View from the states

The authors of this lucid volume, both connected with the India Development Foundation, have done a tremendous job. They have rightly identified the states as pivotal actors in second-generation economic reforms, especially on sectors to be developed, namely agriculture and irrigation, both major and minor. "For inclusive growth that would reduce poverty take economic growth," they assert, "to smaller towns and villages and ensure uniform economic prosperity ... the segments that have been ignored are areas where there is some serious debate on opening up of markets. Second, these sectors have traditionally been completely under government hands. Third, there is a suspicion that privatisation and liberalisation might not work well here. Fourth, these sectors are in the hands of State governments and the Central government has a limited role to play in restructuring many of these areas. Finally, there is a great deal (of) misinformation and misunderstanding of these areas."

What the authors have perhaps euphemistically called "misinformation and misunderstanding" is entrenched party politics. The Rajasthan government led by Bhairon Singh Shekawat had introduced what Gandhiji called antodaya or caring for the poorest family in the village. It would consist of giving a pair of goats for each of such families. They would tend the animals and drink their milk (in Rajasthan villages the goat is called the refrigerator of the poor because it can be milked at any time of the day). It may not be a sophisticated welfare measure but it worked. But the programme died with that government because the successor Congress government under Gehlot had other fish to fry.

Similarly in Andhra Pradesh during the stewardship of N Chandrababu Naidu, a determined endeavour was made to launch and develop the IT sector and also pay attention to exploring oil and gas and biotechnology. There is a qualitative difference between the growth of the IT sector in Andhra Pradesh and that in Karnataka. Bangalore has become the hub of IT industry due entirely to entrepreneurs like Narayana Murthy of Infosys and Azim H Premji of Wipro. The Infosys promoter had sometimes to face hurdles from leaders like Deve Gowda. Further, Chandrababu Naidu's janma bhoomi project was to cater to the needs of the villages; it had also provided access to local markets for the produce of the villages. However, supplying kerosene lamps to the needy had run into trouble as an election sop.

In the matter of water use, also the picture is uneven and fraught with contradictions. For instance, in the 1980s the then Andhra Pradesh chief minister, N T Rama Rao, a pioneer in championing the cause of autonomy for the states, encountered resistance from Karnataka leaders to his pet Telugu Ganga scheme for reaching drinking water to Chennai from the Krishna river. In other words, disputes over sharing river waters overshadow nation-building schemes on water use.

The book focuses on building roads and bridges by the states in their non-plan expenditure and projections up to 2010. The Jharkhand figures for the projection for 2010 are five times the current outlay of Rs 92.5 crore as in the case of its "forward" opposite numbers like Maharashtra and Tamil Nadu. The quantum of central grants varies no doubt, perhaps sometimes underlying non-economic criteria. In this context, Kerala "has an impressive record of social development comparable to the developed economies of the West". That is despite "a moderate record of domestic economic growth". How far the former rulers of the princely states, especially Cochin, have prompted the Christian missionaries to facilitate the consummation is a matter of fruitless debate.

West Bengal, a developed area from the British period itself, retains its preponderant services sector. The authors' statement that West Bengal is surplus in thermal power is news to those of us who have had the experience of the Jyoti Basu days. Apparently it is one of the miracles performed by the present chief minister. In the matter of the crucial poverty alleviation programme, Gujarat has an edge.

In short, the book is a goldmine of facts and figures.

STATES OF THE INDIAN ECONOMY
TOWARDS A LARGER CONSTITUENCY FOR SECOND GENERATION ECONOMIC REFORMS

Amir Ullah Khan & Harsh Vivek
Sage
Rs 550, 240 pp (plus notes)