By Venkatachari Jagannathan
Chennai, Jan 12 (SocialNews.XYZ) Even though Tamil Nadu ranked third in the overall score, it still lags behind on many aspects like fiscal, governance, economic, ease of doing business, as per the CARE Ratings study.
The glaring aspect is its ranking under the governance category where Tamil Nadu's ranking is sixth after Andhra Pradesh, Telangana, Uttar Pradesh, Madhya Pradesh and Rajasthan.
According to CARE Ratings, the selected indicators for ranking the states can be broadly classified into two categories viz., business friendly environment and public service delivery (law, police, e-service).
A better governance leads to stability and foster trust which are crucial for unlocking new investment opportunities.
As regards the fiscal performance, Tamil Nadu is ranked 11th in the country based on the indicators like: Debt/GSDP, Fiscal Deficit /GSDP, Revenue Deficit /GSDP, Education Expenditure/Total Expenditure, Health Expenditure/Total Expenditure, Capex/Total Expenditure, Maintenance of Guarantee Redemption Fund (GRF) and Consolidated Sinking Fund (CSF-as percentage of outstanding liabilities).
According to CARE Ratings, the indicators are selected to cover three aspects: Debt and deficit sustainability, quality of expenditure and debt management.
Under the economic category Tamil Nadu is ranked sixth scoring 39.6 points behind Gujarat, Karnataka, Maharashtra, Haryana and Odisha.
According to CARE Ratings, the indicators and the respective weights have been selected to capture the overall economic growth and also if the growth is inclusive in nature. Investment has a major role to play in propelling the growth trajectory. This is reflected in higher weight for investment related indicators.
The credit rating agency has taken into calculation the per capita gross state domestic product (GSDP), GSDP growth, industry and services (percentage share in gross state value addition), inflation, foreign direct investment, Industrial Entrepreneur Memorandum (IEM) filed, gross capital formation/gross value added.
Tamil Nadu is ranked third under the financial inclusion head after Maharashtra and Telangana with CARE Ratings taking into account the indicators like: Credit/GSDP, Population/No. ofABank Branches, NBFC Sanctions (as percentage of GSDP), Mutual Fund Penetration, Life Insurance Penetration, Health Insurance Penetration, Balance in Pradhan Mantri Jan Dhan Yojana (PMJDY) Account Per Beneficiary, Average Loans Disbursed Aby self help groups (SHG) during the year.
According to CARE Ratings, access to financial services, especially for low-income households is not only crucial for their economic wellbeing but also for their social upliftment.
"We have attempted to select indicators which represent availability of funds as well as the extent of participation by the households to avail these financial services," CARE Ratings said.
Tamil Nadu got the third rank on the overall ranking owing to its high score under the social category indicators like Gross Enrolment Ratio, Percentage Literate, Poverty Rate, Gini Coefficient, Infant Mortality Rate and Life Expectancy.
The state scored second rank under the social category after Kerala.
"Investment in human capital has gained significant importance in recent times to attain sustainable and inclusive growth. Indicators have been selected to represent income equality, education and health related aspects," CARE Ratings said.
Similarly in terms of environment, Tamil Nadu is ranked sixth with CARE Ratings taking factors like quality of natural resources as well as waste management efforts taken by each state.
The quality of environment has a direct bearing on social well-being and is crucial for long-term economic development, CARE Ratings said.
Tamil Nadu was ranked third under the financial inclusion category and fourth under the infrastructure segment by CARE Ratings.
"The State Ranking study is aimed at capturing the comprehensive performance of the states. This study highlights the areas in which the various states have shown healthy performance and the areas which need further attention of the policymakers. Maharashtra, the financial capital of the country, tops the ranking with a favourable score not just in financial inclusion but also for the state government finances and social indicators. In this comparative study, the leading states could offer the others a model to follow," said Mehul Pandya, Managing Director and CEO, CARE Ratings
While the Union Territories were excluded from the study, CARE Ratings had the states into two categories -- Group A (large states) and Group B (Northeast, hilly and small states)
"We have looked at the performance of the states not just in terms of economic growth, physical infrastructure and investment, but also given due importance to social indicators, environmental aspects, governance and financial inclusion. This is with the recognition that inclusive and sustainable growth is the need of the hour.
"As expected the top few ranks have been taken by the Western and Southern states. Western states have scored high on the fiscal and economic category, while southern states have outperformed in the social and environmental category," said Rajani Sinha, Chief Economist, CARE Ratings.
(Venkatachari Jagannathan can be reached at firstname.lastname@example.org)