According to an IMF study Centripetal Forces in China's Economic Take-off by Anuradha Dayal-Gulati and Aasim Husain published in May 2000 "after declining in the late 1970s and 1980s, the dispersion of provincial per capita incomes has increased steadily". They estimate that in 1978 real per capita income in the richest province was around nine times that of the poorest; by 1997 the multiple had risen to over eleven. When economic reforms were first launched by Deng Xiaoping, barring perhaps Shanghai the more advanced provinces of China were in its northeast, the region much like our own eastern region that received significant doses of public sector investment in coal and steel-based industries in the 1950s and the 1960s. But in two decades time, China's coastal provinces of Shandong, Guangdong, Fujian, Jiangsu, Zhejiang and Hainan along with the city-province of Shanghai surged ahead on the backs of foreign investment (largely from near-by Hong Kong and Taiwan), exports and the growth of township and village enterprises (TVEs) that ensured diffusion of prosperity within the regions. In India, when we talk about China we automatically think of foreign investment and foreign trade. But the role of the TVEs has been equally crucial and they contrast with our own failed subsidy-based, protection-driven, scale-hampered, investment-starved rural industrialization efforts carried out in a romantic Gandhian framework.

Regional disparities in India take on a different meaning. In China, even in the poor regions, real per capita incomes have increased by 5-7% compound per year over the past twenty years as compared to between 1-2% in states like Assam, Bihar, Orissa and UP. While regional disparities persisted during 1950-1990 in the heyday of the planning era and in some cases, paradoxically, even increased, the dispersion of real per capita incomes went up in the 1990s. The decade of the nineties brought them into sharper focus and in some cases accentuated them. But the normal perception that poor states became poorer and rich states became richer is not entirely true. This conclusion has to be nuanced somewhat. Punjab's compound annual growth rate decelerated from 5.7% in the 1980s to 4.9% in the 1990s. Haryana took an even steeper fall from 6.1% to 4.7%. Among the poorer states, Madhya Pradesh improved its performance from 4.2% to 5.4%. In India, the real per capita income of the richest state is about six times that of the poorest state. That is because there is really no state in India that can match China's growth performance.

Even after accounting for exaggeration, real per capita incomes in the coastal provinces of China have increased by anywhere between 7-8% per year for 20 years which means a quadrupling. In India, by contrast, real per capita income in Gujarat and Maharashtra, our two most dynamic states, have increased by 4-5% per year. Goa is perhaps the only state to have Chinese-type growth numbers in the 1990s but it hardly conveys the image of a booming region. Relative rankings have been more stable in India than in China although West Bengal's rank has come down sharply much like China's northeast and Tamil Nadu, Andhra Pradesh and Karnataka have all improved their positions, Tamil Nadu most dramatically from number 11 three decades back to number five now. But even here, you don't get a feel of a boom-perhaps because urban renewal does not take place as spectacularly in this country as in China. The national bird of any booming economy, it is said, is a crane. But construction technology in this country is such tbhat cranes are hardly visible in our cities!

China's western development programme is of more than academic interest to India. Historically, this region of China was traversed by the famous Silk Route that led to enormous cultural, economic and technological cross-fertilisation between the Indic and Sinic civilizations in which, it is largely forgotten that Kashmir has played a crucial role. But more than history, the improvement of connectivity to provinces like Tibet, Yunnan and Sichuan will boost Sino-Indian trade. The Chinese have also been pushing the so-called "Kunming Initiative" named after the Yunnanese capital. This envisages investment and trade cooperation between Yunnan, Bangladesh, Myanmar and India's northeast. This initiative has meandered along for two-three years not the least because of lukewarm support from the Indian establishment suspicious of Chinese motives. What is unusual about this move is the keen interest being evinced by the province of Yunnan.

What will happen if sub-regional cooperation is fostered? India's northeast cannot develop except in a regional context. Even Bihar and UP need closer cooperation with Nepal on water management. Three years ago, India too came up with its grand Ganga-Mekong project to promote a broad range of cooperation in that region involving India, Myanmar, Thailand, Laos, Cambodia and Vietnam. How this will work leaving out China through which the Mekong runs and Bangladesh where the Ganges ends is a separate issue. But lofty announcements have to be backed by money allocations and expenditures on specific projects particularly in infrastructure like roads and highways. This has yet to materialize.

The Chinese central government has taken on a direct role in developing its backward regions. We had such an approach in the 1950s but lost it along the way. It is btime to rediscover that Nehruvian vision. Transferring more money to poorer states through the Finance Commission is no solution, nor is panchayati raj.