Why is South India more developed than North India?

We all wonder why the most prosperous region in ancient and medieval India, for which many battles were fought, which had seen the first republic of the world(Vaishali), which saw huge in-migration,  which saw the oldest world-famous university, Nalanda  is now lagging behind the rest of India. Bihar, Uttar Pradesh, Madhya Pradesh which were known for its prosperity and richness is now called as “Bimaru states” (diseased state) even in economic surveys. An area which was the major source of revenue for Gupta, Magadh, Maurya dynasties have no such economic relevance now.

The land, which was  the centre of biggest dynasties in India have lost all of its charm and is now seen as the reason for over population and illiteracy in country. 

So What changed?

Actually, quite a lot. We have social, economic, Political, geographic factors responsible for this, But all the other factors are directly or indirectly related to economic and geographical factors. Let’s see how.

Northern states like Uttar Pradesh, Madhya Pradesh, Bihar, Chattisgarh etc largely depended on agriculture. Due to the holy river Ganga, this region got the most fertile alluvial soil due to young fertile alluvium deposited every year in plains supporting very good agriculture. Due to agricultural land and proximity to rivers, this area got huge influx of migrants. In ancient and medieval India, agriculture was the main source of income all over the world and same was with India. So, Kingdoms surrounding these regions got good tax collection and so had large armies sustaining their empires for long time. This is the reason, this area saw prosperous dynasties like Maurya and Guptas.

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ancient empires: Gupta Empire

In medieval India also, we saw Slave, Khilji, Tughlaq ,Sayyid, Lodhi and finally Mughal dynasty. These all dynasties prospered in this region. We saw invasions from Afghanistan, Iran, Turkey etc due to huge amount of wealth present here.

So question arises, What was the source of huge wealth ?

In ancient and medieval India, agriculture was the biggest wealth creator in economy. More the fertile land you have, more your income will be and so will be the prosperity. Having so much vast agricultural fertile land created trickle down effect. This had good impact on artisans, potters, blacksmiths, painters etc. There were many growth poles in these regions. Ancient capitals and cities were around these growth poles. Trade also flourished. Students from all over the world came for studying in Nalanda University. This region even saw the birth of new religions like Jainism, buddhism, Sikhism. Buddhism spread to south India, Srilanka, Japan, China, Myanmar and many other regions. This shows the importance this area had in past.

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spread of Budhism

With the passage of time, we saw economic models changing. After big ships were invented by Europeans, they started importing heavily from India, we saw decrease in Land based exports. New sea routes were discovered, increasing trading through ships. During British and french colonial times also we saw fights for ports. Tipu sultan and Haider Ali also fought with Europeans to have control on ports. Ports affected a large part of the economy. So, growth poles started shifting from agricultural land towards ports, and cities started growing around them.

This was not only in India, but whole throughout the world.

Coming to the recent period.

Till world war 1, we had very less industrialisation. We had few textile mills around Maharashtra, resulting in huge in-migration for jobs. Maharashtra and Gujarat were the first few states to see the initial glimpse of Industrialisation. Gujaratis were money lenders and thus helped industrialize this region. Later during second world war, we saw industrialisation in Jharkhand too, due to presence of Iron ores and coal. Early start helped Gujarat and Maharashtra  become one of the few industrialised states. we saw cities like Bokaro and Ranchi coming up in Jharkhand. These all became the growth poles around which other dependable industries got set up. This created a trickle down effect in these areas. The areas around the growth poles further develop due to proximity to it. They become supplier of raw materials and human capital.

After Independence, government followed Mahalanobis stategy and invested heavily in big industries having a feeling, of these industries acting as growth poles and so further developing areas around it.

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mahalanobis

They opened refineries at those places also which was never viable or profitable. For example , Barauni refinery in Bihar imported crude from Assam.

Yes, I agree , it created a growth centre around it and a lot of other small industries which are based on these refineries got set up in close proximity and a state like Bihar with no natural resource also, saw an industrialised city, but this is also true that the project was never a viable one. Even today it imports crude from Africa. The crude which could have been refined in Gujarat, is taken to Bihar resulting in a lot of extra transportation expenses which could have been avoided otherwise. Like this, a lot of other projects were started in different sates which got closed later. This is also the reason, we see very less GRM( gross refinery margins) of IOCL whereas GRM of Reliance Petroleum is very high.

What we must understand is , you can’t challenge geography and topography. Whole through the world, growth engines are created near to the coast so that we incur minimum transportation cost and thus profitably and competitively export produced goods or further transport in inner mainland for domestic consumption.

This theory is followed all over the world. Here are some growth pole examples.

  1. USA 

    tech-map
    USA economic centres

The growth centres can be clearly seen as Boston, New York, Philadelphia, Washington, Atlanta, Los Angeles, San Francisco etc.

2. China

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China economic centres

 

In this map too we can clearly see the growth centres like Shanghai, Liaoning, Zhenjiang ,Anhui etc

3. The United Kingdom

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UK economic centres

The major cities like Manchester, London, Edinburgh etc are all situated near to the coast.

4.  Africa

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African continent main growth centres

In Africa too , the countries which are a little bit developed compared to others are situated near to the coast.

Now the question arises “Why states near to the coast and NCR, more developed?”

I will like to elaborate the reasons for the economic developement of different states.

Presence of port :

Presence of port may not seem a big advantage to you but it is in fact the best jewel, a state can have.

Due to proximity to the ports, big exporting companies invest heavily in the economic zones there. They get cheap raw materials imported from other countries and further incur minimal cost for exporting final manufactured goods. That’s the main reason we see a lot of automobile companies in Chennai, Steel companies in Orissa, Oil refining companies in Gujarat, Textile companies in Maharashtra etc.

Eventually, when industries are set up in a region, it requires human capital, skilled labour and educated work force. This creates an opportunity for educational institutions. In most of the industrialised nations we see educational institution nearby industries, so that industrial research can be carried out in institutions and also, students are in proximity to the industries. So it is win-win situation for both.

Further, when Educational institutes are set up, we see huge in migration of human capital from other states, leading to employment generation for local people. capital inflow from mainland to coastal states supports further growth.

This helps in spread of cities and eventually, growth of state.

Thus, we can see how a single port can change the fate of a state.

2. Capital and NCR effect

Being a capital, Delhi gets good amount of investments. The NCR, ie. the region around it gets developed due to capital effect. Capital will always be a growth pole and will attract migrants from whole India and NCR will keep spreading, as the population grows.

This is the reason why Haryana, western UP, eastern Punjab got developed. Many express highways and high-speed trains are being constructed for further connectivity of this region.

3. Green revolution effect.

When India had huge scarcity of food grains and during draughts, we had no other option, other than to ask USA ,we were in shame. We had to have a green revolution to feed our hungry population. The only way to do so was to subsidise every agricultural input required to big farmers and buy it back at good prices. Farmers of Punjab and Haryana were the only one having vast lands who could have experimented the new seeds and technology. Green revolution was successful and we saw minimum Support Price system come up. Punjab farmers have a very strong lobby in govt department which lobbies every year to increases MSP of food grains. Due to subsidised resources, they made very good profits and became one of the prosperous states of India.

4. IT effect

When most of the educational institutions got set up near to the coastal zones then it made sense to start IT companies nearby the institutions for easy flow of skilled workforce. Now IT centres have started spreading in other parts of India too, as softwares don’t require ports for export.

I have explained how coastal states like Tamilnadu, Kerala, Andhra Pradesh, Gujarat, Maharashtra, West bengal got developed due to port effect. Haryana, Western UP got developed due to NCR effect. Punjab got developed due to Green Revolution effect.

What about the central states who don’t have any one of the things mentioned above?

Agriculture can’t provide income like it did in ancient and medieval times. So poverty increases. In modern times only service and manufacturing sector can provide good income and prosperity. In central mainland states, 60-70% people have no other option than to depend on agriculture.

What about the other countries?

It’s the same situation in other countries too. As I mentioned, in the maps you can see the growth centres. Central states always act as human resource. There is bound to have migration to the coastal states, having no way to avoid it.

However, we are seeing some opportunities opening up for mainland states too. After the telecom and banking boom in India, states like Bihar, Orissa, Madhya Pradesh which were called  diseased states once, due to very poor growth rates, have seen double-digit growth in past decade.

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double digit growth rate of Bihar

 

Seeing saturation and lack of space in IT hubs like Bangalore, new IT hubs in Noida, Gurugram, Pune, Kochi etc are being set up. Even BPO centres are being shifted to tier 2 and tier 3 cities due to increased wages in metropolitan cities.

Before GST, tax collection was production based, ie. the industrialised states which produced a lot of goods and services had more tax revenues, but now post GST, taxation is consumption based. So, more populated states with high consumption of goods and services will see more tax revenue generated. This will help mainland states a lot.

Even if all of these steps are properly implemented and new growth centres created, then also the importance of ports can never be under estimated. Government is implementing  project “Sagarmala” in which new greenfield investment is being done in developing big  ports and coastal economic zones alongside it. Many new cities are also being developed to support the immigration problem. The Sagarmala project will run from West bengal to Tamilnadu and will see hundreds of billions of dollars investment in the long term.

I have tried covering all the major aspects. If anything got untouched, You can comment here.

Article By : Gaurav Kumar

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