Size may matter! But smaller states are mere political placebos without decentralisation


Published: 04th August 2013 07:25 AM  |   Last Updated: 21st January 2014 01:13 PM   |  A+A-


India seems to produce a political paradox almost every week. Indians were told that overall poverty levels fell from 37 per cent in 2004-05 to 21.9 per cent in 2011-12. This did not trigger any review of the idea to give 67 per cent of the population subsidised grains. The chasm between statistics and political arithmetic persists.

Hidden in the reams of data on poverty reduction is an interesting fact. United Andhra Pradesh is among those states which brought down poverty the most. Since 2004, when K Chandrashekar Rao of the Telangana Rashtra Samiti was promised Telangana, poverty in united Andhra Pradesh dropped from 29.6 per cent to 9.2 per cent in 2011-12. And the absolute number of those below poverty line has come down from 235 lakh to 78 lakh. World over, poverty reduction is an accepted indicator of growth and governance. This should be an accepted precept in India too. Not among politicians facing an election! On Tuesday, the coalition members of the UPA formally approved the creation of Telangana.

This is not about the creation of Telangana. It is about debating what drives growth and good governance. Continuing with the measure of poverty reduction, consider the states along with Andhra Pradesh which have brought down poverty the most between 2004 and 2012: Tripura (25.95 per cent), poverty-ridden Odisha (by an astonishing 24.6 per cent), Bihar and Maharashtra (by 20.8 per cent) and Tamil Nadu (by 18.1 per cent). There is no obvious commonality—Bihar and Tripura (as indeed Telangana will be) are land-locked states while others have access to ports. Now consider the performance of the newly formed and land-locked states of Uttarakhand, Chhattisgarh and Jharkhand. Uttarakhand has outdone most states bringing down poverty by 21.44 per cent but its siblings Naxal-hit Chhattisgarh (9.4 per cent) and Jharkhand (8.3 per cent) haven’t done well.

Fact is, whether it is economics or politics, outcomes are determined by necessary and sufficient conditions. Smaller size states promise access to the citizens and easier operations but good governance also needs enlightened political leadership. When Jharkhand was carved out, Lalu Yadav had said Bihar was left with floods, droughts and poverty while Jharkhand walked away with riches. Turns out Bihar has done twice as well as resource-rich Jharkhand. Thanks to political instability, Jharkhand has been subjected to a musical chair of nine chief ministers—including three terms of Arjun Munda, two of Shibhu Soren and a term under the one-man-majority of Madhu Koda. In the beginning of the millennium, it was argued that size matters and that states which are smaller are better governed. Size may matter, but size is not all.

The elephant in the room, which no committee or commission talks about, is rampant centralisation. The operations of state governments are pretty much dictated by the writ and fancies of governments at the Centre. Under the Constitution, bulk of the taxes are collected by the Centre and allocated through the finance commission to different states. Indians paid a sum total of Rs 14.94 lakh in taxes in 2012. The Centre itself collected Rs 9.32 lakh crore of which Rs 2.67 lakh crore, or 29 paise per rupee, was shared with the states. A large chunk of the remainder is spent on the states—directed by ideas from the Planning Commission and dictated by reigning political ideology.

In the 11th Plan, the Centre spent nearly Rs 7 lakh crore on Centrally sponsored schemes. This will shoot up to over Rs 15 lakh crore in the 12th Plan (2012-2017). The states can only suggest changes but don’t have a say. For instance, since 2006, the Centre has spent over `1.6 lakh crore on MGNREGS. The states may perhaps want to spend this “dole budget” differently—put a condition for creation of assets in the rural economy—but it is the Centre which decides. Policies on every major issue—be it education, health, agriculture or approach to urbanisation—is dictated, funded and regulated from Delhi. There are at least 18 ministries at the Centre which have no business to exist. There is no real logic why the Centre must have ministries for subjects that are state administered.

And it is not just the Centre which centralises. The states are worse offenders and deny panchayats, zilla parishads and municipalities the autonomy to plan and decide. If small is always beautiful and efficient, why are India’s cities—the smallest geographical units—so badly governed? Why do the middle class urban Indians in Mumbai, Delhi or Bangalore have to suffer poor services and pot-holed roads? It is because the municipal bodies are virtually run by the diktat of state governments. Former Maharashtra CM, the late Vilasrao Deshmukh, pithily told this columnist: “What the Centre does to the states, the states do to local self-governments!”

The cry for smaller states is less about representation and more about real aspirations. 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 month. Let not petty political cartography obfuscate the real reasons for failure. Let not India get lost in transmogrification.

(Shankkar Aiyar is the author of Accidental India: A History of the Nation’s Passage through Crisis and Change.


Disclaimer : We respect your thoughts and views! But we need to be judicious while moderating your comments. All the comments will be moderated by the editorial. Abstain from posting comments that are obscene, defamatory or inflammatory, and do not indulge in personal attacks. Try to avoid outside hyperlinks inside the comment. Help us delete comments that do not follow these guidelines.

The views expressed in comments published on are those of the comment writers alone. They do not represent the views or opinions of or its staff, nor do they represent the views or opinions of The New Indian Express Group, or any entity of, or affiliated with, The New Indian Express Group. reserves the right to take any or all comments down at any time.

flipboard facebook twitter whatsapp