In itself, this is not news since Delhi and its "hinterland" in Haryana, Uttar Pradesh and Rajasthan have experienced the fastest growth of new business activity over the last three decades. But economic liberalisation was supposed to change all that.

So the news is that a decade after delicensing, deregulation, disinvestment and liberalisation, Delhi remains the most attractive location for private investment. A pity. No other country of continental dimensions has witnessed such a concentration of political, economic and cultural power as India finds in its so-called "national capital region".

Delhi is not only the country's political capital, which it has been for a long time, but more recently has become its "education capital", with the best universities and schools located here; its "cultural capital", with the most active theatre and the largest number of cultural events being held here; its "intellectual capital", with the most influential "think-tanks" and national research institutions located here; its "sports capital", with the best sports facilities having been set up here; its "media capital", with most national newspapers and television companies headquartered here; its "tourism capital", with the largest number of foreign tourists arriving at the Delhi airport to travel into the Agra-Rajasthan tourism triangle; and, now, its "business capital".

The CII study, conducted by Dr Bibek Debroy and colleagues at the Rajiv Gandhi Institute for Contemporary Studies (again New Delhi!), ranks Indian states according to several criteria, but on a per capita basis (See chart). a dicey denominator it can distort the ranking, and it perhaps does. How else could Kerala have ranked above Andhra Pradesh as an "investor friendly" state when hardly any new investment has gone into that state?

Whatever the shortcomings of the study's methodology, it does capture reality. If surprise has been expressed in the media about Andhra Pradesh's middle order ranking, it is more due to the ignorance of analysts who psyched themselves into believing Andhra Pradesh chief minister Nara Chandrababu Naidu's hype. Andhra Pradesh has for a long time remained steadfastly in the middle--at the bottom of the list of "developed" states and at the top of the list of "backward" ones. It was beginning to move up the ladder in the 1970s, but slipped again in the late 1980s and early 1990s. Mr Naidu has helped move it up back to the middle. He has miles to go before the state can catch up with its southern neighbours.

The regional spread of investor friendly and "unfriendly" states is not new. What is certainly surprising is that Delhi still remains at the top. This is not good for Delhi. It runs the risk of becoming a Rio de Janeiro, a Buenos Aires, a Mexico City--overgrown globalised metropolises with an incestuous social life disconnected from a backward hinterland.

Other countries of continental dimensions, like the United States and China have not developed in this manner. Between Washington DC, New York City, Los Angeles, Chicago, San Francisco, Atlanta, Houston, Boston and so on, America thrives in many metropolises and there is a decentralisation of development, prosperity and power. If one city has more political power, another is an intellectual capital, a third the sports centre and a fourth the business and finance capital. China has taken care to allow the parallel growth of Beijing, Shanghai, Nanjing, Suchow, Guangdong and so on.

Delhi's unparalleled growth, with the relative stagnation of Calcutta and Mumbai, the slow development of Chennai, Ahmedabad, Hyderabad, Bangalore and Pune, and the decline and collapse of Kanpur, Lucknow and Patna, does not augur well for balanced regional development. But Delhi will remain a singular magnet as long as the "Delhi Durbar" thrives. Genuine liberalisation and decentralised development alone can restore balance to the growth process.