The divided leviathan

For development,it is necessary now to think region,state,city and locality

Written by Aseema Sinha | Published: April 23, 2013 1:18:19 am

For development,it is necessary now to think region,state,city and locality

Does the Indian state contribute to development? It depends upon who you ask. Currently,faith in Central state action is abysmally low. If one looks at Delhi,examples of inefficiency and corruption are legion. Public perception of the state in India is negative,especially in contrast to another emerging power,Brazil,where the view of the state is more upbeat. We need to move beyond New Delhi to evaluate state capacity and failures in India. The enormous variation of state and public action across India should change the way we evaluate the Indian state and its failures.

Sixteen Indian regional states started e-governance initiatives with many degrees of success. Some literacy programmes initiated by the Central ministry of education work,while others fail. NREGA works well in some districts but not in others. The Mahila Samakhya programme for women’s empowerment has achieved amazing effects in some part of the country but not in others. Forms of corruption vary across Indian states with differential effects on growth and development. Bihar’s campaign against corruption with the setting up of a special vigilance unit deserves note. West Bengal’s electricity privatisation programme remains an invisible but notable example of success,even as elementary education languishes in the state.

Even during the pre-1991 Centrally planned economy,regional states pursued industrial development,mitigating the effect of the centralised licence system known as the licence raj. These states designed state-level policies and actions,such as industrial estates,the earlier incarnation of the current special economic zones,and competed for scarce domestic investment. In a dirigiste system,the ability of states to bargain for Central investment played a crucial role. Some states used their cultural centres in New Delhi as “embassies”,monitoring and lobbying for Central investment,and redirecting private investment wherever possible. Sub-national developmental states deploy those embassies in Delhi and on the global stage. Chief ministers travel to the West seeking investment and resources.

Gujarat was the classic sub-national developmental state,and in the words of a Gujarat cadre civil servant,L. Mansingh,an “Asian tiger” much before current CM Narendra Modi came on the stage. In fact,Gujarat’s development of the 1980s and 1990s saved Modi’s career in 2002; he has sought to reinvent himself as a developmental saviour since. Underlying this sub-national developmental state of Gujarat was a remarkable confluence of state- and societal-level factors. Gujarat’s state capacity was unparalleled in the 1970s and 1980s. The industry level secretary stayed in his post for almost eight years in the 1980s,creating an unprecedented continuity of expertise and leadership. Gujarat and Maharashtra created a state index bureau that,in a nimble,flexible way,pursued central and domestic investors even as economists modelled India on the whole as a “failed developmental state” with a “Hindu” rate of growth. Others,however,saw the centralised system as a way to build sub-national regional coalitions and abjured bargaining with the Centre. Both strategies were equally successful on their own terms. Different regions may not only have different strategies,but different objectives. West Bengal,although not generally considered an economic success story,was able to activate local panchayat institutions in order to create and carve out a sub-national coalition for its landed constituents.

So,it does not make sense to compare India’s performance to other nations without looking at sub-national developmental states. States like Gujarat,Karnataka,West Bengal,and Tamil Nadu pursue development in diverse ways and for regional ends. Each state leader has twin compulsions to pursue regional industrial strategies and to extract central resources. An electoral logic and a developmental logic are common across India’s provinces,although they work differently in different states given local class dynamics and state institutions.

Economic liberalisation magnified and amplified these imperatives as states sought foreign investment,as well as new channels of regional industrial development while still lobbying Central ministries for investment. A regional developmental imperative has transformed India into a powerful but segmented leviathan,where developmental and economic activity takes place beyond Delhi. There are some negative effects of such divisions,but good diffusion is also in evidence. States copy from each other; such diffusion of policy ideas is evident for power reforms,e-governance and education for the girl child. Diffusion processes across Indian states are creating healthy and not-so-healthy competition.

Also,somewhat counter-intuitively,Central intervention can be a good thing and action from the top has facilitated key reforms. The national literacy programme,Sarva Shiksha Abhiyan,fostered literacy precisely because of Central guidance and monitoring. Between 2001 and 2011,India’s literacy rate grew by 9.2 percentage points to reach 74 per cent,a remarkable feat and probably the result of this Central scheme. The Asian Development Bank loan to the state of Gujarat during a fiscal crisis in the 1990s facilitated the reform agenda of the regional state. Without such help,Gujarat’s financial troubles would have been much worse and its subsequent success may not have been possible.

In sum,state action varies by type and design. We must not think about the “Indian state” as a uniform leviathan. Regional states,cities and localities matter for development. Markets,citizens,and private actors want and need smart states rather than a withdrawal of public action. Development is achieved when Central and sub-national entities work together,rather than against each other. We must not choose between the imperfect alternatives of state vs markets,or Central vs sub-national governments,but strive to design variable models that combine various alternatives. Our models of the mind must reject either-or thinking that lampoons the state without looking at its variations and nuances across India’s regions and cities.

Sinha,author of ‘The Regional Roots of Developmental Politics in India: A Divided Leviathan’,holds the Wagener Chair in South Asian politics at Claremont McKenna College,US

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