India - Jharkhand : Addressing the Challenges of Inclusive Development

Abstract

This study on Jharkhand in India addresses the challenges faced by that new state of India (founded in November 2000) to surmount adverse initial conditions of low average income, very high incidence of poverty, and little social development. In addition, initial health and education indicators in Jharkhand were also markedly unfavorable in comparison to both the all-India average and the major Indian states. The paper points out that in order to put its fiscal house in order, the state needs to introduce reforms for improving resource mobilization, increasing cost effectiveness of expenditure and rationalizing the budgetary processes. Improvement of infrastructure is critically important, and once this has occurred, this will lead to favorable pro-poor changes in the labor market as well. Two opposite views of the development debate are represented by the different degrees of importance given to mining and agriculture. One view contends that the development of the mining sector can usher in a new decade of development in Jharkhand. The second view is that the potential risks associated with the mining sector are high and that agriculture has shown great potential through impressive growth in recent years contributing significantly to poverty reduction and human resource development. Given the strengths and weaknesses of the two options, the present study suggests a middle path, aiming at an inter-temporal balance between the two strategies. The paper stresses that social inclusion and effective citizenship for all are desirable outcomes everywhere, especially in Jharkhand with its sharp social and regional divide. It concludes that political commitment is needed to "make development happen" in the shortest possible time.