cover story maharashtra economy

8/11/2019 Cover Story Maharashtra Economy

1/10

Maharashtra Economic Development Council

Maharashtras Economy @ 50

Development Challenges and Policy Priorities

Cover Story

The Maharashtra Economic Development Council

[MEDC] and Yashwantrao Chavan Pratishthan

[YCP] organized a One-Day Conference on

Tuesday, 8th March 2011, at the Y.B. Chavan Centre,

on the subject of Maharashtras Economy @ 50:

Development Challenges and Policy Priorities ,

marking the Golden Jubilee Year of the State. Following

are the glimpse of the topics discussed during the

conference. The conference consisted of 4 sessions,

starting from Maharashtra: The Macro Economic Prole:

Growth and Fiscal Balance, Regional Imbalance and

Inequalities, Human Development and Empowerment,

and Urbanisation in Maharashtra.

Excerpts :

Session 1 : Maharashtra : The Macro Economic

Prole - Growth and Fiscal Balance

Economy o f Maharashtra in Post Reform Era

Dr. M. K. Datar, Gen. Manager, IDBI Bank

Economic opportunities before a state during post-

reform era would depend on

i) Different development opportunities confronting a

increased leeway to private initiative which would

be guided by competitive markets and states like

Maharashtra, generally considered as a relatively

advanced progressive state would benet more as

compared to other less developed states. In fact the

likely adverse impact of deregulation and competition on

less developed states was a concern. Need to nd ways

to minimize such adverse consequences remained a

focus point in these not very frequent discussions.

The paper rst assesses the performance of the

Maharashtra economy in the post reform period in

comparison to pre reforms period by using a simple

method. Compounded Annual Rates of Change in select

indicators of human / economic / sector development in

post reform period are compared vis--vis similar rates

for pre reform years. If growth rates are found to have

accelerated during the post reform period would mean

economic reforms have augmented growth potential

for Maharashtra and Maharashtra has been successful

in exploiting such opportunities. If no acceleration is

observed it would be a challenge to decipher whether

reform programme did not offer better opportunities

or the state was unable to exploit them The paper

( Summary Proceeding of Conference )


2/10

) p pp g or the state was unable to exploit them The paper

Maharashtra Economic Development Council Cover Story

diffusion of growth benets. Agriculture, road & electricity

generation are the segments where state level policies

and funds are deployed to a great extent. In other words

these are the sectors where state could have shown betterperformance which may have improved the distribution

of growth effects. Though the dimensions of regional

distribution has not been analyzed in this paper less

than satisfactory performances in agriculture and rural

infrastructure may explain regional imbalances as well.

Fiscal Performance of Maharashtra State Government

: Some perspectives on Fiscal Legislation

Dr. R. Pattnaik, Professor of Economics K.J. SIMSR,

Mumbai

In recent years, the budgetary position of Maharashtra

state government was guided by rule based scal regime

as stipulated in their respective Fiscal Responsibility

Legislation (FRL).Consequent upon this development,

the nances witnessed improvements in terms of

reduction in key decit indicators. Notwithstanding this,

there are evidence of high debt prole, lower social

sector and growth oriented expenditure, stagnation in

non-tax revenue. Above all, the pace and quality of scal

correction and consolidation is an issue which needs to

be addressed.

The onset of economic crisis and its knock-on effect

on the Indian economy necessitated countercyclical

Summary and Concluding Observations

In conclusion, it is submitted that the importance of the

budgetary performance of the State in market oriented

plan nance is extremely important. Maharashtra has

progressed very well in terms of scal correction and

consolidation under the frame work of scal legislation.

While, scal restructuring will continue under the

framework of MTFP, the state may consider creating

scal space by augmenting own resource mobilization.

Further more, reorientation of expenditure allocation

with priority on growth oriented and social sector

expenditure needs urgent attention of the authorities. In

social infrastructure, the emphasis would be on primary

education, primary health, social security and to some

extent law and order. These activities are in the States

domain. In growth oriented expenditure, especially,

physical infrastructure, the authority should emphasis on

water supply (both for drinking and irrigation) drainage,roads, power supply, medium and minor ports etc.

Session 2 : Regional Imbalance and Inequalities

The Poverty-reducing Elasticity of Growth: Some

Tentative Results f or Distric ts in Maharashtra

Dr. Neeraj Hatekar - Professor of Econometrics, &

Mr. Ashutosh Sharma - Research Scholar, Dept. of

E i U i it f M b i


3/10


attention to pre-existing inequalities and the importance

of managing regional inequality along with raising

standards of living. In this paper we calculate the

growth elasticity of rural and urban poverty for districtsin Maharashtra. These estimates are characterized

by a great deal of diversity that has important policy

implications.

This paper points to the differential experience of the

districts of Maharashtra in terms of the efcacy of the

trickledown effect. The paper presents the results

of a simple calculation that enables us to calculatethe growth elasticity of poverty. The ndings of the

paper emphasize the need to scrutinize in detail the

developmental histories of each of the districts under

study, to analyse the existing congurations of levels of

living and inequality. This will help us to nd the ways

in which developmental processes lead to poverty

outcomes by inuencing levels of living and inequality.Another insight that this study provides us is that

regional experience might encompass a fair amount of

diversity at the sub-regional level. For example, rural

Parbhani as well as Hingoli share the feature of poverty

elasticity lower than Maharashtra. However, while the

MPCE in Parbhani is lower than that of Maharashtra,

that in Hingoli is higher. At the same time, inequality inParbhani is lowerr than that of Maharashtra, while that

in Hingoli is higher. Parbhani has lower growth elasticity

Jubilee year, during the year 2010. Hence, it would be

appropriate to take a review of its progress made during

the last 50 years. To study the extent of regional disparities

in terms of Human Development Index (2002). To studythe policy of balanced regional development of the

Govt. of Maharashtra, and allocation of plan funds for

the improvement of low HDI districts in Maharashtra.

The United Nations Development Programme (UNDP)

has recently evolved various concepts of human

development. i.e. Human Development Index, Human

Poverty Index, Gender Development Index etc. Theseindices reect upon the quality of life of the common

people in a given country or region. These concepts are

much more superior to the concept of per capita income,

which is generally used to measure the standard of living

of people in a given region. The focus of the paper is

on the problem of regional disparities in Maharashtra in

terms of the Human Development Index.

Regional Inequalities and Demand for separate

Statehood

Dr. Vinayak S. Deshpande, Professor of Economics,

University of Nagpur

A closer examination of the nature of backward regions

in each State will indicate specic reasons for their

backwardness. The major cause of backwardness of


4/10


5/10


has declined to near ideal levels, but we have critical

demographic challenges like urban migration without

support infrastructure, declining sex ratio, early age

of marriage, quick succession of childbearing aftermarriage and rising life expectancy without social

and health care support. Though MMR and IMR have

declined substantially, there remain pockets of high IMR

and MMR. Malnutrition is a major hard core problem,

with low weight for age, stunting, wasting, low BMI

among men and esp women that can nearly redene

poverty levels. The rising BMI among high income &urban strata is also a problem. The old illnesses like TB

and malaria remain and so also new threats epidemic

threats like swine u. The rising burden of diabetes,

hypertension, heart disease and cancers imply long

stays in hospitals, disability and nancial burden. The

health care system is widely split. An ailing public health

sector struggling to keep its institutions intact through

budget crunches, HR depletion, governance issues and

a crisis of condence. On the other hand the dominant

private health sector widely ranges from quacks to

high tech super-specialties. The rural and urban

informal sector people are facing deprivation, thanks to

distances, costs , poor quality of care and lack of social

support. Maharashtra needs to put its demography on

track, reduce malnutrition, empower consumers, launch

public health programs to lower morbidity and foster

India took an important step towards attaining substantial

democracy when it passed the 73rd Amendment in

1993 which put in place the elected gram panchayat at

the village level. One of the important features of thisAmendment was to give reservations to the Scheduled

Castes, Scheduled Tribes and Women. With respect to

women, the Amendment states that 33 % of the gram

panchayat seats should be reserved for women and

33% of the sarpanch seats i.e. the head of the gram

panchayat should be reserved for a woman. This was

indeed a crucial step considering the low status ofwomen in India and their consequent low participation

in the public life.

The purpose of this research paper is to examine if the

reservation of women for the post of the sarpanch has

had any signicant impact on the availability of basic,

public services to the women, especially with respect

to the services that the women are supposed to valuethe most. It is the responsibility of the gram panchayat

to provide the basic, public services like drinking water,

toilets, gutters etc. to the villagers. Thus the well being

of the villagers depends, to a great extent, on the

efcacy of the gram panchayat. Further, it is expected

that the sarpanch would play a crucial role in provision

of these services, by her/his initiative and interest.

This paper tries to look at the relationship between the

gender of the sarpanch and the availability of services.


6/10


Higher Education and Skill Development

Ms. Varsha Malwade,Associate Professors of

Economics & Mr. Vijay Tapas, Professors of Marathi &

Executive Ofcer, Planning & Development, Ramnarain

Ruia College

Education and Skill Development sector comprise

primary education, secondary education, higher

education and industrial/ technical training, including

vocational training. Skill development, in general, means

development of marketable skills in an individual. But it

has come to be equated with the vocational or technical

education / training for the manufacturing/ industrial and

services sector in the recent past.

In India, though various aspects of education, from

primary to higher education fall under the ambit of

Ministry of Human Resource Development, skill

development falls under the purview of the Ministry of

Labour and Employment, with AICTE (All India Council

for Technical Education) as the regulatory body and the

DGET (Directorate General of Employment and Training)

and NCVT (National Council for Vocational Training)

being responsible for developing and implementing the

programmes for vocational training.

The state of Maharashtra, the industrial hub of India,

has made a considerable progress in the last decade

with respect to a number of education indicators. It

it is required to equip those who drop-out of mainstream

education with adequate vocational skills and life skills.

This would further increase the demand for teachers and

trainers from the levels mentioned in this paper. Giventhis context and the discussions in the earlier sections, it

is required that technology and other innovative means

of teaching content/training delivery be adopted. Even

with these factors in mind, and considering the formal

Education and Skill Development/Vocational Training

Sector alone, we expect that the demand for teachers

and trainers would continue to the extent of training 75.3thousand teachers and trainers annually.

Session 4 : Urbanisation in Maharashtra

Urban Maharashtra at 50 : Iss ues and Prospect s

Ms. Sulakshana Mahajan, Urban Planner, MTSU

Changes in Urban structure of Maharashtra

Maharashtra was considered as the most developed state

at the time of independence due to higher percentage

of urban population. In 2001 the state of Tamil Nadu

overtook Maharashtra as far as urban development was

concerned. Urban population registered in Tamil Nadu

was 43.86% against Maharashtras 42.40%. There were

880 cities in Tamil Nadu against 378 in Maharashtra.

Urban structure of Maharashtra is highly polarized


7/10


and sustainable urban development are neglected. The

most developed metropolitan region of Mumbai, which is

also the nancial capital of the Nation, is suffering from

severe socio-economic and political crisis and erosion ofits image as the most advanced city in India. It is not that

solutions and means of addressing them are not known,

but the political will to understand and address them

with bold decisions on the matters of urban governance

reforms are simply missing. In spite of large nancial

help received from the central government through

JNNURM initiative, the basic problems of reforminglegal framework, governance, infrastructure and urban

planning and delivery remain neglected.

Need for paradigm shift in addressing development

It is essential to think of future of Maharashtra in terms of

urban development which does not mean to neglect rural

development. Need for a coherent policy for geographical

restructur ing of Maharashtra. Such a policy has to

address the urban issues by developing understanding

of each of the cities in terms of its economy, natural

resources for growth and regional setting, physical

infrastructure and society. To understand each city in its

context and developing effective and responsible local

governance mechanism would be the key to healthy

growth. Decentralization of local urban governance as

envisaged in the 74th Constitutional amendment needs

calculate inter generational equity

Reorientation of expenditure in order of priorities, for

example, enhanced allocation for growth oriented

and social sector expenditure

For just and equitable distribution of HDI funds, a

New Formula is suggested :

d X 20% funds = Allocation to the district.

d 1

Where, d = 1.0 HDI value of district ;

d = total of differences.

The important key for the development of any state

is equitable budgeting and region specific budgetary

allocation for the sustainable development.

Inequality-adjusted HDI demonstrates the need

for disaggregated analysis of human development

across districts

The diversity in human development outcomessince 2002-03 hints at the need to strengthen public

policies for broader intervention that would stabilize

livelihoods, education, health and welfare of gender

and social groups

Improvements in ranking of Nagpur and Pune due

to improvement in education and health outcomes

hints at plausible links between HD-EG chain

Need to reorient public spending and target human


8/10


To start with we can even use available paramedics

(3 in each sub center) creatively to upgrade the

health sub centers.

Launch public health programs for Cardiovascular

diseases, Diabetes Smoking and addictions,

Obesity, Road Accidents, Malnutrition

Promote affordable drugs, Standard protocols,

Promote generics, Inform consumers, Rationalize

drug prices

Affordable Health care, Empower & Inform

consumers, Promote low priced hospital services

thru PPPs, More public hospitals, Promote Risk

pooling/ social insurance, Improve pre-and post

hospital primary care

For Urbanisation there is a need for a paradigm

shift - Accepting and addressing urban issues of

Maharashtra on a priority basis, Redefining urban

categories to include mega, metro cities, towns,

peri-urban areas, Reforming legal framework for

urban governance and planning, Reforming urban

infrastructure sector, Developing urban reform

agenda through debates, Creating manpower to

tackle the urban development

Compalied and Edited by

Ms. Vidya Dhopatkar, Economist, MEDC with inputs from

Dr. C.S. Deshpande, Executive Director, MEDC

[email protected]

[email protected]

Cover Story

Session I : Maharashtra : The Macro Economic Prole - Growth and Fiscal Balance


9/10


Session II : Regional Imbalance and Inequalities

(R to L) Dr. Neeraj Hatekar, Professor of Econometrics, Department of

Economics, University of Mumbai, Mr. Sharad Kale (IAS, retd), Dr. D. M.

Sukthankar (IAS, retd) - Session chairman

Dr. Vinayak Deshpande, Professor of Economics,University of Nagpur

presenting the paper

Dr. R. P. Kurulkar, Acting Chairman, Marathwada Statutory

Development Board, Aurangabad, presenting the paper

Experts participated at the conference

Session III : Human Development and Empowerment

Cover Story


10/10


Session IV : Urbanisation in Maharashtra

Ms. Prachi Merchant, MTSU, presenting the paper with Dr. Pethe

in chair

Mr. D. R. Pendse, Eminent Economist, Dr. Vivek Damle, CMD, Savida

Group of Companies, Mr. V. S. Palekar, Past - President, MEDC and Mr.

Ajit Nimbalkar, Chairman, MWRC, participating in the Discussions.

Participants in the Conference

cover story maharashtra economy

Documents