Between The Lines

Are new states vehicles for better governance?

Former UP chief minister Mayawati with K Chandrashekhar Rao, president of the Telangana Rashtra Samithi (TRS), which spearheads the movement for Telangana state. PRAKASH SINGH / AFP / GETY IMAGES
01 April, 2013

MOST NEW STATES IN INDIA have come into being—or failed to see the light of day—for political rather than administrative reasons, as the protracted Telangana imbroglio demonstrates. Yet one of the standard arguments that has been made in recent years for creating new smaller states is that they would provide improved administrative efficiency and better, more responsive governance. Despite the passion with which campaigns to create new states are contested in political life, there have been few empirical studies of the particular governance dividends that may follow from the creation of smaller states. My own research has focused on the politics of state creation in India’s three newest states—Chhattisgarh, Jharkhand and Uttarakhand. These regions have mixed records when it comes to improved governance, and may hold lessons for regions such as Telangana and Vidarbha.

The only comprehensive exercise in post-independence India to consider the shape of states was the States Reorganisation Commission (SRC) in the 1950s. Where possible, the SRC favoured creating large states, in order to produce economies of scale. For instance, the commission argued that the newly amalgamated state of Madhya Pradesh could become “one of the richest states in the Indian Union” precisely because its large borders encompassed diverse agricultural regions (both wheat- and rice-growing), and planned investments in industry, including the Bhilai Steel Plant (in what is now Chhattisgarh).

This general preference for large over small states has left its mark on India’s federal system; yet, even at the time, dissenters such as BR Ambedkar spoke about the merits of creating smaller states. Specifically, Ambedkar argued that large Hindi-speaking states should be divided in order to protect minorities from the crushing “weight” of majorities.

Today, the precise ways in which smaller states are thought to deliver improved governance are rarely articulated at length, but a number of underlying assumptions can be delineated. Smaller states, it is argued, have the potential to reduce the size or complexity of administrative agendas; to increase the efficiency of public spending; to improve the quality of democratic representation; and to strengthen accountability. The two principal arguments—for administrative efficiency and better representation—are often linked: the creation of smaller political communities should lead to a broader consensus about how public funds should be spent, and provide a greater voice to harder-to-reach minority populations. This, in turn, allows for more equitable targeting of public expenditure, while increasing local oversight.

Simple intuition suggests that larger states—with diverse climatic regions, topographies, trajectories of urbanisation and patterns of inequality—are more difficult to govern effectively. Many bureaucrats and politicians therefore see the division of large states—especially the unyieldingly large state of Uttar Pradesh—as a route to reducing the complexity of issues they face. As Mayawati said in 2009, while still the state’s chief minister: “I was always in favour of smaller states as they are much simpler to govern.” (The creation of new districts by state governments—47 new districts were created across India between 2001 and 2011—may speak to a similar concern, as well as creating vehicles for other political projects.)

In addition to reducing administrative complexity, smaller states are often thought to produce much-needed governance dividends by aligning the incentives of politicians and local officials more closely with the concerns of local communities—and strengthening local structures of political representation and administration. Communities that were marginalised in larger states, because of their minority status or geographical concentration, are given a greater voice in decision-making as administrators—in theory—become closer, more visible and therefore more accountable to the communities they are meant to serve. The quality of information available to politicians may be enhanced and officials may become better informed about local needs and priorities, thereby improving the potential for what economists call “allocative efficiency”—the ability of lower-level governments to respond to changing local needs and to appropriately target public spending.

The present set of debates around Telangana, Gorkhaland and, in a more muted way, Vidarbha, also reflect a growing recognition that linguistic states may not be the only or natural end-point of political community in India. Smaller, regional political communities can be more cohesive and provide better environments in which to pursue developmental goals that are both rooted in the concerns of, and monitored by, local populations.

Considering the cases of Jharkhand, Chhattisgarh and Uttarakhand, however, presents mixed evidence with regard to whether creating smaller states necessarily leads to improved governance. The three states have been in existence for more than 12 years now. (They rank 13th, 17th, and 19th among Indian states in terms of population, and only Uttarakhand, with just over 10 million inhabitants, would even approach being considered a ‘small’ state.) In terms of governance, the three states display very different trends that reflect their divergent histories.

In Jharkhand, a long struggle for statehood did not bequeath the region a cohesive political culture; over generations, the denial of the demand for a tribal state helped to divide regional social movements and political parties. As a result, Jharkhand exhibits high levels of political fragmentation, and eight different chief ministers have formed governments there since 2000. The state’s failure to form stable majority governments has recently ushered in its third period of president’s rule. Several governments have attempted to bring civil society into their deliberations, but effective decision-making and institutionalised accountability are difficult in the context of political fragmentation and administrative instability.

Though such a high level of government turnover has clearly had an impact on the quality of administration in Jharkhand, we might still ask whether the situation is worse than when the state was part of Bihar. In many ways, the pathologies of administration are similar, but Jharkhand’s post-statehood period has arguably revealed even higher profile cases of corruption and rent-seeking from the region’s rich mineral resources than was the case when the region was part of Bihar (even if this corruption now has a more local face).

In Chhattisgarh, by contrast, political leadership is extremely centralised and party competition revolves around two parties: the BJP and Congress. This has produced stable governing majorities. The present chief minister works with a streamlined apex bureaucracy, and executive political leadership is clearly conveyed on the ground. This has meant some real policy innovation and improvements, particularly in the areas of food, nutrition and health. But the strong state also has a much darker side in terms of human rights abuses, especially those that were connected to the counter-insurgency group Salwa Judum, in districts where Maoists are deeply entrenched.

Chhattisgarh is pursuing an aggressive strategy of resource-led industrialisation in a state whose population remains rooted in the agrarian economy. The state government’s administrative agenda therefore remains complex (as reflected in large subsidies to the agrarian sector), even if it now seeks to project a more unified strategy.

Uttarakhand offers a different test of the potential changes to governance in a new state, for it is the only one of the newest states that has also seen a decentralisation of political representation. After the state was created in 2000, the number of assembly constituencies there was increased from 19 to 70. This considerably improved the density of representation in what—in the old state of Uttar Pradesh—had been very large constituencies in hilly areas where population density is lower than it is in the plains.

Arguments about the administrative and representational benefits of decentralisation within existing states—particularly the empowerment of panchayats—are similar to those commonly made in favour of creating new, smaller, states. It is important to be clear, however, that creating a new state is not, in and of itself, a decentralising act. Chhattisgarh and Jharkhand, created at the same time as Uttarakhand, have seen no change in their total number of assembly constituencies; nor does state creation have any necessary consequences for decentralisation to lower tiers of local government, such as panchayats. At a national level, a new state does not alter the distribution of powers between the central government and state governments, or change the dominance of the central government in the design or financing of social sector programmes. (By creating more smaller states to compete against each other, the centre’s power may even be augmented.)

Moreover, at the state level, decentralisation—like the formation of smaller states itself—does not ensure improved governance. In Uttarakhand, the localisation of political representation has been accompanied by increased factional and inter-familial contests over power. In the 12 years since it was created, the state has seen seven changes of chief minister—almost as many as Jharkhand (albeit without intervening periods of president’s rule). Though the formation of the state had been demanded in order to better address the needs of the hills, complaints continue to be made about plains-centric development and the neglect of upland regions.

Thus smaller states are not necessarily more homogeneous or better-governed units; the administrative dividends of state creation cannot be taken for granted. It may be too early to assess the longer-term consequences of granting statehood to Jharkhand, Chhattisgarh and Uttarakhand; political fragmentation will not necessarily endure over time, and we have seen meaningful policy innovation in some of the new states. Yet it is also clear that political and administrative histories continue to matter in shaping how new states fare: rather than taking off along striking new paths in terms of their administrative capacity and governance, these newer states so far reflect the range of outcomes we see among existing ones.