States in India and their Competitiveness
India is the largest democracy in the world and it has one of the most elaborate federal system of Governance. The Hierarchy of Governance is really deep compared to other parts of the world. The Governance system starts with The Central Government and then it is divided further into States, Districts, Corporations / Municipalities and Panchayats.
In terms of division of responsibility, the powers are available to those governing even at the Panchayat level. The Division of States is for administrative convenience. The states in India typically have a large City around which the entire states’ fortune revolves. The other Cities in the State after the large city are generally smaller compared to the large city and their contribution to the Economy is not very significant. In fact, the leading cities in states act as hubs around which all other cities and towns operate. The hub city provides the competitive advantage for others places in the State.
The states in India are already well divided and they have a system of Governance in all the levels as mentioned above. The initiatives taken by the Central government in the past have catalysed the management capacity of the governing systems at local levels and best management practices are being followed even at Panchayat levels in most of the states. In a few states, the governance systems at local levels are yet to be improved. But the efforts are on by the government to improve the capacity of these institutions across India. The evolution of IT in India is going to make the governance of these systems much easier going forward.
India is the only country where, people from different parties can represent the same population. People have the choice to choose a candidate from a party for the Lok Sabha. They can choose another candidate from the Second party from the same area for the Legislature. Third party can govern the Corporation/Municipality or Panchayat. Three parties can be chosen by people from the same area for Parliament, Legislature and the Local Body. The parties have the full freedom to compete for all the three and they have a chance to get elected for all the three.
The parties can create an environment whereby they can persuasively convince the electorate to vote for them based on the past performance as well as the Agenda being put forward to the Electorate. Since we have one of the best functioning democracies in the world, parties should give importance to the verdict of the people and if the mandate is for the party , then whatever promises made could be fulfilled.
Since we already have a well defined functioning governance system , what needs to be done is improving the existing systems to achieve higher levels of performance. Division of states further will lead to higher costs of governance and affecting the viability of the states. Further , the new states would require support from government which would put lot of financial burden on the Central Government and affect its finances.
The division of States should be based mainly on Economic considerations and the criterion to divide states based on any other consideration should be mainly avoided. Before dividing the state, an hub city has to be identified which can provide the competitiveness and the required resources for the divided states operations. There has to be a detailed cost benefit analysis for dividing the states and only if benefits outweigh the costs, then the division should happen. As mentioned earlier, since there is various levels of governance, there is an opportunity for parties to campaign and win elections which would help them to achieve the desired objectives.
The parties wanting the division should try and get the mandate at the various levels of governance and try and implement the ideas. In the recent past, various state governments in India had taken initiatives addressing the needs of masses. This has helped many states to increase their competitiveness in the past.
Going forward, the parties wanting division of states, should clearly define their objectives for the division of states and once the objectives are stated, then they should try and achieve those objectives through the existing systems of governance instead of disturbing the viable economic systems in the states/county. It is possible to achieve those objectives with the deep governance system we have and this could be achieved through concerted efforts and ways and means could be identified to achieve using the present systems.
The Indian advantage today is that the best practices in Economics and Commerce are gainfully applied to the management of the Economy which has resulted in one of the enviable economic growth rates in the world. This augurs well for making our states more competitive which will provide the resilience to the Entire Economy.
