Moving the BIMARU under a Shining Skin

(pic: hindubusinessline.com)

IN his speech addressing the 57th National Development Council meeting of Chief Ministers from various Indian states, PM Dr Manmohan Singh yesterday (Dec 27 2012) made some observations of the state of affairs in the nation. Right from the fact that the invited Chief Ministers were not allotted enough time to speak it was clear how unmanageable and unfruitful any such conglomerate would be in this vastly diverse nation.

Among other things that he read out at this annual meeting, which is a brainchild of the Planning Commission of India, the Prime Minister (its chairman) morphed available data into potential dire situations, thereby passing subtle threats to the state Chief Ministers, and openly communicated the helpless stance the Government of India (GoI) might have to take in such situations. With such a choice of words the PM has both, taken up responsibilities that he need not (we'll come to that later), and dared the state CMs that he could pull the carpet beneath, leaving the states with very little scope to innovate, perform and deliver to people belonging to their states. By doing so, the PM, representing the GoI indirectly assumes sole responsibility of the people of each state, bypassing the state governments, and thereby violates the very federal spirit this nation would like to adopt in its democracy.

An excerpt of Dr Manmohan Singh's speech goes like this:

While we need to accelerate growth, we do not view growth as an end in itself. Our real objective must be to improve the condition of lives of the aam aadmi, which is why we emphasise that growth must be inclusive.

There are two reasons why rapid growth is necessary to achieve greater inclusiveness. First, it is necessary to generate the revenues to finance our many programmes of inclusiveness. If growth slows down, neither the States nor the Centre will have the resources needed to implement inclusiveness programmes. We will either be forced to cut these programmes, or be pushed into tolerating a higher fiscal deficit, which will have other negative consequences.

As we shall see in the parts to follow this post, the GoI headed by the PM must realize that in a federal democratic set up, delegation of responsibility of governance is from the states toward the center and not vice-versa. Meaning, the center cannot assume every responsibility there is, and then devolve them to the states to tackle. For instance, in a truly federal set up the states need not, and cannot afford to, give up the task of increasing inclusiveness to the center. Given the amount of diversity in the nation, in various walks of life, the role of GoI should be limited to understanding the fact that achieving inclusiveness at a national level is not the way to go at all, and in turn support policy making at state-level to enhance inclusiveness within each state. Any attempts made at the national level in this regard will only roll on the title of BIMARU states from one pack to another! In fact this very phenomenon of moving the BIMARU underneath a "shining India" has perhaps been wrongly interpreted by the PM in the same speech:

States that used to grow slowly in earlier periods have done much better. The average growth rate of the five poorest states exceeds the national average for the first time in any Plan period. I think we may be reaching the stage when the term “BIMARU States” can be relegated to history.

What can be relegated to history and what is indeed running the risk of getting relegated to history, and other analyses will be seen in following posts.