By Achyutam Kallani and Rahul Bajoria
(Originally appeared in Centre Right India)
The
demand for smaller states is a complex issue in India. From a
historical precedent, India spent considerable amount of resources
uniting India into one single polity in its early years, after the
British left over 550 Royalties in charge of their own fate. Once their
allegiance to the constitution of India was secured, the Congress
government under Jawaharlal Nehru ordered a state reorganisation
committee, which led to the single largest realignment of states along
linguistic lines in 1955.
This
idea of splitting states based on a common language / community has
stood the test of time, broadly speaking. However, with Telangana being
announced, clearly an act of political expediency, the ‘linguistic’
re-organization of states perhaps does not hold water any more.
India
has gone through several more independent exercises to carve out
smaller states from larger states, and it has also involved conversion
of union territories into states. In fact, most of the legacy
conversions have involved union territories being given quasi/full
statehood.
The
latest example is of course Delhi or National capital region, which has
benefitted from strong growth under a more de-centralised government,
even if its performance on other issues like security is suspect. From
14 in 1956, the numbers of states have risen to 28, and could be 29, if
Telangana eventually materialises.
Let
us critically analyse the arguments put forth by various commentators
and political parties on the benefit of smaller states.
To
start with, it has often been pointed out that smaller states are
better placed to administer and respond to the needs of the state’s
citizens more nimbly. While, indeed a government may be more agile if it
has a focussed catchment area. A true measure of delivery of public
services would manifest in the social indicators, let us look at the
economic growth.
Let
us first look at the three states which were created in November, 2000
out of their mother states – Uttarakhand, Jharkhand and Chhattisgarh. We
look at the economic growth first for these states and contrast them
with that of their mother states for two period- 1994 – 2000 (pre) and
then from 2001 to 2012 (post). We have carefully chosen to exclude
2000-01 period for this was the transition year.
In
the pre-birth years, Uttarakhand and Chhattisgarh clocked an average
growth rate of approximately 3% during the pre-birth periods. In the
post- birth period, these states improved their growth rates
dramatically too approximately: Uttarakhand 11%, Chhattisgarh: 9% – a
good 200% increase in the growth rates. Contrast this with the mother
states – UP accelerated 20% from 4.7% to 6%, MP from 6% to 7%.
Clearly
these two states – Chhattisgarh and Uttarakhand performed much better
than their mother states after their birth. Jharkhand, on the other
hand, did shown an increase in growth rate, from 5% to 7%, but not as
stellar as its other cousins. Bihar outpaced Jharkhand during this
period from roughly 4.7% to 7.2%, being an outlier.
The
pertinent question then is – while all new small states accelerated its
growth rate a, why is it that Uttarakhand and Chhattisgarh performed
better than their mother states but Jharkhand could not mimic the same
feature? Is it merely smallness of states that explains this dichotomy?
If
small states, as a rule, perform better then why don’t we see Manipur
and Punjab also performing better as well? On the contrary, Maharashtra,
Gujarat, Tamil Nadu, which can be classified as ‘large’ have also, was
performing well in terms of economic growth despite being “large”
states. Clearly ‘largeness’ based on size or population alone is not a
true deterrent for growth.
In
the absence of any coherent measure of “efficiency of delivery of
public services” the other measure which could be used to compare small
Vs Large states is the Human Development Index. The best comparable pan
India level insight can be gauged from the National Human Development
Report, 2001 by the Planning Commission.
A
priori, it does seem that given the relatively good performance of
Kerala, Punjab and Haryana on HDI, small states may perform better when
it comes to delivery of services which are necessary, but not sufficient
for development. But here again we have mixed results with states like
Tamil Nadu, Gujarat and Karnataka also performing relatively well
despite being “large”.
Another
point which is often adduced to support the case of small states is the
quick decision making. Quick decision making must manifest itself the
most in how easy it is to start / cease a business based on procedural
modalities of the administration. For evaluating this claim , we turn to
the “Doing business in India , 2009″ report commissioned by the
Government of India and prepared by the World Bank which covered select
cities to make a comparative evaluation.
Fortunately
these 10 cities are from states spanning both – ‘small’ and ‘large’
states. Here also, we find that it is easiest to do business in Ludhiana
from Punjab (a ‘small’ state) and Ranchi (from a new born small state)
ranks better than Patna (from the ‘mother’ state).
However,
presence of cities lie Hyderabad ,Ahmadabad , Jaipur (all from ‘large’
states) among the easiest places to do business shows a mixed result. We
also sense that while some large cities which have grown rapidly in
recent years might appear high in the list now, but competitiveness is
not guaranteed to persist, or they maybe overtaken by other tier 2/3
cities.
Interestingly
another argument produced by various commentators on both sides of the
divide has been the law and order. While votaries of ‘small ‘ states
argue that small state administration are quicker to respond , those
against division of current big states argue that small states may pose
law and order challenge especially in containing extremism citing the
example of North eastern states.
However
, truth again lies somewhere in between. That small states may not be
very prompt in responding was amply clear in the recent unfortunate
floods of Uttaranchal. However, some of the worst terrorist attacks have
taken place in ‘large’ states. Naxalism – affected ‘small’, ‘large’,
‘old’, ‘new’ states equally. Hence, this argument is perhaps is not
convincing.
What
then explains the performance of different states? In our view it is
the political stability which lends continuity of policies that matters
the most and not ‘largeness’ of states. An efficient and willing
administrator can manage even a large state fairly satisfactorily. In
our example above, if we compare the growth of Bihar from 2001-2005 and
2005 – 2012 and compare that of Jharkhand, Bihar in 2001-2005 performs
worse than Jharkhand.
Post
2005, after Nitish Kumar took over as chief minister of Bihar, it has
seen good economic progress. This may well appear as a correlation, but
we have sufficient number of studies providing causal evidence between
establishing rule of law being a pre-condition to economic growth.
On
the contrary, Jharkhand has shown relatively poor progress because of
political instability with 12 changes in head of administration (passing
into President’s rule often). A similar small state – Sikkim with Pawan
Chamling at the helm for almost two decades now has grown spectacularly
because of development oriented consistent and stable policies of the
administration.
Another
example is Uttar Pradesh – with frequent administration changes and
with dubious track record in terms of upholding the rule of law, is
unstable in terms of policies and hence a laggard. As such, political
stability may create conditions which help in encouraging more
investment into social sector by the government, which in turn may bring
private investment.
This
is a very promising trend in India, where pro incumbency is
increasingly seen in state election results, and the incentives for
politicians or state leaders to adopt a more pro growth stance is
politically viable. This trend is present in states of all sizes, and
there is no trend that small states see less change of governments,
relative to large ones.
Having
said that, we do believe that an effective administration can increase
its efficiency if it’s focussed on a particular size of population. In
our opinion, given the new realities of demographics in India, it is the
population size that should matter in carving out new states and not
linguistic / cultural homogeneity.
Language
or culture based divisions are no less ‘communal’ than religion and a
state has no business in dividing on the basis of these attributes of
the population. If focus, responsiveness and efficiency is to be
optimized it should probably be on the basis of population size.
For
a state like UP, with a population of almost 200 million (similar to
Brazil in terms of population but similar to Kenya in terms of per
capita GDP) and Maharashtra with a population of 100 million (similar to
Mexico in terms of population but Sri Lanka in terms of per capita GDP)
it almost seems implausible to efficiently govern it.
Even
if their per capita income is higher than the national average, a
smaller but more focused administration can definitely raise the pace at
which nominal incomes can rise in certain parts of these states. As
such, the authors strongly believe that states with population of more
than 50million people can be divided to efficiently provide for public
services.
Another
dimension which should be considered is the geography. Locations with
strategic importance should probably be administered by the Central
Government. Gorkhaland is a classic example to this end. With its tiny
size, it would be foolish to grant it state-hood (if not viewed purely
on the archaic and myopic ‘linguistic’ lens) but given its strategic
importance and geography, it may be better off as a Union territory.
To
conclude, we believe there is no perfect correlation of smallness of
states and economic/social well being. An efficient and willing
administrator can govern a small or a large state well. However, to
ensure proper, focussed and efficient delivery of public services,
states should be divided based on population size.
This
is an idea which was mooted by Dr. Ambedkar even during the first
re-organization but priorities of a newly born nation was to strengthen
the federal yet unitary form of governance and to keep India united.
Linguistic reorganization served the purpose then but it should no
longer be the single yard stick of defining state boundaries. This
should be based on the basis of the population, geography and economy
and the boundaries of the states should be re-drawn.
Given
that this is a vexatious and arduous issue, we call for a Second State
Re-organization Commission to look into this and carve out provinces in a
more objective and scientific manner. Further a large part of the
problem or demands for state hood has arisen ostensibly because of
development and discrimination. This should be addressed adequately if
we truly decentralize our administration in letter and spirit and give a
large part of administrative duties to the local self governments.
We
are conscious that it is difficult for any political front to devolve
power, but it would be far more efficient, healthy and beneficial if the
local self governments have a greater hand and say in the local
development.
PS: Authors’ views are personal
References
