Economic viability of small states

Introduction:
states have emerged as important players determining national political patterns.
And in the era of coalition governments, regional or state parties have become partners in central
governance. The establishment of a market economy, too, has opened the floodgates to private capital
that has led to increasing regional inequalities and, thus, contributed to the rising demands for smaller
states.
Economic backwardness of sub-regions within large states has also emerged as an important ground on
which demands for smaller states are being made. Vidharbha, Bodoland and Saurashtra
fears of the Centre weakening due to the creation of a large number of small states are unfounded.
Political act? - There are, of course, emotional considerations like culture, language, religion and a sense
of economic and regional deprivation. But more importantly, politicians envision additional posts of
power as chief ministers or ministers, leaders of the opposition, Assembly speakers and so on. Similarly,
government servants think of becoming chief secretaries or secretaries, DGs of police, chief-engineers,
and directors and so on.
Financial, administrative and national security concerns

Benefits:
Carved out in 2000- Jharkhand, Chhattisgarh and Uttarakhand( more statistics ). Let us concentrate on
the time duration from 2004-05 to 2008-09. The GDP of rise in the three states was Jharkhand 8.45%,
Chhattisgarh 7.35% and Uttarakhand 9.31%. Now that is fast. It is even more astonishing if we consider
the fact that these areas (when part of the parent state) were considered stagnated economies. While
Uttarakhand has seen a stable two party political system with a focus on governance, Jharkhand has
brought out the worst in our Parliamentary democracy. Chattisgarh though producing a stable polity has
been at the receiving end of the naxalite menace.
There is no denying that India needs smaller states. Some states are simply too unwieldydue to large
populations spread over huge areasto be effective administratively.
Large states within a strong political Union and a socialist economy that would enable centralized
planning of resources, leading to equitable regional development.
It was thought that the interchange of capital and labor between the richer and poorer sub-regions in
large states would create greater equality over time
Division of UP: There is no administrative rationale, no economic justification, no compelling political
logic, and not even any linguistic or cultural framework for holding the state together
There is the possibility that citizens of smaller states have more homogeneous preferences that make
for more effective collective action.
Argument for small states in north east which are not doing well: that is largely a consequence of
aligning ethnicity with territoriality rather than the fact that they are small states.
that they make for better delivery of public services, greater accountability and greater opportunities
and access to opportunities.
Disadvantages:
Creation of smaller states automatically gives greater political power to large states as the number of
members to be sent to the Lok Sabha depends on the population of the state. Creating small states
without ensuring equity in representation can have unforeseen political consequences. It will certainly
upset the inter-state political equilibrium in the country.
There are strategic and national security issues in creating new states with ethnic majorities especially in
border regions. The needs of ethno-linguistic minorities need to be balanced with broader concerns
about national security.
It would foster local nationalisms, breed parochialism and undermine national unity
A small state is likely to face limitations in terms of the natural (physical) and human resources available
to it.
it will lack the kind of agro-climatic diversity required for economic and developmental activities. It
would also be restricted in its capability to raise resources internally.
Increasing the number of states in the country would expand the span of control of the central
ministries dealing with states and of party high commands dealing with state party units.
A new small state may find itself lacking in infrastructure (administrative and industrial), which requires
time, money and effort to build- takes about a decade for a new state and its government and
administrative institutions to become stable
It calls for a thorough evaluation of physical features like land quality and topography, agro-climatic
conditions, socio-cultural factors, natural and human resource availability, density of population, means
of communication, existing administrative culture and effectiveness of its district and regional
administrative units and so on.
we cannot ignore the widespread corruption that is prevalent in these states.
Important question : If smaller states are a ploy to bring political governance closer to the populace,
then shouldnt empowerment of local self-government institutions provide a more permanent
answer?