See discussions, stats, and author profiles for this publication at: https://www.researchgate.

net/publication/262121776

Indian Ports and Globalisation: Grounding Economics in Geography

Article  in  Economic and political weekly · January 2001

DOI: 10.2307/4411030

CITATIONS READS

21 226

2 authors:

Buddhadeb Ghosh Prabir De

Indian Statistical Institute Research and Information System for Developing Countries
53 PUBLICATIONS   455 CITATIONS    100 PUBLICATIONS   866 CITATIONS   

SEE PROFILE SEE PROFILE

Some of the authors of this publication are also working on these related projects:

Evaluation of Infrastructure Projects in Manipur, Mizoram, Nagaland and Tripura Submitted View project

Indian under NDA View project

All content following this page was uploaded by Buddhadeb Ghosh on 22 September 2015.

The user has requested enhancement of the downloaded file.

Indian Ports and Globalisation: Grounding Economics in Geography
Author(s): Buddhadeb Ghosh and Prabir De
Reviewed work(s):
Source: Economic and Political Weekly, Vol. 36, No. 34 (Aug. 25-31, 2001), pp. 3271-3283
Published by: Economic and Political Weekly
Stable URL: http://www.jstor.org/stable/4411030 .
Accessed: 24/05/2012 08:11

Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at .
http://www.jstor.org/page/info/about/policies/terms.jsp

JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of
content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms
of scholarship. For more information about JSTOR, please contact support@jstor.org.

Economic and Political Weekly is collaborating with JSTOR to digitize, preserve and extend access to
Economic and Political Weekly.

http://www.jstor.org
 Indian Ports and Globalisation
Grounding Economics in Geography
This paper is concerned with the economics of Indian ports as one importantphenomenon in
Indian economic geography, and its relationship with regional development under the free
market economy. A port performance index derived with the help of principal component
analysis of eight individualport performance indicators shows that overseas traffic intensity is
the most significant determinantof performance. With increasing openness of the economy and
absence of an integrated policy toward export transportnetwork, there is a decline in export
intensity and rising domestic coastal traffic in Indian ports.
BUDDHADEB GHOS;I, PRABIK DE

here is a kinship between econo- development, have drawn freely on the located in the hinterland. A highly plau-
mics and geography. It is easy to prevailing concepts of economics. But sible area of future research would be to
understand but difficult to prove economists have tended to accord little if find whether our failure to exploit the huge
empirically. Even though it is transparent, any attention to geographical factors in coastal line is the result of our inward-
until 'very recently it was not acknow- economic modelling even when they fail looking economic policies pursued over
ledged in Indian academic circles. But this to find any economic explanations for the the last 50 years.
was recognised by both classical econo- same. The traditional logic that counters It is worthwhile to mention here that
mists like Adam Smith, and the pioneers this argument points to the price mecha- nearly200 years afterJohannvon Thunen's
of development economics like Myrdal .nism that is supposed to take care of the Isolated State (1826), 70 years after Alfred
and Hirschman. Smith's emphasis on geo- forces of supply and demand. But it fails Weber's Theory of Location of Industries
graphy relates to the transportmechanism to answer the problems of specialisation, (1929), 50 years after August Losch's The
which strengthens his classic sequence of trade orientation, increasing returns and Economics of Location (1954) and Walter
specialisation -> division of labour -> hence regional inequality. Isward's Location and the Space Economy
productivity -> extent of market: Traditional trade economists have been (1956) were published, nowhere in the
As by means of water-carriagea more regarding the national economy as world do spatial factors like transportation
extensive marketis opened to every sort 'spaceless' [Krugman 1998]. 'Space', or (and more specifically, port), regional
of industrythan what land-carriagealone what may be called 'geography', is so inequality and urbanisation have found
can afford it. so it is upon sea-coast, and importantthatit can neatly divide the world any place in economics textbooks.
along the banks of navigable rivers, that into some basic building blocks. For Before switching to the theme of the
industryof every kind naturallybegins to example, there are on the whole 35 land- paper let us have a brief recapitulation of
subdivide and improve itself, and it is locked counties in the world which, except the logic behind the rise of this 'new
frequently not till a long time after that a few European countries like Austria and economic geography'. l In the standardneo-
those improvementsextend themselves to
Switzerland, are neitherdeveloped nor rich classical formulation, there is a natural
the inland part of the country. in termsof percapitaincome. These handful smooth tendency towards inter-regional
At another point Smith's reference to of countries (seven only) are located in transmission of growth from the richer to
India (and Bengal) reminds us of our past western Europe, and hence deeply inte- the poorer regions within an economy with
trading glory: grated into the developed Europeanspace. perfect mobility of factors and diminish-
There are in Africa none of those great This is perhaps one of the causes for the ing returns to capital. Barro and Sala-i-
inlets, such as the Baltic and Adriaticseas commonly held view thatpoverty is by and Martin (1995), Quah (1993) and many
in Europe,the Mediterraneanand Euxine large 'tropical' [Gallup and Sachs 1998]. others have tried to test the hypothesis of
seas in bothEuropeandAsia, andthegulfs Moreover, a significant share of the convergence of economic growth or levels
of Arabia,Persia,IndiaandBengal,andSiam, population in the developed countries is of economic development between differ-
in Asia, to carrymaritimecommerce into concentratedin the coastal region. By sharp ent regions within a country and also
the interiorpartsof that great continent... contrast, the
population in south Asia is between differentadvancedcountriesthem-
But up to the eighties economists did not heavily concentrated in the interior. Spe- selves. But this theorisation pays little
deal directly with such factors as trans- cifically, India's great mass of population attention to the spatial variables which, for
portation and ports, manufacturing belt lives along the course of the Ganges. Most all practical purposes, have significant
and urbanisation which exemplified 'in- of these habitations are often hundreds of influence on the process of economic
creasing returns'. Thus, until recently, the kilometres away fiom the coast. Among development. Moreover, Indian economic
relationship was rather asymmetric. For others, this demonstratesour inward-look- development during the last 50 years dis-
example, economic geographers abroad, ing attitude. For example, even in those plays rathera tendency towardsdivergence
while constructingtheiranalytical theories states that have a very high coastal line, across the major regions [Marjitand Mitra
and explanations of unbalanced regional the main centres of economic activity are 1996; Ghosh et al 1998].

Economic and Political Weekly August 25, 2001 3271

 A parallel literature in economic geog- follows. Section I deals with the concept became irrelevant. It is also shown that in
raphy has been simultaneously trying to of port and studies relating to regional order to decentralise industries from the
enrich the explanatory power of the re- growth. Section II deals with data and core region to a periphery, a temporary
gional development theory incorporating methodology and gives a schematic clas- protection of industries in the peripheryby
the impact of external sector on domestic sification of Indian ports and their insti- worsening the transport connection with
economic development more specifically. tutional framework. Inequality among the core for a short period of time may be
Thus over the past two decades a 'new Indian ports and ports of maritime states desirable. But their findings may not be
trade theory' and a 'new economics of are discussed in Section III.Also discussed true in case of an economy where portdoes
competitive advantage' have emerged are individualperformancesof Indianports not play a decisive role in the growth of
which have brought to the forefront the along with the construction of a port the economy.3
role that the internal geographical factors performanceindex (PPI). Section IV analy- The historic and most common view
of a nation may play in determining the ses the relationship between port perfor- about the role of transportation in the
trading performance of that nation's in- mance, cargo composition and per capita development process is as a precondition
dustries as well as concentration / spread income, in termsof the degree of openness, or prerequisiteforeconomic growth.While
of economic activity.2 In this endeavour, port traffic and port capacity. Section V dealing with the stimulus to the take-off
Paul Krugman,the leading exponent of the concludes with an analysis of policy issues stage of economic growth in the US,
'new trade theory' has sought to answer including the pros andcons of privatisation Rostow (1964) identifies the railroads as
how internationaltradeof a country is both initiatives, and future research. the critical investment sector. According
influenced by and in turn influences the to Hunter (1965), the economic history of
processof geographicaldistributionof eco- western Europe and North America has
nomic activities within a nation [Krugman PortsinTheory shown that the introduction of modern
1991 1993, 1995]. In a different but related transportation methods has drastically
vein, Porter (1990) has argued that the A port is essentially an economic con- lowered shipping costs. There is a causal
degree of geographical clustering of in- cept, an economic infrastructurethatserves linkage between low-cost transportation
dustries within an economy plays an coastal and overseas traffic. Port is a sub- and economic development. The indus-
importantrole in determining which of its system of the total transportnetwork and trialrevolutionwas facilitated,among other
sectors command a 'competitive advan- a meeting place' of other modes of trans- things, by a prior revolution in transport
tage' in the global economy. port. A port is a gateway for the entrance technology. Some pioneering studies
Thus in order to understand the trading from surface water to land and vice versa. [Fogel 1964; Cootner 1963] have found
performanceof a country we need to know Port is also construed as the major cross- that in terms of causal association, devel-
the nature of supply of the trading instru- road of traffic in ideas, peoples and goods opment of transportationfacilities was the
ments of the regions of the country from over the centuries [Kindleberger 1996]. outcome of rising demand. That is, trans-
the points of production to the final outlet There is sufficient evidence in literature port facilities were built-up in a process
in the chain of transportation. This may of a strong spatial relationship between of 'backward linkage' of industrialisation.
be reflected in differing economic perfor- transportationandeconomic development. Hardlyany attempthas been made in recent
mance of various competing regions. Thus It is universally recognised that capital years to verify the impact of transport
the linkage from the production points to formation has very direct and positive network on trade in the LDCs. To the best
the shipmentpoints through various trans- impact on growth. Transportation is an of our knowledge, the work by Taaffe et
action points in the chain of location is a important component of capital forma- al (1963) is such an attempt for under-
central theme of the process by which tion. The question of where economic standing the transportnetwork and devel-
national economic prosperity and tradeare activities should be located is partly de- opment in west Africa.
created and maintained. terminedby 'historicalaccidents' andpartly Samuelson (1954) in aclassic paperdealt
Thus one of the most importantjustifi- by the geographical specificities of the with the effects of trade impediments as
able forms of industrial (and trade) poli- countryconcerned- the motive force which a result of transportbottleneck under a 2x2
cies thatregional, industrialand locational guides economists to develop models of framework. But considering the exact
factors merit is neglected in most of the the spatial structure of the economy. location of production unit of the export-
LDCs and of course in India. Krugman (1998) has also emphasised able item in the home country thereby
Against such a background the purpose spatial perspective as evident in the ways making 'distance' an explicit issue, things
of this study is to highlight the role the port in which geographic phenomena are spa- become much more complicated as pointed
plays in India's regional economic devel- tially interconnected and the interaction out by Rauch (1991). Accordingly to him,
opment, and also to find relationship that occurs over geographic space. per-unit-distance transportation costs
between port performance and overseas In recent works Fujita and Mori (1995a, within the country always account for the
traffic. The importance of such work has 1995b, 1996) have explained the evolu- final node of volume of tradethan the same
increased since the initiation of the tionary model of spatial economic devel- exportable items of other countries. These
globalisation programme in 1991. But no opment in which agglomeration econo- costs combined with the assumption that
serious attempthas been made to this effect mies and the hub-effect of transportnodes cities are the basic units of spatial organi-
except theIndia InfrastructureReport [GoI interplay in the making of major cities. sation in a country lead the model to
1996]. Above all, one objective of this Their model explains the irreversibility of predict that population size, wage rates,
paper is to invite discussion on various spatial economic development such as the and residential rental rates of cities will all
aspects of the topic dealt with here. continuing prosperity of port cities even decline monotonically as one moves in-
The organisation of the paper is as after initial advantage of water-access land from a coastal port. But this result is

3272 Economic and Political Weekly August 25, 2001

anexceptionratherthanaruleinthepresent In India, some worthy but unheeded performance.These include(i) ship turn-
Indiansituationof humansettlementand works have startedto come out which deal roundtime,(ii) pre-berthing waitingtime,
concentrationof industries.4 explicitly with non-price factors as the (iii) percentageof idle timeatberthto time
Thereis also a belief thattransportis a most importantbarriersto India's success atworkingberth,(iv) outputpershipberth
safe investment politically. Hirschman in foreign trade [Peters 1990; Marjit and day, (v) berththroughputrate,(vi) berth
(1958) suggests that perhaps it is the Roychoudhury 1993; EXIM Bank 1998]. occupancyrate,(vii) operatingsurplusper
absenceof criteriaand of sanctionsthat Thus, the ability of the developing coun- ton of cargo handled,and (viii) rate of
endearstransportation investmentsso much tries to provide the required transportand returnon turnover(Appendix1).
to developers. After all, development communication services essential for Thesedataaretakenfromthefollowing
planningis a risky business,and thereis modernlogistics managementwill increas- sources: (i) estimates of state domestic
naturallyan attractionto undertakeven- ingly determine theirability to compete for products, (ii) Economic Survey, (iii) Sta-
turesthatcannotbe provenwrongbefore export market and direct foreign invest- tistical Abstract,(iv) NationalAccounts
they are startedand unlikelyever to be- ments. Mexico's maquiladoraoperations, Statistics,(v)BasicPortsStatisticsof India,
come obvious failures.5 Chile's exports of fruits, Columbia's of and(vi) TransportStatisticsof India- all
We have so far seen thatsome studies cut flowers and Kenya's of horticultural publishedby thegovernment of India.This
have addressedthe role of transportin productsareexamples wherecountrieshave dataset is supplementedby variouspub-
regionaldevelopmentbutveryfew of them been able to meet logistic requirementsof licationsof (i) the Centrefor Monitoring
have assessed the significance of ports their overseas customers. On the other Indian Economy (CMIE), Mumbai;
therein.Thereis also no dearthof studies hand, there are many examples of coun- (ii) IndiaDatabase- The Economy(Vols
thathavefocusedon regionaldisparityin tries which are losing the competitive edge I andII ) by H L ChandokandThe Policy
India in generalduringthe last few de- because of shortcomings both in key in- Group,andvariouspublicationsof Indian
cades,butnota singlestudyhastakenport frastructureas well as in institutional and Ports Association,New Delhi.
facility as an infrastructureattributeto procedural delays, especially relating to India is endowed with an extensive
assess either regionaldisparityor trade custom processing and transportservices. coastlineof about6,000 kms along nine
impedimentin India.6 In India, the freight rateof containertraffic coastalstates,namelyGujarat,
Maharashtra,
A portgrows by virtueof the tradeit andtransittimes throughportsexceed those Karnataka, Goa, Kerala(west coast) and
canattract.Itsgrowthis a functionnotonly of her Asian competitors by large margins. TamilNadu,AndhraPradesh,Orissa,West
of technologicallyrelatedsupplyfacilities This seriously constrains India's export Bengal(eastcoast).Theseninestateshave
but also of the economic and political promotion goals. Therefore, the success of in all 12 major8and 179 minor ports.
objectivesof a countrythatdeterminethe economic reform, which is essentially a Among these 12 majorports,six are lo-
demandfor portservices.The historyof sort of export-led growth strategy, cru- catedon the west coast(Kandla,Mumbai,
portdevelopmentis often an epitomeof cially hinges on the level, development JawarlalNehru,Mormugao,Cochin,New
changingeconomic,politicalandtechno- and utilisation of transportand communi- Mangalore) and six on the east coast
logical circumstanceson various scales cation facilities, especially ports. (Chennai, Tuticorin, Paradip, Vizag,
aided by outward orientation of the Calcutta,Haldia).Fourof the majorports,
economy[Ray 1993;Kindleberger1996]. II viz, Calcutta, Mumbai, Chennai, and
An efficientportraisesthe productivity Portsin Practice Mormugaoare more than.100 years old.
of otherfactorsof production(labourand Cochin and Vizag ports have recently
capital)andprofitabilityof the producing For the present purpose, we have celebratedtheirgoldenjubilee.The ports
units therebypermittinghigherlevels of organised data for nine Indian states over of Kandla,Tuticorin,New Mangaloreand
output,income and/oremployment.For the period from 1970 to 1996. Paradipcameintoexistenceafterindepen-
mostof theunderdeveloped world,therole In India, income data are very scarce. dence.JNPTbecameoperational after1989.
of port as a policy instrumentfor both Net statedomestic product(NSDP) as given Out of total declared 179 minorports
highermobilityandlowertransactioncost by the government are defined as the net including13 non-workingports,120ports
as well as forspreadingthegrowthcentres value added(afterdepreciationis accounted (67 per cent) belong to west coast states,
awayfromthe core metropolitanlocation for) originating in each state. Here we have 24 ports to east coast states and the rest
has not been utilised so far. gone a step further from the prevalent (35) belongto the islandunionterritories.
Duringthe last two decades increased practices for the conversion of nominal Maharashtra is the only state havingthe
globalisationand intensifiedcompetition NSDP into real term. Following Ghosh et highest numbersof both major (2) and
in worldtradehaveresultednotonly from al (1998) which to the best of our know- Table 1: Annual Throughput of Selected
the liberalisationof tradepolicies butalso ledge is the first paper in this line, we have Ports of the World In 1994-95
from significant advances in transport, used consumer price indices for agricul-
Port Traffic(in MT)
communication, storageandpowerfacili- tural labourers (CPIAL) with base 1960-
ties.Thesedevelopments havetransformed 61=100 for deflating nominal PCNSDP.7 Rotterdam 288
Singapore 274
the traditionalorganisationof production Another majorachievement of this paper
Shanghai 165
andmarketingin orderto gaincompetitive is port facility. This in the Indian context Houston 126
102
advantagein theinternational market.The can be understood as public infrastructure Hong Kong
Antwerp 102
main focus here is on managementand input from the supply side. We have taken Tokyo 79
transportlogistics to achieve efficient eight important variables for major ports Hamburg 65
utilisationof inputstherebypermitting for fourdifferenttime pointsover the period Mumbai 32
rapid India(all majorports) 197
responseto emergingfacilities. from 1985 to 1996 to judge their relative

Economicand PoliticalWeekly August 25, 2001 3273

 Figure 1: MaritimeStates and MajorPorts in India 1996-97 China's openness ratio of 43 per
cent was just double that of India but
China's port traffic was five times that of
India.
The natural advantage of having a long
G
AF G 3H -A--
ATAN
:l " '. 'o
>
.
*
r/
coastline in the economic life of a region
"-' :'- :"' ":1'<V?,''
" * '....1twSc even within a country is evident from
, /
C':- ,':/. , ".' .( ..,'
?..:'J
- -,. ,\ ?-'"" "_-..yCHINA
. , ,:' a..;* Tables 2a and 2b. First, with a perceptibly
?
lower geographical area (42.25 per cent as
.... ~'t"' '? i' - "M
" *)
' ".;...-...' ' " "-." ;
.<' 2 'c'-- *..
against 57.75 per cent for rest of India
. ,:" '
* .
-, .,>,-
.:,' j
........>e
' '*\
, . ,, _ '_ .): 1 .
SP .t... . which includes both Madhya Pradesh and
K [ S T Ali,.-/
p I5? ! < f n Uttar Pradesh), the shares of the coastal
. x states in total population and GDP in
-...f^. :"pp.t
' 1996-97 were as high as 49.34 per cent and
--. .: * *'i '
P
_KISTA ? _ . - ?S-,..,--
.
. ..t.. ; *:- 61.71 per cent respectively (See Figure 1
. ,,
....:.
r.I
for the map of maritime states). In terms
_~ .-- .. ..<s".W, .c. ,
~r" _.- ,~~l ':,, -. ,. of population density, urbanisation and
' - ^ 8 URMA
:.-' .... '" 2 ....' literacy,thecoastal statesstandmuchhigher
,
' "
'"~ ''" : > ' than the rest of India. Naturally therefore,
t"*t;.
:*'-',' * " .KRK^I-:. " ' .. ._ ,; ;-
the average real per capita income of the
*.~.jl'~
'" s:>i^
...... .?' * vy' ' ?. 1. -..'? '"
'--/. ~.t -" ,"~ non-coastal states (Rs 614.08) is not only
. S '.~ t''. ' -?- : ;*?--* ;
*"Sr ,.--', * -'
lower than the average of the coastal states
'. a-V '- .n-.;: .- .~ - ,T :. ...
(Rs 818.78) but also lower than the all-
*
f t~f; ;U T t t
CA Indiaaverageof Rs 684.94. Anothernotable
;L . , ' :,:-,! feature is that the share of the coastal states
' \" ' ' in GDP has been rising continuously since
' ' 9 ' ' .... . .. ? . ...
1960-61 from 57.02 per cent in 1960-61
^
_^@3 -,^^yqi--
;~ C ?-~^.<i""-
'~A"
\'^lt~~c ~' ~
'
:\ -c.?? . ws^( -
X to 59.10 percent in 1990-91. This disparity
is strengthened in the post-reform period:
:
k-4v <a,
2.61 per cent increase in this share has
-- 541gL-,'I~~ AAIMTU1J ' ' -
- 'w"W^i to'>'^ .
occurred only within a span of six years.
Only Delhi (Rs 1,348.96), Punjab
(Rs 1,118.36), Haryana (Rs 995.35) have
per capita incomes higher than the coastal
states. Finally, investment in EOUs in the
o~gij^[J
______ ______________________________________;g . tfj
3 t __
coastal states during the post-reform pe-
4. /Pb L'LAS !, .NDOSiA riod has risen as high as 74 per cent. Better

Table 2 (b): Share of Coastal States In

India's Gross Domestic Product (GDP)
Year Share in GDP (Per Cent)
minor (53) ports in India. Next is in India which was insignificant compared 1960-61 57.02
Gujaratwhere one majorand 40 minor to other global ports. A comparison of 1970-71 57.17
ports are situated. West Bengal is the India's port traffic and openness with 1980-81 59.12
1990-91 59.10
only maritime state which, even with those of China makes it clear why China
1996-97 61.71
adequate waterfront has no declared won the first round of liberalisation. In
minorport.
Table 2(a): A Comparison between Coastal and Non-Coastal States: 1996-97
India's total port cargo has increased
approximatelyfourfoldbetween 1970-71 Features Coastal States Rest of India
and 1995-96 rising from 56.14 MT to Area (000 sq.km)* 1388.70(42.25) 1898.30(57.75)
218.07MT.It mayappearto be a highrate Population(000)* 417598 (49.34) 428705 (50.66)
of growthbut in any internationalcom- Populationdensity (per sq km) 301 226
Urbanpopulation(percent) 30 24
parison,our port-intensityis representa- Literacyrate (percent) 62.34 55.07
tive of our trivial trade orientation.As Share in GDP (percent) 61.71 38.29
evidentfromTable 1, while all the major PCNSDP (Rs)** 818.78 614.08
Share in investmentsmade in
portsof Indiahandledtrafficof 197 MT 100 per cent EOUs (August1991-September1998)(percent)*** 73.71 26.21
in 1994-95, Rotterdam alone carried Share in manufacturingvalue added (percent) 68.05 31.95
288 MT, Singaporealone 274 MT and No of inlandcontainerdepots (ICDs) 10 4
Shanghaialone 165 MT. As a matterof Notes. * Numbersin parentheses are the percentage shares of the respectivefeatures.
fact, during the same period, Mumbai * Deflated CPIAL
by (1960-61=100).
porthandledthe highestcargo of 32 MT ** Totalinvestmentin this periodwas Rs 62,930 crore.

3274 Economicand PoliticalWeekly. August 25, 2001

 Figure 2: Lorenz Curve for Port System of Major Ports Authority whereas the Major Port Trusts
(a) (b) Act, 1963 enables the port to conduct its
LorenzCurve1970-71 LorenzCurve1980-81
1 C 1 regulatoryas well as commercial functions.
c~ cm Indian Ports Act, 1908 extends automati-
ca
cally to all ports and parts of navigable
E
E rivers and channels leading to the ports ir-
respectiveofcategory(ie, majorandminor).
-5
Major Port Trusts Act, 1963 is restricted
02.2
to the port proper of the major ports.
-
o 0 0 'Major ports' mean any ports which the
0 0.2 0.4 0.6 0.8 1 0 0.2 0.4 0.6 0.8 1 central government may by notification in
Cumulativepercentageof no of ports Cumulativepercentageof no of ports the central gazette declare underthe Indian
(c) (d) Ports Act, 1908, or may under any law for
LorenzCurve1990-91 LorenzCurve1997-98 the time being in force have declared to
a 1-
.
. 0 . be a majorport.(Portsof Calcutta,Mumbai
|
c(c
0.80 0.4 6 0.8 1 0.8 and Chennai were declared 'major port'
(a
in pursuance of statutory enactment dated
a00
December 16, 1920, and were brought
0
Q 0.4 under the direct control of the central
government by virtue of the Seventh
Eo Schedule of the Government of India Act,
0o '______
0 02 04 0.6 0.8 1 0 0.2 0.4 0.6 0.8 1935.) 'Other port' means any port, which
Cumulativepercentage of no of ports Cumulativepercentage of no of ports the state government may by notification
QE g0.6 / in state gazette, declare as a port.
6/ of Coastal States
Figure 3: Lorenz Curve for Port System The crux of the matteris thatownership,
(a) (b) control and administration of minor ports
LorenzCurve1970-71 LorenzCurve1980-81 differ from state to state. While some
1. . . I 1. ...
S> 0.9 Co maritime states have enacted maritime
m' wo./ as board acts and created maritime boardsfor
0)Q 06 >E 06 management and control of their ports,
o0.5
other states still continue to perform these
? o 00.4 0
-5003 ^ o
functions under their ports and fisheries
E *5 02 E 0 02 departments.The states, while promulgat-
o 2_ ing order for laying down their rules of
0'
O1='^3 0
0 02 0.4 06 0.8 1 0 02 04 06 08 business, also allocate the subject for the
Cumulativepercentageof no of ports Cumulativepercentageof no of ports control of various departments through
(c) (d)
these orders. Even where the states have
Lorenz Curve 1990-91 Lorenz Curve 1997-98 enacted a maritime board act and created
1 . .-- ) 1.00
co ID a maritime board, the administration and
c~
m9Ca8 0.90
a. a. supervision of the maritimeboardis vested
in the ports and fisheries departmentas the
Q2
E'C
o5 0.10 a, case may be. However, most of the mari-
time statesarein the process of reorganising
co Oa3 c the control structure for their ports by
constituting maritime boards. Gujaratand
E 00.2.0 E 0oo . Maharashtra have already created mari-
02 04 a6 a8 1 0 02 0.4 0.6 0.8
time boards whereas Andhra Pradesh,
Cumulativepercentage of no of ports Cumulativepercentageof no of ports
Tamil Nadu and Karnatakaare in process
of enacting the necessary legislation. Minor
endowmentof the coastal states is also by the Major Port Trusts Act of 1963 and ports in Orissa, Kerala and Goa are con-
evidentfromthe correspondingsharesof the Indian Ports Act of 1908. Ports other trolled either by ports and fisheries depart-
industrialvalue added. than major ports are included in List III ments, or by public works departments,or
The foregoinganalysisonly remindsus (concurrentlist, entry 31), and are control- by transport departments.
of the fact thattheremust be some eco- led and operated by state governments
nomic advantageto having ports. subject to some central legislation. The III
Ports in Indiaare classified as 'major primaryresponsibility for thedevelopment PortPerformance
ports' and 'other (minor) ports'. Major and managementof minorand intermediate
portsare underthe centralgovernment's portsrestswith thestategovernmentswithin Traditionally, the study of competition
controlandthese,by entry27 in List I of the purview of Indian Ports Act, 1908.9 among ports has focused on hinterland
ScheduleVII to the Constitutionof India, The Indian Ports Act, 1908 mainly (the interior region-served by each port),
are a centralsubject.They are governed describes the regulatorypowers of the Port which was initially defined on the basis

Economicand PoliticalWeekly August 25, 2001 3275

of the rail rates from the ports to the words,the importanceof the minorports makes the portsystem volatile which forces
interior. Later,port competitionstudies has increasedin recentperiod. the system to concentrate more on coastal
beganto considerforelands(the overseas Thus, in the post-liberalisation
period, trading.A fall in portsystem concentration
regionservedby each port)and the com- a cleartendencyof equalisationwith and does not always bring benefit to all the
bined water-port-landrate advantages withoutminorports in port system con- ports. Performance of a port depends on
[Weigend 1958; Draine 1963]. Continu- centrationis noticed.Oneplausiblereason many factors which may be broadly di-
ing to this vein, explanations of port forthisobservationmaybe thatmoststates vided into internal and external factors.
competitionhavebeenextendedto include are trying to utilise minor ports due to External factors may be composed of trade
other factors such as labour costs and limitationof capacityof majorports. orientation of the region in which the port
productivity, railconnections,portaccess, is located, objectives of the local as well
andlandavailability[Kenyon1970;Mayer Measures as centralgovernments, and the geographi-
1978]. Hoare (1986) found overlapping In spite of the considerablefluctuation cal importance of the concerned location
hinterlands of portsof UK, andconcluded of overseastradethroughIndianportsfrom on the global map. All these factors doubt-
thatconceptof relativelyexclusive port yearto year,one sees a pictureof general less have importance for the overall per-
hinterlandsno longerappliesas well as it growth of traffic among all the ports, formance of a port. But these factors are
once did. Hinterlandhas been definedas particularlyin the post-liberalisation
pe- admittedly beyond the direct control of the
"organised anddevelopedlandspacewhich riod. A fall in inequalityamong Indian port authority.The internalfactors include
is connected with a port by means of portsmay meana rapidrise in the value both geo-navigational as are considered
transport lines,andwhichreceivesorships of commoditieshandled,or an absolute here, and also those factors which deter-
goodsthroughthatport"[Weigend1958]. diversionof trafficaway from the larger mine the productivity of labourand capital
An alternativehinterland/foreland ap- to the smallerand betterequippedports. (which again is influenced by technologi-
proachfor studyingportcompetitionis to A port grows by virtue of the trade it cal developments). Due to lack of consis-
look at the degreeof trafficconcentration attracts.A weak growthof foreigntrade tent informationwe could not employ these
in the portsystem. To assess changes in
portsystemconcentration,we have used Table 3: Lorenz Ratio for the Ports of India: 1970-1997
the Gini coefficient,a widely used index Observations LorenzRatio* No of Ports/Maritime
States
that measuresinequality.The Gini coef- 1970-71 1980-81 1990-91 1997-98 1970-71 1980-81 1990-91 1997-98
ficient rangesfrom zero (perfectlyeven PortTrafficof 0.356 0.373 0.367 0.295 9 11 12 12
distribution) toone(perfectlyconcentrated MajorPorts (0.222) (0.291) (0.290) (0.234)
distribution). Thelevel of concentrationis PortTrafficof 0.325 0.300 0.288 0.285 9 9 9 9
Coastal States* (0.239) (0.227) (0.232) (0.230)
showngraphicallyusinga Lorenzcurve.10
Figure2 (a, b, c, d) and Figure3 (a, b, Notes- * Numbersin parentheses referto the Ginicoefficient.
" Includesbothmajorand minorporttraffic.
c, d) show the Lorenzcurvesfor 1970-71,
1980-81,1990-91,and1997-98,forIndia's Table 4(a): Weights of Port Performance Indicators: PCA
majorportsandcoastalstatesrespectively.
Table 3 presentsthe value of Gini coef- Variables 1985-86 1991-92 1996-97
Weights Rank Weights Rank Weights Rank
ficientsandLorenzratioscomputedunder
twopossiblecombinations- (i) porttraffic TRT -0.536 7 0.131 6 0.778 3
PBWT 0.414 6 0.457 4 0.903 1
of major ports, and (ii) combined port PITTWB -0.639 8 -0.655 8 -0.544 8
trafficof coastalstates.In the lattercase, OSBD 0.892 1 0.808 2 -0.183 7
BOR 0.561 5 0.698 3 0.831 2
porttrafficconsiderstrafficof bothmajor BTR 0.769 4 0.891 1 0.122 5
and minor ports of coastal states. The PTOS 0.789 3 -0.561 7 -0.155 6
importantfindingsare presentedbelow. RRT 0.881 2 0.116 5 0.416 4
First,portsystemconcentration increased
from0.222in 1970-71to 0.291 in 1980-81 Table 4(b): Port Performance Index (PPI): PCA
for all majorports,whichcontinuedmore
MajorPorts/Year 1985-86 1991-92 1996-97
orless unabateduntil1990-91(0.290).But PPI Rank PPI Rank PPI Rank
since liberalisationof industrialand for-
Kandla 13.45 1 9.34 2 13.62 1
eign sectorsin 1991, the Gini coefficient Mumbai 7.83 5 1.75 11 10.57 2
declineddrastically,(0.234 in 1997-98), JNPT * * 3.09 9 7.96 6
11.32 2 9.37 1 5.45 10
althoughremainedat a high level com- Mormugao
New Mangalore 3.69 8 3.35 8 5.04 11
paredto 1970-71.Thisis morea reflection Cochin 2.45 10 1.83 10 4.10 12
of risingimport-intensity in all the hinter- Tuticorin 6.11 7 3.67 7 7.75 7
lands than that of export. Chennai 9.14 4 4.72 4 9.79 3
Vizag 7.74 6 6.41 3 8.11 4
Second,we have foundoppositeresult Paradip 3.27 9 4.19 5 8.03 5
in caseof coastalstates.Here,portsystem Calcutta 0.68 11 -0.48 12 5.97 9
concentrationhas fallen from 0.239 in Haldia 9.34 3 3.89 6 6.57 8
1970-71to 0.230 in 1997-98.Obviously, Mean 6.82 4.26 7.75
inclusionof minorporttraffichaschanged SD 3.97 2.93 2.65
the directionas well as distributionof CV 0.58 0.69 0.34
trafficacross the coastal states. In other Note. * Not in operation.

3276 Economicand PoliticalWeekly August 25, 2001

productivity-augmenting factorsin deter- here the sole objective is to explain the vidualportin thefirsttwoyears.Similarly,
miningthe portperformanceindicator.In variance across ports for each of the vari- BOR has been found to be an important
lieu of these, we have takeninto account ables at a particular point of time. This determinant of portperformance in 1991-92
two types of financialperformanceindi- limitation is inherent in such a proposal. and1996-97.Itcanthereforebeconcluded
catorswhich have embodiedthe net out- thattwo of the asset performanceindica-
come of labourand capitalproductivity. Indicators tors (OSBD and BOR) have emergedas
We havetriedto builda compositeindex We have at our disposal values of eight influentialfactors in determiningPPI.
calledportperformance index(PPI)across port performance variables for three dif- In the post-liberalisationperiod, India
all majorportsin orderto test whethera ferent years across all the 12 major ports. has witnesseda rise in heroverseastrade
fall in portsystem concentrationimplies These years are 1985-86, 1991-92, and volumes,particularly between1993-94and
increasingcompetitivenessin Indianport 1997-98. Due to limitation of data, we 1996-97.Thelion's shareof thistradewas
system. have restricted our analysis to three years carriedthroughher ports, and this was
We have taken eight individual port only. The last two years help us to evaluate reflected in the port capacityutilisation
performance indicatorsforall the 12major the impact of performancedifferentials on rate. Duringthe periodfrom 1991-92 to
portsfor threedifferenttime points over the concentration of port systems in the 1996-97, Indian ports have been over-
theperiodfrom1985to 1996tojudgetheir post-liberalisation period. utilisedat an averagerateof 102 percent
relativeperformance. Theseinclude(i) ship The details of the factor loadings derived per year. So, it is quite likely for the rate
turn-roundtime (TRT), (ii) pre-berthing from the principal component analysis are of congestionto increaseduringthis pe-
waitingtime (PBWT),(iii) percentageof given in Appendix 2. The weights derived riod.Consequently,twoof theoperational
idle timeat berthto timeat workingberth from PCA are presented in Table 4 (a), and performanceindicators,PBWTand TRT
(PITTWB),(iv) outputpership berthday the PPI in Table 4 (b). A few observations andone assetperformanceindicatorBOR
(OSBD), (v) berth throughput rate are in order. became the three most influentialvari-
(BTR),(vi) berthoccupancyrate(BOR), We have not found a single variable that ables in determiningperformanceof an
(vii) operatingsurplusper tonneof cargo has emerged as the most influential factor individualport.
handled(PTOS)and (viii) rate of return in all the years. However, looking at the Contraryto general belief, financial
on turnover(RRT). Basic definitionsof two consecutive good rankings of OSBD performance indicators likePTOSandRRT
theseperformanceindicatorsaregiven in in 1985-86 and 1991-92, it is obvious that haveemergedas factorsof low importance
Appendix1. The basic limitationof the OSBD has played an influential role in in determiningPPI in the last two years.
conventionalmethodof constructionof determining the performance of an indi- However,thesetwofinancialperformance
PPI is that while combiningthe perfor-
Table 4(d): Share of Major Ports in Total Indian Port Traffic
manceindicatorsthey give subjectivead
hoc weights to differentindicators.This Ports 1970-71 1980-81 1985-86 1990-91 1998-99
could lead to unwarrantedresults. To (Per Cent) (Per Cent) (Per Cent) (Per Cent) (Per Cent)
overcome this limitation,we have em- Kandla 2.08 10.88 13.79 12.96 16.16
ployedthe well-knownmultivariatetech- Mumbai 18.56 21.10 20.32 19.02 12.30
JNPT 1.34 4.66
nique of factoranalysis from which the Mormugao 14.22 17.10 13.48 9.81 7.17
weights of the individual performance New Mangalore * 1.19 3.08 5.28 5.65
indicatorsare derived on the basis of Cochin 6.21 6.50 4.41 4.79 5.04
Tuticorin *3.18 3.53 3.34 4.04
principal component analysis (PCA) Chennai 8.95 12.90 15.17 16.14 14.00
[Fruchter1967]. Vizag 11.27 12.57 - 13.30 12.78 14.18
In thePCAapproach,the firstprincipal Paradip 27.90 2.78 2.78 4.53 5.21
componentis that linearcombinationof Calcutta 7.98 5.04 3.48 2.71 3.63
theweightedvaluesof thevariableswhich Haidia 2.80 6.76 6.65 7.31 7.96
explainthe maximumof variance.Hence, Notes. * Not in operation.** Insignificantshare.

Table 4 (c): Rank of Ports In Individual Performance Indicators

Ports TRT PBWT PITTWB OSBD BOR BTR PTOS RRT
(Days) (Days) (Per Cent) (Tonnes) (Per Cent) (Per Cent) (Rs Crore) (Per Cent)
1985- 1996- 1985- 1996- 1985- 1996- 1985- 1996- 1985- 1996- 1985- 1996- 1985- 1996- 1985- 1996-
86 97 86 97 86 97 86 97 86 97 86 97 86 97 86 97
Kandla 6 11 10 12 1 2 2 4 1 1 2 2 2 11 1 2
Mumbai 10 12 11 11 9 6 8 11 3 5 9 11 1 4 6 10
JNPT * 4 * 8 3 * 9 * 7 * 7 2 4
Mormugao 7 8 8 1 3 5 1 1 7 9 1 1 7 12 4 12
New Mangalore 8 2 5 4 10 11 10 12 6 12 8 6 8 6 8 1
Cochin 4 1 1 3 11 10 9 6 10 11 10 10 9 7 9 11
Tuticorin 2 3 2 5 8 8 7 10 9 2 6 9 6 10 3 3
Chennai 3 10 3 10 7 7 5 8 2 4 4 8 3 8 2 5
Vizag 5 6 6 6 6 1 4 3 8 6 5 4 5 9 5 6
Paradip 9 5 9 7 4 4 6 7 11 3 7 5 10 5 10 9
Calcutta 11 9 7 9 5 9 11 5 4 10 11 12 11 1 11 7
Haldia 1 7 4 2 2 12 3 12 5 8 3 3 4 3 7 8
*
Note. Not in operation.

Economicand PoliticalWeekly August 25, 2001 3277

variables played a key role in determining ports in terms of individual performance port network leading to the ports may have
PPI in 1985-86. indicators. sufficient strengthto invalidate the attempt
Similarly, PITTWB has emerged as an at limiting the contour of hinterlandto the
unimportantfactor. Incidentally, weight of IV concerned state only. Hence, the tradi-
PITTWB is fixed at eight in each of the PortPerformance
and tional concept of hinterland (which calls
three observation years, and it has been Hinterland
Income for the use of regional income) needs be
added as a negative factor in the index. modified for successful application to
Let us now touch upon the inter-port Any interested readercan verify that the such an analysis. Conversely, this can be
variationsof each of the eight performance higher the overseas traffic of a port the taken to imply lower competitive advan-
variables as they are given in the form of higher the value of the performanceindex. tage even of a specialised line of produc-
rawdataovertime. The values of the mean, It is generally argued that a rising hinter- tion in any region.
SD and CV of the raw indicators of port land/foreland always helps the port to The above result indicates that differen-
performance are given in Appendix 3. sustain its growth. We have tried to inves- tial levels of overseas consignment are the
Except OSBD, BTR, PTOS and RRT, the tigate the factors responsible for the per- most influential factor in determining port
coefficients of variations (CV) for the rest formance of a port. To test this hypothesis, performancedifferentials. One majorlimi-
of the variables have been rising over the we have used here three independent tation of the present study is its failure to
years. Among these four variables, only variables for the year 1996-97 - (i) share incorporate the necessary transport link-
RRT has become more even over time. of overseas port traffic, (ii) port tariff, and age between the port, manufacturingbelt,
That is, the value of CV of this variable (iii) per capita net state domestic product and the hinterland.This is reflected in low
has fallen from 0.64 in 1985-86 to 0.41 (PCNSDP). This relationship may be value of R2. Now the question is: How can
in 1991-92 lo 0.19 in 1996-97. In contrast captured in the following function: the PPIbe improved?The answer from this
to this, PBWT displays the highest dis- Y = a + PXl + yX2 +X3 +e paper is rathersimple and obvious: under
parity - more than doubling from 0.33 in where Y = port performance index, no situation should export consignment be
1985-86 to 0.76 in 1996-97. This is a Xl = port tariff, X, = share of overseas compromised. This will not only improve
reasonably good indicator of the conges- traffic, X3 = PCNSDP and e = error term. port performance but also help initiate
tion in a port. From the standardregression, a high value positive steps in terms of transaction eco-
Let us now concentrate on Table 4(b) of R2 will be reflected in lower e. The fitted nomies thereby facilitating the ongoing
that presentsthe values of the performance results of this regression (OLS) are pre- globalisation programme.
indicators of 12 major ports over three sented in Table 5 with correspondingvalues Openness of a country means the degree
different time points. First, the CV of PPI of the coefficients, t-statistic, R2, DW and of its involvement with global trade and
has declined substantiallyin 1996-97 (0.34) F-statistic for the year 1996-97. economic activity. When a country opens
even after rising from 0.58 in 1985-86 to The most interesting finding is that port her economy, it becomes necessary to
0.69 in 1991-92. Thus there has been a performance is highly contingent upon strengthen her port systems to sustain the
tendency toward equalisation of inter-port overseas traffic, the coefficient of which rising overseas trade.
performanceindex afterliberalisation.This is high (0.176), positive and significant The globalisationprocess during 1991-92
is also evident from higher mean and lower (t=2.08). Port tariff and PCNSDP have to 1995-96 has enhanced the importance
SD. Second, the average performance of turned out to be insignificant in influenc- of internationaltradein the hithertoclosed
the west coast ports has been slightly better ing PPI. The definition of port tariff used economy of India [Mehta 1997]. To be
than that of the east coast ports, and the here prevents the drawing of any rigorous precise, the India's share of trade in GDP
first two ranksare held by the former ports. conclusion. In fact there are numerous has increased to more than 24 per cent in
Interestingly, the first four ranks have rates of tariff levied on various items. 1995-96. Duringthe 1990s, a highergrowth
remained unchanged since 1991. In Naturally therefore, we have here consid- has been recorded in exports relative to
order of ranking, these ports are Kandla, ered only the vessel related charges as importsresultingin a decline in tradedeficit
Mumbai, Chennai and Vizag. They also levied under Indian Ports Act 1908 and the from the level of US $ 5-6 billions per
hold the first four positions in India's total Major Port Trust Act 1963. Other charges annum in 1980s to around two billions in
port traffic since 1970-71. Their current are not easily comparable. The most plau- 1994-95. In 1995-96, tradedeficit increased
(1998-99) shares are as follows: Kandla sible explanation for lower t-statistics of to US $ 4.5 billion. A large number of
16.16 per cent, Vizag 14.18 per cent, PCNSDP may be that given the size of the policy measures, which were in use for
Chennai 14 per cent and Mumbai 12.30 non-coastal states, even a moderate trans- the control of imports, have been dis-
per cent. Table 4(d) presents the shares of
the major ports from 1970-71 to 1998-99. Table 5: Regression of PPI on Overseas Traffic, PCNSDP and Port Tariff, 1996-97
It appearsthat some sort of scale economy Independentvariables Coefficients t-statistics F value R AdjustedR DW
exerts its positive impact on the perfor- Constant 3.871 0.715 3.004 0.530 0.354 1.680
mance index. A look at Table 4(c), which Port tariff 0.051 0.009 -
presents the ranks of individual ports in Overseas traffic 0.176 2.080
raw individual performance indicators, PCNSDP 0.002 0.480
makes it clear that except Chennai, Vizag Notes. 1 Porttariffcountsonlyvessel relatedcharges leviedunderthe IndianPortsAct,1908 andthe Major
and Haldia, the other ports of the east coast PortTrustAct, 1963 as otherportcharges are not comparable.
2 Conversionfactorfortariffcalculationis taken at 1 US $ = Rs 43.50.
have been gradually retreating in terms of
No of observations 12
most of the indicators. Finally, there is Dependentvariable= PPI
substantial lack of symmetry among the Independentvariables= Porttariff,Overseas traffic,PCNSDP

3278 Economicand PoliticalWeekly August 25, 2001

mantled. Also a number of quantitative became 62.75 MT, coastal traffic intensity traffic has grown by 12.69 per cent per
restrictions, which were imposed in the of all the major ports except Kandla has annum.This trendhas completely reversed
earlierprotectionistregime, have been done been rising faster than overseas traffic after 1991. Although overseas traffic has
away with. intensity in the post-liberalisation period. been rising at approximately the same rate
Due to our traditional pessimism to- While this has reduced the burden on land (11.39 per cent) since 1991, that of coastal
wards overseas trade, and with some transport,port infrastructurehas failed to traffic has fallen to 4.21 per cent. While
measures taken in the post-liberalisation exert its favourable impact on export com- this is certainly an encouraging symptom
period, our port capacity utilisation rate petitiveness. The output per-ship-berth- from the viewpoint of the country's open-
has again crossed the limit: 108.75 per cent day and ship turn-around-time at major ness, the export intensity of overseas traf-
in 1951-52 and 105.60 per cent in 1996-97 ports have worsened in the post- fic has been declining at a faster rate in
(Table 6). This is specifically true for the liberalisation period. The situation is ag- the post-reform period (5.53 per cent per
ports of Kandla, Mumbai, Chennai, and gravated in case of old ports like Calcutta annum during 1991-92 to 1996-97 as
Vizag that have been continuously suffer- where average turnaroundtime of 9.8 days against 1.14 per cent per annum during
ing from supply-side constraints (i e, lower is really serious. Likewise, its 77 per cent 1951-52 to 1991-92). This means thatlarger
capacity) since liberalisation. Beyond the capacity utilisation is extremely low com- part of import passed through over-
performance indicators so far dealt with, pared to the all-India average of 105 per burdened ports of India with a rising mag-
port utilisation depends on the economic cent. The situation appears much more nitude of openness.
characteristicsof the hinterlandand on the grave when one considers costs. It is 40 Furtherstudy must be undertakento see
type and modality of transport linkages. per cent cheaper to ship from Singapore whetherrising importsthroughIndianports
Why are some ports overutilised and to MumbaithanfromSingaporeto Calcutta. is a barrier to Indian export. Given that
others are not? The traditional answer is Given that international ship turn-around export consignment is always contingent
probably a sort of unbalanced growth of times range between 3 to 10 hours rather upon timely supply, if the port authorities
manufacturingbelts as evolved over time than a week or more, it becomes clear why do not have any special incentives for
across the country in general and concen- the capacity utilisation of Calcutta port is export shipment, they cannot but use the
tration in and around the ports of Kandla, so low. Beyond the proximate causes, existing capacity for import traffic only.
Mumbai, Chennai, and Vizag in particular. declining waterdraftandthe riverinenature Moreover, in such an endeavour, serious
As a matterof fact, these are the country's may be the two main factors for the lower attention must be focused on the origin and
top four ports according to their annual values of the performance indicators of destination of the cargo composition be-
cargo throughput and performance as we Calcutta port [Sau 1990]. fore any full-fledged policy initiative for
have seen in the previous section. Also, Again, during the last 50 years, Indian future investment in port development is
these are the ports of four coastal states ports are becoming more and more en- undertaken.
which contributethe largest sharein India's gaged not only in importsbut also in coastal
manufacturing value added - 12.75 per domestic traffic. It can be noted from V
cent, 23.86 per cent, 10.32 per cent and Table 6 that the export-import ratio has ConcludingRemarks
7.10 per cent in the year 1996-97. fallen from 137.75 per cent in 1951-52 to
It is clear from Table 6 that India's 54.19 per cent in 1996-97. This is a direct Policy
overseas port traffic intensity reached the reflection of our rising trade deficit. Some On July 3, 1997, Jawarlal Nehru Port
lowest level of 66.91 per centin 1991-92, emerging trends of a hitherto semi-closed Trust (JNPT) signed a 30-year concession
and naturally the coastal traffic intensity economy are obvious from Table 6. First, agreement with Nava Sheva International
rate touched the highest level of 33.09 per shortfall in port capacity will be a major Container Terminal, a P and O Ports led
cent in the same year. It is also interesting concern in thecoming yearsas liberalisation consortium, to build, operate and transfer
to note that a fall in overseas port traffic gains furthermomentum incorporatingthe (BOT) a container terminal. The project
intensity means a rise in coastal traffic agricultural sector also. (In 1996-97 port is under implementation. This is India's
intensity that is shown at intervals of 10 traffic was 227.26 MT against the capacity firstportprivatisationprogramme.It should
years from 1951-52 to 1996-97. This means of 215.21 MT.) Second, increasing trade have been a catalyst for across the board
that during the lean period of overseas orientation (openness) has halted the fast changes in India's port industry. But to
traffic, per se, port systems had been used rate of growth of coastal traffic since 1991. date, concession agreements have-been
for coastal trade. Although Indian ports For example, coastal traffic has grown at signed only at JNPT and Tuticorin. On the
handled 4.50 MT of coastal cargo in an average annual rate of 26.30 per cent contrary, India's major ports have been
1951-52, which at the end of 1996-97 from 1951-52 to 1991-92, while overseas remained completely outside the purview
Table 6: Port Traffic, Port Capacity and Openness Scenario
Year Port PortTraffic(MT) Port TrafficIntersity(Per Cent) EX-IMRatioof Openness
Capacity Overseas Coastal Total UtilisationRate Overseas Coastal Overseas Port Rate
(MT) (Per Cent) Traffic(Per Cent) (Per Cent)
1951-52 20.00 17.25 4.50 21.75 108.75 79.31 20.69 137.75 18.00
1961-62 36.67 23.83 9.18 33.01 90.02 72.19 27.81 120.50 11.00
1971-72 59.55 51.89 7.30 59.19 99.40 87.67 12.33 115.49 9.00
1981-82 104.45 72.01 15.97 87.98 84.23 81.85 18.15 81.02 17.00
1991-92 169.23 104.81 51.84 156.65 92.57 66.91 33.09 74.92 17.00
1996-97 215.21 164.51 62.75 227.26 105.60 72.39 27.61 54.19 22.00

Notes. Port utilisation rate = (Port traffic/Port capacity ) 100; Overseas traffic intensity = (overseas traffic/Total traffic ) *100; Coastaltraffic intensity= (Coastal
traffic/Total traffic ) 100; Openness rate = [ (Exports + Imports)/GDP ] *100

Economic and Political Weekly August 25, 2001 3279

of the ongoing globalisation programme. only some guidelines issued from time to place throughtransshipment at Colombo,
The story in minor ports is not any differ- time on ad hoc basis. Again, some of the Dubaior Singapore.Theextratransittime
ent. The only two privatised minor ports maritime states like Gujarat and and additionalcosts incurredby Indian
that are functioning today are Mundraand Maharashtra have some port policies of importersand exportersare substantial.
Pipavav. Both are located on the coast of their own but they too lack the required The costs of excessive ship waitingtimes
Gujarat. The involvement of the state direction. There is no doubt thatthe coun- in portsdue to slow cargo processingin
government is quite substantial in these try needs a commercial revolution in the the case of bulk tradesare passedon to
two privateport projects in terms of equity port industry. But to do this Indian ports the ultimateusertherebyraisingthe price
and administration. need to go through a process of techno- of importsunnecessarilyandundermining
The reasons for the slow-down in Indian logical development which demands the competitivenessof Indianexportsin
port development are many. One of the monetary and fiscal policies which are no the internationalmarkets.
main reasons is the low plan investment less than revolutionary. Apartfromall microlevel incongruities,
in the transportsector as a whole, and only Although the federal government and its inIndia,cargoandvesselhandlingcharges
a very insignificant part of it devoted to respective maritime states have opened the areresponsiblefordistortingtheinter-port
ports over the half century after indepen- sector for private investments, experience competitiveenvironment.LookatTable8
dence.11 It is clear from Table 7 that the suggests that investors face an unwilling for vessel relatedchargesof majorports
share of the transport sector in total plan bureaucracyin getting the projectscleared. of Indiafor the year 1997-98.It is reason-
outlayhas fallen from 22.10 percent during The major trouble is that quite a large ably true that port tariff dictates cargo
the First Five-Year Plan (FYP) to.13.10 number of clearances are required which flow. In India,porttariffis a combination
percent duringthe Eighth FYP. Moreover, are controlled by union and state govern- of cargorelatedchargesandvessel related
the share of ports in the transport sector ments. And there is lack of transparency charges- those levied underthe Indian
has fallen from 7.31 per cent in the First [Sarbh 1998].12 PortsAct, 1908andMajorPortTrustsAct,
FYP to 6.34 per cent in the Eighth FYP. Another very critical factor that has Table 8: Vessel Related Port Tariffof
It is surprising to note that such a crucial accounted for poor performance in India's MajorPorts of India, 1996-97
infrastructuresub-sector like ports is the waterfrontindustry is the absence of inter- Rank
Ports Tariff
worst affected area in terms of both allo- portcompetition which has been the source US $/GRT
cation and utilisation of development fund of substantial productivity increases in
Kandala 0.470 3
during the eight plans. Again, in all the national port systems in many countries. Mumbai 0.405 1
plans except the fourth, fund utilisation in Shielding the domestic ports against com- JawarlalNehru 0.440 2
0.518 7
port sector has always been marred by petitive pressures as a matter of govern- Mormugao
New Mangalore 0.475 4
inefficiency. Failureto utilise the disbursed ment policy is now a habit that dies hard. Cochin 0.560 8
fund may have been responsible for re- The consequences of all these shortcom- Tuticorin 0.480 5
Chennai 0.510 6
duced allocation in the subsequent period. ings for the Indian economy continue to 0.615 9
be severe. In the liner trades very few Vizag
And as a matter of fact, due to this low Paradip 0.720 10
investment, adequatecapacity has not been carriers serve India's ports through direct Calcutta 0.830 12
calls. Because of the high costs of opera- Haldia 0.830 11
created. In fact, the government has failed
to understandthe crucial role the portsector tion of modern deep-sea line haul tonnage Notes. 1 Tariffrate includes portdues, pilotage
can play in the liberalised regime. But this carriers cannot accept the long waiting and berthhirecharges leviedon foreign
vessels forsingle entryto the portonly.
sort of reasoning cannot go beyond the times at Indian ports. Most general cargo 2 Highertariffmeans lowerrank.
proximate explanation. The more funda- traffic, particularlycontainer traffic, takes Source Scales of Rates of all majorportsof India.
mental cause must be sought in the lack Table 7: Plan Investment in Transport Sector: Allocation and Utilisation
of export orientation of our investment (Percent
policies startingfrom the Second Plan to the Sectors 1st FYP 2nd FYP 3rd FYP 4th FYP 5th FYP 6th FYP 7th FYP 8th FYP
Eighth. And this is more so for a country 1951 52 1956-61 1961-66 1969-74 1974-79 1980-85 1985-90 1992-97
where ports account for more than 90 per
Portsector
cent of tangible trade (except information FUR 75.68 73.33 60.78 127.69 85.46 112.06 123.01 64.72
technology and horticulture products). STTSPO 7.31 3.46 10.97 7.58 10.54 5.36 5.43 6.34
Road sector
Apartfrom low plan investment, aware- FUR 108.89 92.02 148.15 98.97 125.72 113.03 121.83 125.42
ness, direction and understanding of the STTSPO 26.68 20.25 21.29 33.88 24.96 28.47 22.96 22.88
port industry has been lacking. Port au- Railwaysector
118.75
thorities must understandboth the revenue FUR 81.27 80.33 148.99 88.95 93.69 129.12 134.17
STTSPO 52.77 69.28 63.80 40.84 40.63 42.22 -54.47 48.50
earning capacity and the catalytic role of Civilaviationsector
111.41 256.99 177.54
ports. There is an urgent need for a co- FUR 79.31 113.95 89.09 87.19 87.24
7.11 3.35 7.28
STTSPO 5.73 3.31 3.94 7.90 6.22
ordinated policy for regulating and en-
Totaltransportsector
couraging investments from both public FUR 85.77 84.68 142.15 98.09 102.27 115.57 130.17 115.78
and private sectors in ports. One may be STPO 22.10 23.50 23.10 16.00 14.10 12.80 13.50 13.10
surprised to note that although all the 12 Notes FURmeans Fundutilisationrate(Planexpenditures/Planoutlay);STTSPOmeans Share in total
major ports are controlled by the govern- transportsector plan outlay;STPO means Share in total plan outlay.
ment of India through the ministry of 1 Plan outlayconsiders bothcentraland state plan outlays.
2 Road sector does not includeallocationmade for roadtransportsector.
surface transport,the government still does 3 Portsector does not includeallocationmade forshipping,IWT,lighthouseand lightships.
not have a coordinated port policy. It has Source. Plan Document,Vol II,NinthFive-YearPlan, PlanningCommission,Governmentof India.

3280 Economicand Political Weekly August 25, 2001

1963. To calculate vessel related tariff, we vate sector. In this case, government con- sible for provision of new infrastructure
have taken berth hire charges, pilotage trols regulatory matters and the conser- but that the private sector provides the
charges and port dues. Due to absence of vancy of navigable approachchannels. UK superstructuresuch as cranes and terminal
compatibleinformationon porttariffacross ports like Tilbury, Flixstowe and Harvich buildings. This is more a partnership
all major ports, we have not taken cargo and ports of Australia are owned and approach in which the government still
related charges. operated by the private sector. retains at least some degree of control over
From Table 8, one may notice that west In the third model, all the three powers its ports industry. Even in BOT arrange-
coast ports have lower vessel related tariff - regulatory, landownershipand operation ments, the government generally retains its
than those of east coast ports. Except - become the responsibility of the private public port authority, may also impose
Calcutta and Haldia, all are sea ports, and sector. With this, government does not restrictions on futuretariff increases, share
all have quite stable approach channel. have any role except to react in certain in portprofits, stipulate minimum through-
One important source of this disparity is cases like pollution, accidents and threat put targets, and keep propertyrights which
thatthe individual port trustfixes the berth to the sovereignty of the country. Three revert to the government at the end of the
hire charges vis-a-vis pilotage charges as of the top 100 container ports, contract period.
per its fiscal performance in the previous Southampton, Liverpool and Thamesport After many years of inconclusive delib-
year. This is done in a very haphazard (all in UK) conform to this model. There erations the central government has taken
manner. The situation will.be worse if are general cargo ports (not specialised in steps to invite private interests to engage
cargo related charges are included. This container) which belong to this category. in the financing of new port facilities on
monopolistic nature of tariff adjustment Baird (1997) has shown that out of 100 a BOT, basis. The first initiative was to
affects the entire port system. It is some- top container ports in the world, seven issue a tender that called for the financing,
times argued that annual incidence of in- ports are still managed by government construction, and subsequent operation of
trinsically avoidable costs to the Indian (mainly ports in South Africa, India, Israel two new container berths at JNPT. The
economy occasioned by considerable and Singapore), 88 ports conform to the ministry of surface transporthas recently
demurragecharges, the extra expenditures first model, two ports to the second model announced its plans to issue during the
of transshipment, congestion of ship and and three ports to the third model. next two years tenders for 21 new projects
cargo handling installations could be as A joint venture between public and throughoutthe country's waterfrontsector
high as US $ 1.5 billion. Moreover, the private sector splits the costs and risks of at an estimated cost of about US $ 6.6
country's importers and exporters gener- a new port development, and this appears billion. The government through its min-
ally forego the ability to count on now to be one of the main approaches currently istry of surface transporthas estimated that
universally common 'fixed-day-of-the- used for port investment in China. Clearly, the cost of expanding India's port system
week' services offered by the international these privatisation methods can help fa- to efficiently deal with cargo types and
liner industry in response to the spreading cilitate an advanced port system while volumes projected to materialise during
practice of selling and buying on a 'just- minimising state expenditure, and without the next eight years will be of the order
in-time' basis. Because of uncertainties any need to transferultimatepropertyrights of US $ 40 billion.
about the speed of cargo handling and the orregulatorycontrolfromthepublic sector. There are several flaws in the draft BOT
availability of transport services India's. Inefficient ports, through lack of inte- concession agreement which was drafted
traders and producers are forced to con- grated transport network, outdated work by the ministry of surface transport. The
duct their business with substantial buffer practices and obsolete facilities, can stall main drawback is that investors' invest-
stocks. While no official estimates of the economic development. This is one of the ments are not backed by legal statue al-
annualcost incidence relatedto such hedg- main reasons why local governments are though it is a common practice in leading
ing are available, it may not be an exagger- actively seeking private sector participa- south-east Asian countries and particu-
ation to put it at several billion US dollars. tion in their port sector usually via lease, larly in the US. Furthermore,the ministry
concession, BOT, orjoint venturearrange- asks investors to follow the same draft
Privatisation ments. There is also a need to introduce irrespective of location of the port system.
A review of literature suggests that efficiency and know-how of the private Geo-technical and socio-commercial fea-
broadly three types of models have been sector. Increasing specialisation and tures of ports of India are not at all ho-
adopted across the world for privatisation standardisation in the shipping and trans- mogeneous. So there should be some ad-
of port systems [Baird 1997]. In the first portindustryhave resultedin the formation justment and preferential incentives for
model, only the port operation part is of expert multinational terminal operating private investment from the viewpoint of
transferredto the efficient private sector. companies, often subsidiaries of shipping backward area development.
This type of arrangementis referred to as lines, who know precisely how to meet the This is the time for a national debate on
a 'landlord' or 'tool' port. In this model, ever changing, and increasing needs of the possibility of corporatising the major
port land is still in public ownership, and portsusers.These firmsbenefit fromecono- port trusts, i e, converting them from
regulatory activities are also the respon- mies of scale and learning through their government agencies into public compa-
sibility of the government. There are many wide geographic scope of activities. nies which are managed on the basis of
examples of this type of arrangement, There is also pressureto reducethe public commercial principles. This would be a
especially throughoutNorth American and sector budget but this does not necessarily right first step in the direction of ultimately
European ports, in which terminals are mean that the government withdraws freeing ports of the central government's
generally leased to the private sector. entirely from investing in its ports. Many benevolence altogether. International ex-
In the second model, port operation and examples of the first model demonstrate perience with port systems reform has
property rights are controlled by the pri- that the state may continue to be respon- repeatedly 'demonstrated that delegating

Economic and Political Weekly August 25, 2001 3281

regulatory and institutional responsibility port infrastructure. ness of our resultscan be tested,and the
over ports to the local levels leads to major These findings have very important analysisextended.Third,consideringthe
productivity improvements because of policy implications for future development mode of transportlinkagewith the ports,
induced competition. of Indian ports. In this light, further re- one shouldalso examinetheeffectiveness
search into the extent to which such non- of the economics of ports not only for
FutureResearch of thethrustarea
price factors as ports is responsible for our practicalimplementation
Let us briefly summarise the majorfind- poor export performance is needed. The of liberalisation(that is, to raise export)
ings of the study. First, after 50 years of findings presented here are revisionist, and but also for spreading India's halted
planning and protected industrial regime, highly aggregative. Future studies will no urbanisation.Forthis, a studyof this eco-
although there was a fall in inequality doubt refine the methods and data used geographical phenomenon must be
among major ports, India has failed to here, and revise our arguments. First, other brought to the forefront of Indian
strengthenherportsector. Geographically, theoretical approaches might be explored. economic analysis.f3m
the ports of eastern India have stagnated, New ways of thinking about growth could
while the same in west and south coasts provide other models in which geographic
Notes
have flourished. Second, contrary to con- dynamics and economic growth could be [An earlier version of the paperwas presentedin
ventional belief, performance of a port has assessed jointly. Second, as further ad- the '98 Marine Port China Conference' held at
been proved to be significantly dependent vances in the growth literature define the Shanghai Port in October 1998. We are indebted
to Sugata Marjit and Amiya Bagchi for their
upon overseas cargo. Third, in the absence steady state more effectively, the robust- encouragementto invest time andenergyintosuch
of an integrated policy of manufacturing a barrenfield in Indianeconomic analysis.Thanks
Appendix 3
belt, transportnetwork and export orien- arealso due to A N Biswas, formerchiefHydraulic
Performance 1985-86 1991-92 1996-97 engineer,CalcuttaPortTrust,M K Jalan,director,
tation, existing capacity of the ports is Variables Bengal Port and S Pal, librarian,Calcutta Port
being utilised for domestic coastal trade Trust,for theircooperationduringvariousphases
and imports. Fourth, allocation of funds TRT
Mean 10.27 6.37 6.76 of writingthispaper.Theusualdisclaimerapplies.]
by both union and state governments over SD 2.75 1.82 2.24 1 For a critical and comprehensive review see
the plan period has been found to be too CV 0.27 0.29 0.33 Martin (1999).
PWBT
low to utilise the potential of the huge Mean 2.92 1.46 2.30
2 This new and popularwave of researchwork
coastline through development of trans- SD 0.97 0.74 1.80 in the fields of 'new trade theory' and 'new
CV 0.33 0.51 0.76 economic geography'was pioneeredin a series
PITTWB of seminal works which started about two
Appendix 1: Port Facility decades ago: Dixit and Stiglitz (1977),
Mean 35.73 34.17 31.63
1 Shipturn-roundtime(TRT)is the durationof the SD 11.74 11.66 12.56 Lancaster(1980), Krugman(1979, 1981) and
vessel's stay in portand is calculated fromthe CV 0.33 0.34 0.40 Porter (1990).
timeof arrivalto the time of departure. OSBD 3 A reviewof theliteraturesuggeststhreepossible
2 Pre-berthingwaitingtime(PBWT)meansthe time Mean 3073.45 4458.42 5031.67 relationships,with transportationhaving (i) a
whicha shipwaitsbeforegettingentryintoa berth. SD 11773.89 2506.94 2071.99 positive effect on the development process -
3 Percentageof idletimeat berthto timeat working CV 0.58 0.56 0.41 the expansion in directly productiveactivities
berth(ITTWB)is the ratioof total idle time and BOR
being a direct result of providing improved
totalworkingtime while a ship is in the port. Mean 70.40 66.87 73.01
4 Outputper ship berthday (OSBD) means total SD 8.34 12.73 15.85 transportation facilities;(ii) a permissiveeffect
on the development process, because
tonnage handled, or distributedover the total CV 0.12 0.19 0.22
does not independentlyproduce
numberof ship berthdays. BTR transportation
5 Berththroughputrate (BTR)means total cargo Mean 99.63 116.33 143.10 directly productive activities or subsequent
handledby a berthin a port. SD 86.90 74.89 85.67 increasesin the level of economic growth;(iii)
6 Berthoccupancy rate (BOR) is the time that a CV 0.87 0.64 0.60 a negative effect occurring when an over-
berthis occupied by ships. OSTC investmentin transportationreducespotential
7 Operating surplus per ton of cargo handled Mean 1.21 2.34 5.71 growth in directly productive activity, and
(PTOS) is derived fromtotal operatingsurplus SD 0.97 1.27 4.12 consequently leads to an absolute decline in
dividedby totaltonnage of cargo handledby the CV 0.81 0.54 0.72 the level of income percapita[Goutheir1970].
port. RRT 4 Broadlyspeaking,thereis atleastone inlandcity
8 Rate of returnon turnover(RRT)derives from Mean 27 27.47 40.02 in most of the coastal states where population
operatingsurplusdividedbyoperatingincomeof SD 17.33 11.33 7.55 size, wage rates and rental rates are higher.
a port. CV 0.64 0.41 0.19 5 Hirschmanconjecturedthethenprevalentmode
of operationof the promotersin the year 1958.
Appendix 2: Principal Component Analysis After 40 years, we in India have neither any
The factorloadingof the eight portperformanceindicatorsforthree differentyears are given below economics of transportnor any nationwide
fromwhichthe eigen vector is derivedby the formula: awarenessof transportas an area of concern.
Eigen vector = (factorloading)f/(eigenvalue) 6 However, some recent studies have dealt with
where eigen value is the firstvalue of the 'varianceexplained'columnin the unrotated infrastructurefacilities and income in general,
factorloading(pattern). forexample,ElhanceandLakshmanan(!988),
FactorLoadings(FL) Binswangeretal(1989), GhoshandDe ( 1998a,
Variables 1985-86 1991-92 1996-97 1998b).
FL Rank FL Rank FL Rank 7 The seriesof availableCPIALarelargeenough
for the period of present study. But it is not
TRT -0.536 7 0.131 6 0.778 3 available for all the states. Hence for those
PBWT 0.414 6 0.457 4 0.903 1 states for which the government does not
ITTWB -0.639 8 -0.655 8 -0.544 8 estimate it, we have proxiedby the CPIAL of
OSBD 0.892 1 0.808 2 -0.183 7 the most adjacentand comparablestate. This
ABOR 0.561 5 0.698 3 0.831 2
BTR 0.769 4 0.891 1 0.122 5 replacementis preferableto WPI and CPI for
PTOS 0.789 3 -0.561 7 -0.155 6 industrialworkers of the all-India type.
RRT 0.881 2 0.116 5 0.416 4 8 Except Calcutta and Haldia ports, which are
governedby a single porttrust( called Calcutta

3282 Economic and Political Weekly August 25, 2001

 Port Trust ), each of the remaining ports is Cootner, P (1963): 'The Role of the Railroadsin Monopolistic Competition and International
governed by a separate port trust. US Economic Growth',Journal of Economic Trade', Journal of InternationalEconomics,
9 Basically, ports administration in India is History, pp 477-521, December. Vol 9.
governedby the following five acts- (i) Indian Dixit, A and J Stiglitz (1977): 'Monopolistic - (1981): 'Trade, Accumulation and Uneven
Ports Act, 1908; (ii) Major Port Trust Act, CompetitionandOptimumProductDiversity', Development', Journal of Development
1963; (iii) Dock Workers (Regulation of American Economic Review, Vol 67, No 1. Economics, Vol 8.
Employment)Act, 1948; (iv) Dock Workers Draine, E H (1963): 'ImportTraffic of Chicago - (1991): Geography and Trade, MIT Press,
(Safety, Health and Welfare) Act, 1986; and and Its Hinterland',Departmentof Geography Cambridge, Massachusetts.
(v) The MerchantShipping Act, 1958. There ResearchPaperNo 8, Universityof Chicago. - (1993): 'First Nature, Second Nature and
areothergeneralenactmentsthathavea bearing Elhance, A P and T R Lakshamanan(1988): MetropolitanLocation', Journal of Regional
on portslike the IndustrialDisputes Act, 1947 'Infrastructure-Production System Dynamics Science, Vol 33, No 2, pp 129-44.
and Customs Act, 1962. The Environment in National and Regional Systems: An -(1995): Development,GeographyandEconomic
(Protection)Act, 1986andtherules/regulations Economic Study of the Indian Economy', Theory,MITPress,Cambridge,Massachusetts.
framed thereunderare also relevant to port Regional Science antd Urban Economics, - (1998): 'Space: The Final Frontier',Journal of
development and operations. vol 18, North Holland. Economic Perspectives, Vol 1, No 2, Spring,
10 Mathematically, the Gini coefficient is ExportImportBank of India (1998): Transaction pp 161-74.
calculated as: CostsofIndia's Exports:AnAnalysis,Mumbai. Lancaster,K (1980): 'Inter-IndustryunderPerfect
G = 0.5 IX - Y | Fogel, R W (1964): Railroads alnd American Monopolistic Condition', Journal of
Economic Growthi: Essays in Economic International Economics, Vol 10.
wheren is the numberof ports,X. is the volume History, John Hopkins Press, Baltimore. Losch, A (1954): The Economics of Location,
in percentof the i-thportandY. is theexpected Fruchter, B (1967): Introduction to Factor Fischer Verlag, Jena.
per cent if the distribution were perfectly Analysis,AffiliatedEastWestPress,New Delhi. Marjit, S and S Mitra (1996): 'Convergence in
uniform, that is, Y. = l/n. The relationship Fujita,M andT Mori(1995a): 'StructuralStability Regional Growth Rates: Indian Research
between the Gini coefficient and the Lorenz and Evolution of Urban Systems', Regional Agenda', Economic and Political Weekly,
curve is simple. The Gini coefficient is equal Science and UrbanlEconomics, vol 34, no 8. August 17.
to the ratio of the area between the Lorenz - (1995b): 'Why are Most Great Cities are Port Marjit, S and A Roychoudhury(1997): India's
curve and the diagonal line, relative to the Cities?TransportNodes andSpatialEconomic Export: An Analytical Study, OUP, Delhi.
maximumpossible area(the entire rightangle Development', WorkingPapers in Regional Martin,R (1999): 'The New GeographicalTurn
formed by the bottom and right axes and the Science, no 175, Regional Science Graduate in Economics: Some Critical Reflections',
diagonal). Programme, University of Pennsylvania, Cambridge Journal of Economics, Vol 23,
11 Public gross infrastructure investments Philadelphia, PA. No 1, January.
including stocks (PGII), as a proportionof - (1996): 'The Role of Ports in the Making of Mayer, H M (1978): 'CurrentTrends in Great
GDP, and in per capita terms (PCPGII) at Major Cities: Self-agglomeration and Hub- LakesShipping',GeoJounal, vol 2, pp 117-22.
1980-81 prices: effect,' Journal of Development Economics, Mehta, R (1997): 'Trade Policy Reforms, 1991-
vol 49, pp 93-120. 92 to 1995-96:TheirImpacton ExternalTrade',
Year PGII PGII to GDP PCPGII Gallup, J and J Sachs (1998): 'Geography and Economicand Political Weekly,vol 31, no 17.
(Rs Crore) (Per Cent) (Rs) Economic Growth', conference paper, Tenth Peters, H J (1990): 'India's Growing Conflict
Annual Bank Conference on Development betweenTradeandTransport',PolicyResearch
1970-71 3,772 3.70 69 Working Paper No 346, The World Bank,
Economics,The WorldBank,Washinton,DC.
1975-76 5,043 4.30 83
Ghosh,B andP De (1998a): 'Role of Infi-astructure Washington, DC.
1980-81 7,158 5.30 105 in Regional Development:A Study over the - (1992): 'Service: The New Focus in
1985-86 8,426 4.80 111 Plan Period', Economicand Political Weekly, Manufacturingand Trade', Policy Research
1989-90 10,589 4.70 125 vol 33, nos 47-48. Working Paper No 950, The World Bank,
- (1998b): 'Linkage between Infrastructureand Washington, DC.
12 Due to lack of such services in case of port
Incomeamong IndianStates:A Tale of Rising Porter,M (1990): The CompetitiveAdvantageof
developmentat a place called Kulpi in West Disparity', paperpresentedin the conference Nations, Macmillan, London.
Bengal on the east bank of river Hooghly by on 'Development, Displacement, and Quah, D (1993): 'Galton's Fallacy and Tests of
Bengal Port (a joint venture between Disparity' during the last quartercentury in the Convergence Hypothesis', Scandinavian
government of West Bengal and Mukand- India, Centre for Studies in Social Sciences, Journal Economics, Vol 95, No 4.
Keventer Consortium and Associates), the Calcutta, December. Ray, A (1993): Maritime India: Ports and
promoting company has not yet received Ghosh,B, S MarjitandC Neogi (1998): 'Economic Shipping, Pearl Publishers, Calcutta.
clearances from the ministry of surface Growth and Regional Divergence in India: Rauch, J E (1991): 'Comparative Advantage,
transport,governmentof Indiaeven after four 1960 to 1995', EconomicandPolitical Weekly, Geographic AdvantageandtheVolumeofTrade',
years of incessant efforts through all possi- vol 33, no 20. The Ecoonloic Journal, vol 101, pp 1230-44.
ble legal channels. To our knowledge, ap- Goutheir,HL(1970): 'Geography,Transportation Rostow, W W (1964): The Stages of Economic
proximately80 official meetings were held at and Regional Development', Economic Growth, Cambridge University Press,
Calcuttaand New Delhi among CalcuttaPort Geography, Vol 46, No 4. Cambridge.
Trust,Bengal Port, West Bengal government Government of India (1996): The India Samuelson, P A (1954): 'The Transfer Problem
and ministry of surface transport. This InfrastructureReport:Policy Imperativesfor and TransportCosts: Analysis of Effects of
represents the likely scenario for future Growth and Welfare, New Delhi. TradeImpediments',The Economic Journal,
developmentof ports. Hirschman,A O (1958): Strategy of Economic Vol LXIV, No 254.
Development, Yale University Press, New Sarbh,J(1998): 'IndianPortPolicy. WhereNext?',
References Haven.
Hoare,A G (1986): 'BritishPortsandtheirExport
Port Development International,November.
Sau, S N (1990): 'Economics of Calcutta-Haldia
Baird, A (1997): 'PrivatisationDefined: Is it the Hinterlands:A RapidlyChangingGeography', Port Complex', Economic and Political
Universal Panacea?', Transportation,Water Geografiska Annaler, vol 68B, pp 29-40. Weekly, Vol XXV, Nos 18-19.
and Urban Development Department, The Hunter,H (1965): 'Transportin SovietandChinese Taaffe, E J, R L Morrill and P R Gould (1963):
World Bank, Washington, DC. Development', Economic Development and 'Transport Expansion in Underdeveloped
Barro, R and Sala-i-Martin (1995): Economic Cultural Change, vol 14, pp 71-84. Countries: A Comparative Analysis',
Growth, McGraw Hill, New York. Isward,W (1956): Locationand Space-Economy, Geographical Review, Vol 53, No 4.
Binswanger, H P, S R Khandkur and M R MIT Press, Cambridge, Massachusetts. von Thunen, J (1826): The Isolated State,
Rosenzweig (1989): 'How Infrastructureand Kenyon, J (1970): 'Elements in Inter-Port Pergamon, London.
FinancialInstitutionsaffect AgricultureOut- Competitionin the United States', Economic Weber, A (1929): Theory of the Location of
put and Investmentin India', Policy Planning Geography, vol 46, no 1, pp 1-24. Industries,Universityof ChicagoPress,Chicago.
and Research Working Paper No 163,.Latin Kindleberger, C P (1996): World Economic Weigend, G (1958): 'Some Elementsin the Study
America and the CaribbeanCountry Depart- Primacy: 1500-1990, OUP, New York. of Port Geography', Geographical Review,
ment II, The World Bank, Washington, DC. Krugman, P (1979): 'Increasing Returns, vol 48, pp 185-200.

Economicand PoliticalWeekly August 25, 2001 3283

View publication stats