International Journal of Social Science & Interdisciplinary Research_____________________________ ISSN 2277-3630 IJSSIR, Vol. 3 (6), JUNE (2014) Online available at indianresearchjournals.com 211 INVESTIGATING THE INTER-RELATIONSHIP BETWEEN REGIONAL INFRASTRUCTURE, POVERTY AND ECONOMIC GROWTH: A DISTRICT-WISE STUDY OF RAJASTHAN VARUN CHOTIA*; OMVIR CHAUDHRY** *RESEARCH SCHOLAR, ECONOMICS AND FINANCE DEPARTMENT, BIRLA INSTITUTE OF TECHNOLOGY AND SCIENCES, PILANI, RAJASTHAN. **ASSISTANT PROFESSOR, ECONOMICS AND FINANCE DEPARTMENT, BIRLA INSTITUTE OF TECHNOLOGY AND SCIENCES, PILANI, RAJASTHAN. ABSTRACT Through this paper, we have tried to analyze the disparities in infrastructure facilities across the 33 districts of Rajasthan. For latest year of data availability i.e. 2011, we have used Principal Component analysis method to construct the composite Infrastructure index using different criteria – Economic, Social and Physical. Further, an attempt has been made to examine the extent of disparities between the different districts in terms of the composite district Infrastructure Index (IFI), Per Capita Net District Domestic Product (PCNDDP) and poverty. The empirical analysis also proves that there exists a positive relationship between IFI and PCNDDP and a negative relationship between IFI and Poverty. KEY WORDS: Economic Infrastructure, Social Infrastructure, Per capita district income, Poverty, Principal Component analysis, Infrastructure Index, Regional Disparity 1. Introduction Infrastructure is the building foundation for economic development of a nation. Adequate infrastructure facilities have become a major pre-requisite for achieving sustainable economic and social development. Improving the infrastructural services is a key necessity for enhancing the productive efficacy of the process and for bringing economic growth. Identifying their importance in achieving economic development, these infrastructure services are also referred as “Social Overhead Capital” (Hirschman, 1985). Infrastructure is defined in the dictionary as “the underlying foundation or basic framework” and can be categorized into “Economic Infrastructure” and “Social Infrastructure”. Economic Infrastructure includes all internal measures of infrastructure that make business activity possible and subsequently promote it. Economic infrastructure includes Transport and Communication, Irrigation, Energy, Banking and Insurance etc., whereas Social infrastructure typically includes social service sectors like Health, Education, and Housing etc. In our study, we have devised one separate category of infrastructure named Physical Infrastructure. This includes all those indicators which facilitate the transfer of goods, services and people from one geographical place to another.eg. Roads per sq.km of area,
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International Journal of Social Science & Interdisciplinary Research_____________________________ ISSN 2277-3630 IJSSIR, Vol. 3 (6), JUNE (2014) Online available at indianresearchjournals.com
211
INVESTIGATING THE INTER-RELATIONSHIP BETWEEN
REGIONAL INFRASTRUCTURE, POVERTY AND ECONOMIC
GROWTH: A DISTRICT-WISE STUDY OF RAJASTHAN
VARUN CHOTIA*; OMVIR CHAUDHRY**
*RESEARCH SCHOLAR, ECONOMICS AND FINANCE DEPARTMENT,
BIRLA INSTITUTE OF TECHNOLOGY AND SCIENCES, PILANI, RAJASTHAN.
**ASSISTANT PROFESSOR,
ECONOMICS AND FINANCE DEPARTMENT, BIRLA INSTITUTE OF TECHNOLOGY AND SCIENCES, PILANI,
RAJASTHAN.
ABSTRACT
Through this paper, we have tried to analyze the disparities in infrastructure facilities
across the 33 districts of Rajasthan. For latest year of data availability i.e. 2011, we have
used Principal Component analysis method to construct the composite Infrastructure index
using different criteria – Economic, Social and Physical. Further, an attempt has been made
to examine the extent of disparities between the different districts in terms of the
composite district Infrastructure Index (IFI), Per Capita Net District Domestic Product
(PCNDDP) and poverty. The empirical analysis also proves that there exists a positive
relationship between IFI and PCNDDP and a negative relationship between IFI and
Poverty.
KEY WORDS: Economic Infrastructure, Social Infrastructure, Per capita district income,
Poverty, Principal Component analysis, Infrastructure Index, Regional Disparity
1. Introduction
Infrastructure is the building foundation for economic development of a nation. Adequate
infrastructure facilities have become a major pre-requisite for achieving sustainable
economic and social development. Improving the infrastructural services is a key necessity
for enhancing the productive efficacy of the process and for bringing economic growth.
Identifying their importance in achieving economic development, these infrastructure
services are also referred as “Social Overhead Capital” (Hirschman, 1985). Infrastructure
is defined in the dictionary as “the underlying foundation or basic framework” and can be
categorized into “Economic Infrastructure” and “Social Infrastructure”. Economic
Infrastructure includes all internal measures of infrastructure that make business activity
possible and subsequently promote it. Economic infrastructure includes Transport and
Communication, Irrigation, Energy, Banking and Insurance etc., whereas Social
infrastructure typically includes social service sectors like Health, Education, and Housing
etc. In our study, we have devised one separate category of infrastructure named Physical
Infrastructure. This includes all those indicators which facilitate the transfer of goods,
services and people from one geographical place to another.eg. Roads per sq.km of area,
International Journal of Social Science & Interdisciplinary Research_____________________________ ISSN 2277-3630 IJSSIR, Vol. 3 (6), JUNE (2014) Online available at indianresearchjournals.com
212
number of registered motor vehicles etc. We have included all those indicators under the
physical infrastructure category which could not lie under economic and social
infrastructure categories. Overall, Infrastructure comprises of all those activities that share
technical features (such as economies of scale) and economic features (such as spillovers)
from users to non-users (WDR, 1994). When the World Bank published the World
development Report (WDR) in 1994 titled “Infrastructure for Development”, it rightly
affirmed the fact that Infrastructure represents the wheels of economic movements of a
nation. These wheels if start running on the right track can bring together major
repayments in terms of higher economic growth, poverty alleviation etc. However, this
could happen only when Infrastructure efficiently provides the services in response to
effective demand (World Bank 1994: pp. 2, 14). The report also talks about the fact that
sufficiency of infrastructure helps in determining a nation’s success and stresses that the
type of infrastructure establishes whether growth can impose its maximum effect on
reducing poverty.
By definition, Infrastructure is the public accumulation of social and economic overhead
capital due to its immense potential for improving the quality of life and effectively putting
a large impact on overall economic scenario. This has been quoted quite often in early
research studies of economists like Rosenstein-Rodan (1943), Lewis (1955), Hirschman
(1958), Myrdal (1958), Hansen (1965) and others. The World development report of 1994
while emphasizing on the strong relationship between infrastructure and economic
development, also mentioned that one should be careful that investment in infrastructure
alone does not assure us growth. This was supported with one more study which showed
that effect of infrastructure on final output is a bit difficult to measure along with a tough
task of measuring this direction of causality. The WDR 1994 report estimated that
infrastructure capacity and economic output go hand in hand i.e. a 1 % increase in
infrastructure stock brings about 1 % in GDP growth or effectively economic growth.
Also, there are different infrastructure sectors which have their own separate impact on
improving quality of living and reducing poverty. Concurrent to the 1994 WDR report, a
decisive contribution by Gramlich (1994) made the way for further empirical researches at
both national and regional levels (Ramirez, 2004; Lambrinidis, 2005; Dasgupta and Koji,
2006; Zou et al. 2008). All these empirical works proved that there existed a significant
difference in the estimates for achieving economic growth for different countries.
Therefore in the current context, it appears quite relevant to analyze these three interrelated
issues – infrastructure, economic growth and poverty and that too at district level as it
gives a more realistic picture. We have done this analysis on the 33 districts of Rajasthan.
An effort has been made through this paper to investigate the spatial gaps in infrastructural
facilities across the 33 Rajasthan districts and in turn analyze their impact on regional
economic development. These inter-district inequalities are a result of various factors like
differences in natural and physical endowments, variations in social factors, institutional
formation etc. These factors hinder the economic development and therefore some districts
keep on developing at a high rate, the others are kept lagging on their slow pace of
development. This backwardness in certain districts of Rajasthan is obviously a contrast to
the essential goal of balanced growth of the state which policy makers aim to achieve.
Further in the study, an attempt has been made to study the interlinkages between Per
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213
Capita Net District Domestic Product (PCNDDP), poverty and infrastructure. Therefore as
we see, this inter-district economic imbalance is a problem which has been feebly
addressed while formulating the five year plans of Rajasthan. Hence, we felt it appropriate
to undertake a study keeping in view the magnitude of this problem.
2. Literature Review
Talking about Rajasthan’s geographical dynamics, it has a total geographical area of 3.42
lakh sq. Km, out of which 61 % is under arid and semi-arid zones. The State does not have
the presence of any perennial river, except Mahi and Chambal which also depend on the
water resources coming in from other states. However, it is strange to see that even after
the policy framework envisioned in the state during the past fifty years, there has not been
much effort made to impede the inter-district inequalities among 33 districts of Rajasthan.
Also, there have not been much studies analyzing these inter regional inequalities. Some
region-specific programmes such as Drought Prone Area Programme (DPAP), Desert
Development Programme (DDP), District Poverty Initiative Project (DPIP), Mewat Region
Development Programmes, Tribal Area Development Programme, Sahariya Project etc.,
have been aimed at bridging the gap between the economically developed districts like
Jaipur, Alwar etc. and the other districts which are still slow on economic (and social)
development forefront.
In terms of Indian context, there are studies which have tried to address the interrelated
issues of infrastructure, economic growth and poverty (Ghosh and De, 1998, 2000; Lall,
1999; Thorat and Fan, 2007; Sahoo and Dash, 2009). Studies like that of Somik V.Lall
(1999, 2007), deal with the role of infrastructure investments in achieving regional
economic development. To put infrastructure at the levels where it can start promoting
economic growth, we need to have the optimal level of investments in infrastructure. There
have been numerous studies in literature corroborating this argument. The starting point of
investigating the role of infrastructure in economic growth was the seminal study done by
Aschauer (1989) where he had put forth the view that public expenditure was quite
productive and slow pace of US economy was due to dip in the public infrastructure
investment. Except this, there have been other studies by Mera (1973), Looney and
(1994) which had their focal point that public infrastructure investment brings about
economic growth. All these studies were done for Japan, Mexico, EEC, USA and Spain.
There have been research studies done on the inter-state disparities examining the
relationship between economic development and infrastructure facilities ,e.g., Rao (1977),
Elhance and Lakshmanan (1988), Ghosh and De (1998, 2004), Sahoo and Saxena (1999)
are a few among these. Meher (1999) in his paper tried to measure inter-state disparities in
the level of development by selecting 16 development indicators for 15 Indian states. He
proposed two methods for measuring inter-state disparities i.e. (a) Equal Weightage Index
Method and (b) Deprivation Method.
There have been quite a few research studies analyzing the regional disparities within the
Indian states or focusing particularly on Rajasthan. Damodar Suar (1984) analyzed the
district-wise data of Orissa relating it to 20 indicators. He used Factor analysis for his
study. Likewise, P.Sudershan (1985) investigated inter-district disparities in the
development levels of Andhra Pradesh. He made use of 21 indicators for his study.
B.D.Parmar (1985) performed an inter-district disparities study centered at the Saurashtra
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214
region of Gujarat. He had used Principal Component Analysis for his research. A number
of studies were done measuring the inter-district disparities in Bihar, Orissa and West
Bengal – Pathak (1970), Uttar Pradesh (U.P) - Sharma and Katiar (1974), and Karnataka-
Nandappa and Sudershan (1981). However, comparatively a broader study with a holistic
prospective was accomplished by Hemlata Rao (1984) when she had used 85 indicators.
She had basically analyzed the tehsil-wise data to describe inter-regional disparities in
India using the Factor Analysis Method. In her study, she classified all the indicators in
two sets. One set was linked to the structural diversity of regions, while in the second set,
indicators were chosen based on the disparities in sectoral and composite levels of
development.
Talking about Rajasthan, the first study talking about inter-district disparities was done by
K.L. Sharma (1975). He selected 22 indicators taken up from four sectors. K.M.Kulkarni
(1977) in this study used demographic data of 1971 Census and selected 8 indicators.
Siddharth Shastri (1997) did a micro-regional study focusing on the disparities in
Rajasthan by telling that how proper planning in Rajasthan could help in reducing the
regional disparities. His period of study was 1961-84. He identified 32 district-wise
indicators chosen from six different sectors and the method was Principal Component
Analysis. Coming to the method of constructing the Infrastructure Index, there is vast
literature available on the same. Sarkar (1994) had used the principal components method
to compute the infrastructure index. In 1997, CMIE (Centre for Monitoring Indian
Economy) had calculated the infrastructure index as a weighted average of various
components pertaining to infrastructure facilities. However, these weights were assigned
arbitrarily. In his study, Bhatia (1999) also constructed an index measuring rural
infrastructure and discovered the fact that infrastructure index had a significant impact on
the per hectare yield of food grains in the analysed state. This was followed by Nagar and
Basu (2002) who together calculated the Infrastructure Development Index for 17 major
Indian states through Principal Component Analysis method. In terms of Rajasthan, the
technique of Principal Component Analysis (PCA) was first employed by M.N.Pal in
1961, and was later extended by Hemlata Rao in 1977. Shastri analysed inter-tehsil (taluk)
disparities in Rajasthan by comprehensively reviewing similar scholary works and finally
gave a detailed note on PCA.
2.1 Infrastructure Scenario in Rajasthan (A) Economic Infrastructure: The Economic infrastructure comprises of all those
indicators which are productive in nature and help in improving the economy eg.
Agricultural production Energy, Telecommunication, Number of post offices etc.
(a) Agriculture: In spite of the era of industrialization and growing contribution of
industrial sectors to the state economy, Rajasthan being an agrarian state still depends
heavily on its agricultural sector. About 70 percent of the state population is dependent on
agriculture and allied activities for their livelihood with around 30 percent of the total
state’s income generated through agriculture. Agriculture in Rajasthan still today depends
heavily upon the timely arrival of monsoon. In kharif crops, the production and
productivity not only depends upon the quantity of rainfall but also on the proper and even
distribution of rain over an adequate time span along with intensity. Bajra is the single
largest crop in terms of area in the state whereas Wheat is the most important Rabi crop
grown in the state. Gram is also one of the important rabi crops of Rajasthan. Under the
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pulses, crops sowing was done in 47.22 lakh hectare area in the year 2010-11 against the
sowing done in 35 lakh hectare area on an average from 2005-06 to 2009-10. Similarly
from the point of production, the average production from the year 2005-06 to 2009-10
was 12.92 lakh metric tonne. Against this, the production in 2010-11 was 32.32 lakh
metric tonne, which was about two and half times more than the average production of five
years.
Development reforms in Agriculture:
The State Government constituted the Rajasthan Kisan Commission for improving
the condition of farmers and finding effective and efficient solutions to problems
related to loan to farmers, price of production, mandi arrangements, agriculture
production export, agro-based industries, agriculture labourers etc. The
Commission started functioning and submitted its first interim report to the Chief
Minister on June 21, 2012.
The agriculture insurance scheme was lunched to reduce the risk in agriculture and
to compensate the farmers for the damage caused to the crops due to adverse
weather. Under this scheme, compensation of Rs.1773.70 crores was provided to
28.60 lakh farmers from kharif-2008 to rabi-2009. Similarly compensation of Rs.
969.27 crores was provided to 59.32 lakh farmers under the weather based crop
insurance scheme from kharif-2008 to rabi-2011.
New Agriculture Colleges have been setup under the Rajasthan Agriculture
University, Bikaner and Agriculture University, Udaipur.
Pack houses have started operating at Chomu (Jaipur), Muhana (Jaipur) and Sohela
(Tonk), while the construction of cold storage of 4000 metric tonne capacity has
been completed at Jhalawar. Under the Agricultural Processing and Agriculture
Business Promotion Policy in 2010, a total of 643 proposals have been received
most of which are related to the setting up of agriculture based industries.
(b) Energy: Rajasthan wants to lead the way in the field of electricity by utilizing
resources available in specific non-renewable energy resources. The power sector has
always been one of the major sectors which receives the major share of the Rajasthan
budget outlay. Recently the centre government has given its thumbs up to set up a new
atomic power project on the banks of river Mahi in Banswara district of the state.
The Power generation picture of Rajasthan is:
Total installed power generation capacity 8958 MW
State generated of which, 56.68 %
Coal based power 71.00 %
Gas based power 9.00 %
Hydro based power 20.00 %
Centre generated 24.26%
Private sector generated 19.06%
(Source: Phd Research Bureau, Compiled from Monthly Review of Power Sector February
2011)
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Development Reforms: Some of the inventive programs taken up by Rajasthan
Renewable Energy Corporation Ltd. (RREC) are Solar City Program, Remote Village
Electrification Programme (RVE), Solar Photovoltaic Power Plant (Grid Interactive)
Program, MW scale Grid Interactive Electricity generation from Solar Energy. The Rural
electrification covers a wide reach of over ninety two percent of villages in the state.
Keeping aside the thermal power generation and conventional wind energy sources,
Rajasthan has a nuclear power plant at Kota.
(c) Telecommunication: Rajasthan has a strong infrastructure in terms of
telecommunication facilities. Rajasthan today possesses a competitive business
environment in both fixed and value added network services. Main service providers in
telecom are BSNL, Airtel, IDEA, AIRCEL, Tata, Reliance, and MTS which are catering to
the ever increasing needs of the state. The strong infrastructure of Rajasthan in
Telecommunication is cemented by the following facts:
As of January 2011, Rajasthan had a massive 29.08 million GSM subscribers.
According to TRAI (Telecom Regulatory Authority of India), there are 33.7 million
wireless subscribers coming in from the state of Rajasthan. Internet connectivity is
available throughout the state and it consists of 1, 95,118 Internet/Broadband
subscribers.
Number of post offices and other communication services: The state has 10321
post offices, 559 telegraph offices and 2350 telephone exchanges.
(B) Social Infrastructure:
Social Infrastructure is a major sub-category of the infrastructure sector and includes all
the assets which provide social services. Social infrastructure includes facilities and
measures for providing health care, education, social welfare and employment etc.
However, the cost of providing all these social benefits is very high. Major social policy
apprehensions of the Government include the provision of infrastructure services,
encouraging more and more Government and community partnerships, integrated service
delivery and social justice.
(a) Education –In Rajasthan there are total 37 Universities out of which 16 are private, 9
are deemed and 12 are Government universities. There are more than 1032 colleges, 6010
Rajasthan’s literacy rate according to 2011 census was 67.06%, out of which male and
female literacy rates were 80.51% and 52.66% respectively. Even though the female
literacy rate has improved over the last decade, it still lags behind the national average of
65.46%, whereas the male literacy is quite close to the national average of 82.14%.
Education development in Rajasthan:
Recently the state government of Rajasthan has declared the opening of 4 new
government universities in different parts of Rajasthan.
With already the presence of one of the top ranked private universities in India-
Birla Institute of Technology and Science, Pilani (BITS PILANI), Rajasthan is well
placed on the education map of the country.
IIT in Jodhpur, IIM in Udaipur, and Central University in Kishangarh are the top
level educational institutions which have been recently started functioning with the
assistance of the Government of India.
Physical education and Sports University is going to be set up on PPP (Public
private partnership) Mode at Jhunjhunu.
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Hydrology and Water Management Institute is going to be established in Bikaner.
This type of institute has been set in only two countries of the world till now.
A State level Agro and Food processing center would be made in Bharatpur.
The State Literacy Mission Authority encourages PPP (Public Private Partnership)
to strengthen and consolidate the infrastructure of CECs (Continuing Education
Centers). In the state budget of 2011-12, a significant amount of Rs 1707.72 Crores
was allocated to the education sector.
(b) Health:
In Rajasthan, there are total 13848 health centers out of which we have 127 hospitals, 199
Health Centers, 13 Urban Aid Posts, 11461 Sub Health Centers and 43864 inpatient beds
as of 2011 census.
There is a provision of Rs 663.53 Crores for the medical and health sector including
ayurveda in the Rajasthan budget of FY12.The development in this sector is ongoing as the
services and amenities in all the hi-tech hospitals and nursing homes of the state are
regularly been upgraded to attract patients from abroad for specialized medicare and health
checkups.
Development reforms: During the Budget session of 2011-12, The Chief Minister of
Rajasthan came up with a policy of distributing useful medicines to the citizens of the state
free of cost. However, this facility would be made available only in government hospitals.
This was implemented from October 2nd, 2011.
(C) Physical Infrastructure
The Physical infrastructure of a particular state comprises of Airports, Railways, and
Roads. The following points tell us all the information pertaining to physical infrastructure
of Rajasthan:
(a) Roads: Rajasthan’s location between landlocked Northern States and Western port
States inflict extra burden on roads due to main reason of interstate movement of
goods and passenger traffic. Also the presence of border areas and the long
international boundary calls for a very good quality of road infrastructure in the
state. Rajasthan has a total road length of 189034 km. as of May, 2011. Out of this,
5724 km. constitute the length of national highways, 11615 km are state highways
and the remaining 7340 km are major district roads.
Infrastructure development:
The construction of new roads is going on to connect all villages in the state.
Different schemes like Missing Link Project (MLP) and Central Road Fund (CRF)
have been put into action for this purpose. Over 1000 km of road stretches joining
national highways are now being upgraded into expressways under the Mega
Highway Project (MHP).
For ensuing better development of road infrastructure in Rajasthan, Road
Infrastructure Development Company Of Rajasthan Ltd. (RIDCOR) is a striving
enterprise of Government of Rajasthan. RIDCOR is a public limited company and
it is a 50:50 joint enterprise of the Government of Rajasthan and Infrastructure
Leasing & Finance Services Ltd.
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(b) Railways: Rajasthan has a good quality railway network with a total length of
about 5911 km, out of which 3842.15 km (65 %) is under broad gauge. The
national average of railway route length (per 1000 sq. km. of geographical area) is
19.23 km. This is 17.05 km in Rajasthan which is quite close to the national
average.
Infrastructure development: Through the Jaipur Metro Rail Project, the State
Government established the Jaipur Metro Rail Corporation in 2010 with the main objective
of improving the levels of city transport in Jaipur city. Many new railways lines have been
set up along with the extension of already existing ones.
(c) Aviation: On Aviation aspect, Rajasthan has full-developed national airports at
Jaipur, Bikaner, Kota, Jodhpur, Udaipur, and Jaisalmer. Jaipur is the only complete
international airport from the state with flights to Dubai, Sharjah, Bangkok and
Singapore. In 2003, Jaipur Airport was approved of the ISO 9001:2000 certification
for its quality Management systems. The number of passengers using the Jaipur
airport has been on the rise as the below numbers suggest:
Jaipur
Airport
2004-05 2005-06 2006-07 2007-08 2008-09 2009-10
International 47033 51689 140019 204283 221732 255704
National 338763 397204 598341 1137762 987608 1267876
Total 385796 448893 738360 1302045 1209340 1523580
(Source: Phd Research Bureau compiled from all India airports- Airport Authority of
India)
3. Data & Methodology
3.1 Data
Infrastructure is calculated either from the prospect of investment towards a particular
service or in terms of the availability of physical quantity of the services to the end users.
For this study we have used the below mentioned indicators of infrastructure classified
under Economic, Social and Physical Category.
Economic Infrastructure:
Cropwise Production in Tonne/hectares - Crops include Chillies, Ginger, Termeric,
Coriander, Cumin Seed and Ajwain.
Percentage of Gross Irrigated area (Out of Total area of district)
Number of Bank branches per lakh of population. The list of banks here include
State Bank of India and its Associates, Nationalized Banks, Foreign Banks,
Regional Rural Banks, Other Scheduled Commercial Banks
Number of post offices per lakh of population
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Social Infrastructure:
Literacy Rate - We have used the percentage values for 2011 (provisional).
Government Medical Institutions (modern medicine) per lakh of population. The
medical institutions here include Hospital, Dispensary, Community Health Centre,
Mother and Child welfare Centre, Primary Health Centre, Aid Post Urban, Sub-
health centre.
Number of scholars per educational institution. The Educational institutions include
Pre-primary and Primary, Upper Primary (Middle), Secondary and Senior
Secondary, Colleges.
Number of Scholars per teacher
Physical Infrastructure: All those indicators which facilitate transfer of goods and
services, which are physical in nature and finally which could not be classified under
Economic and Social infrastructure criteria were included to construct this Physical
Infrastructure category.
Length of Roads per square km. of area. The type of roads includes Painted,
Metalled and Gravelled roads.
Number of census houses per square km. of area
Number of Registered Motor Vehicles per lakh of population
Percentage of Villages connected with roads (Out of total villages per district)
The required data is collected from various files/sources such as:
Basic Statistics,2012, Directorate of Economics & Statistics, Rajasthan, Jaipur
Department of Agriculture and Cooperation, Ministry of Agriculture, Directorate of
Economics & Statistics, Government of India
Agriculture Statistics of Rajasthan, 2010-11, Directorate of Economics & Statistics,
Rajasthan, Jaipur ,
Statistical Abstract Rajasthan 2012
Economic and Human Development Indicators, UNDP report, Rajasthan
Census data Rajasthan, Planning Commission etc.
3.2 Methodology
In our study we have used all the above mentioned 12 indicators of infrastructure services /
facilities to construct firstly the respective individual indices i.e. Economic, Social and
Physical and then by integrating the three to construct a composite/overall infrastructure
index (Calculated as per the Principal Component methodology).
For constructing the index, firstly all the indicators under a specific category need to be
normalized before the Principal Component Analysis was applied to decide the factor
loadings and their respective weights. For normalization, the following formula was
employed:
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NVij = 1 - (Best Xi- Observed Xii)
(Best Xi- Worst Xi)
(1)
Where NVij=Normalized value corresponding to the Xth indicator where i = corresponding
district and j = corresponding indicator
Best Xi = Best/Maximum value of Xth indicator, where i= number corresponding to the
district (In this case values of 33 districts under the Xth indicator will become the i series)
Observed Xij= Observed/current value of Xth indicator where i = corresponding district and
j = corresponding indicator
Worst Xi=Worst/Lowest value of Xth indicator
The Best and the Worst values are dependent upon the nature of a particular indicator. In
case of a positive indicator i.e. positive impact on Infrastructure, the highest value will be
treated as the Best value and the lowest will be considered as the Worst value. However, if
the indicator is a negative in nature (negative impact on infrastructure) , then the lowest
value will be considered as the Best value with highest value as Worst value. In our study,
out of all indicators used, Number of scholars per educational institution and number of
scholars per teacher which have been used to construct Social infrastructure index have a
negative impact on infrastructure.
More number of scholars per education institution signals that there is a scarcity in terms
of educational institutions and same logic applies when we have more number of scholars
per teacher. Therefore, for these two indicators in normalization process, the lowest or
minimum value was considered as the Best value and the highest as the Worst value. Once
the Normalized Values are obtained for all the indicators across the districts of Rajasthan,
in the next step we assign Factor Loadings and Weights. Principal
Component Analysis (PCA) is used to compute the Factor Loading
and Weights of these indicators.
(2)
Where I is the Index for a particular category, Xi is the ith indicator under a particular
category. Lij is the factor loading value of the ith variable on the jth factor; Ej is the Eigen
value of the jth factor.
4. Empirical Analysis and Results Applying the above methodology, we calculated the Economic infrastructure index, Social
Infrastructure index and Physical Infrastructure index for all 33 districts of Rajasthan.
Economic Infrastructure: All the districts were ranked based on the highest to lowest
values of Economic Infrastructure Index. Ganganagar was the highest in terms of
Economic Infrastructure followed by Alwar, Dholpur, Jhunjhunu and Bundi.
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1 1
11
.
.
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Table 1:
Districts Economic Infrastructure
Index
Rank
Ganganagar 0.753 1
Alwar 0.618 2
Dholpur 0.604 3
We have then divided the districts according to the value of Economic infrastructure index
into two groups, viz., (i) developed districts and (ii) Under-developed districts. The
“developed districts” category have its economic infrastructure index value higher than the
average value of Economic Infrastructure index (0.464) and the “Under-developed
districts” category has its value lower than the average (0.464).
Developed Districts - Ganganagar, Alwar, Dholpur, Jhunjhunu, Bundi, Baran, Kota,
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Descriptive Statistics analysis: Sikar was the highest with on levels of social
infrastructure index score of 0.661. This was 1.946 times the value of the district with
minimum value i.e Sirohi having a score of 0.340. The mean index value for all districts is
0.499, standard deviation is 0.086 and coefficient of variation is 17.3%. This tells us that
there is some amount of dispersion but not up to those levels when compared with
economic infrastructure.
Physical Infrastructure: In terms of indicators pertaining to Physical Infrastructure,
Jaipur was the leading district followed by Alwar, Jhunjhunu, Dausa and Ajmer.
Table 3:
Districts Physical Infrastructure
Index
Rank
Jaipur 0.848 1
Alwar 0.727 2
Jhunjhunu 0.701 3
Developed districts: Jaipur, Alwar, Jhunjhunu, Dausa, Ajmer, Bharatpur, Rajsamand,
Descriptive Statistics analysis: Analyzing the districts on physical infrastructure index,
Jaipur leads the way with a physical infrastructure index score of 0.848. This is 20.798
times the value of the district lying at the bottom with lowest value i.e Jaisalmer with a
score of 0.041. The mean index value for all districts is 0.469, standard deviation is 0.179
and coefficient of variation is 38.1%. This tells that there is a huge dispersion between
districts of Rajasthan with respect to the physical Infrastructure index higher than the
economic and social infrastructure.
Overall Infrastructure Index (IFI): After classifying all the districts in terms of
Economic, Social and Physical Infrastructure; an Overall infrastructure index (IFI) was
constructed using the three previously calculated indices. Consequently, the districts were
again classified based on the overall infrastructure levels.
When an overall measure of Infrastructure was constructed, Jhunjhunu was seen as the
leader among all the districts of Rajasthan followed by Ganganagar, Alwar, Sikar and
Jaipur.
Table 4:
Districts Overall Infrastructure
Index
Rank
Jhunjhunu 0.808 1
Ganganagar 0.779 2
Alwar 0.727 3
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Descriptive Statistics analysis: Analyzing the districts on overall infrastructure index
(IFI), we can see that there is a huge variation in terms of infrastructure development.
Jhunjhunu has the distinction of being at the top of the list with an overall infrastructure
index score of 0.808. It is 3.759 times the value of the district with lowest value of
infrastructure index score i.e Barmer which has an index score of 0.215.Jhunjhunu.The
difference between these two extreme infrastructure index scores is 0.593. The mean index
value for all districts for IFI is 0.497, standard deviation is 0.156 and coefficient of
variation is 31.4%. This was a clear evidence of dispersion between districts of Rajasthan
with respect to the overall Infrastructure index (IFI).
Developed districts – Jhunjhunu, Ganganagar, Alwar, Sikar, Jaipur, Rajsamand,
4.1 Inter-linkages between IFI, PCNDDP and Poverty Further in our study, we wanted to see whether the districts possessing good infrastructure
facilities are actually well off or not. To investigate this issue, we have taken two
indicators: (1) Per capita net district domestic product and (2) Percentage of below Poverty
line families out of total families pertaining to a particular district. The Per capita net
district domestic product data at 2004-05 prices (in Rs) was available from 2005 to 2010.
The yearly growth rates were calculated based on the available data and an average of all
these growth rates was taken and applied on the 2010 value to arrive at the 2011 PCNDDP
values which was used in the study. The data for number of below poverty line families as
of 11/3/2014 was used for our study. We calculated the percentage of below poverty line
families out of total families for each district of Rajasthan. The analysis of this data also
shows that there is a negative correlation/relationship between PCNDDP and poverty data;
if one is high the other is low. Also, we found out a positive correlation between PCNDDP
and IFI. This is in alignment with the economic logic.
As we did earlier for infrastructure indices, we made the classification of all the 33 districts
into two groups (i) developed districts and (ii) Under-developed districts on basis of
PCNDDP and percentage of below Poverty line families out of total families. The
“developed districts” will have their PCNDDP value higher than the average (23,942 Rs)
and the “Under-developed districts” will have their income lower than the average (23,942
Rs).For Poverty we will have the reverse case i.e. the good performing districts will have
their percentage value lower than the average (24.16%) and the bad performing districts
will have their value greater than the average (24.16%).
We proceeded in our analysis by analyzing the status of districts with respect to IFI,
PCNDDP and proportion of families below poverty line. Following are the things which
we inferred from the analysis:
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The districts having a high IFI value should ideally signify high PCNDDP and low
percentage of families below poverty line - Alwar, Bundi, Jaipur and Kota fall
under this classification. They can be treated as ideal districts.
The contrary of the first point i.e. districts with a low value of IFI should lead to
low PCNDDP and high percentage of families below poverty line – Barmer,
Churu, Jalore, Karauli, Pratapgarh fall in this category. These can be taken as
the poor performing districts.
However, there are certain inconsistencies i.e. two indicators on the desired side but one on
the undesired side
(1) High IFI, High PCNDDP and High percentage of families below poverty line –
Baran, Ganganagar, Rajsamand, and Udaipur are those districts where
poverty is an issue.
(2) High IFI, Low PCNDDP and low percentage of families below poverty line -
and Sikar are the districts which have their per capita net district domestic
product on the lower side.
(3) Low IFI, High PCNDDP and low percentage of families below poverty line –
Ajmer, Hanumangarh, Jodhpur, Pali and Sirohi are the districts which are
lagging behind on the infrastructure front.
When only one indicator on the desired side and the other two on the undesired side:
(4) Low IFI, Low PCNDDP and low percentage of families below poverty line –
Jhalawar, Nagaur and Tonk only have poverty under the check but fall
behind on infrastructure and income levels.
(5) Low IFI, High PCNDDP and high percentage of families below poverty line –
Bhilwara, Bikaner and Jaisalmer are good on their income levels but fall
behind on infrastructure and poverty measurement.
(6) High IFI, Low PCNDDP and high percentage of families below poverty line –
Banswara and Dungarpur have strong infrastructure but are short on income
poverty criteria.
4.2 Hypothesis Testing
In final part of our empirical analysis, we framed a hypothesis aimed at testing that
whether there is any difference between the rate of economic growth and Infrastructure.
Therefore, we framed the null and alternate hypothesis as :
Null hypothesis: H0: There is no difference between the rate of economic growth and
Infrastructure development
Alternate hypothesis: H1: There is difference between the rate of economic growth
and Infrastructure development
Pearson Correlation Coefficient or r is one of the most important parameters to determine
the linear dependence between two variables.
Using this coefficient the t test statistic is calculated by the relation:
t2 = (R
2) *(n-k)/ (1- R
2)*(k-1)
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Where,
n = number of observations
k=DF= Degrees of Freedom =2 for our study
R2 = r
2 (Square of the correlation co-efficient for a simple linear regression model as
present in our study)
The two tailed t test table value for 0.05% significance level is 4.303 for degree of freedom
2. Therefore, if the calculated t statistic value is greater than the table value, the null
hypothesis can be rejected in the favor of the alternate hypothesis. We performed the
hypothesis testing by taking PCNDDP as our dependent variable as a proxy for economic
growth and changing our single explanatory variable i.e Social, Economic, Physical and
Overall Infrastructure Index (IFI) for each of our models. All the models had their
calculated t statistical value less than the table or critical value i.e 4.303. Therefore, we can
safely conclude that at each of the infrastructure levels, there is no difference between the
rate of economic growth and Infrastructure. In other words, we can say that infrastructure
development and economic growth go hand in hand.
5. Conclusion
This paper uses Principal Component analysis method to compute a composite or an
overall Infrastructure Development Index (IFI) by combining various infrastructural
indices constructed on the basis of social, economic and physical criteria at the district
level of Rajasthan. The Principal component analysis method assigns weights to each of
the indicators used for calculating a particular infrastructure index so as to make certain
that large disparity in any one of the indicators will not disproportionately dictate or
overlook the role of the remaining indicators and avoid any deformity in this inter-district
comparison for the state of Rajasthan.
Analyzing the regional disparities between the districts in terms of Social infrastructure,
we can see that Sikar district is the strongest while Sirohi is the weakest. High literacy rate
and the emergence of Sikar as an educational hub are main reasons behind Sikar’s strong
social infrastructure. There is a good proportion of youth in the district which is the main
catalyst behind this need for education. Many private educational institutions have come
up. On the health front also, Sikar has been on the uptrend with medical institutions
equipped with high end technology coming up in the district. Sirohi, on the other end lacks
the basic infrastructure of schools and hospitals which have led to its downfall on the
social infrastructure levels. On the Economic infrastructure front, Ganganagar shows
impressive results due to its agricultural and fertile land. The fraction of irrigation
happening in this district is enormous and it amounts to the fact that Ganganagar possesses
one of the most fertile lands of Rajasthan. Ganganagar scores well on other production
indicators like number of bank branches and post offices as it is a big district with
population on the higher side and therefore demand is high. Barmer has the lowest score
on economic infrastructure and it is pretty understandable keeping in view of its arid land
and hot climatic conditions which are not at all suitable for agricultural purposes. When it
comes to Physical infrastructure containing indicators like Roads per sq. km of area,
Number of census houses per sq. km, percentage of villages connected with roads etc.,
Jaipur holds the edge over the other districts of Rajasthan. Being the capital of the state, it
is understandable that roads will be of supreme quality along with their high connectivity
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to nearby villages. The road density will be obviously high , setting the benchmark for the
state. On the other hand, Jaisalmer lies at the bottom on these measures. A major
proportion of the area of the district is covered with deserts and being on the Indo-Pak
border also makes it one of the less developed districts of Rajasthan.
Overall when we construct the Infrastructure index (IFI), we see that Jhunjhunu is leading
district among Rajasthan while Barmer is at the bottom. Jhunjhunu is the most consistent
district on each of the individual infrastructure indices whether it is Social, Economic or
Physical. Jhunjhunu gets the distinction of having the presence of educational towns like
Pilani, Bagar etc. In terms of health also, it maintains a good standard. On Economic
forefronts, banks are present in good number as it has high number of educational
institutions and consequently higher number of students. Agriculture is again a major
player in Jhunjhunu’s economy. Village connectivity with roads is good and therefore in
totality Jhunjhunu leads the way among the 33 districts of Rajasthan on measures of
Infrastructure.
6. Policy Implications
Through our empirical analysis investigating the inter-relationships between the IFI,
PCNDDP and poverty, we can see that there is a positive association between IFI &
PCNDDP and a negative association between IFI & Poverty for the districts of Rajasthan.
Therefore, if our economic policymakers of Rajasthan strengthen and improve the
infrastructure facilities along with focus on declining the regional disparities among the
districts, then for sure Rajasthan is on the ideal path of “economic growth with justice”.
Hence, more and more efforts should be aimed at creating a sound infrastructure at the
district level, which will eventually raise the district domestic product, reduce the poverty
levels and in due course improve the standard of living of the people of Rajasthan. Our
econometric hypothesis testing confirms the fact that economic growth and infrastructure
development are compliments to each other and improvement in one leads to the other.
While Rajasthan has been taken steps towards strengthening its infrastructure over the past
decade, there is still a long way to go. As our empirical analysis has shown, economic
growth follows infrastructure development. Boosting infrastructure development levels
will surely bring an increase the state domestic product, which will in turn lead to our
national income growth. Developing the infrastructure will create more employment
opportunities which would eventually help many people come out of abject poverty
conditions. Through improving infrastructure, the sideline attempt is to lift the poor from
one level to another so that they come out of their poverty and are able to participate more
effectively in the economic and social processes of the state. We require a coordinated
action between the policymakers and the government to achieve this.
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Appendix
Table 5: Economic Infrastructure Index Rankings
District Economic Infrastructure
Index
Rank
Ganganagar 0.753 1
Alwar 0.618 2
Dholpur 0.604 3
Jhunjhunu 0.599 4
Bundi 0.597 5
Baran 0.586 6
Kota 0.571 7
Chittorgarh 0.571 8
Bharatpur 0.563 9
Hanumangarh 0.563 10
S.Madhopur 0.545 11
Sikar 0.531 12
Dausa 0.524 13
Jaipur 0.514 14
Jhalawar 0.510 15
Karauli 0.461 16
Dungarpur 0.457 17
Sirohi 0.452 18
Rajsamand 0.452 19
Banswara 0.447 20
Udaipur 0.421 21
Ajmer 0.415 22
Pratapgarh 0.398 23
Bhilwara 0.398 24
Tonk 0.376 25
Pali 0.366 26
Jaisalmer 0.349 27
Nagaur 0.322 28
Jalore 0.293 29
Jodhpur 0.292 30
Churu 0.285 31
Bikaner 0.275 32
Barmer 0.211 33
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Table 6 : Social Infrastructure Rankings
District Social Infrastructure
Index
Rank
Sikar 0.661 1
Ganganagar 0.647 2
Jhunjhunu 0.637 3
Chittorgarh 0.616 4
Tonk 0.598 5
Rajsamand 0.577 6
Jaisalmer 0.575 7
Dungarpur 0.570 8
Bhilwara 0.549 9
Nagaur 0.545 10
Baran 0.543 11
Udaipur 0.531 12
Pali 0.530 13
Bundi 0.516 14
Alwar 0.507 15
S.Madhopur 0.506 16
Banswara 0.496 17
Barmer 0.486 18
Jhalawar 0.484 19
Karauli 0.481 20
Hanumangarh 0.479 21
Bharatpur 0.477 22
Jodhpur 0.464 23
Kota 0.459 24
Churu 0.448 25
Bikaner 0.442 26
Jaipur 0.413 27
Pratapgarh 0.407 28
Jalore 0.398 29
Ajmer 0.378 30
Dausa 0.348 31
Dholpur 0.348 32
Sirohi 0.340 33
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Table 7: Physical Infrastructure Index Rankings
District Physical Infrastructure Index Rank
Jaipur 0.848 1
Alwar 0.727 2
Jhunjhunu 0.701 3
Dausa 0.681 4
Ajmer 0.647 5
Bharatpur 0.633 6
Rajsamand 0.628 7
Banswara 0.626 8
Kota 0.626 9
Dungarpur 0.626 10
Dholpur 0.600 11
Sikar 0.562 12
Pali 0.527 13
Nagaur 0.495 14
S.Madhopur 0.493 15
Sirohi 0.482 16
Udaipur 0.477 17
Bhilwara 0.452 18
Bundi 0.444 19
Jhalawar 0.408 20
Karauli 0.396 21
Jalore 0.393 22
Ganganagar 0.384 23
Churu 0.360 24
Pratapgarh 0.339 25
Bikaner 0.319 26
Jodhpur 0.283 27
Tonk 0.282 28
Baran 0.257 29
Chittorgarh 0.254 30
Barmer 0.251 31
Hanumangarh 0.225 32
Jaisalmer 0.041 33
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Table 8: Overall Infrastructure Index (IFI) Rankings
District Overall Infrastructure Index Rank
Jhunjhunu 0.808 1
Ganganagar 0.779 2
Alwar 0.727 3
Sikar 0.718 4
Jaipur 0.633 5
Rajsamand 0.625 6
Dungarpur 0.622 7
Bharatpur 0.622 8
Kota 0.610 9
Bundi 0.591 10
S.Madhopur 0.570 11
Chittorgarh 0.569 12
Banswara 0.555 13
Dholpur 0.529 14
Baran 0.521 15
Dausa 0.511 16
Udaipur 0.497 17
Jhalawar 0.490 18
Bhilwara 0.486 19
Pali 0.482 20
Nagaur 0.450 21
Karauli 0.448 22
Ajmer 0.445 23
Hanumangarh 0.439 24
Tonk 0.435 25
Sirohi 0.365 26
Pratapgarh 0.319 27
Jaisalmer 0.288 28
Churu 0.284 29
Jodhpur 0.267 30
Jalore 0.264 31
Bikaner 0.253 32
Barmer 0.215 33
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Table 9 : Status table of 33 districts of Rajasthan with respect to IFI, PCNDDP and
Poverty District IFI PCDSP Poverty Overall Sign
Above
Average
Below
Average
Above
Average
Below
Average
Above
Average
Below
Average
Ajmer * * * €
Alwar * * * √
Banswara * * * €
Baran * * * €
Barmer * * * €
Bharatpur * * * €
Bhilwara * * * €
Bikaner * * * €
Bundi * * * √
Chittorgarh * * * €
Churu * * * €
Dausa * * * €
Dholpur * * * €
Dungarpur * * * €
Ganganagar * * * €
Hanumangarh * * * €
Jaipur * * * √
Jaisalmer * * * €
Jalore * * * €
Jhalawar * * * €
Jhunjhunu * * * €
Jodhpur * * * €
Karauli * * * €
Kota * * * √
Nagaur * * * €
Pali * * * €
Pratapgarh * * * €
Rajsamand * * * €
Sawai Madhopur * * * €
Sikar * * * €
Sirohi * * * €
Tonk * * * €
Udaipur * * * €
Note: √ represents High IFI, High PCDSP and Low Poverty (Ideal situation). €
represents inconsistent relationship between IFI, PCDSP and Poverty i.e either High IFI,
High PCDSP and High poverty where poverty is issue or High IFI, Low PCDSP and low