A New Order Is Emerging

A NEW ORDER IS EMERGING God seems to be thinking of relocating from His own country-Kerala. And the new God's own country is Himachal Pradesh. After years of consistent strides in primary education, Himachal Pradesh has finally beaten Kerala to the second place. Sure, Kerala still has the highest literacy rate (91 per cent of Keralites can read and write, compared with only 76 per cent people in Himachal Pradesh) and it also has the largest percentage of girl child population enrolling in school. But Himachal Pradesh has taken the lead in the teacher-pupil ratio and the hill state spends more than double the amount that Kerala does on school students. Among small states, Sikkim beats even states like Delhi and Goa on education. Apart from having the country's second highest teacher-student ratio (the highest is in Nagaland), Sikkim's more heartening achievement is putting more girls in school than boys-a lesson that more prosperous and prominent states like Punjab and Haryana can imbibe. But then, empowerment of women is very high in north-eastern states. On health too, Himachal Pradesh is closing its gap with Kerala. Another state with an impressive performance is Tamil Nadu. Though the state trails its PRIMARY EDUCATION southern neighbours Kerala and Karnataka on infant mortality (Kerala is the only Indian state with infant mortality in single digit per thousand children) and sex ratio, a high 62 per cent of families in Tamil Nadu have access to tap water and there are 111 doctors per lakh of population-a figure lower than only Punjab and Karnataka among the big states. Punjab's top positions on investment environment and budget and prosperity are under attack. Gujarat has scaled four ranks to beat Punjab as the state with the best investment environment. How did the poster child of communal hatred become the most investment friendly state in India? To be sure, with the highest rate of economic growth among all big states in INFRASTRUCTURE the 1990s (7.8 per cent a year) and fifth largest contributor to India's GDP, Gujarat has always been an economic powerhouse. Till the communal violence tarnished its image in 2002, Gujarat wasand to a large extent still is-one of the safest states for the common man and businessmen alike. The state has shown a huge jump in government investment and has contained the spending on state CLICK HERE TO VIEW THE administration remarkably. A bigger GRAPHIC surprise is the emergence of Chhattisgarh as the state with second-best investment environment. The state's score on this factor almost doubled in a year. Himachal Pradesh has almost pipped Punjab to the CONSUMER MARKET post on budget and prosperity by jumping from sixth rank to the second. The growing divide between Punjab's rich population and its pauper government is taking its toll. The state with the highest CLICK HERE TO VIEW THE rank on this factor is Delhi. It is one of GRAPHIC the rare states which has a cash rich government and relatively affluent citizens. IMPROVED PERFORMANCE MAY NOT MEAN IMPROVED RANK... ... just as a fall in performance may not always lead to a fall in rank. The ranks show relative performance, scores show both relative and absolute performance-how much better a state has done compared with other states as well as with its own past performance. For instance Gujarat's score on law and order has fallen consistently in the past two years (from 1.25 to 1.02), but its rank hasn't slipped. At the same time the state has improved its performance on infrastructure significantly from a score of 1.44 to 2.53 between 2003 and

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2005, but its rank has actually slipped from fifth place to seventh. Reason: all Indian states, including Bihar, are improving in infrastructure, and many of them at a rate faster than Gujarat. The scores of Punjab and Maharashtra have almost doubled on infrastructure in the past two years-without any significant change in their ranks. Delhi, Goa and Pondicherry remain leaders on these factors among small states. The good news for the country is that the infrastructure is improving in all states. Conversely the factor on which most states' performance is either stagnant or falling, including those of Kerala, Punjab and Himachal Pradesh, is law and AGRICULTURE order. The only big states that have bettered their law and order score in the past one year are the usual laggards-Bihar, Jharkhand and Orissa. So performance is improving at the bottom, but it is falling at the top. Ironically, the average score of states is improving on consumer markets, which tracks levels of consumption and affluence. One obvious inference is that peace and prosperity aren't walking hand in hand in India. BEING BIG ISN'T A BIG DEAL "Small is beautiful" was the message from the first India Today ranking of states. In some form or the other, the message comes out of every year's study quite compellingly. One obvious reason is that the study lays equal emphasis on spread and level of development. And by measuring performance on most factors in per capita terms, the adequacy of a public service is assumed to be as important as its availability. And since access is almost invariably easier in small states, the study returns to this theme every year. At a conclave of chief ministers in 2003, Chidambaram (not in the government then) had made a convincing case for carving out newer and smaller states out of Maharashtra and Uttar Pradesh. Economist and Congress MP Jairam Ramesh has also argued for bifurcation of existing big states (see column: Outlay Vs Outcome). Ramesh represents Andhra Pradesh in the Rajya Sabha-a state that is debating carving out a new Telangana state. True, on factors such as economic CLICK HERE TO VIEW THE growth, industrial production or overall GRAPHIC INVESTMENT SCENARIO prosperity big states will continue to show up well. But even a high average performance in a big state is likely to be more unevenly distributed than it would be in a small state. Though the recent demands for grant of statehood for Mumbai (made following the city's virtual submergence in the monsoon rains) may be a case of stretching the argument too far, but the experience of the three new states created in 2000 are BUDGET & PROSPERITY case studies in benefits of small states (see story: Predicament of the Young). Though convincing data will take a few more years to emerge, there is enough already to prove that Jharkhand, Chhattisgarh and Uttaranchal are better off today than they were as parts of Bihar, Madhya Pradesh and Uttar Pradesh. The crux of the argument is this: governance is easier in small states. CLICK HERE TO VIEW THE That's particularly so since some of the GRAPHIC big Indian states are also the ones with the fastest rate of growth in population. Finally, a few words about north-eastern states and Union territories. Building on their always strong social indicators, states like Sikkim and Mizoram have improved substantially on investment environment and infrastructure. If

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something is holding back a big bang economic resurgence of these states it is the limitation that they lie beyond the relatively stagnant states of east India. If West Bengal, and to some extent Orissa, revive their economic fortunes, access to and investments in northeast states will go up. A more engaging trade relations with India's north-east neighbours can also swing the wheels of fortune in favour of these states. As for UTs, Chandigarh is heads and shoulders above the other four. That is most unsurprising. Sandwiched between two of India's most prosperous states, Haryana and Punjab, and pampered for years by both, Chandigarh has the best of both the worlds. Suburbs like Mohali are now hotspots for new economy businesses. It is a good instance of a city helping strengthen and revive business fortunes of a state-Punjab.