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c. Comparing Tamil Nadu

c. Comparing Tamil Nadu Growth with GDP Growth Looking at Tamil Nadu’s performance in terms of growth rate of GSDP (at constant prices) since the late nineties, two features stand out: (a) there was a fall in the growth rate in the early part of this decade, and (b) this fall was more than that of GDP representing average growth performance in the country. In comparative terms, growth rate of Tamil Nadu has been more than the GDP growth in many years but the reverse is also true for several years. In general, there is greater volatility in Tamil Nadu’s growth rate as compared to the GDP growth rate (Chart 2.2) Chart 2.2: Growth Rate of Tamil Nadu GSDP and the Overall GDP Growth of the Economy 14.000 12.000 10.000 8.000 6.000 4.000 2.000 0.000 -2.000 1994- 95 1995- 96 1996- 97 1997- 98 1998- 99 1999- 00 2000- 01 2001- 02 2002- 03 2003- 04 2004- 05 2005- 06 2006- 07 -4.000 TNGSDP GDP Given that the share of secondary and tertiary sectors in Tamil Nadu are higher than that in the all-India GDP, and since these are the high growth sectors, it is desirable for Tamil Nadu to aim at a growth rate that is at least 0.5 to 1.0 percentage points higher than the National GDP growth rate on a sustained basis. If the real GDP growth rate is likely to average at about 9 percent (leaving out the current slowdown phase), the Tamil Nadu GSDP should be targeted to grow at 9.5 to 10.0 percent per annum in the medium term. Given Tamil Nadu’s relatively lower growth of population (see section 2.5), this could translate into higher growth in per capita income of about 1.5 to 2.5 percentages to the average for India. This will require attracting considerable investment from the rest of India and abroad. These trends will lead to a reduction in rural poverty both by reduction of the head count ratio in rural areas and migration of some poor to the urban areas. There will be a significant impact on poverty reduction in Tamil Nadu provided 34

policies are in place to absorb larger and larger people migrating out of agriculture into the fast growing services sector. 2.3 Growth and Poverty Reduction in Indian States: Some Empirical Results Datt (1997, 1999), Datt and Ravallion (1992, 1997, 1998a, 1998b) and Ravallion and Datt (1996a, 1996b, 1999) have analysed the determinants of and factors (including policy instruments) that influence the trends in poverty. Some of their main findings can be summarised as follows: (a) poverty ratio falls by one percent for every one percent increase in net domestic product per capita; and (b) a decomposition of the changes in poverty ratio into a growth component (i.e., growth in mean consumption) and a redistribution component shows that nearly 87 percent of the observed decline in poverty ratio was accounted for by the growth component. The decomposition of growth and income distribution and their impact separately on poverty is discussed later in this Chapter. Further, the sectoral composition of growth is important as rural economic growth contributes far more to poverty reduction than urban economic growth. Also, initial conditions relating to human resources and infrastructural development accounted for a sizeable share of the differences between states in reducing rural poverty. Ravallion and Datt (1999) address specifically the problem of why growth is more pro-poor in some economies than others. They examine the evolution of poverty measures across major Indian states and cross-state differences in the poverty-reduction impact of various sources of growth. They use the diverse experiences of states to shed light on the question whether these differences are due to variations in rates and sectors of growth, or whether there are differences in the actual impact of that growth including the effects of differences in initial state conditions. Their starting point is based largely on modelling aggregate (rural and urban) poverty measures, and relaxing the traditional assumption that the impact of growth on poverty reduction is uniform across states. Ravallion and Datt’s study reveals that non-farm growth is more pro-poor when initial conditions in the states indicate higher female literacy rates, higher initial farm yields, lower infant mortality, and lower urban-rural disparities in consumption levels and landlessness. When these variables are controlled, initial urbanization rates and initial non-farm products are not found to have a significant impact on the non-farm output elasticity of poverty. By using state poverty measures for India over 1960-1994 and allowing for state fixed effects, Ravallion and Datt found that higher farm yields, higher state development spending, higher urban and rural non-farm output and lower inflation 35

World Comparative Economic And Social Data
Police Stations - Tamil Nadu Police
N u m b e r o f S c h o o l s - DISE
Census 2011 population of Latur district
PDF: 1.0MB - Population Reference Bureau