The regional disparity within the State has been rising over the years, particularly as the services sector, concentrated in Bengaluru, grows by leaps and bounds while agriculture, the backbone of most districts, stagnates, according to the Economic Survey 2018-19.
When compared to 2014-15, Bengaluru Urban saw its average income increase by nearly ₹83,000, but in Yadgir, incomes went up only by ₹12,000.
Among the reasons for the impressive growth rates of Bengaluru region is the contribution of the services sector.
Bengaluru Urban’s tertiary sector income is 10 times more than its closest competitor Dakshina Kannada and 50 times that of Yadgir.
While the survey cautions against comparing district-level incomes over time owing to the limitations of their methodologies, the report notes: “District income is a useful policy indicator to monitor the nature and degree of inter-district variations as well as, disparities in the process of economic growth at the State-level.”
Narasimha Pani, Deputy Director from Department of Planning, Programme Monitoring and Statistics and who oversaw the chapter on State income in the survey, said that incomes are tabulated on a combination of income, production and expenditure.
“Data is available for the primary sector (agriculture). But the secondary (manufacturing) and tertiary (services) sector incomes are allocated to districts based on certain economic indicators. This is the best we can do with the allocated data,” he says.
‘Political will needed’
Regional data needs to be more robust as it give impetus to areas that specifically need attention and expenditure, say economists.
Vinod B. Annigeri, Director, Centre for Multi Disciplinary Development Research (CMDR) at Dharwad and who has researched regional imbalances in the State, says the State’s expenditure has been skewed towards Bengaluru and South Karnataka.
“There are Special Development Plans (SDPs) to address the inequalities of North Karnataka. But the governance infrastructure is not there to implement it. We had suggested that there has to be a system that imposes penalties if the SDPs are not spent within the time limit...There is a need for political will if the State has to address historic, cultural and political reasons for North Karnataka lagging behind,” he says.
With agriculture fluctuating based on rains and market prices, it becomes imperative to break Bengaluru’s monopoly on the services sector to ensure equitable growth, he says.
“For this, you need to set a skill-base and infrastructure to attract private investment. It is a long-term goal, but there has yet to be an earnest start,” says Dr. Annigeri.
K. Gayithri, Professor at Institute for Social and Economic Change in Bengaluru, showed in her recent research work that Karnataka’s budgets tend to put more money in better-off districts than backward districts. They note that the per capita spending on education and health is lower in backward districts than in districts at the top of the educational rankings.
“There has been a policy focus on regional disparity since the Nanjundappa report in 2001-02. But it hasn’t been implemented effectively. The government should review to find out why the disparity continues. Addressing the disparity should be a high priority,” she said.
‘Absorptive capacity’
While allocations to backward areas are high, the “absorptive capacity” is low. “Funds that are allocated are spent well in districts that are better off. The per capita expenditure on health, education and infrastructure is higher there, compared to backward areas where sanctioned posts remain vacant and they aren’t able to spend their allocations,” she said.
