India’s Eighth Five Year Plan (1992-97) had target of 5.6% growth in Gross Domestic Product (GDP). But liberalisation, restructuring and economic reforms have over-shadowed the planned growth targets. The country’s economy had to undergo recession due to demand management with the result the period of 1990-91 to 1997-98 had lower growth than was planned. But last few years have witnessed growth of over 7% in GDP. The agricultural sector, which is major constituent of GDP has been reduced from over 55% in 1950-51 to half way mark in 1995-96 and is reducing further. These accompanied by commensurate increase in share of manufacturing and other sectors. The large public sector enterprises (PSEs) are located few states in India generating a significant number of employees of the respective states. This regional misbalance is the main constraints of development in all the states. The following table shows a petty distribution of capital and employment generation in Himalayan region.

Table 8. PSE’s distribution of gross block and employment in Himalayan region: states are ranked according to the gross block on financial year ending March 1996.
 

States	Gross block (Rs. in crore)		Employment in lakhs
	April 1985	March 1996	April 85	March 96
JAMMU & KASHMIR	46.28	5795.43	0.04	0.07
HIMACHAL PRADESH	211.05	3988.70	0.04	0.07
ARUNACHAL PRADESH	0.00	1126.60	0.00	0.01
TRIPURA	93.38	626.33	0.01	0.01
NAGALAND	72.98	389.44	0.01	0.02
SIKKIM	0.00	165.79	0.00	0.01
MANIPUR	131.32	146.02	0.03	0.02
MEGHALAYA	1.89	36.00	0.01	0.02
MIZORAM	0.00	29.69	0.00	-

[Source: Public Enterprises Survey, 1996-97, Vol. 1]

Some parts of Assam, Uttar Pradesh, and West Bengal hills come under the Himalayan region and the districtwise data for them is not available.

In terms of Public Sector Enterprise’s distribution the Himalayan states altogether share is very insignificant to the country’s gross block. Though the gross block of 9 Himalayan states has increased over 22 times during these 10-year periods, but it contributes only 4.8% of country’s total gross block as on March 1996. The employment figures of these states have increased more than 64%, while it exhibit a marginal decrease (21.91 to 20.96 lakhs) in number of employees of all-India during the period.

Table 9. States’ Finance 1995-96: states are ranked according to the descending order of revenue-expenditure ratio (Rs. in crores)
 

State	Grant from Centre	Tax revenue	Capital disbursements	Revenue expenditure	Developmental expenditure	Non-developmental expenditure	Plan expenditure	Non-plan expenditure	Additional resource mobilisation	Revenue/expenditure ratio
ARUNACHAL PRADESH	502.4	8.8	275.3	432.2	598.2	150.8	436.4	321.1		0.231
JAMMU & KASHMIR	1890.7	267.9	1017.8	2295.8	2061.8	1034.4	1045.8	2267.3		0.222
MANIPUR	391.7	26.7	164.1	500.9	473.4	184.7	269.3	403.7		0.210
HIMACHAL PRADESH	841.7	334.3	343.7	1652.3	1473.7	669	801.5	1394.4		0.186
MIZORAM	305.5	5.2	135.9	430.1	419.2	135.9	209.8	356.1	0.8	0.185
MEGHALAYA	362.1	79.4	219	600.4	604.5	190.9	391.9	427.5	2	0.182
NAGALAND	480.5	20.2	202.2	767.4	580.9	356.6	304.4	665.3		0.174
TRIPURA	536.8	50.2	256.9	897.1	816.5	312.2	544	610		0.171
SIKKIM	205.1	19.7	111	565.4	287.7	379.3	199.5	477	5.5	0.114
HIMALAYAN STATES$	5516.5	812.4	2725.9	8141.6	7315.9	3413.8	4202.6	6922.4	8.3	0.194
	(22.82)	(1.32)	(8.78)	(5.54)	(6.54)	(5.79)	(8.17)	(5.47)	(0.87)	(117.58)

[Source: RBI Bulletin]

Figures within () indicate the % share of Himalayan states to the all-India figure. The total revenue and expenditure ratio of Himalayan state is much higher than that of national average (0.165).

Figure 6. Finances of Himalayan states (1995-96)

All these states have the common characteristics of significant tribal population and border states with considerable international boundaries. All of them having very low level of infrastructural development with relatively low per capita income. Only Arunachal Pradesh having a marginally higher NSDP, while Tripura is the second poorest state in the country. Some area of Assam, Uttar Pradesh, and West Bengal (low to middle income states respectively) falls under hill region, whose NSDP is not comparable to entirely hilly states and hence excluded.

Bank Credit: Commercial Banks in India mostly saddled with the responsibilities of serving the needs of priority sectors like agriculture, small scale industries/business and weaker sections of the society and unable to cope with the credit requirements of large industries, innovative technologies which is expected to reduce its dependence on bank credit. Statewise distribution of aggregate deposits and gross bank credit by all scheduled commercial banks for financial year ending 1993 and 1998 are given in the following table 10.

Table 10. Scheduled commercial bank deposit and credit (Rs. in crores): states are ranked according to the descending order of credit-deposit ratio in 1998.
 

State	Deposits			Credit			Credit-Deposit Ratio in Percentage
	1993	1998	% change	1993	1998	% change	1993	1998	% change
MANIPUR	113	283	150.44	86	167	94.19	76.11	59.01	-22.46
JAMMU & KASHMIR	2350	5806	147.06	1081	2169	100.65	46.00	37.36	-18.79
TRIPURA	344	832	141.86	207	283	36.71	60.17	34.01	-43.47
MIZORAM	115	214	86.09	29	49	68.97	25.22	22.90	-9.20
HIMACHAL PRADESH	1918	4373	128.00	610	945	54.92	31.80	21.61	-32.05
SIKKIM	111	280	152.25	34	58	70.59	30.63	20.71	-32.37
NAGALAND	243	545	124.28	98	100	2.04	40.33	18.35	-54.50
MEGHALAYA	463	1019	120.09	82	155	89.02	17.71	15.21	-14.11
ARUNACHAL PRADESH	198	413	108.59	36	54	50.00	18.18	13.08	-28.09
Indian Himalaya$	5855	13765	135.10	2263	3980	75.87	38.65	28.91	-25.19

According to RBI Bulletin referring all scheduled banks the all-India figure of credit-deposit ratio (1996-97) is 54.91, which is much higher than the respective figure of Indian Himalaya. All the states show a declining rate of credit-deposit ratio on 1998 over 1993.

Table 11. State-wise and purpose-wise sanctions and disbursements (Rs. in lakhs) under schematic lending during 1998-99.
 

State	Financial assistance	Disbursement	Major scheme/programme
HIMACHAL PRADESH	7482	6416	Non-farm sector, farm mechanisation, dairy development, land development, IRDP, minor irrigation
JAMMU & KASHMIR	3158	2570	Non-farm sector, farm mechanisation, IRDP
TRIPURA	1840	1735	IRDP, non-farm sector
MEGHALAYA	868	796	Non-farm sector, IRDP
ARUNACHAL PRADESH	706	459	Plantation/horticulture, non-farm sector, IRDP, farm mechanisation
MIZORAM	376	351	IRDP, non-farm sector, poultry/sheep/piggery, plantation/horticulture, dairy development
MANIPUR	375	325	IRDP, non-farm sector
SIKKIM	184	167	IRDP, non-farm sector
NAGALAND	167	149	IRDP, SC/ST action plan

[Source: NABARD Annual Report 1999]
Data of Assam, Uttar Pradesh and West Bengal Hills are not available

Content

Index