For:
Should India be broken up into smaller states?
Keeping in mind the vast population of majority of the states in India and
their lack of effective development, it seems feasible to break up big states
which are not doing well economically and socially. India has five states each
with populations larger than Europe's largest nation, Germany, which has 80
million citizens. The western state of Maharashtra has almost twice as many
people as Europe's second largest nation, France. Even the country's sixteenth
largest state, Haryana, has more people than Australia. The large size of some
of India's 28 states makes them difficult to manage and has prompted movements
to divide them. There is no denying that India needs smaller states. Some
states are simply too unwieldy, due to large populations spread over huge
areas, to be effective administratively. Smaller states have proven to be more
viable from a governance standpoint, and economically they have done very well
if you look at the last 10 years.
And in the era of coalition governments, regional or
state parties have become partners in central governance. The establishment of
a market economy, too, has opened the floodgates to private capital that has
led to increasing regional inequalities and, thus, contributed to the rising
demands for smaller states.
History is evidence that smaller
states have been advantageous for India’s growth. Comparatively
smaller but compact geographical entities tend to ensure that there is better
democratic governance, as there is greater awareness among the policy makers about
the local needs. Homogenous smaller states would always be better poised to
provide wider range of policies in response to local conditions. Smaller
spatial units having linguistic compatibility and cultural homogeneity also
allow for better management, implementation and allocation of public resources
in provisioning basic social and economic infrastructure services. A relatively
homogeneous smaller state allows for easy communicability, enabling marginal
social groups to articulate and raise their voices.
Division of states would reduce distances between
the state capital and peripheral areas and hence improve the quality of
administrative responsiveness and accountability. Smaller states would also
help India stay integrated.
Factual
analysis shows the development and efficiency argument does work in favour of
the new states when compared with the parent states. In the year 2000,
Chattisgarh, Jharkhand and Uttrakhand emerged as separate entities from their
parent states of Madhya Pradesh, Bihar and Uttar Pradesh, respectively. During
the tenth five-year plan period, Chhattisgarh averaged 9.2 percent growth
annually compared with 4.3 percent by Madhya Pradesh; Jharkhand averaged 11.1
per cent annually compared with 4.7 percent by Bihar; and Uttarakhand achieved
8.8 percent growth annually compared with 4.6 percent by Uttar Pradesh.
Arguably, getting a territory of their own unleashes the untapped/suppressed
growth potentials of the hitherto peripheral regions.
Against:
Size may matter; Big could be bold and beautiful too. Bigger states like Maharashtra, Gujarat and Tamil Nadu do better by leveraging the state’s output and budgets for intervention and investment. So let’s forget formulaic solutions and worry about formats. In a democracy, every vote is sacrosanct. Voters vote for change, not to be presented with fait accompli. And delivery of governance is dictated by devolution, not dialects. India turns 66 this year. Let not petty political cartography obfuscate the real reasons for failure. Let not India get lost in transmogrification.
India’s strength is in its unity. Today concept of small state is dividing India. Creating small states gives rise to regionalism and adds to the already existing adverse inter-state relations. Small or new states depend on central government, continue to get special grants and outright transfers for extended periods which increases the government expenditure. Small states like mineral rich Chhattisgarh and Jharkhand are often viewed as being much more vulnerable to the pressures of the corporations and multi-nationals due to their small scale of economies and the greed of the newly emergent regional elite.
Small states suffer from three major handicaps:
- Diseconomies of scale in production, marketing, distribution, and public administration;
- Exposure to high levels of risk because of small populations and limited physical space and
- Limited scope and capacity for negotiating with larger states and private sector entities.
Small states experience similar burdens linked to a combination of indivisible fixed costs and diseconomies of scale. In the public sector, this results in higher costs and reduced volumes of services provided; in the private sector, in concentrated market structure and a lack of diversification; and in trade, in high transport costs which are exacerbated for the most remote small states. Small size also influences the financial sector and how small states manage their exposure to natural disasters. These characteristics translate into a number of common macroeconomic features, such as high trade openness, high government wage bills, high levels of state intervention, a heavy reliance on trade tax revenues, and the frequent use of fixed exchange rates. A second broad challenge lies in small state financial sectors, which have not yet developed adequately to play their full role in managing volatility and fostering growth.
World over poverty reduction is an accepted indicator of growth and governance. Poverty in Andhra Pradesh dropped from 29.6% to 9.2% from 2004 to 2011.And in Tamil Nadu it decreased by 18.1%. But in small states like Chhattisgarh it decreased by only 9.4% and in Jharkhand by only 8.3%.According to the National Sample Survey Organization Jharkhand and Chhattisgarh is the worst performers when it comes to poverty levels and per capita expenditure. Greater economic freedom is positively associated with growth at the state level. If we see the economic freedom ratings 2011, we find that Gujarat has shown a remarkable increase from 0.46 to 0.64 and has moved from 5th position in 2005 to become India’s top state in economic freedom today. Among top ten states there are seven big states and the worst performer is Jharkhand which has come down from rank 8 to rank18. It shows the growth and governance of small states.
When India desperately needs her people to think globally, small states make them think regionally, even sub regionally. With 28 states alone India has so many regional parties that fractured verdicts and consequent instability have become an integral part of politics, both at the center and states. A dozen more going by the demands including those made by letterhead organization with no ground support, would mean scores of regional parties and there by more black mail, more fractured mandates and a more fragmented politics. It will ultimately lead to the balkanization of India.
