New Delhi: it is Often It has been argued that dividing large, populous states into smaller units helpfrom both administrative and economic point of view. However, according to a new study, the data does not support such claims about economic benefits.
Looking at the impact of the reorganization of Bihar, Madhya Pradesh and Uttar Pradesh in the year 2000, the study found that growth in newly created states did not match the hype, while “native” states did not suffer as much as is commonly believed. Is.
the study, title ‘Does the creation of smaller states lead to higher economic growth? Evidence from State Reorganization in India’ was published by the Mumbai-based Indira Gandhi Institute of Development Research (IGIDR), set up and funded by the Reserve Bank of India last week and authored by Vikas Vaibhav and KV Ramaswamy, researchers went. Institute.
Although India’s state boundaries have changed several times since independence, after the year 2000, only five states—Uttar Pradesh, Bihar, Madhya Pradesh, Andhra Pradesh, and Jammu and Kashmir—have been reorganized.
The study looked at three of these five states, with the authors excluding Jammu and Kashmir and Andhra Pradesh – both reconstituted within the past decade – from their analysis because their methodology requires long-term data. .
The study examined the impact of the division of Uttar Pradesh, Bihar and Madhya Pradesh on their Gross State Domestic Product (GSDP) over three-and-a-half decades (from 1980 to 2015).
It further attempted to find out what effect this had on the states’ development by analyzing the post-partition states separately and combining these data to obtain imaginary numbers for the original, undivided states—as if they were combined together. were being
Data from three regions that were formed as new states in 2000 – Bihar to Jharkhand, Madhya Pradesh to Chhattisgarh and Uttar Pradesh to Uttarakhand – were analyzed from 1994.
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Bihar-Jharkhand
The study noted that, collectively, Bihar’s per capita income graph (GSDP divided by population) was a flat line during the 1980s and 1990s, meaning that before its bifurcation, the state recorded substantial growth. Had not.
It also found that Bihar’s improved growth years – taken as a hypothetical United State, with the data following the bifurcation of Jharkhand and Bihar – began almost five years after its bifurcation in 2000; Till then it remained flat.
Considering the post-partition states individually, the study found that Bihar’s growth was stagnant post-partition, but Jharkhand initially faced a slowdown.
For Jharkhand, the study also found that the growth in per capita income of the region was erratic before it became a state. But due to limited data available, the authors were unable to comment definitively as to what caused it.
Uttar Pradesh-Uttarakhand
The trajectory of Uttar Pradesh was similar to that of Bihar – flat growth before Partition and better development as a fictional United States five years after Partition.
Considering the post-partition states individually, the authors’ statistical exercises did not find any positive effect of the reorganization on Uttar Pradesh. Uttarakhand, on the other hand, made a remarkable performance after being carved out of its parent state.
Madhya Pradesh-Chhattisgarh
In the case of Madhya Pradesh, growth in per capita income before secession was not as flat as in Bihar – it was trending upward. However, right after its partition, the per capita income of the United States fell, then rose.
In the context of separate states, per capita income in Madhya Pradesh fell and stagnated just after partition. Chhattisgarh also faced slowdown initially, but recovered sooner than MP.
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analysis
The study indicates that even 15 years after the partition, the United States did not show any significant difference in economic growth.
“The results of our analysis in this subsection suggest that the United States did not show any ‘extraordinary’ positive, or negative, growth over what we consider the period of one and a half decade (2000 to 2015),” it says. .
The authors state that in some cases, the increase in per capita income may also be due to political changes and not necessarily the effect of restructuring.
“The positive, but statistically insignificant, case of Bihar appears to be due to a change in political leadership. Whether this change in political leadership due to the reorganization requires further investigation. The case of a joint parliamentarian is not sufficient to suggest that the reorganization has a negative impact. The case of UP also does not seem to be able to break the mould,” he writes.
In isolation, the study finds different results for the six newly created states, and therefore cannot say with certainty that secession leads to economic benefits for all.
In the case of post-partition Madhya Pradesh and Chhattisgarh, the development of the former – the “original state” – suffered after separation.
The author calls Uttarakhand an outsider, adding that its growth can be attributed to exemptions given to industries – whose share in the economy had doubled in the decade after its formation – and received from the central government. Additional funds (the state was given ‘special category’ status).
The authors observe, “We can be safe in concluding that the reorganization does not adversely affect the original states as was commonly believed. Furthermore, economic development in newly created states is usually precipitated by such events.” The linked wasn’t close to the hype.”
complex dynamics
It is not that the demand for division of states into smaller units has ended.
In 2011, Bahujan Samaj Party chief and then Chief Minister of Uttar Pradesh, Mayawati pass Resolution to divide the state into four parts.
Over the years, demands for separate states have been raised in different parts of India, such as Saurashtra In Gujarat, Vidarbha in Maharashtra, Bodoland in Assam, Gorkhaland in North West Bengal.
The IGIDR study aims to provide policy makers with an insight into the economic consequences of the division of states, and said that more research is needed to understand the complex dynamics of reorganizing them.
“Our analysis best captures the average impact over the medium term. Regional reorganization is a complex phenomenon, and it can affect various aspects. Further research is needed to understand these characteristics in order to gain a more comprehensive picture.” Is.”
(Edited by Nida Fatima Siddiqui)