Good Politics And Bad Economics

Updated: Aug 11 2004, 05:30am hrs
The ranking of states in the latest issue of India Today has the obvious utility of measuring states across a range of variables, instead of focusing on just a few.

If nothing else, this allows states to benchmark their progress against better performers. While use of objective and quantifiable data eliminates subjectivity, data is available with time lags.

Hence, the latest ranking is based on data for 2002-03 and sometimes even 1999-2000 (NSS). Apart from making this difficult to gauge recent improvements in, say, physical infrastructure, qualitative data also have their uses.

With this caveat, the 2004 ranking doesnt throw up any big surprises. In overall rankings, Punjab and Kerala are the best big states and Delhi and Pondicherry the best small ones.

States are clearly clustered into three groups better, medium and the worst. Within these, there has been little churning, which is understandable given the short time span.

With a longer time horizon, one can witness the relative improvement in Tamil Nadu and the relative decline in West Bengal.

Indeed, scores show that Punjab and Kerala are largely riding on their past successes but the momentum is petering out.

States show convergence in educational attainments but not necessarily in health indicators or poverty ratios.

This becomes evident in projections done till 2020. Using limited district-level data that is available, the study measures disparities within states and identifies worst and best districts.

For instance, among larger states, Himachal and Haryana are most equal while backward regions pull down states like Gujarat or Maharashtra.

What can be done to improve governance in these backward areas Governance implies provision of public goods and since these are efficiently provided at a certain scale, there is, perhaps, a case for smaller states. While breaking up states is a political issue, targeting deprived districts is not.

Unfortunately, the Planning Commission hasnt placed criteria for identifying backward districts in the public domain. Nor did the assembled chief ministers at the conclave seem to feel that good governance translates into votes. And thats the problem.