Exploring Hartwick Rule Counterfactual for Jharkhand
Student name: Ms Anvi Khandelwal
Guide: Dr Nandan Nawn
Year of completion: 2017
Host Organisation: TERI University
Abstract: Resource curse is one of the peculiar hypothesis in the field of economics. The resource curse
deals with the feature that the economies abundant in natural resources have tended to grow
slower than economies without substantial natural resources. Sustainable development requires
that depletion of mineral capital should be compensated by increase in other forms of capital.
One of the theoretical direction for this is “Hartwick ruleâ€, which is prescription for countries
based on nonrenewable resources.
The paper primarily focus on what Jharkhand could have achieved in terms of development in
the year 2015 if it had followed the Hartwick rule since 2000. Further, one must understand what
share of the resource rent generated by mineral extraction should be reinvested to offset
depletion for keeping the Net Wealth constant. Also, what Jharkhand could have achieved for the
re-investments in terms of multiple dimensions of economic development.
It was identified that there was an unearned profit of around ₹ 76000 crores which if would have
been accounted by the state government, Jharkhand would have been in much developed state as
compared to current scenario.
Key words: Resource curse, Hartwick rule, unearned profit, Jharkhand.
