For decades, the mineral bearing areas of our country got a raw deal — not by accident, but by the deliberate policy of the Union government. States like Orissa, West Bengal, Jharkhand and Chhattisgarh were deprived of thousands of crores of investment by the cynical undermining of their competitive advantage.

Policies like freight equalisation — which subsidised transport costs — neutralised these states’ natural advantage for attracting investment in those sectors, that is, steel, power, aluminium and the like. Instead, those investments were artificially incentivised to go to more politically convenient destinations, rather than to where economic logic dictated. These poor states were forcibly made to subsidise the industrialisation of those with more clout.

Those who claim that coalition governments conduct poor economics should remember that such policies happened in an era when coalitions were unheard of. It’s simple, really: in those days of single-party governments, even the ruling party MPs of these states were powerless to resist the diktat of their all-knowing, national high command. Things are different now.

The rise of regional parties has led to the blossoming of the underlying federal character of our Constitution. And that has led to a far more level playing field for many states. For a decade now, the leaders and representatives of these states have been increasingly vocal and assertive about their rights. Thus Chandrababu Naidu’s and the TDP’s reputation as the tail that wagged the NDA dog. The same goes for other regional parties like the DMK in today’s UPA government. And then there are those, like Orissa’s Naveen Patnaik and the BJD, who have used this new leverage to turn around their states, but unobtrusively and without much fanfare.

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