizabad, Etawah, Rae Bareily, and Badayun, and between 30% and 40% were C handoli, Gonda, Balrampur, Chitrakootdham, Auraiya, Farukhabad, Sitapur and Pilibhit. The 20 districts in the range of 20% to 30% were Sant Ravidasnagar, Varanasi, Gorakhpur,

the range of 80% and above, while in seven it was in the range of 70% to 80%. In 16 districts it was between 60% and 70%, in 12 districts between 50% and 60%, in 14 d istricts between 40% and 50%, and in 10 districts between 30% and 40%. Five districts were below the 30% level. Thus, poverty at the division and district level is much higher than the aggregate level.

4 Imperatives

The above analysis shows that the state’s fluctuating growth rates could not keep pace with the national average. Agriculture and irrigation suffered neglect in plan expenditure amidst stagnating revenue, declining central transfers, and the intermittent change of governments. The index of development suggests that no d istricts in the eastern and Bundelkhand regions were in the most developed category. At the same time, many districts in the w estern and central regions were also on the lower rungs. A lmost all the districts in Bundelkhand and the eastern region were in a lower state of development and lagging behind those in the western and central regions. As a result, vertical disparities in terms of consumption deficiencies were reflected to a higher degree in these two regions. Although disparities among the districts in terms of distribution of per capita income were not that serious except in the Central region, the incidence of poverty was highest in the eastern region. Agricultural and casual l abourers, marginal and small farmers, and SCs and STs were the most poor across the regions. The real challenge is to address the intra-regional horizontal and vertical disparities at the district level which are hardly explicit in macro level data for the state as a whole.

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SPECIAL ISSUE
D D KOSAMBI: THE MAN AND HIS WORK
July 26, 2008
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