States

In all federal structures, the composing units are not self-sufficient financially. But, in India, the economic dependence of states on the centre is rather high because of widespread disparities in their levels of economic development. The federal transfers to the states through the Finance Commission, Planning Commission and centrally-sponsored schemes are investigated. The role of the union government in equitable direct investment, subsidy, and private investment policy for unbiased regional development is also underlined . The data proves that although the Finance Commission’s transfers are progressive, the share of devolution for low-income states is gradually decreasing. Unfortunately, all other transfers and efforts by the centre are regressive to address the regional inequality issues.

Building on a methodology developed in an earlier paper, the results of an exercise in ranking Indian states based on five sets of criteria--infrastructure, social services, fiscal performance, justice, law and order, and quality of the legislature--are presented to show how states have fared relative to each other between 2001-02 and 2011-12. What emerges is that five of the six best-performing states of 2001 were also the best performers in 2011. Similarly, four of the six worst performers of 2001 were also among the worst performers of 2011. A consequence of such stickiness of rankings at the top and the bottom is growing regional disparity between the more- and less-developed states.

The drought of 2002 has brought home the critical need for a short-term forecasting model for the agriculture sector at sub-national level, since good and bad agricultural years are not synchronous across states. This paper attempts forecasting through the fitting of univariate ARIMA models to past agricultural outcomes for five states: Punjab, Rajasthan, Karnataka, Andhra Pradesh, and Uttar Pradesh.