When it comes to Indian politics, the issue of bifurcation and the creation of new states has never failed to attract the interest of scholars, policy planners, political parties, and the people of India. The reorganization of states has been one of the most contentious issues since the independence of India. Besides political bargains, the creation of new states has attracted the attention of policymakers and intellectuals who hold divergent views regarding the formation of smaller states. The best way to analyze whether the new states have ushered in economic growth and development of various regions is to look at their track record using empirical data.
Economic Growth: Smaller states in India trade more than the rest. New states offered better and efficient administration which leads to the creation of infrastructure strengthening the connectivity in the area, expand its access to the market and boost trade for the overall economy of the country.
Resources: The effort to have newer states carved out from the existing ones mainly revolves around issues of political entitlement and economic development. The demand for new states is driven mainly by the desire of the people residing in those areas to gain control over resources, administration, economic growth and equal opportunities.
Political stability: Political stability is the cornerstone of any economic development. Moreover, political instability restrains economic growth. It through the birth of newer States that grow economically over the rest of the States and their economic well-being remains intact amidst various challenges like religious intolerance, regional discrimination, militancy, etc. through greater participation by its people in administrative affairs, allocation of adequate resources to develop infrastructure and human capital.
Increase in Economic Activity: After the creation of newer states like Chattisgarh, Uttarakhand, and Jharkhand their growth rates have been pasted in the charts. There is a marked increase in economic activity immediately across the border in the new states as per their findings. School enrolment also increased suggesting greater investment in human capital.
Fast Economic Growth: Newer states in India are economically catching up to the older states at a much faster pace than expected. This means that for the economic and industrial growth of India, newer states will play a larger role in comparison to the earlier thinking of old states being the growth drivers of India.
Better socio-economic development: It is an accepted fact that smaller states tend to enjoy better socio-economic development than larger states. The more contentious issue is whether this phenomenon has enough presence in India. In order to understand the impact of state formation on different aspects of economic growth, the data on the Indian States since 1960 has been analyzed.
There has been poverty in many states of the country like Jharkhand, Chhattisgarh and Uttarakhand for a long period of time. The natural resources in these states are quite rich, but its underdevelopment may be due to the presence of tribal population rather than other factors.
The issue of the creation of new states ran high after the formation of Uttarakhand, Jharkhand and Chhattisgarh. A series of agitations were led by different political groups in the contention that reorganization was not done on the specified basis and parameters. There is a chatter that there exists even an ideological reason behind this reorganization, which is to divide and rule. The creation of the new states has led to new legislative assemblies with local aspirations and concerns needing to be addressed by respective governments along with issues pertaining to regional governance.
Jharkhand has failed from the governance and administrative perspective. First, it may be noted that the State Government is not ready to make an honest attempt to improve its governance framework by changing its working culture. Copying the working style and maintaining corrupt practices of any other states was a part of the earlier as well as present dispensation. The direct consequences of this policy-oriented approach would result in deteriorating the already tarnished image of the state.
The newly formed state of Telangana is facing the task of creating and running its own government, providing resources for new administrative and institutional types of machinery to meet the needs of its people. Telangana has been separated from Andhra Pradesh after decades of struggle by statehood activists. Now the goal after a long struggle is to build a new state with an identity different from that of Andhra Pradesh.
Increasing growth and development in the cities which are regarded as 'new states' has had a huge impact on the environment. Urbanization is consistently pushing a man into the industry and commercial activities, which in turn means large-scale destruction of the environment at both micro and macro levels.
The creation of new states is not an effort to create more revenue for the state as many people still have the notion that small states do not provide enough economic opportunities hence government does not increase its revenue. The public should understand that by dividing them into smaller units it will be easier to build infrastructure and perform progress towards the development of backward regions which has remained a challenge for progressing the region economically. This will also reduce the burden on the central government who at present has to bear the cost of maintaining so many governments.