The Justice Srikrishna Commission report, to be made public on January 6 after an all-party consultation, has once again raised the issue of whether smaller states do better than larger states. Apart from economic growth numbers, the other question is whether smaller states are easier to administer, and therefore more important from the point of view of human development indicators like mortality. While the picture is as mixed as it is for economic growth, the bigger blow to the Telangana movement comes from a study commissioned by the Srikrishna report, this newspaper reported, which said that the Telangana region compared favourably with Rayalaseema and coastal Andhra on indicators like infant mortality and maternal mortality?one of the main reasons for the Telangana agitation is its backwardness in economic and human development terms.
The picture on growth is also mixed. Smaller states grew the fastest in the 2001-02 to 2004-05 period?an average of 7.2% per year versus 6.3% for larger states like Gujarat and Rajasthan. But in the 2005-06 to 2008-09 period, they grew the slowest. From 2001-02 to 2008-09, smaller states grew at 7.2% on average versus 7.5% for the larger ones. Indeed, if you break up the states in terms of income, the lowest-income ones also grew at a marginally lower rate than the higher-income ones in the 2001-02 to 2008-09 period.
At the centre of the debate over growth, of course, is what happens to Hyderabad, does it to go Telangana or not? Include Hyderabad in Telangana, and the region is doing well in economic terms as well. Remove it and, well, the results get reversed?think of what would happen to Maharashtra without Mumbai. India?s top 20 cities, an NCAER-Future Capital Research report points out, account for 10% of the country?s population, 20% of its spending, 30% of its disposable income and 60% of overall savings. Indeed, according to a McKinsey Global Institute publication, India?s urbanisation (from 30% right now to a projected 40% by 2030) is what will drive its income growth?indeed, 70% of net new jobs will be generated in urban areas. Building to cater to this new demand, McKinsey estimates, will cost $1.2 trillion?the residential and commercial space that needs to be added each year, to put this in perspective, is equal to building a new Chicago each year. The real fight over Telangana, no matter what the PR spin is, is really about Hyderabad.