Rural Infrastructure in Odisha: An Inter-District Analysis

Rural Infrastructure in Odisha: An Inter-District Analysis

Chittaranjan Nayak

ABSTRACT

The present study attempts to analyse inter-regional disparity in rural

infrastructure in the state of Odisha. Three separate indices have been developed

for different categories of rural infrastructure- physical, social and financial -

with help of the Principal Component Analysis before unifying them to a single

index known as the Rural Infrastructure Index (RII). The study observes that

there exists vertical inequality in the spread of different categories of

infrastructure in the state. Disparity is the severest in the case of financial

infrastructure. The study attributes underdevelopment of Kalahandi- Bolangir-

Koraput (KBK) belt and some of districts of western- central Odisha to the

underdevelopment of rural infrastructure. The analysis lauds the formation of

special plans such as the KBK plan and formation of Western Odisha Council by

the government. It calls for a time-bound delivery system and region-specific

measures in place.

Keywords: Rural infrastructure index, Principal component analysis, Odisha

1.0 Introduction

Rural infrastructure involves the very socio-economic climate created by

some special categories of rural facilities, which contribute to the development of

the rural economy both by increasing productivity and by reducing unit cost in

production. It is a critical supply-side factor, which plays an indispensable role in

economic development. Its role may be more perceptible in agriculture and rural

development. China‟s success with rural enterprise can be ascribed to „the

provision of a minimum package of transport, telecommunications, and power at

the village level‟ (World Development Report, 1994).

_________________________

Dr. Chittaranjan Nayak, Lecturer, Department of Economics, Ravenshaw University,

Cuttak, Odisha.

18 PRAGATI: Journal of Indian Economy

Since economic reforms in 1991, strengthening infrastructure has become a

new-fangled paradigm of India‟s development policy (Government of India

1996). In addition to the efforts of Government of India, states are also having

their own policies in this regard. However, it is argued that state policies have

regional prejudice (Schiff and Valdés, 1995; Sawant and Mhatre, 2000). An

ESCAP study points: “Policy decisions to leave the allocation of resources to the

market or to invest scarce resources in places with the best growth potential

benefit some areas and regions over others” (p.8). Although many studies have

attempted to analyse disparity in overall development indices, very few studies

have addressed infrastructure disparity in India.1

Some studies have tried to examine linkage between infrastructure and

economic development in India [Elhance and Lakshmanan 1988, Binswanger et

al 1993, Gowda and Mamatha 1997, Datt and Ravallion 1998, Lall 1992 and

1999, Sahoo and Saxena 1999-00 and Ghosh and De 2004]. The above studies,

however, have taken into account mostly urban infrastructure items, whereas

issues concerning the provision of rural infrastructure services should be tackled

in a different manner compared to those concerning urban infrastructure2. Only

very few studies (Binswanger et al 1993, Bliven et al 1995, Bhatia 1999, Zhang

et al 2001, Rao 2005) have analysed the progress and economic effects of rural

infrastructure. Out of these studies, inter-state disparity in infrastructure is

addressed by Bhatia (1999), which has attempted to build a composite index of

rural infrastructure state-wise and examine the relationship between rural

infrastructure development and growth in agriculture. Although innovative, it

suffers from subjectivity and arbitrariness in selection of items and assignment of

1 Please see Bhatia (1999), Ghosh and De (2004)

2 The population density in rural areas is much lower than urban areas. Due to sparse distribution

of population, average cost of provision of basic goods is much more in rural areas in comparison

to the urban areas. The average purchasing power of people in rural areas is also significantly

lower than that of the urban areas. It is not expected that rural people can pay for the installation

of basic goods. As a consequence, they may remain as a deprived lot for a longer period. It is

observed that the average purchasing power of urban people is 180 per cent higher than average

purchasing power of rural people. See India Rural Infrastructure Report published by National

Council of Applied Economic Research (2004).

Rural Infrastructure in Odisha- An Inter-District Analysis 19

weights (Nayak 2008). The present study takes into account these aspects in a

different perspective.

The present study attempts to analyse disparity in rural infrastructure in the

state of Odisha. This eastern Indian state is considered to be one of the most

backward states of India having a lot of potential. Measuring infrastructure

development especially in a rural set-up involves several problems like selection

of factors, assignment of weights, specifying time-dimensions, and problem of

aggregation. These issues have been addressed in this paper. I have prepared

composite indices of rural infrastructure for different categories of infrastructure.

The paper develops as follows: Section II gives a brief description of the

methodology and data base for the present analysis. Section III analyses the

results of the study. Section IV concludes.

2.0 Methodology and Database

This is a cross-section study based on secondary data for the year 2001. Data

has been collected from different published sources like Census 2001(Orissa),

Statistical Abstracts of Odisha, 2002; different issues of Economic Survey,

Government of Odisha; Agricultural Census of Odisha, 2005; District Statistical

Handbooks 2002 of all the districts of Odisha for the years.

2.1 Categorisation of rural infrastructure

Rural infrastructure has been categorized into three broad categories, viz.

Physical, Social and Financial infrastructures. Each category has again been sub-

divided to encompass different factors. The final selection of the items in each

category has been made on the basis of fundamental reasoning and their

significance on the predominant rural activity, i.e. agriculture. The details of

finally selected items in each category of infrastructure have been presented in

Table 1.

2.2 Normalisation

Since the units of measurement of the selected factors are different, they give

rise to the problems of aggregation. So the items have been normalised by

deducting arithmetic means and dividing standard deviations to make them unit-


free. Unit free measurement of different factors is essential for the development

of a composite index.

Table 1: Categorisation of Rural Infrastructure

Categories of

infrastructure

Facilities

Taken

Variables taken Abbreviation

of variables

Physical

Irrigation

Electricity

Transport

Communication

Percentage of gross irrigated

area to gross cropped area

Percentage of rural households

with electricity connection

Density of rural roads per

thousand hectare of net sown

area

Per centage of rural household

with telephone connection

PGIA

PHHELCT

RURDEN

PHHTELCN

Social

Education

Health

Housing

Amenities

Rural literacy rate

Beds in rural allopathic

hospitals per lakh of rural

population

Percentage of rural good houses

to rural total houses

Per centage of rural household

with latrine

RURALIT

BDHOSP

PGDHOUSE

PHHLATRN

Financial Banking

Credit

Marketing

Percentage of rural households

availing banking services.

Credit per operational holding

given by Agricultural Credit

Co-operative Societies

Marketing co-operative

societies per lakh of operational

holdings

BNKSER

AGCREDIT

MKTGSOC

Weighing method: Principal Component Analysis (PCA)

2.3 Preparation of Composite Indices

We have prepared three composite indices such as Physical Infrastructure

Index (PII), Social Infrastructure Index (SII), and Financial Infrastructure Index

(FII) encompassing all the desired factors of infrastructure in the respective

category and then combined them into a single composite index for rural

infrastructure, known as Rural Infrastructure Index (RII).


Contrary to the conventional methods of indexing by subjective weight

assignment, the present study has employed the Principal Component Analysis

(PCA) which is one of the approaches of factor analysis. Factor analysis attempts

to identify the underlying variables or factors, which explain the pattern of

correlations within a set of observed variables. Factor analysis is often used in

data reduction by identifying a small number of factors, which explains most of

the variance observed in a much larger number of manifest variables. In the PCA

approach, the first principal component is that linear combination of weighted

items, which explain the maximum variance across the observations at a point in

time. Here the sole objective of the weighing mechanism is to explain the

maximum variance for all individual indicators taken together across the districts

at a point in time.The rationale of using the PCA is that it helps to reach an

aggregate representation from various individual indicators. The infrastructure

index is a linear combination of the unit free values of the individual factors such

that

Index i=Σ Wk Xki

where Indexi = index of the ith

district, Wk = weight of the kth

factor and Xki = unit

free value of the kth

factor for the ith

district.

3.0 Results and Discussion

The present study has used both the Eigen value and the Bartlett Criterion for

selection of principal components. It is observed that the first principal

component explains around 54%, 57% and 49% of variances in the chosen

normalised variables of physical, social and financial categories of infrastructure.

The first principal component satisfies the Bartlett‟s criterion in all the three

cases. Accordingly the indices are constructed as follows:

3.1 Physical Infrastructure Index (PII)

PII = 0.684 PGIA + 0.957 PHHELCT + 0.877 PHHTELCN + (-) 0.0764

RURDEN

It is observed that electricity (PHHELCT) has got the maximum weight

followed by telecommunications (PHHTELCN) and irrigation (PGIA). However


rural road density (RURDEN) has got negative weight. This is contrary to the

expected lines. An analysis of the simple pair-wise correlation between the above

factors reveals that RURDEN is either uncorrelated or slight negatively

correlated to the other three factors (Table 2). This may be a reason for the

unexpected sign as well as inconsequential weight of RURDEN.

Table 2: Correlation Table

PGIA PHHELCT PHHTELCN RURDEN

PGIA 1.000 0.535** 0.317 -0.055

PHHELCT 0.535** 1.000 0.840** -0.093

PHHTELCN 0.317 0.840** 1.000 0.044

RURDEN -0.055 -0.093 0.044 1.000

** Significant at 1 per cent level of significance

3.2 Social Infrastructure Index (SII)

SII= 0.843 RURALIT + (-) 0.734 BDHOSP + 0.442 PGDHOUSE + 0.909

PHHLATRN

It is observable that PHHLATRN, a proxy measure of household amenities,

assumes the highest weight in the social infrastructure category. As per the

census, 2001, only about 7% of rural households in Odisha has got the facility of

latrine of any kind. This indicates low level of progress in household amenities in

the state. RURALIT and PGDHOUSE come in the second and third positions

respectively in assignment of weights.

Table 3: Correlation Table

RURALIT BDHOSP PGDHOUSE PHHLATRN

RURALIT 1.000 -0.532** 0.115 0.695**

BDHOSP -0.532** 1.000 -0.067 -0.501**

PGDHOUSE 0.115 -0.067 1.000 0.458*

PHHLATRN -0.695** -0.501** 0.458* 1.000

** Significant at 1 per cent level, *significant at 5 per cent level

However, BDHOSP, the representative of health infrastructure in the study,

has surprisingly been assigned negative weight. It is evident from Table 3 that


BDHOSP is negatively and significantly correlated to the other items of social

infrastructure sans PGDHOUSE. It is quite possible since these factors are

exogenously determined. Moreover, BDHOSP is inversely related to population.

This means that, unlike the other factors, BDHOSP is likely to be lower in the

populated coastal districts in comparison to the underdeveloped central and

southern districts. This might be responsible for the negative weight of

BDHOSP.

3.3 Financial Infrastructure Index (FII)

FII = 0.04907 BNKSER + 0.859 AGCREDIT + 0.857 MKTGSOC

AGCREDIT has received the highest weight, which is closely followed by

MKTGSOC. BNKSER has got the lowest weight (0.049). The study observes

that there is a relatively extensive network of agricultural credit co-operative

societies in comparison to banking and marketing societies in Odisha. Low

volume of transaction of banks in rural areas may be a cause of making its weight

relatively lower.

It is seen in Table 4 that there is significant correlation between AGCREDIT

and MKTGSOC but BNKSER is almost uncorrelated to AGCREDIT and

MKTGSOC.

Table 4: Correlation

BNKSER AGCREDIT MKTGSOC

BNKSER 1.000 0.026 0.001

AGCREDIT 0.026 1.000 0.474**

MKTGSOC 0.001 0.474** 1.000

** Significant at 1 per cent level of significance, *

significant at 5 per cent level

3.4 Overall Rural Infrastructure Index (RII)

The Rural Infrastructure Index (RII) is the composite index of PII, SII and

FII. This indexing has been done by using the PCA approach too. The similarities

of the factors have been tested by the test of communalities. Since the first

component explains around 83 per cent of total variance of the factors and the

Eigen values of the other two components are less than unity, we have extracted

the first component only.


RII = 0.951 PII + 0.920 SII + 0.863 FII

It is notable here that out of the three separate indices, PII has got the highest

weight followed by SII and FII. All the three indices have been assigned positive

weights in the making of RII. This is in line with expectations.

3.5 Disparity in Rural Infrastructure Development in Odisha

The study makes use of coefficient of variation (CV) and the Gini coefficient

as the criteria to understand the spread in different aspects of rural infrastructure.

The districts have been ranked and categorised on the basis of RII.

Disparity in Physical Infrastructure

As per the level of development of rural physical infrastructure, the districts

have been categorised as high physical infrastructure (High PI), medium physical

infrastructure (Medium PI) and low physical infrastructure (Low PI) districts. All

the thirty districts of the state have been vertically divided among the above three

categories; comprising 10 districts each. It is noteworthy that Khurda, which

entails the state capital Bhubaneswar, is way ahead of the other districts of the

state in physical infrastructure (Table 5). The ratio of the most developed district

(Khurda) and the worst performer district (Nawarangpur) in terms physical

infrastructure development is as high as 5.73:1.

Table 5. Physical Infrastructure Index: District-wise Division

High PI Medium PI Low PI

S.N District PII S.N District PII S.N District PII

1 Khurda 9.671 11 Baragarh 6.356 21 Gajapati 3.430

2 Cuttack 8.438 12 Sambalpur 6.183 22 Mayurbhanj 3.300

3 Puri 8.092 13 Dhenkanal 5.588 23 Koraput 3.247

4 Jajpur 7.810 14 Sonepur 5.330 24 Kalahandi 3.234

5 Bhadrak 7.299 15 Nayagarh 5.202 25 Malkangiri 2.933

6 Ganjam 7.257 16 Jharsugura 5.048 26 Bolangir 2.833

7 Jagatsingpur 7.011 17 Sundargarh 4.411 27 Nuapada 2.822

8 Kendrapara 6.818 18 Keonjhar 3.819 28 Kandhamala 2.335

9 Balasore 6.562 19 Boudh 3.783 29 Deogarh 1.948

10 Anugul 6.434 20 Rayagada 3.431 30 Nawarangpur 1.688


The study finds that most of the erstwhile undivided coastal districts of the

north-eastern Odisha occupy relatively higher positions in PII in comparison to

their south-western counterparts mostly inhabited by tribal people. Anugul is the

only district from central Odisha, which could occupy a position, that too, the last

position among the High PI districts category. Otherwise, the districts in the

Middle PI group are located in the Central and in the Western Odisha.

There is vertical inequality in physical infrastructure among the coastal,

western and southern regions of the state. Apart from Sonepur and Rayagada, all

other KBK (undivided Kalahandi, Bolangir and Koraput) districts are clubbed in

the Low PI category. The tribal dominated Sundargarh district of the northern

Odisha and Deogarh of the undivided Sambalpur district are also seen in the Low

PI club.

The analysis also explores development in the sub-items of physical

infrastructure. Given the higher weights of rural electrification and rural

teleconnectivity, it is well understood that the districts which fare well in these

two infrastructure items are better performer in physical infrastructure

development than the other districts of the State (Table 6). Amongst all the

districts of the state, the KBK districts are the discriminated lot in physical

infrastructure items, especially in rural electrification and teleconnectivity.

Barring Malkangiri, almost all the KBK districts have poor irrigation

infrastructure too. Thanks to the much-hyped drought situation and subsequent

governmental activism, Kalahandi has got some respectability in irrigation factor

but the situation of its sibling Nuapada, is one of the worst. Similar is the case of

the undivided Bolangir district. While Sonepur has got the 5th

position, Bolangir

has got distant 28th

position in the development of irrigation infrastructure.

The analysis finds an unanticipated situation in the case of development rural

roads. Most of the districts of coastal Odisha like Balasore, Bhadrak, Ganjam,

Jagatsingpur and Kendrapara are coming in the lowest bracket in RURDEN,

whereas some of the otherwise underdeveloped districts e.g. Gajapati,

Kandhamala, Boudh and Deogarh have got ranks in the top ten districts in

RURDEN.


Table 6: District-Wise Ranking in Physical Infrastructure Items Rank in

Districts PGIA RURDEN PHHTELCN PHHELCT PII

Anugul 24 7 2 14 10

Balasore 15 30 10 5 9

Baragarh 9 24 13 7 11

Bhadrak 4 28 8 12 5

Bolangir 28 26 23 24 26

Boudh 12 4 19 22 19

Cuttack 3 18 6 3 2

Deogarh 23 5 30 27 29

Dhenkanal 16 10 12 11 13

Gajapati 19 2 20 20 21

Ganjam 10 25 3 6 6

Jagatsingpur 11 23 9 4 7

Jajpur 6 20 11 2 4

Jharsugura 29 11 4 15 16

Kalahandi 13 16 27 25 24

Kandhamala 27 3 24 28 28

Kendrapara 2 21 16 10 8

Keonjhar 21 29 18 18 18

Khurda 8 9 1 1 1

Koraput 20 27 22 26 23

Malkangiri 7 19 29 29 25

Mayurbhanj 17 22 26 19 22

Nawarangpur 30 14 28 30 30

Nayagarh 22 6 15 8 15

Nuapada 26 17 25 23 27

Puri 1 1 7 9 3

Rayagada 18 12 21 21 20

Sambalpur 14 8 5 13 12

Sonepur 5 15 17 17 14

Sundargarh 25 13 14 16 17


This finding has two probable implications. One, the length of rural roads in

these supposed underdeveloped districts is relatively lager than that of the coastal

districts. Two, Net Sown Areas (NSAs) in the coastal districts are higher in

comparison to the KBK districts. A careful analysis based on our observation of

the study area points towards the later one. Most parts of the southern and some

of the western regions of the state are densely covered by forests and hills,

thereby the availability of NSA in these districts are lower in comparison to that

of the coastal districts. So, physiographic factors come into the fore in explaining

this inconsistency. Otherwise, the situation of rural roads is no way better in

these underdeveloped districts.

The above analysis, therefore, clearly indicates that there is both inter-regional

and intra-regional diversity in the development of physical infrastructure in the

state.

Disparity in Social Infrastructure

The categorisation of districts of the state in social infrastructure has been

presented in Table 7. Here too we see the undivided coastal districts (except for

Kendrapara) and Anugul are in High SI category whereas the undivided KBK

districts with exceptions of Boudh, Bolangir and Sonepur come in Low SI

category. Most of the districts of central Odisha are in the Medium SI category.

The Western Odisha districts maintain their positions in the middle. The ratio of

SII of the highest (Jajpur) and the lowest ranked districts (Malkangiri) is 5.006:1.

Noticeably, there is a north-south divide in the social infrastructure

development. The findings here are similar, with one or two exceptions, to the

finding in case of physical infrastructure. Kendrapara of the coastal Odisha has

marginally slipped to the medium SI category. Bolangir and Rayagada have

swapped their places from low SI category to medium SI category.

Some unusual revelations are brought about when we go for an item-wise

analysis in social infrastructure. The districts, which are ranked higher in the

health infrastructure, have got lower ranks in overall social infrastructure. This is

due to the negative weight of BDHOSP, the selected parameter of health

infrastructure.


Table 7: Social Infrastructure Index: District-Wise Division

It is also contrary to the general supposition that the coastal districts which

are ahead of the central /south-western districts of Odisha have been ranked

poorly in relation to BDHOSP (Table 8). It may be due to the simple reason that

the coastal districts are densely populated and the availability of beds has not

been according to the size of the population.

A general impression is that the spread of urban health infrastructure is better

in some of the coastal districts such as Cuttack, Khurda and Ganjam in

comparison to that of the western and southern districts of the state. The

impression from it might have been superimposed on rural areas of these districts

too. But the present study proves it as an illusion eventually. The study observes

that BDHOSP is lower in coastal districts than the KBK districts. The population

factor explains this anomalous observation. The KBK districts and some of the

districts of Central Odisha are sparsely populated. This makes BDHOSP higher

in these districts in comparison to that of the coastal districts. Otherwise,

BDHOSP is even below 15, which is perceived as the minimum requisite bed per

lakh of rural population, in some of the KBK districts3.

3 Considering the incidence and severity of spread of diseases, the state government has also

given emphasis to the KBK districts. However, the functioning and management of public health

care system in these areas has always been a matter of controversy.

High SI Medium SI Low SI

Rank Dist SII Rank Dist SII Rank Dist SII

1 Jaipur 10.233 11 Kendrapara 8.090 21 Kalahandi 5.156

2 Cuttack 10.172 12 Dhenkanal 7.844 22 Mayurbhanj 4.993

3 Nayagarh 9.762 13 Jharsugura 7.275 23 Kandhamala 4.922

4 Khurda 9.713 14 Boudh 6.486 24 Gajapati 4.800

5 Ganjam 9.568 15 Baragarh 6.237 25 Koraput 4.687

6 Jagatsingp

ur

9.195 16 Keonjhar 5.780 26 Nawarangpur 4.432

7 Puri 9.077 17 Bolangir 5.721 27 Nuapada 4.149

8 Balasore 8.836 18 Sundargarh 5.658 28 Deogarh 3.898

9 Anugul 8.214 19 Sambalpur 5.423 29 Rayagada 3.546

10 Bhadrak 8.174 20 Sonepur 5.296 30 Malkangiri 2.044


It is clear from Table 8 that the districts, which are in better positions in

PHHLATRN, are also better ranked in social infrastructure.

Table 8: District-Wise Ranking in Social Infrastructure Items

Districts

Rank in

BDHOSP RURALIT PGDHOUSE PHHLATRN SII

Anugul 15 12 3 9 9

Balasore 27 4 18 8 8

Baragarh 10 13 24 15 15

Bhadrak 28 5 28 11 10

Bolangir 17 21 14 24 17

Boudh 30 18 26 30 14

Cuttack 26 7 2 4 2

Deogarh 5 19 30 20 28

Dhenkanal 18 10 11 10 12

Gajapati 13 26 15 18 24

Ganjam 20 17 1 3 5

Jagatsingpur 23 1 13 6 6

Jajpur 29 8 9 2 1

Jharsugura 9 11 5 13 13

Kalahandi 16 24 20 19 21

Kandhamala 2 22 7 14 23

Kendrapara 21 3 16 12 11

Keonjhar 14 16 17 21 16

Khurda 22 6 4 5 4

Koraput 12 30 6 22 25

Malkangiri 1 29 25 29 30

Mayurbhanj 11 23 29 23 22

Nawarangpur 19 27 23 26 26

Nayagarh 24 9 21 1 3

Nuapada 7 2 22 28 27

Puri 25 2 19 7 7

Rayagada 4 28 12 27 29

Sambalpur 3 14 8 16 19

Sonepur 8 15 27 25 20

Sundargarh 6 20 10 17 18


This is due to the highest weight assigned to this factor, which indicates that

latrine facility is a positive and strong factor in social infrastructure in rural

Odisha. The study takes this factor as a proxy measure of a number of household

amenities like drinking water, kitchen, orchard etc. It is noticed that PHHLATRN

is highly correlated to the other two factors, viz. PGDHOUSE and RURALIT.

Once again it is seen that most of the coastal districts are in higher positions in

relation to PHHLATRN whereas most of the KBK districts have got the bottom

ranks. As regards PGDHOUSE, a coastal district Bhadrak has got one of the

lowest positions (28th

), whereas its sibling Balasore has got the 18th

position.

While Koraput has got the 6th

position, the adjoining Malkangiri and

Nawarangpur have got distant 25th

and 23rd

positions respectively. Similarly,

while Bolangir has got the 14th

position, its sister district Sonepur has got distant

27th

position in PGDHOUSE. Here we notice an intra-regional disparity is more

severe than inter-regional disparity. In RURALIT, however, the north-south

divide is clearly visible. Almost all the KBK districts (except Nuapada) are in

bottom positions, whereas almost all the coastal districts sans Ganjam have

occupied top slots in RURALIT.

Therefore, there exists inequality in the distribution of social infrastructure

among and across the three major regions of the state.

Disparity in Financial Infrastructure

The districts too have been divided into three categories such as high

financial infrastructure (High FI), medium financial infrastructure (Medium FI)

and low financial infrastructure (Low FI) districts. The district-wise ranking has

been presented in Table 9.

Here we can see that Cuttack, Khurda, Ganjam and Nayagarh, which are

ahead in PII and SII, are ahead in FII too. But some coastal districts such as

Bhadrak, Jagatsingpur, Jajpur and Kendrapara have been placed in Medium FI

districts category; Puri has been positioned in the Low FI districts category. On

the other hand, tribal dominated Sonepur of the KBK districts; Sundargarh and

Baragarh of North-Western Odisha have occupied positions in the High FI

districts category. The performance of Nuapada and Kandhamala, two KBK

districts of central Odisha in FI is visibly abysmal.


Table 9: Financial Infrastructure Development Index: District-Wise Division

High FI Medium FI Low FI

Rank Districts FII Rank Districts FII Rank Districts FII

1 Cuttack 7.418 11 Sambalpur 3.425 21 Nawarangpur 2.127

2 Khurda 5.901 12 Bhadrak 3.334 22 Boudh 2.050

3 Ganjam 4.640 13 Jagatsingpur 3.248 23 Puri 1.977

4 Nayagarh 4.396 14 Jajpur 3.172 24 Rayagada 1.802

5 Sonepur 4.387 15 Jharsugura 2.827 25 Mayurbhanj 1.653

6 Sundargarh 4.129 16 Gajapati 2.660 26 Keonjhar 1.571

7 Baragarh 3.906 17 Kendrapara 2.549 27 Deogarh 1.425

8 Balasore 3.879 18 Bolangir 2.396 28 Kalahandi 1.364

9 Anugul 3.715 19 Koraput 2.330 29 Nuapada 0.841

10 Dhenkanal 3.487 20 Malkangiri 2.288 30 Kandhamala 0.741

The distribution of financial infrastructure is not as asymmetric as it is in case

of the other two categories of rural infrastructure. Though the southern districts

including the KBK districts are far below their coastal and western counterparts

in terms of development of financial infrastructure, yet the spread of FII between

coastal and western Odisha is almost evenly balanced.

It is seen that out of the three tribal dominated districts of North Odisha,

Mayurbhanj and Keonjhar have been placed in the low FI category, whereas

Sundargarh has got a place in the high FI category. It is noteworthy here that

amongst the financial infrastructure items AGCREDIT has been assigned the

highest weight, closely followed by MTKGSOC whereas BNKSER has been

assigned the lowest weight (Table 10). As regards AGCREDIT, all the coastal

districts sans Puri, Kendrapara and Jagatsingpur are well placed whereas all the

KBK districts except Sonepur and Malkangiri have been ranked in lower stratum.

The districts in the rolling uplands of Central Odisha have been ranked in middle

stratum.

The per centage of rural households availing banking services (BNKSER)

is another factor in the making of the FII, albeit its low weight in overall FII. It is

interesting to observe that the top three ranks have been shared by Anugul,

Kandhamala and Nayagarh (Table 10), the three adjacent districts representing

separate regions of the state whereas Kendrapara and Jajpur, the two


neighbouring districts representing the same region have been placed in 6th

and

26th

positions respectively.

Table 10: District-wise Ranking in Financial Infrastructure Items

Rank in

District AGCREDIT BNKSER MKTGSOC FII

Anugul 12 1 5 9

Balasore 6 10 9 8

Baragarh 4 29 13 7

Bhadrak 8 18 16 12

Bolangir 25 30 7 18

Boudh 26 12 15 22

Cuttack 3 14 1 1

Deogarh 23 21 28 27

Dhenkanal 9 11 11 10

Gajapati 10 23 25 16

Ganjam 2 19 12 3

Jagatsingpur 17 4 8 13

Jajpur 7 26 22 14

Jharsugura 16 8 18 15

Kalahandi 29 24 19 28

Kandhamala 30 2 29 30

Kendrapara 19 6 10 17

Keonjhar 28 9 21 26

Khurda 5 16 2 2

Koraput 22 7 14 19

Malkangiri 14 25 26 20

Mayurbhanj 21 5 27 25

Nawarangpur 18 20 23 21

Nayagarh 1 3 20 4

Nuapada 27 28 30 29

Puri 24 22 17 23

Rayagada 20 13 24 24

Sambalpur 13 17 6 11

Sonepur 11 27 3 5

Sundargarh 15 15 4 6


Similar evidence is witnessed in case of the undivided Sambalpur district.

While Jharsugura is in the 8th

position, its adjoining district Deogarh has been

placed in the 21st position. Here also disparity is more of intra-regional type than

inter-regional. BNKSER is among the lowest in the undivided Bolangir and

Kalahandi.

Disparity in Overall Rural Infrastructure in Odisha

The positions of different districts regarding rural infrastructure have been

presented in Table 11 and Map 4. It is noticeable that there is vertical division

among the three broad regions of the state in terms of rural infrastructure

development. The coastal districts are ahead of their counterparts in the Southern

and the Western Odisha.

Table 11: Rural Infrastructure Development Index: District-wise Division

High RII Medium RII Low RII

Rank District RII Rank District RII Rank District RII

1 Cuttack 23.78 11 Kendrapara 16.12 21 Gajapati 9.974

2 Khurda 23.22 12 Dhenkanal 15.53 22 Koraput 9.410

3 Ganjam 19.70 13 Baragarh 15.15 23 Mayurbhanj 9.158

4 Jajpur 19.57 14 Jharsugura 13.93 24 Kalahandi 8.996

5 Jagatsingpur 17.93 15 Sambalpur 13.82 25 Rayagada 8.081

6 Puri 17.75 16 Sonepur 13.72 26 Nawarangpur 7.518

7 Nayagarh 17.72 17 Sundargarh 12.96 27 Kandhamala 7.389

8 Balasore 17.71 18 Boudh 11.33 28 Nuapada 7.227

9 Bhadrak 17.33 19 Keonjhar 10.30 29 Deogarh 6.670

10 Anugul 16.88 20 Bolangir 10.02 30 Malkangiri 6.644

Out of the Central Odisha districts, only Anugul is in a relatively better

position. This is due to better performance of the district in rural

telecommunication, housing and banking infrastructure. The pace of

industrialisation and the rural-urban linkage may perhaps be one of the factors for

a relatively higher attainment of these basic infrastructures in Anugul district.

Otherwise, all the other districts in the high RI category are from the undivided


coastal districts of Odisha. Only Kendrapara has been clubbed in the medium RI

category, that too in the highest position in the said category.

Mostly districts from the Western Odisha, mainly from undivided Bolangir

and Sambalpur, are in the medium RI category. Similarly, two northern districts

Keonjhar and Sundargarh are in medium RI. However, another northern district

Mayurbhanj is a low RI district. The same is the case of Deogarh. Though carved

out of Sambalpur district, this district lags far behind the other districts of

erstwhile Sambalpur. The vertical division between the sibling districts Gajapati

and Ganjam is also evident. So in addition to inter-district variation, the study

finds intra-district variations (within the erstwhile undivided districts) in rural

infrastructure in the state.

It is observed that all the present districts from undivided Koraput and

Kalahandi districts have been categorised in the low RI group and almost all the

districts in the low RI category are predominantly inhabited by the tribal people.

Therefore, the governmental efforts to focus the Southern and Western Odisha

through the KBK and the Western Odisha Council plans are steps in the right

direction4.

The scatteredness of different categories of infrastructure has been studied

with help of Coefficient of Variation (CV) and Gini coefficient5 (Table 12).

Table12: Descriptive Statistics

Indices Mean Standard

Deviation

Coefficient of

variation

Gini

Coefficient PII

SII

FII

RII

5.07706

6.64598

2.98801

13.52124

2.15917

2.27126

1.47484

4.98443

42.53

34.17

49.36

36.86

0.238

0.191

0.264

0.206

4 The KBK plan is launched by the joint sponsorship of the central and the state governments with

a view to focus on development of the three erstwhile undivided districts of Kalahandi, Bolangir

and Koraput. 5 Gini coefficient (G) = 1=(1/n)-(2/n

2 I) [I1 + 2 I2 +3 I3 +………………..+n In], where Ii ,

i=1,2,……….,n represent individual index in decreasing order of value, I is the mean value of the

indexes and n is the number of districts, which is 30 in this study.


We see that the CV of FII is the highest and it is the lowest for SII among all

the indices. The same is the observation if we see the Gini coefficients. So,

disparity is more severe in case of financial infrastructure. In the case of physical

infrastructure more divergence is found in the irrigation variable PGIA.

Relationship between Different Categories of Infrastructure

It is normally expected that there is a positive correlation between different

categories of infrastructure. The Karl Pearson‟s correlation coefficients have been

calculated for this purpose (Table 13). It is found that the zero-order correlation

coefficients between all the categories of rural infrastructure are highly

significant. The physical infrastructure index is more associated with the social

infrastructure index than the financial infrastructure index. Roughly speaking the

set of base variables (PGIA, PHHELCT, PHHTELCN and RURDEN) of PII is

more associated with the set of base variables (RURALIT, BDHOSP,

PGDHOUSE and PHHLATRN) of SII than AGCREDIT, BNKSER and

MKTGSOC of FII.

Table 13: Pearson’s Correlation Coefficients

PII SII FII

PII 1.000 0.859** 0.731**

SII 0.859** 1.000 0.648**

FII 0.731** 0.648** 1.000

** Significant at the 0.01 level (2-tailed)

Underdevelopment in one aspect results in underdevelopment in another

aspect of infrastructure. For example, if people have less access to physical

infrastructure, their productive capacity is bound to be adversely affected. This

may result in low accessibility to merit goods such as education and healthcare.

Low attainment in the social field would reduce their bargaining power, by which

they may remain alien to credit and marketing facilities. So, there always exists a

cause-effect relationship among different categories of infrastructure. That is,

however, beyond the scope of the present analysis.


4.0 Summary, Conclusion and recommendations

The cross-section analysis in our framework develops composite indices for

different categories of rural infrastructure viz., physical, social and financial

infrastructure in the state of Odisha at district level. It is observed that the three

indices are significantly correlated pair-wise, which indicates that

underdevelopment in one aspect leads to underdevelopment in another aspect of

infrastructure. These indices are further combined together to construct an index

for the overall rural infrastructure. The analysis points towards existence of

vertical inequality in the spread of different categories of infrastructure in the

three principal regions of the state viz., Coastal, Southern and Western-Central

Odisha. Disparity is more severe in case of financial infrastructure followed by

physical and social infrastructure. The coastal region of the state is relatively

better-off than the west-central and the southern regions of the state.

The KBK districts, comprising districts mostly from Southern-Western Odisha,

are in the lowest bracket of development in every aspect. This calls for proactive

and participative role from concerned quarters so that all categories of

infrastructure develop in synchrony and become adequate for rural development.

Government efforts through the KBK plan and formation of the western Odisha

Council are laudable steps in this direction. There is greater need for a time-

bound delivery system and certain region specific measures in place. The present

study calls for revitalizing the existing rural infrastructure and evolution of a

policy both at regional and national levels encompassing both the benefactors and

the beneficiaries.

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Rural Infrastructure in Odisha: An Inter-District Analysis

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