SANJEEV SANYAL On India's East-West Divide, Best States & How India Works

The Neon Show

After India’s big economic shift in 1991, each state grew at different rates—but they didn’t all get there at the same speed.
Western and southern states saw major benefits, while many in the east and north struggled to keep up. In fact, by 2021-22, the per capita income in the top five states was 3.3 times higher than in the bottom five—a clear sign of the widening divide.
So, what does this uneven growth look like?
In the 1960s, Uttar Pradesh, Maharashtra, and West Bengal were leading India's economy with contributions of 14.4%, 12.5%, and 10.5% of GDP, respectively. Today, Uttar Pradesh's share has fallen to 8.4%, and West Bengal's to 5.6%, but Maharashtra remains a top contributor.
Gujarat's share grew from 6.4% in 2000-01 to 8.1% in 2022-23, driven by strong industry and urban centres. Southern states like Karnataka, Telangana, Tamil Nadu, and Kerala now make up about 30% of India's GDP, boosted by cities like Bengaluru and Hyderabad.
In this NEON Show episode, economist and policy advisor Sanjeev Sanyal discusses India’s economic journey and why growth has been so uneven across states. He explains why some regions have surged ahead while others have lagged behind, touching on the role of anchor cities and old policies like the Freight Equalization Policy that held back Eastern states.
Time stamps
00:00 - Trailer
02:40 - Banking Reforms and Creative Destruction
03:20 - Process vs. Structural Reforms
05:33 - Bureaucratic Challenges Affect Efficiency
14:09 - Autonomous Bodies and Obsolete Institutions
16:02 - Is it time to rethink outdated National Monuments?
26:06 - What Does Data Reveal About Indian States
35:03 - Did “Freight equalization” Rob Kolkata of its Competitive edge?
36:25 - East vs. West: Is this India’s true economic divide?
37:32 - Southern and Western India's Success
42:42 - High Growth States Rely on Anchor Cities
44:01 - Reviving Kolkata and Eastern India
45:12 - Local policies that can make or break state economies.
49:11 - Tourism Has Made Sikkim and Goa Economic Stars.
53:35 - India Needs to Modernize the Shipping Sector
01:00:36 - India Needs a Healthy Clash of Ideas
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