India is a union of states, but bigger than the sum of its parts. The Centre and the states share a symbiotic relationship, but states are India's real growth engines. When the states flourish, the Union prospers. The converse also holds true. GDP targets like a $5 trillion economy cannot succeed if the states are not pushing at peak performance. Economic growth is dependent on good governance and the quality of administration.
As every successive state election tells us, voters tend to vote differently in national and state elections. Emotive national issues dominate the Lok Sabha elections, state elections are driven by the quality of governance. As we saw in May this year, the BJP swept the Lok Sabha election but fell short of a majority in Haryana and Maharashtra.
This has not been lost on our elected representatives. So while populism still matters, it needs to be accompanied by governance which is participatory, consensus-oriented, accountable, transparent, responsive, effective and efficient, equitable, inclusive and follows the rule of law.
Competitive, cooperative federalism has also been the norm, particularly in the past five years as fiscal relations between the Centre and the states have undergone a tectonic shift. Three factors are responsible for this — the dissolution of the Planning Commission in 2014, increased tax devolution to the states and the landmark Goods and Services Tax (GST) in 2017.
As a PRS Legislative study explains, India's states spend over 70 per cent more than the central government. This figure has been increasing substantially over the years. In 2014-15, for example, they spent 46 per cent more than the Centre. Much of the expenditure that affects citizens is decided at the level of the state.
The India Today-MDRA State of the States (SOS) survey indicates just how well our states are doing, particularly in this changed landscape. Now in its 18th edition, the annual SOS survey's robust methodology is designed to rank the states based on exhaustive and most relevant data, covering aspects that are crucial to foster competitiveness among states and enhance the true spirit of India's federal structure. States were ranked under two broad groups - 'best performing', indicating the latest performance of a state specific to the category using the most recent data across multiple parameters, and the 'most improved', indicating improvement in the state over the past five years.
Tamil Nadu emerged as our best-performing big state this year while Assam topped the list of most improved states. Gujarat aced all states in the economy category while Punjab led in agriculture and infrastructure. Himachal Pradesh walked away with the honours for education and healthcare, Rajasthan for governance, Andhra Pradesh for inclusive development, Haryana for entrepreneurship. Kerala stole the show in three categories — tourism, environment and cleanliness.
Our findings also show that Tamil Nadu, Kerala and Gujarat may be toppers, but are growing slowly. And that while states such as Bihar, Assam and Uttar Pradesh may feature in the bottom five states in environment, healthcare, education, economy, tourism, infrastructure, governance, entrepreneurship and cleanliness, they are among the top five fastest-improving states when it comes to governance, entrepreneurship, economy and agriculture.
West Bengal has pulled off a surprise. The state might have been bogged down by poor performance in the past, but now ranks 12th among the 20 best-performing big states. It has improved its ranking in 10 categories -overall, economy, governance, law and order, entrepreneurship, cleanliness, environment, healthcare, education and agriculture. Among the most improved states, it has shown remarkable progress in vaulting from 13th to eighth place in just a year, proving that fast turnarounds are not improbable.
Of course, states can do a lot more to improve. A January 2019 report by analytics firm Crisil makes the case for states to relentlessly shore up their tax revenues without relying on central doles. States that traditionally rank high in certain categories need to focus on other sectors that require attention. Housing, for instance, attracts merely 1 per cent of state spend on an average, irrigation 4 per cent and urban development 3 per cent. Moreover, most states are heavily in debt because of populist policies.
For India to grow, we have to pay more attention to the quality of governance at the state level. And there is no better barometer of the progress of states on this front than the annual India Today SOS survey.
(India Today Editor-in-Chief's note for the cover story, Champion States, for December 2, 2019)