SMALLER OR BIGGER  STATES IN INDIAN FEDERATION

Report on FCCI Interactive Presentation and Discussion on the motion:

This house is of the opinion that the creation of smaller states in India will lead to good governance, progress and strengthen unity.

Event Date: 25-03-2010

Venue:  Van der Valk Hotel

               Haagsche Schouwweg 14

               2332 KG Leiden

1. Foundation has tackled this issue in its very first paper on a New Constitution of India (pp. 76-77). Here Foundation has given its preference for more but smaller states giving reasons like further decentralization, more possibilities of participation, more effectiveness in identification and solution of problems, etc. We should remember that this was the stand taken in early 1980s when both the internal and external environment of India was different.  Globalization and economic liberalization had not grown substantively then. Also, not many new states were created after independence, except bifurcation of Maharashtra and Gujrat into two separate states, creation of small states out of bigger states like Jhadkhand, Uttarkhand, etc.  In the last few years there have been vocal demands for creation of other states mostly based on demands of ethnic groups like Gorkhaland, Vidarbha, Telengana.

2. Case for a number of small states in Indian Federation: This was first mooted by Indira Gandhi in the days of Emergency. She then suggestion dividing India into 100 small states. Although the formal justification was in terms of more participation and decentralized democracy, the real motive was to make the Centre even stronger than what the Constitution provided.  Among the federations in the world, Indian federation is considered most centralized with enough constitutional instruments for changing India into a centralized unitary state. This was done deliberately by the Constituent Assembly keeping in mind India’s historical lack of unity and a centralized power to deal with intruders.  In addition to the constitutional means there were some extra-constitutional centralizing forces like planning, a single top bureaucratic cadre for federal and state governments recruited and controlled by the Center, disproportionate control of the Centre over revenues, public enterprises, etc.  Added to this was a high level of centralization among all political parties, particularly the Congress, BJP, Communist Party. As a result the Chief Ministers of States are seen more in Delhi than in their state capitals. Accountability to state Chief Ministers and Cabinet Ministers is often to the leaders in Delhi rather than to the State Assembly.

3. In the last 3-4 decades there have been some changes which have reduced the extent of centralization. Creation of panchayat raj institutions, change in the allocation of revenues between the Centre and the States through Five Yearly Finance Commissions, reservation of quotas for women and increasing number of ethnic groups based on their backwardness and political pull, greater priority given to rural development, poverty alleviation, etc.. Initially the demand for shift in political and economic power was between the Centre and the States but now it is between the state power elites and different ethnic groups in the states. And chief ministers of both the Congress and BJP have increasingly to concede demands for reservation

in educational institutions, job market, political positions, etc. We should not be surprised if more demands for separate statehood are articulated by other groups (J&K, MP, Assam, UP).

Statehood provides to the group which fights the battle for it control over resources allocated to the new state, employment in public sector, opportunities for negotiating with the Centre and neighbouring states. This raises also the issue of on what criteria the creation of small and bigger states should be done?

4. Criteria for creating states: In most cases, the basic structure of governance is inherited from the independence time when creation of sub-units was essentially based on efficiency and control of the colonial power. From the point of view of both efficiency and control fewer te4rritorial units are better. Hence few, big provinces or regions which requires fewer bureaucrats, policemen and by appointing heads of regions and sub-regions loyal to the Colonial masters, control was ensured. In fact at one time the British ruled the present day Kenya, Uganda, Tanzania as one entity. Similarly the present day India, Pakistan, Bangladesh, Sri Lanka, Mayanmar, Tibet, were ruled together under one umbrella. After independence there has been an attempt, not so much consciously or formally to use additional criteria like effectiveness, safety of the country, responsiveness to different major groups in the society, maintaining unity in diversity, increased participation by people from grass roots, etc . In the final analysis this is a political decision and in reality that will be the major criterion for those taking decision. Will the new state vote for us or the opposition party? The ruling party often changes the boundaries of constituencies to gain more seats in elections. In fact whatever criteria one may use, some of them are likely to contradict each other. Let us just take four criteria Effectiveness (degree to which goals are realized), Efficiency (degree to which cost in rupees and in time can be minimized), Responsiveness (degree to which different stakeholders feel satisfied) and Innovation (to realize the first three criteria, simultaneously one needs a high degree of creativity and innovation in design of the change). Let us see how different options score on these criteria.

5. What should be GOI policy?  In view of uncertainty in both external and internal environment

GOI should not create more states at this juncture. Creation of Telengana will definitely give rise to other demands, as they have already done which may give rise also to more violent expression of demands and even more violent to stop that.  At present India’s priority is not to allow a drop in the growth rate and development of the economy. Some experts are already predicting that India will overtake Japan as the third biggest economy by 2012!

6.  The problem is not creation of a separate state. This is a means for uplifting the neglect sections. At present both at the state and sub-state level  power is exercised by a dominant ethnic/political group which comes to power with only a support of 25-30% of total votes, with no representation for the remaining 70%.  This can be avoided by providing proportional representation to legislative bodies at the state and sub-state level. (See arguments in support of this in Foundation’s earlier mentioned paper).  The present upsurge of quotas and reservations is an indicator of political alienation of a substantive number of people.  Right of vote does not result in power sharing by all groups. In proportional representation each group will be represented in accordance with its number in concerned population. When all groups will be represented in legislative policies will reflect the needs and demands of different groups. They will also be represented in the executive proportionately. This will reduce or stop further demands for reservations as well as for creation of new states. In other words just as present the coalition govt. at center cannot ignore other coalition partners and there is give and take amongst them, the same will happen at the state and sub –state level.

Dr. Vasant Moharir