Small Vs Big

Uttar Pradesh Chief Minister Mayawati has succeeded in the Uttar Pradesh Assembly passing a resolution proposing to divide the state into four parts. That does not necessarily mean that we will witness three more new states immediately as the power to create any new state is vested with the union government through parliamentary consent and the recent developments over the Telangana issue shows that the government acts only when people get violent. Only time will tell how the map of Uttar Pradesh would look like in the future. But Mayawati’s decision has sparked off once again the debate over whether “smaller states” are better.

This debate, erupted periodically ever since the country’s Independence, has never been conclusive. And it is unlikely that it will be this time. Presently, India has 28 states and seven union territories. Independent India in 1947 had 16 states and some 10 union territories. But the number of states has increased over time due to the splitting of some big states and the conversion of some union territories into states. The last time cartographers were sent scurrying to redraw India’s boundaries was in 2000, when three new states were added—Uttarakhand from the state of Uttar Pradesh, Jharkhand from the state of Bihar and Chhattisgarh from the state of Madhya Pradesh.

Some newly created states such as Andhra Pradesh, part of the original Madras state; Haryana, part of the original Punjab state; and Maharashtra and Gujarat, originally of the undivided Bombay province, are the creations of protests and hunger strikes by important national leaders. But many of the new states were formed on the basis of recommendations by the States Reorganisation Commission set up in 1955. Formed in the wake of agitation for the creation of a Telugu language-speaking Andhra Pradesh by breaking up Madras province—where Tamil was the other major language—the commission devised in 1956 the highly dubious criterion of linguistic commonality as the basis for new states.

It may be mentioned here that the then Prime Minister Jawaharlal Nehru was not exactly happy with the recommendations of the Commission, which essentially favoured the creation of new states on the basis of the language spoken by its people. Importantly, Mayawati’s “idol” BR Ambedkar also was not in tune with the Commission’s recommendations. Ambedkar pointed out, “The commission evidently thinks that the size of a state is a matter of no consequence and that the equality in the size of the status constituting a federation is a matter of no moment. This is the first and the most terrible error cost which the commission has committed. If not rectified in time, it will indeed be a great deal.”

Ambedkar realised that the disparity in population sizes was a ‘fantastic’ result, bound to create huge costs for the nation. His opposition to the commission’s recommendations stemmed from the imbalance of political power in the country—the large states in the north and balkanisation of the south would pit the two regions of the country against each other. The solution he offered used the size of the state and administrative effectiveness for making smaller states in the north: dividing the three large states—Uttar Pradesh, Bihar and Madhya Pradesh and using the rule that ‘a population of approximately two crores which should be regarded as the standard size of population for a state to administer effectively’.

As Ambedkar clarified, “One language one state should be the rule, but people with the same language can divide themselves into many states—this promotes more uniform balance of power within the country, satisfies social needs and most importantly, creates units that can be administered with ease, leading to better growth performance for the nation.” While he used this rule to call for the division of Uttar Pradesh, Bihar and Madhya Pradesh, he went into greater detail analysing his home state Maharashtra with 3.3 crore Marathi-speaking population and an area spanning 1.74 lakh square miles—it “is a vast area and it is impossible to have efficient administration by a single state”. According to his analysis, economic, industrial, educational and social inequalities in the regions of Maharashtra make for a clear division of the state into four parts—Bombay, Western (Konkan), Central (Marathwada) and Eastern (Vidarbha).

As subsequent events proved, Ambedkar was perhaps right. New states have been created over the last five decades periodically. In the mid-60s Haryana was formed out of Punjab and some districts of Punjab formed today’s Himachal Pradesh. In 1971, Arunachal, Meghalaya and Mizoram were carved out of Assam and then, in 2000, Uttarakhand, Jharkhand and Chhattisgarh were formed out of UP, Bihar and Madhya Pradesh. And more importantly, economists say these creations contributed towards economic development of the country. Punjab, Haryana and Himachal Pradesh have done very well economically. After the division of Bihar, Madhya Pradesh and Uttar Pradesh in 2000, except for Madhya Pradesh, all the others—UP, Uttarakhand, Bihar, Jharkhand and Chhattisgarh—performed much better in the seven-year period post-reorganisation than the seven preceding years. In the case of Uttarakhand and Chhattisgarh, the annualised growth rates increased by about 6 percentage points in the post-reorganisation years. In Jharkhand as well there was an improvement, about 4 percentage points—the smaller Bihar also found its growth rising by 3.7 percentage points.

Even from the point of view of governance, small states are supposed to be better. The arguments cited in this regard are: by dividing the problem in small parts and concentrating on the problems region wise, there are more chances of better growth. We need governance at small level so that we can mange and regulate the life more appropriately. Reorganising India into smaller states on the basis of problems such as poverty and illiteracy can give the chance to the government to resolve those problems in a much better way.

But there is also a counterview. In a diverse and pluralistic country like India, too much decentralisation is not seen as a good thing. In fact, India’s first Prime Minister Jawaharlal Nehru was not in favour of small states, as he believed they could accentuate the divisiveness in the country. Some of the small states being demanded may not even have enough resources to stand on their own. Also, a smaller state does not always mean a smaller government. In fact, at least in the short and medium term, the cost of administration will increase, for one would be duplicating a lot of the existing systems and resources in the new state. Thus, instead of “administrative convenience”, what one should be looking at is “administrative necessity”. Increasingly it is also being argued that smaller states are less likely to be able to deal with the ever-present threat of militancy. The examples of Punjab, Assam and the north-east, Jharkhand and Chhattisgarh provide some evidence supporting this argument.

As a bureaucrat/columnist Srivatsa Krishna argues, it is a myth that big states do not deliver. Maharashtra, Tamil Nadu and Karnataka have done well economically. It is pointed out in this context how even in the United States, the states which are the economic dynamo of America are the larger ones such as California, New York, Texas, Illinois, and not Montana or Wyoming. Stellar research by Michael Porter at Harvard Business School indicates that within each country there are clusters—the US has at least 400—which are the engines propelling growth, and these are spread all across the US, not correlated with a big or small state.

Krishna also makes another interesting point. Drawing from statistics, he proves that there is no overwhelming difference between the newly created states and their parent states in terms of poverty, electricity generation, irrigation and revenue generation etc. “What has been seen to consistently matter is the quality of government intervention, and it is debatable whether this improves with the size of government or with the quality of leadership, as such evidence is still nascent and mixed. There is very little to prove that a smaller state would mean a smaller government too. On the contrary, at least in the medium term, a relatively larger government would be needed to ‘duplicate’ all the existing functions in the new state”, he argues.

What the above arguments, both in favour and against the creation of smaller states, suggest is that we are yet to come across the rational criteria for statehood in India. I think that more than language or ethic affinity, “better governance”, taking into account a range of criteria such as administrative issues, socio-economic factors, language, ethnicity and geography, should be the key. In fact, there would be merit in converting metropolitan cities such as New Delhi, Mumbai, Bengaluru, Chennai, Hyderabad and Kolkata into union territories or partial states, delinking them from narrow parochial forces.

By Prakash Nanda