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Growth and Development in Chhattisgarh: a Credible State

Chhattisgarh :Credible state with incredible potential Introduction Creation of the State of Chhattisgarh The creation of Chhattisgarh on November 01, 2000 fulfilled the demand for separate statehood that was originally raised in 1925 and subsequently rejected in the post independence era by the State Reorganisation Commission set up in 1954.The ‘Madhya Pradesh Reorganisation Act 2000’ was eventually passed by both houses of Parliament and approved by the President of India on August 25, 2000.This paved the way for the creation of the 26th State of India on November 01, 2000.

The creation of the new State of Chhattisgarh has succeeded in granting a sense of identity to its people and has provided them with the unique opportunity to chart their own destiny.

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General Profile Chhattisgarh located in central India has been carved out of the sixteen eastern and south-eastern districts of undivided Madhya Pradesh. It is a landlocked state bound in the north by Uttar Pradesh and Jharkhand, in the east by Orissa, in the south by Andhra Pradesh and in the West by Madhya Pradesh and Maharashtra.

Chhattisgarh is the tenth largest State in India with an area of approximately 135000 sq kms. The state now consists of 27 districts in 5 divisions with capital in Raipur and high court at Chhattisgarh. The population of the state as per 2001 census is 2,55,40,196(prov. ) In terms of population the State ranks 16th. 80% of the total population lives in rural areas. A large portion of the State’s population comprises of tribals, scheduled castes and scheduled tribes. State has a population density 189 which is fairly low as compared to India.

Sex ratio is 991 per thousand of males and ranks 5th in India in this regard. The literacy rate is 71. 04% which is still quite low. Competitive analysis of Chhattisgarh For a comprehensive analysis of the state it is important to assess the State’s potential in terms of its inherent strengths and weaknesses. The SWOT analysis which I am going to present is not intended to be exhaustive. However, it is indicative of some of the primary issues that the State will need to contend with, going forward with its strengths and opportunities. . WEAKNESSES Threats

The absence of large local markets, skilled labour, adequate physical infrastructure and low urbanisation are some of the key weaknesses of the State. ?? Landlocked and limited local markets As a virtually landlocked area, the State has to depend heavily on its road and railway network, which is to a considerable extent limited. Additionally a large rural population coupled with low per capita income limits the size of the local market. However, a few cities in the State have demonstrated the potential to develop into substantial local markets, which is evident from their current levels of per capita spending ? Low telephone density The telephone density in the State is low as compared to the national average. This particularly inhibits the efficient functioning of the service industry that depends heavily on Information and Communication Technology (ICTs). Opportunities ?? Low skilled labour The relatively low level of industrialisation in the State has limited the development of skilled labour. The current availability of skilled labour is further restricted to select industries only due to the absence of a divergent industrial base ?? Limited physical infrastructure

State still have vast area of undeveloped land and regions that have been untouched by modern development. While this is the result of years of prior neglect in developing proper physical infrastructure but now constitutes the weakest link in the progress towards economic development ?? Frequent droughts Although the average rainfall in Chhattisgarh compares well with several other states, neglect of traditional water preservation practices in recent times has led to frequent droughts. Further, the proportion of irrigated area in the State is only 16 percent of the total cultivable area.

There is however, potential to raise the proportion of irrigated area to 75 percent of the total cultivable area ?? Low urbanisation The State ranks low on urbanisation index with limited number of urban centres, which are confined to central Chhattisgarh. Low urbanisation and lack of adequate physical infrastructure are the key reasons why Chhattisgarh is low on national perception, and also ranks low on development indicators along with the perceived potential for development. THREATS ?? Over dependence on natural resources

The State must take care to use its natural resources judiciously. An emphasis on balanced and all-round development would be essential to ensure environmentally sustainable growth. Having said that, there is little doubt that the optimal utilisation of natural assets holds the key to State’s development process ?? Political compulsions Political will at all levels is a must to enable any kind of change. Any disruption in the pace or direction of proposed reforms could hamper the swift movement towards economic development ?? Suspicion of and opposition to change

The people of the newly formed State being accustomed to prior neglect, may look upon any kind of change with doubt or suspicion. The State must, in the spirit of participatory democracy, take steps to build consensus and infuse a sense of confidence in its people with specific reference to the objectives, direction and pace of economic development While it is absolutely essential to understand the weaknesses and threats (significant but not exhaustive), it is the aggregate of strengths and opportunities that infuses the State and its people with a sense of optimism about the future.

STRENGTHS ?? Rich natural resources Undoubtedly the biggest strength of the State, Chhattisgarh used to contribute 46% of mineral revenues to undivided Madhya Pradesh and is ranked second in the list of mineral producing States in the country. It has rich deposits of limestone, iron-ore, copper-ore, rock phosphate, manganese ore, bauxite, coal, asbestos and mica. In fact Chhattisgarh, along with Orissa and Jharkhand constitute over 80% of the nation’s coal reserves. Chhattisgarh also has proven reserves of diamond – which can, in the future, be a large source of income for the State.

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Although the State already has a substantial presence of core industries, a large part of the mineral potential is yet untapped, providing Chhattisgarh with a unique opportunity to use its mineral wealth to spur economic development. Apart from minerals, Chhattisgarh also possesses a large forest cover encompassing approximately 44% of the total geographical area. However, the true potential of the minor forest produce is yet to be assessed and utilised. The State has abundant but untapped water resources – essential for harvesting the potential of agriculture. ??

Surplus power Chhattisgarh is fortunate to be one of the few States that are currently power surplus. This could be an important criterion for Industrialists making project and investment decisions, to Chhattisgarh’s advantage. Presence of low grade coal makes Chhattisgarh an ideal location for setting up of low cost pit head based thermal power plant, capable of generating power to meet the requirements of other States . By exploiting its unique location along with large coal reserves, Chhattisgarh has the potential to become the power generating hub of India ??

Favourable labour climate Though the relative skill base is low, the presence of a large number of willing and able-bodied people contributes to the presence of a substantial workforce. The State has a high worker participation rate (male and female) and a high labour force in the 15-39 age group. It also has one of the lowest losses in person-days in the country attributed to labour problems ?? Relatively low land cost With a lower population density and urbanisation ratio, the State would be able to offer land at extremely competitive prices for some time to come ? Fiscal position The fiscal deficit situation of the State is currently under control. It also has reliable sources of public finance and possesses no deficit on account of either the State Electricity Board or Road Transport Corporation. This is contrary to the situation in other states, wherein these agencies are the principal contributors to the fiscal deficit. ?? Political Leadership and Bureaucracy The number of bureaucrats and government employees compared to the other States in the country.

This has also resulted in one of the lowest expenditures in the country on government functioning. The presence of a strong, committed and focussed leadership is an asset. OPPORTUNITIES ?? ‘New State’ advantage The fulfilment of the demand for a separate State has given a new sense of identity and pride to the local people. Being a new State and with limited legacies of the past, this is a historic opportunity for Chhattisgarh. It can leverage on this status to undertake reforms and frame policies to aid rapid social and economic development.

No past legacies provide the State with an opportunity to prepare policies which are based on contemporary economic principles and which help create responsive governance. ?? Location advantage The geographic location of the State is strategic – it borders seven states in the country. NH-6, which connects the west to the east, passes through some of the most industrialised areas of the State. Chhattisgarh could use this geographic locational to its advantage to develop a logistics and warehousing network to service the region. ?? Demand for Energy in the country

While the rest of India faces acute power shortages, the same is not true of Chhattisgarh. Further, in view of the presence of large coal reserves in the State and the fact that it is situated in the middle of the national power grid makes it an ideal location for setting-up coal pit-head based thermal power plants. ?? Partnership The State recognises the opportunity of an increasingly borderless world and the resulting benefits of forging partnerships with national and international communities, private and developmental institutions to spur economic development. ?? Value addition

Currently a large part of exports from the State is in form of raw material (across minerals, agriculture and forest produce). The state could capitalise on the abundant availability of basic raw material to encourage setting up of processing units for ensuring value addition and subsequently increasing avenues for employment and enhanced income ?? Service industry India has made rapid strides in the service industry in the past few decades. The State could potentially capitalise on these areas of country advantage, specifically in the field of information and biotechnology.

It is precisely this aggregate of strengths and opportunities that gives the State a positive and optimistic outlook on the future and the confidence to draft its Vision Statement. ————————————————- Chhattisgarh Economy The union ministry of Statistics, has included Chhattisgarh as one of the top four states posting 10. 8 per cent GDP growth during 2011-12. It may be termed as a ‘big success’, as this was the third year the state has maintained over 10 per cent GDP growth which is more than the national average of 6. 5 %.

Chhattisgarh’s success factors in achieving high growth rate are growth in agriculture and industrial production. Agriculture Sector Agriculture is counted as the chief economic occupation of the state. About 80% of the population of the state is rural and the main livelihood of the villagers is agriculture and agriculture-based small industry. The majority of the farmers are still practicing the traditional methods of cultivation, resulting in low growth rates and productivity. The farmers have to be made aware of modern technologies suitable to their holdings.

Providing adequate knowledge to the farmers is essential for better implementation of the agricultural development plans and to improve the productivity. When a very substantial portion of the population is dependent on agriculture, a situation where nearly 80% of a state’s area is covered only by one crop, immediate attention to turn them into double crop areas is needed. Also, very few cash crops are grown in Chhattisgarh, so there is a need to diversify the agriculture produce towards oilseeds and other cash crops. Chhattisgarh is also called the “rice bowl of central India”.

Chhattisgarh has a limited irrigation system, with dams and canals on some rivers. Average rainfall in the state is around 1400 mm and the entire state falls under the rice agroclimatic zone. Large variation in the yearly rainfall directly affects the production of rice. Irrigation is the prime need of the state for its overall development and therefore the state government has given top priority to development of irrigation. Industrial sector Power sector Chhattisgarh is one of the few states of India where the power sector is effectively developed.

Based on the current production of surplus electric power, the position of the State is comfortable and profitable. Strategically located in central India, Chhattisgarh’s large surplus of power can be easily transmitted without losses to any of India’s four grids. Chhattisgarh is in the chronically deficit western grid, and is linked to the southern and northern grids. Chhattisgarh provides electricity to several other states because of surplus production and its power hubs are Korba and Bilaspur. Korba in Chhattisgarh is really the Power Capital of India.

Apart from NTPC and State Electricity Companies, there are a number of private generation units of large and small capacity. The state government has pursued a liberal policy with regard to captive generation which has resulted in a number of private players coming up. As per a study made by the Power Finance Corporation Ltd. , New Delhi, the state has potential of 61000 MW of additional thermal power in terms of availability of coal for more than 100 years and more than 2500 MW hydel capacity. To use this vast potential, substantial additions to the existing generation capacity are already under way.

Non conventional energy sources have been accorded very high priority. A special agency called CREDA (Chhattisgarh Renewable Energy Development Agency) has been set up, and over 1200 villages in dense forests are being electrified using off-grid energy. Micro-Hydel power potential is also being tapped in a big way, and several projects have been identified for viable private investment. Chhattisgarh is emerging as the Power Hub of India – which has the capacity to cover half the demand-supply gap in the entire country. Steel sector The steel industry is one of the biggest heavy industries of Chhattisgarh.

Bhilai Steel Plant, operated by SAIL, with a capacity of 5. 4 million tonnes per year, is regarded as a significant contributor to the growth of the state’s economy . More than 100 steel rolling mills, 90 sponge iron plants and ferro-alloy units are in Chhattisgarh. Along with Bhilai, Raipur, Bilaspur, Korba and Raigarh have become the steel hub of Chhattisgarh. Today, Raipur has become the center of the steel sector, the biggest market for steel in India. Aluminium sector Bharat Aluminum Company Limited(BALCO), which has a capacity of around one million tonnes each year is the major contributor in this sector.

Exports * Handcrafted wood, iron and steel, terra cotta, bell metal and handloom items are major attractions in the international market. * Chhattisgarh is the only state offering quality fabric in Tassar Silk/ Kosa, which has good export potential in the UK, France, Switzerland, Norway, the USA, Canada, Australia, South Africa and Japan. * The state has vast potential for exporting processed foods, organically grown cereals, herbal and medicinal products. * Agricultural products such as rice are presently exported in huge quantities to neighbouring countries .

Derivatives and intermediates of rice products, processed foods and biodiesel have a huge potential for exports. * Mineral-based products including steel and pig iron, steel castings, forging and equipment, structural steel, cement and silico-mangnese are also exported from Chhattisgarh. Unlocking Natural Resources Realising the true potential of natural resources in Chhattisgarh would be one of the most immediate priorities of the state. This would ensure economic benefits to more than3/4th of the population and help create large markets within the State that would help propel growth in the secondary and the tertiary sectors.

Unlocking the true potential of the natural resources would be contingent upon the State’s ability to address the issues facing agriculture, forestry, minerals and the water resources sectors as follows: Agriculture is the primary occupation of the people of Chhattisgarh. About 80% of the population depend on it for their livelihood. It is thus vital to the economy of the State, and any initiatives undertaken in this sector would have a lasting impact on the economy. Water being an important input for sustaining agricultural activities, its effective utilisation becomes vital for economic development.

Chhattisgarh has sufficient water resources, but this resource largely remains untapped. In terms of the irrigation potential, it is estimated that 43- lakh hectare area can be irrigated as against the existing irrigation potential of 1. 34 lakh hectare Forestry has a significant role in the economic development of Chhattisgarh. 44% of the State is covered with forests, ranking it third in India in terms of forest cover. The State boasts of an abundance of minor forest produce like Tendu leaves, Sal seed, Mahua seed, gum, etc. , which have enormous economic potential Minerals: Chhattisgarh is rich in minerals.

It produces 20% of the country’s total cement produce. It ranks first in the nation for coal production and second in reserves, third in iron ore production and first in tin production. Limestone, dolomite and bauxite are abundant. It is the only tin-ore producing state in the country. Other minerals include corandum, garnet, quartz, marble, alexandrite and diamonds Chhattisgarh has not fully realised the potential of its abundant mineral wealth. The presence of vast reserves of coal, iron ore, limestone, diamond, etc. have positioned the State second in the country’s list of mineral producing states

TOURISM Chhattisgarh, situated in the heart of India, is endowed with a rich cultural heritage and attractive natural diversity. The state is full of ancient monuments, rare wildlife, exquisitely carved temples, Buddhist sites, palaces, water falls, caves, rock paintings and hill plateaus. Most of these sites are untouched and unexplored and offer a unique and alternate experience to tourists, compared to traditional destinations which have become overcrowded. For tourists who are tired of the crowds at major destinations will like the Bastar district, with its unique cultural and ecological identity.

Conclusion Comparatively being a newly born state, Chhattisgarh is progressing by leaps and bounds. The global winds of changes can easily be sensed here. With its rich heritage it is competing with other states on number of counts and has been recognized at various forums for its achievements. It is both the land of opportunities and challenges. I, through this presentation could voice some of the challenges, which the state is facing, however with its inherent strengths, I am sure, the state will grow and develop at a high pace and can become leading state in the country.

The people of Chhattisgarh are determined to make the things happen, the way they have envisaged. The people are enterprising and are now well versed with change process. The state has exhibited growth pattern higher than targeted in recent past and would continue the trajectory. And therefore I must say in the end that Chattisgarh is the credible state with incredible potential. Now I would like you all to please watch this one minute video to get a feel of Chhattisgarh.

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