A comprehensive analysis highlights the deepening economic divide across Indian states since liberalisation, with southern states pulling ahead of northern counterparts like Uttar Pradesh and Bihar, raising questions over uneven development trajectories.
A new analysis by the Economic Advisory Council to the Prime Minister suggests that India’s post-1991 growth has been deeply uneven, with southern states pulling ahead sharply while Uttar Pradesh and Bihar have fallen behind. The paper, titled “Relative Economic Performance of Indian States: 1960-61 to 2023-24”, says the southern states became the strongest performers after liberalisation, while the two large Hindi belt states saw their relative positions worsen after bifurcation.
The council’s study, authored by Sanjeev Sanyal and Aakanksha Arora, also finds that Maharashtra and Gujarat remained steady outperformers in the west. Gujarat, in particular, accelerated from the start of the 2000s. In the north, Delhi and Haryana stood out, though the paper notes that Haryana’s economic strength is concentrated largely around Gurugram and nearby districts.
The analysis paints a more mixed picture elsewhere. Punjab, which had benefited from the Green Revolution in the 1960s and 1970s, has slipped steadily since then, prompting the paper to question whether an excessive emphasis on agriculture may have slowed its shift towards industry. West Bengal, meanwhile, is described as a continuing concern: a state that held the third-highest per capita income in the 1960s but later fell to 14th place among major states.
The report says Rajasthan and Odisha recovered some ground after liberalisation, though their gains were limited, while Chhattisgarh and Madhya Pradesh remained persistently low-income states. The paper does not include Goa, Himachal Pradesh, most north-eastern states or Union territories other than Delhi in its main comparison, and it uses per capita income and state GDP share to map long-run divergence across India. Related studies on post-1991 state performance have similarly pointed to strong regional gaps, with growth and development concentrated unevenly across the country.
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