REGIONAL IMBALANCES IN A.P.

AN APPLICATION OF
TAXONOMIC METHOD AT DISTRICT LEVEL
- G. Lakshminarayana, M.A., M.Phil.,
Asst. Director, DE&S, Hyderabad (1996)

SECTION I

SETTING THE GROUND:

Development does not pervade uniformly and perhaps more

particularly in a democracy. To reverse it is the goal of every government.
Economic planning has emerged as a powerful means to achieve this end.
There however, are to serious flaws in the theory and practice of planning
efforts that still exist not only in India but in developed economies also.

It was expected that the cumulative benefits of economic planning

would ‘trickle-down’ automatically or at best be handed down in an
administrative fashion to the majority of masses. The results of Green
Revolution for example spelt out the failure of this paradigm. The auspicious
launch of green revolution package no doubt, resulted in the substantial
increase of agricultural production. The other side of the coin shows widened
economic and social inequalities between the rich and the poor (Krishna Rao,
1978; Hanumantha Rao, 1975). It is because the problems and prospects
were not analyzed for regions having different natural, economic and social
environs.

Another distortion in Indian Planning is over emphasis on ‘time’ while

undermining ‘space’. Out Five Year Plans put targets to be achieved in GDP
growth rate, industrial production etc. the fruits of industrial development for
instance have not been equitably distributed spatially which resulted in the
concentration of industries and establishment of units without taking the
needs, linkages and levels of development of different regions into
consideration.
 The foregoing analysis brings out the need of regional development
based on regional planning to the notice of planners at various levels. True,
development is holistic and one should think globally but it is equally
important to act locally through regional planning at micro-level by initiating
a ‘bottom-up’ process. This has become an important aspect in the frame
work for what economists labeled as ‘Another Development’ (Haque etal,
1975).

WHAT IS A REGION?

It is necessary at this juncture to know the concept of a region. A

region is a spatial unit having some contiguity and homogeneity. Hence, a
region my be economic or physical (Learmount 1958), resource endowment
(Sinha, 1968), metropolitan (Nath, 1972), macro-micro-meso region (Census,
1961), nodal or programme region (Sharma, 1966).

OBJECTIVES OF THE PRESENT STUDY:

The process of regional planning has various steps, viz., (i) identifying
and demarcating the regions (ii) determining the needs of the region (iii)
making a plan for the region (iv) implementing the plan and (v) monitoring
and evaluation of the plan (Bhale Rao, 1968). The priorities and design of a
regional plan will be determined basing on the present levels of development
or backwardness of regions. The relative position of a region vis-à-vis other
regions hence becomes increasingly important as this dimension discloses,
though partially the pace and location of development.

The present study makes an attempt in this direction. Further it

compares the results with other studies.

UNIT OF ANALYSIS:

In the Indian context the district is chosen as the Unit of analysis by

many-a-regional economic analyst. Considering the current status of
availability of disaggregated data the district seems to be a more convenient
unit of analysis. The choice of a district as the unit of analysis does not
preclude interpretation at the regional level as well (Prabhu and Sarker,
1992).
SCOPE AND DATA BASE:

The exercise has been carried out for all the districts in the state
except Hyderabad. The results will lose consistency if the Hyderabad District
is included since it is purely an urban district. the remaining twenty two
districts were considered for the study. Data pertaining to twenty one
important variables covering demography, agriculture, industries, health,
education infrastructure, labour and employment and transport and
communication etc., have been collected for, the latest available year and
used for the purpose. The data were collected from respective departments
apart from D.E. & S.,

METHODOLOGY:

The identification of backwardness or development can be made

basing on different techniques. Earlier, problems involving mass data
analysis such as regionalization were handled by overlaying maps. It was
replaced by multivariate procedure with the help of sophisticated calculating
machines. Factor analysis is such a multivariate procedure which reduce
many variables to a few principal components representing ‘complexes’. The
limitation of this method is that though the main component explains the
maximum variance in the series the proportion of variance explained hardly
exceeds 50 percent (Dasgupts, 1974; Chakravarthy Committee, 1981).

The other procedure is the ‘method of taxonomy’ through which we get

optimal classification of observations into the regions on the basis of the
distances between observations in the factor space (Berry& Ray, 1966). This
is used in various ways, ranging from simple aggregation (Dandekar
committee, 1989) to standardized raking of distance measure. The main
drawback of this method is the lack of an objective weight system resulting
in equal weights to all indicators (Dholakia, 1985).

The present study has adopted the method of taxonomy in its

developed from due to its substitutability.

A SURVEY OF EARLIER STUDIES IN A.P.:

Apart from the Techno-Economic Survey (1956) by NCAER, the state

Planning department attempted to identify backward areas over the years.
Here is a chronological presentation.

(I) 1962: To formulate special programmes for the development of

chronically drought affected areas on the basis of minimum average annual
rainfall in each taluk for a period of 21 Years between 1942-62, 76 taluks in
the state have been identified as drought affected.

(II) 1965: To distribute resources among Community Development Blocks

more rationally, the blocks were classified into advanced, ordinary, backward
and tribal basing on sis indicators covering agriculture, population and
transpiration by assigning arbitrary weights to them.
(III) 1974: The Government of India declared 14 districts in the state as
industrially backward for concessions by Financial Institutions. The coverage
was extended to neutralize the political unrest during 1973-74.

(IV) The State Planning Department has worked out five exercises to identify
backward areas. In the first exercise the ranking method was adopted. The
other exercises were based on indices of development with state average
taken as 100. The indicators chosen for these exercises covered population,
agriculture and transportation. The State Planning Board, however, decided
that the identification of backward areas should be done in each region.
(V) the Technical Committee under the chairmanship of BPR Vithal (1978)
and the CESS (1981) also attempted to identify backward areas at taluk level
using the statistical technique ‘Principal Component Analysis’.

It is evident from the above description that nobody has so far

attempted to apply the ‘Taxonomic Method’ to identify levels of development
among the districts of A.P.
SECTION –II

This section delineates the proposed exercise adopting the method of

taxonomy. The district of Hyderabad which is wholly urban is ignored to make
the analysis meaningful. Twenty one indicators were chosen covering
economic and social characteristics of districts.

INDICATORS TAKEN FOR THE STUDY:

DEMOGRAPHIC INDICATORS :

1.Percentage of Urban Population.

II. AGRICULTURAL INDICATORS :

1.Gross irrigated area as a percentage of gross cropped area.

2.Net sown area as a percentage of cultivated area.
3.Fertiliser (N+P+K) consumption per hectare of gross cropped area.
4.Average size of operational holdings.

III. INDUSTRIAL AND LABOUR INDICATORS :

1.Percentage of other than agricultural labourers to total main workers.

2. work participation rate (General).
3.Number of factory workers per lakh population.

IV. INFRASTRUCTURAL INDICATORS :

1.Agricultural pump sets energized per 100 hectares of net area sown.
2.No. of tractors per 1,000 hectares of net area sown.
3.Percapita consumption of electricity (domestic).
4.Road length per 100 sq. kms of geographical area.

V. MONEY AND BANKING:

1.Percapita bank credit..
2. No. of Cc-operative Societies (all-types)

VI. SOCIAL INDICATORS:

1.Hospital beds per lakh population
2.Number of fair price shops per lakh population
3.Couple protection rate (CPR).
4.Literacy rate (general).
5.Drop-out rate (Classes 1-7)

VII. OTHERS:
1.No. of periodicals and newspapers per million population.
2.No. of telephone connections per lakh population.

METHOD OF TAXONOMY:

‘Taxonomy’ is a term used particularly in biology to define population

and assign new specimens to these classes which are called classification
and identification respectively by taxonomists (Fisher, 1936).

Taxonomic method was developed by polish Mathematicians in 1950s

for non-biological purposes. It was used by United Nations (1968) and U.P.
State Government earlier to identify the levels of development among units.
Being simple and lucid to understand it is an improvement over simple
ranking techniques. In the opinion of economists it can best be substituted
for sophisticated techniques like factor analysis etc. (Mandal, 1988).

Following is the description of the method of taxonomy. The method

with statistical notations is given in the appendix.

(I) SELECTION OF INDICATORS:

The taxonomic method allows the indicators to be progressive and

regressive types.
(II) STANDARDIZATION OF INDICATORS:
Standardization makes indicators unit free and dimension less and
hence aggregation becomes meaningful. The standardized value is obtained
by subtracting the mean of each indicator from it and them dividing it by its
Standard Deviation.
(III) ASSUMING AN IDEAL REGION:

The ideal region contains the highest values of positive indicators and
the lowest values of negative indicators which are to be simulated from the
regions taken for the exercise. Then standardized values of the ideal region
have to be identified.

(IV) PATTERN:

The pattern for a region quantifies the distance of that region from the
ideal region.

(V) MEASURE:

The measure indicates the level of development or backwardness

ranging from 0 to 1. A value close to ‘O’ denotes the highest level of
development and a value close to ‘1’ denotes the least development. We can
express the measure in percentage terms by multiplying it with 100.

THE RESULTS:

The following table gives pattern and measure values and ranks of
respective districts.
Table I

SLNO. DISTRICT PATTERN MEASURE RANK

1 Srikakulam 14.25 0.812 19
2 Vizayanagaram 14.48 0.825 20
3 Vishakapatnam 10.88 0.62 4
4 East Godavari 11.96 0.681 10
 5 West Godavari 11.19 0.637 6
6 Krishna 8.73 0.497 1
7 Guntur 10.94 0.612 3
8 Prakasam 13.81 0.786 17
9 Nellore 11.16 0.636 5
10 Kurnool 13.58 0.773 14
11 Ananthapur 13.68 0.779 15
12 Kadapa 13.37 0.761 13
13 Chittoor 11.33 0.645 7
14 Rangareddy 11.52 0.656 8
15 Nizamabad 10.59 0.603 2
16 Medak 13.71 0.781 16
17 Mahaboobnagar 15.69 0.894 22
18 Nalgonda 13.04 0.743 12
19 Warangal 11.78 0.671 9
20 Khammam 13.84 0.788 18
21 Karimnagar 11.99 0.683 11
22 Adilabad 14.79 0.842 21

Krishna District stands first in the ranking order followed by

Nizamabad, Guntur, Vishakapatnam, Nellore and West Godavari occupying
first six ranks. Mahaboobnagar stands last in the ladder having Adilabad,
Vizayanagaram, Srikakulam, Khammam and Prakasam districts preceding it.
The remaining districts are of middle range. This group consists of Chittoor,
Rangareddy, Warangal, East Godavari, Karimnagar, Nalgonda, Kadapa,
Kurnool, Ananthapur and Medak.

This paper concentrates on ‘how’ the picture is rather than to

comment on ‘why’ it is so. The enquiries like the factors that helped
Nizamabad to secure second position are the subsequent steps of this paper.
Indicators chosen and method adopted may to some extent explain the
ladder of ranking.

LIMITATIONS OF THE STUDY:

(i) Equal weight age is given to all the indicators
(ii) The measure values of two time periods are not directly comparable. This
may happen because of the change in the values of the ideal region though
there is no change for a district.
This exercise perhaps, is the maiden attempt to apply Taxonomic
Method to identify the levels of development among the district in Andhra
Pradesh. However, this method was applied among the mandals of Nalgonda
district (Hanumantha Rao, 1987) earlier.

SECTION-III

This section attempts to compare other exercises done by two premier

organization, viz., CMIE (Centre for Monitoring Indian Economy) and CMS
(Centre for Media Studies) with the present one.

THE CMIE EXERCISE (1993) :

CMIE ranked the districts in India taking national average as 100. simple
aggregated ranking method was adopted.
The weightage structure is as follows:

I. AGRICULTURE SECTOR: 35%

a) Percapita volume of output of principal crops 25%
b) Percapita Bank Credit to Agriculture 10%
II. MANUFACTURING SECTOR: 25%
a) Workers per lakh population 15%
b) Percapita Bank Credit to Manufacturing Sector 10%
III. SERVICES SECTOR 40%
a) Percapita Bank Deposits 15%
b) Percapita Credit to Services 15%
c) Literacy 4%
d) Urbanization 6%
With this framework, the districts were ranked.

THE CMS EXERCISE (1993-93) :

 The CMS, Delhi in collaboration with the Royal Netherlands Embassy
studies Soci-Economic Development Status of A.P. Gujarat, Kerala and Uttar
Pradesh.

THE METHOD :

There are two basic components, viz., Economic Development Value

(EDV) and Social Development Value (SDV) having equal weightage of 0.50
each.

The EDV contains percapita income (0.20), percentage of households

having electricity (0.10), percentage of population employed as main workers
(0.10), and percentage of households having no exclusive room or having
one room only (0.10)).

The SDV consists of age-specific enrolment ratio for the age group of 6-
14 years (0.10), literacy rate (0.10), infant mortality rate (0.20) and
percentage of households having sanitation facilities (0.10).

ESTIMATION PROCEDURE:

For each indicator the district having highest value is given ‘1’ and
adjusted values for other districts are calculated and these values for each
variable are multiplied with respective weights. The EDV and SDV were
computed by aggregation and these two values were added to arrive at
development index and the districts were ranked accordingly.

The following table gives a comparative picture of rankings of the three

methods.
TABLE -2
RANKING OF DISTRICTS
RANK D.E. & S. CMIE CMS
1 Krishna Krishna Rangareddy
2 Nizamabad West Godavari Nizamabad
3 Guntur Guntur Guntur
4 Vishakapatnam Nizamabad West Godavari
 5 Nellore Karimnagar Krishna
6 West Godavari Nellore Ananthapur
7 Chittoor Rangareddy Medak
8 Rangareddy East Godavari East Godavari
9 Warangal Vishakapatnam Nellore
10 East Godavari Ananthapur Kurnool
11 Karimnagar Medak Kadapa
12 Nalgonda Prakasam Nalgonda
13 Kadapa Chittoor Chittoor
14 Kurnool Kadapa Khammam
15 Ananthapur Kurnool Prakasam
16 Medak Warangal Mahaboobnagar
17 Prakasam Khammam Warangal
18 Khammam Nalgonda Vishakapatnam
19 Srikakulam Adilabad Karimnagar
20 Vizayanagaram Vizayanagaram Vizayanagaram
21 Adilabad Srikakulam Adilabad
22 Mahaboobnagar Mahaboobnagar Srikakulam

It is seen from the above table that the CMS ranking differs from CMIE
and D.E. &S rankings. This deviation however is not significant as seen from
the co-efficients of rank correlation.

I.CO-EFFICIENT OF RANK CORRELATION:

Rank Correlation Co-efficient are computed using the formula:

P=1-(6 Sum(di2)/n(n2-1)
Where,
D= Difference in ranks between paired items in the two series.
N=No. of paired observations.
P=co-efficient of rank correlation.
The co-efficients are:
(I) DE&S and CMIE =0.83
(II) DE&S and CMS =0.67
Hence, the two methods of ranking are highly correlated with the present
method of ranking.

II TESTING OF HYPOTHESIS:
We may verify/test whether these three sets of ranks are dependent using ‘t’
test.
The Null Hypothesis (Ho) : The two sets are independent.
Maintained Hypothesis (Hm) : Two sets are not independent. (i.e.,
dependent)
We can compute ‘t’ value from the formula:
‘t’ = p-o/
Where,
p=Co-efficient of rank Correlation.
=Standard error of ‘p’, i.e, ( )

The critical (table) and computed ‘t’ values are given below. If the
critical value is less than the computed value, we may reject the null
hypothesis.
Critical ‘t’ Value computed ‘t’ value
(i) DE&S and CMIE 2.89 6.64
(ii) DE&S and CMS 2.89 4.04
(* degrees of freedom = 20)

The computed ‘t’ values for both the sets are higher than the critical (table)
‘t’ values at 1% level of significance and hence the dependency of two sets is
maintained.
III. CO-EFFICIENT OF CONCORDANCE : We further attempt to know the
extent of concordance between DE&S method of ranking and other two
methods.

W=125/M2[N(n2-1)] where,
W= Co-efficient of concordance
S=Sum of squared deviation of the actual sums from their Mean
M=Total no. of rankings
N= No. of items
(* ‘W’ varies between 0 and 1)

The Co-efficient of concordance among the three methods is 0.81.

Higher level of concordance is obvious.
CONCLUDING REMARKS:

Many methods of regionalization or clustering have been proposed and

some of them proved useful, but none is thoroughly understood and
established firmly. It is very hard to find out all satisfactory and objective sets
of weights and indicators. It is also true that the results obtained by multi-
variate approaches could be had by univariate approaches just as easily
(Ghosh).

Only through experience and comparative experimentation can be

understand how and why procedures fail or work.