Sikkim outdoes nation in per capita GDP growth

GANGTOK, 18 Nov: Sikkim is doing much better as a state than the nation as a whole in terms of growth. This may come as a surprise to many given the size and lack of any visible or vibrant economic activity, but fact remains that the state has a per capita Gross Domestic Product much higher than the national GDP. Not only that, but the Gross State Domestic Product growth rate has been relatively constant at between 7% to 8% on a very modest estimated average over the past decade when that of India as a country has been languishing at 6% on average and for the first quarter of this year was even below 6% at 5.3%.
The most spectacular story is of 2009-10 when the state growth rate went off the charts recording 73.61% growth as per figures with the state. This came down to 8.14% in 2010-11 and presently for 2011-12 the provisional growth estimate, as officials inform is at 8.16% which, too, is much above the national average.
The union government has been constantly lambasted and scandalized on the economic front particularly in view of the grim economic landscape that the present growth rate portends for the country and what it does with the exchange rate with the dollar which has gone up over 10 units over the past year. On the other hand Sikkim has been showing a spectacular growth story with the state economy recording a record and unbelievable high of 71.59 % per capita growth rate for the year 2009-2010, as per figures with the state government!
The per capita GDP in actual figures for that year was Rs. 73,106 lakh. For the financial year previous to that, 2008-09, the per capita gross domestic state product (GSDP) growth rate was recorded at 14.81% or Rs. 42,605 lakh in rupee terms. This, too, is double the national growth story. In 2007-08 the growth rate was recorded at 6.53%.
However, for the past year, 2010-2011 the per capita GSDP came down drastically from the previous two year’s GSDP to register a still positive performance at 6.90%; in rupee terms the GDP stood at Rs. 78,151 lakh. At a growth rate of almost 7%, the state is certainly doing much better than the rest of the country. And to think that Sikkim at one time had an almost negative growth rate when in 1994-95 the GSDP growth rate recorded was less than 1% at 0.8%!
The provisional estimate for the current fiscal in terms of per capita growth rate of the state GDP is 8.16% or Rs.514761 lakh, just a touch higher than the previous year’s. In terms of per capita GDP the figure is 6.93% compared to 6.90% of the previous year and in rupee terms it is recorded as Rs. 83,565 lakh compared to the previous year’s Rs. 78,151 lakh.
There is an explanation for the spectacular jump of growth of GSDP in the years 2008-09 and 2010-11, the figures which have been calculated on a provisional basis. Officials explain that this was the year when the Pay revision was being sorted out. In 2008-09 there was the payment of arrears to the government employees while the following years the pay revision was announced.
This led to tremendous purchasing power with the public and it also goes on to indicate how much the economy depends on government employees who compose the largest single category of work force in the state.  Even the central government employees got a pay revision; the pay revision which led to enhanced purchasing power also led to increased expenditure.
The per capita GSDP is calculated by either adding up everyone’s income during the period or by adding the value of all final goods and services produced during the period or the total expenditure during the given period. It is therefore an indicator of the standard of living as well.
The primary contribution to the GSDP in Sikkim is the Tertiary sector which includes storage, trades, hotels, banking, transport, private businesses and enterprises. While this is the largest contributor to the economy, the exact estimates of its contribution is not quantified as not all private businesses and enterprises have been accounted for.