HOWTHE STATES WERE RANKED

India Today - - THE STATE OF THE STATES - by Bibek De­broy and Laveesh Bhan­dari

men­tary ed­u­ca­tion per 6 to 14-yearold, ra­tio of boys to girls in ele­men­tary school and teacher-pupil ra­tio); consumer mar­ket (house­holds own­ing TV

sets, num­ber of af­flu­ent house­holds, per capita de­posits in banks and per capita own­er­ship of two-wheel­ers); agri­cul­ture (per­cent­age of cul­ti­vated area, agri­cul­ture GSDP per ru­ral pop­u­la­tion, food grain yield, loans to farm­ers and net ir­ri­gated area); in­fra­struc­ture (per­cent­age of homes with elec­tric­ity, per capita road length, per­cent­age of vil­lages con­nected with pucca roads, bank branches, LPG con­nec­tions, post of­fices and tele­phones); and in­vest­ment (per capita cap­i­tal ex­pen­di­ture, com­mer­cial bank credit and gross cap­i­tal for­ma­tion in man­u­fac­tur­ing, ra­tio of fac­to­ries to num­ber of dis­putes, ra­tio of in­dus­trial work- ers to ur­ban 15-59 age pop­u­la­tion, and per­cent­age of sick Small Scale In­dus­tries). Data on all the pa­ram­e­ters was nor­malised.

To ob­tain a state’s per­for­mance un­der any one head, vari­ables have to be ag­gre­gated. We used prin­ci­pal com­po­nents anal­y­sis ( PCA), which churns out weights in the es­ti­ma­tion process. Ac­cord­ingly, for each head, we have scores for each state. Hence, the eight heads are ag­gre­gated into an over­all per­for­mance in­dex for each state. For this ag­gre­ga­tion, we are reporting equal weight ag­gre­ga­tion, since in this case there is lit­tle dif­fer­ence be­tween equal and PCA weights. All the data is pub­licly avail­able and is sourced from govern­ment and re­lated or­gan­i­sa­tions. How­ever, in un­der­stand­ing the de­vel­op­ment of a state, what is im­por­tant is not the base level score, but its in­cre­ment. And this year we move to em­pha­sis­ing the changes in the scores. The base level de­pends on var­i­ous his­tor­i­cal fac­tors and in­cre­men­tal im­prove­ments pro­vide a lot of im­pe­tus for growth. Us­ing the in­cre­ments in scores, states are ranked for each head on the ba­sis of their im­prove­ment.

We ac­knowl­edge the ef­forts of Minakshi Chakraborty, Swati Gupta, and Su­nil Bhatt of Indi­cus An­a­lyt­ics in sourc­ing the in­for­ma­tion as well as con­duct­ing the ba­sic anal­y­sis.

BIBEK DE­BROY(L) AND

LAVEESH BHAN­DARI

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