Opinion Dire states

There are two components to this enthusiasm for states that have some truth in them. One is a normative one. Administrative power and financial allocations in India are centralised. The Planning Commission’s relation to states is nothing short of a constitutional usurpation. Centrally sponsored schemes come at the cost of flexibility to states and produce gross misallocation. So there is a case for more power to states.

Two,not surprisingly for a country of India’s size,there are interesting experiments and administrative successes all over the place: PDS,mid-day meals or public health in Tamil Nadu,the manufacturing prowess of Gujarat,bicycle distribution in Bihar and so forth. When they put their minds to it,several chief ministers in mission mode can do a few schemes well: whether it is the distribution of free medicine in public clinics or building some infrastructure. The impressive growth rates being clocked up by states like Bihar and Orissa make people optimistic about states. But despite some manifest successes,most states have been unable to tackle certain fundamental challenges holding India back.

The prime exhibit in this is the power sector. If you are cursing government while sweltering in the heat or because your energy costs are high,blame the states. As the recent Indian Express survey of the power sector reminded us,power is a mess in almost all states. The shocking irony is that this is not because of shortage of power. The finances of the power sector are in a shambles,preventing it from buying power. And in several states,the government will not let power be supplied even to paying customers for fear of alienating constituencies that it thinks are used to free power. If energy is the bedrock of growth,the majority of states have been complicit in a colossal botch-up.

The second,enduring problem created by states is in education. We did not go far in education despite it being a state subject. And if you are despondent that despite 95 per cent marks you don’t have access to good universities,blame the states. For the fact is that every state government connived to turn its state public universities into arid deserts and political fiefdoms: from Bengal to Gujarat,from Rajasthan to Andhra Pradesh,the wilful destruction of state universities by state governments produced a fundamental crisis in higher education. It is amazing that despite all the powers the states have,none has been able to produce a national class university.

The police and justice delivery systems,particularly the lower courts,are largely in state hands. You cannot name a single state that is a model for reform in this area. States with a law and order problem such as Chhattisgarh continue to struggle. Even states that are better off have shown minimal initiative in reforming the core sovereign functions.

India’s future will depend,in substantial part,on the character of its urbanisation. Again,most states have not got the political economy of rural-urban relations right. States like Andhra,Karnataka and Maharashtra went for a model of creating an economic powerhouse capital,which was the source of rents. In the process,they created unsustainable imbalances in the state,and are now putting their major cities at risk. States like UP and Bihar have not been able to create an urban powerhouse that can act as a catalyst for transition out of agriculture.

The list can go on: from public health to water,from agriculture to environment. This is not to minimise several notable successes. But it is striking how they are more the exception that proves the rule. And this is not an argument against devolving more power to states; some of their failures may be endogenous to their terms of engagement with the Centre. But states,for their part,have also not shown a commitment to appropriate multi-level governance when it comes to devolving power to panchayats or cities. If you did a comprehensive survey,what would strike you about states is not the range of experimentation,but the striking similarities in their failures.

Even when states boast successes (or failure),the causes are more in complex interdependence. The shift of industrialisation to the south and the west has much to do with central policies in the 1950s,particularly freight equalisation. Punjab’s prosperity was founded on central subsidies and technical support in the Green Revolution. Gujarat’s economic dynamism is,in part,founded on water supplied from elsewhere. While states should continue to grow in importance,they are not,on current evidence,a panacea. Even recent successes like Bihar are exposing the limits of what states can do fairly quickly. Bihar’s success is largely a decently executed Keynesian stimulus combined with low-hanging governance reform that started from a low base. Whether it can tackle the next state of challenges is an open question.

States also have worrying political cultures. Very few have what might be called a liberal political culture: the environment for critics of the government or for pushing cultural boundaries can be very intimidating in Gujarat,West Bengal,Tamil Nadu or Maharashtra. Most episodes of success seem to be highly correlated with authoritarian,presidential-style powers of one leader. This makes the success less enduring. It keeps institutions weak. Some chief ministers have popular appeal in their states,but the very basis of their appeal makes it hard for them to transit to political contexts that involve complex negotiations where they do not have unchallenged sway. It is perhaps not an accident that chief ministers across the political spectrum are not finding it easy to transition to national politics. States like UP,despite rays of hope,are slipping back into the old politics of intimidation. Most states are now in the grip of unprecedented crony capitalism.

States are important. But to convert them into knights in shining armour is to engage in the kind of wishful thinking that so muddied serious debate in India.

The writer is president,Centre for Policy Research,Delhi

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