A research paper published in the ICFAI University Nagaland IUN Research Journal in July 2024 revealed that while Nagaland’s per capita income (PCI) has increased significantly, the rate of growth has been on the decline over the past decade.
The study, titled “Trend of Growth of Nagaland Economy: An Exploratory Study,” was conducted by Dr VT Vasagan, Assistant Professor at ICFAI University Nagaland.
According to the study, Nagaland’s per capita income has risen from Rs. 53,010 in 2011 to Rs. 1,30,221 in 2021-22. However, Dr Vasagan highlights a concerning trend: “The average growth of Per Capita Income (PCI) of Nagaland has increased at the rate of 9.5%. On the contrary, the linear curve for the rate growth of PCI has declined from 15.5% in the year 2012-13 to 9.18% in the year 2021-22. The per capita income of Nagaland in terms of money increased. But the trend of linear curve declined. Thus, the per capita income of the state is not increased since 2012.”
The study also found that the Gross State Domestic Product (GSDP) of Nagaland has seen positive growth, rising from 5.68% in 2012-13 to 6.86% in 2021-22, with an average growth rate of 4.5%. Despite this, Dr Vasagan noted that while the GSDP is increasing, the trend curve shows fluctuations, indicating a decline in growth. “While the Gross State Domestic Product (GSDP) at current and constant prices is increasing, the trend curve indicates a decline. It has been observed that the GSDP of Nagaland at current and constant prices is increasing at a rate of 4.3% with fluctuations,” he explained.
The research further pointed out the sectoral contributions to GSDP, with the service sector emerging as the largest and fastest-growing contributor. “The percentage of contribution of service sector to GSDP was higher than other sectors and has grown faster,” the study observed. In contrast, the agricultural sector showed stagnation, and the industrial sector, which has the lowest contribution to GSDP, experienced minimal development with an average growth rate of just 1.64%.
The findings suggest that Nagaland’s economy is transitioning from an agrarian-based economy to a service sector-driven economy. Dr Vasagan highlighted the importance of this structural change, referring to historical theories of economic development by Fisher (1935), Clark (1940), and Kuznets (1973).
However, the study also stressed the need for focused attention on the agricultural and industrial sectors, which are currently underperforming. Dr Vasagan concluded, “The Government of Nagaland needs to take strong measures to develop the state. Merely outlining plans, policies, and strategies will not suffice in driving economic development; they must be executed with precision and dedication.”
The research utilized secondary data from sources like the Nagaland Economic Survey for 2021-22, the Nagaland Vision Document 2030, NEDFI databank, and official state portals. However, Dr Vasagan noted that the contributions of various sub-sectors within agriculture, industry, and services were not factored into the study’s calculations, which could impact the results.