Between 1990-91 to 1995-96, Delhi was the only state which showed a growth rate of 6.3 per cent, while the rate did not pick up significantly in Punjab, Haryana, Rajasthan, Uttar Pradesh, Himachal Pradesh, Jammu and Kashmir and Madhya Pradesh. The chamber did benchmarking with Maharashtra which showed that Delhi registered a highest growth rate of 7.3 per cent.

UP showed the lowest growth rate of 2 per cent followed by MP and Haryana at 3.1 per cent each, Rajasthan at 3.2 per cent, J&K at 3.9 per cent, Punjab at 4.2 per cent and Himachal at 4.3 per cent.

In UP, the low rate of growth has been attributed to political instability and consequent poor governance. But in the case of other states, the locational disadvantage of being away from majorports could have contributed significantly to low growth, the study said.

Another reason cited for higher growth rate in the western and southern states as compared to those in the north has been the dynamic state governments willing to assist private investment vis-a-vis the northern states.

The study points to abysmally low growth rate in agriculture as a major reason for poor growth as agriculture accounted for nearly half of the states' total domestic product. The rates in Rajastahn, UP, Haryana and Himachal were as low as 0.3 per cent, 1.7 per cent, 1.2 per cent and 0.9 per cent.

On the industrial front, the northern states' share in the value of total industrial output of the country is around 30 per cent though they constitute more than 37 per cent of the population.

In the absence of efficient management and economic pricing policy, public sector undertakings, particularly state electricity boards and state road transport corporations, have been showing persistent losses and their contributionto the state exchequer was negative, the chamber felt.

It has urged the government that the thrust of states' fiscal policy should be on adequate resource mobilisation, efficient resource allocation and greater participation of the private sector and a significantly stronger focus on human capital formation to enhance social infrastructure.

The chamber has suggested an `attitudinal change' so that the entrepreneur does not have to approach a number of authorities. The infrastructure of power, roads, communication and industrial estates needs to be rightly identified for the success of the project.

The state governments should subject the users to realistic pricing of services such as electricity, civic services and canal irrigation water.The funds raised would enable the states to implement development plans in these sectors as upgradation of infrastructure quality in these states was a pre-requisite for acceleration of industrial development, the study has noted.