In January 2012, a few members from the Planning Commission landed in Thiruvananthapuram at the invitation of Kerala. The state planning board had also invited outside experts from within the state as well as other institutions such as NCAER (National Council of Applied Economic Research) and ICRIER (Indian Council for Research and International Economic Relations). As the meeting started, Planning Commission Deputy Chairman Montek Singh Ahluwalia began speaking about state planning.
According to a Planning Commission official present at the meeting, Chief Minister Oommen Chandy interrupted him: “We don’t want you to plan for us. We know what we need. What we want from you are the skills one needs to plan.” He then went on to elaborate structural problems Kerala faced. He told the Commission they’d be better off helping Kerala engage systematically with people and institutions outside its boundaries. He wanted them to help create processes to design plans.
Kerala is not the only state eager to learn. Early this month, Amit Mitra, finance minister to the West Bengal government, was in Delhi. He had met with Union Finance Minister P Chidambaram in the morning, given the customary bytes to the media, had lunch at Bengal Bhavan and was ready to leave for the airport. Just as he stepped into the car, his cellphone rang. It was his chief minister, Mamata Banerjee.
While Mitra was with Chidambaram, Banerjee was studying a file on a meeting to be held in Delhi the next day. Organised by the Planning Commission, it was a day-long conference of all state planning boards to share knowledge and initiatives. Bengal’s minister and secretary for planning were scheduled to attend.
Banerjee asked Mitra if he could stay back for a day and beef up the team at the conference. Bengal would present its achievements in overhauling public healthcare. Banerjee was keen that Mitra talk about e-governance and tax reforms too.
In the sub-text of these episodes is the changing texture of India’s federal fabric. “Economic freedom in the domains under the control of the Central government is stagnant. Perhaps it is even reducing. And issues under the domain of the state government are improving,” says Laveesh Bhandari, founder director of Indicus Analytics. That is reflected in what states are doing.
Kerala has prepared a 20-year roadmap with help from the Delhi-based NCAER to eventually position the state as a knowledge and services hub. The plan would be unaffected even if governments change. It has chosen the Nordic economies as its benchmark for human development and has set specific, measurable targets like “appearing in AT Kearney’s index of global cities by transforming Cochin into a global city”.
West Bengal is investing heavily in improving governance and making it easier to do business. “We have made the entire tax process electronic. No other state in India issues VAT [value-added tax] certificates in dematerialised form,” Mitra told Forbes India. What makes it urgent for him and the state’s chief minister is that in a ranking of Indian states on economic freedom, Bengal languished near the bottom in 2011, the year Banerjee came to power.
Changing Narrative
Congress leader and cabinet minister Veerappa Moily counters forcefully when he says that most states have a Janus-like approach when it comes to federalism. In their relationship with the Centre, they want independence. But when it comes to local bodies under their governance, states do not want to let go of powers. “The rules of the game have to be observed by all,” says Moily, who, as head of the second Administrative Reforms Commission (ARC), had suggested deep reforms in the governance machinery down to the last level.
Centre-State Friction
(This story appears in the 08 March, 2013 issue of Forbes India. To visit our Archives, click here.)
excellent! however, i would recommend a body that studies best practices of states and shares them with others-this is a must!
on Mar 6, 2013