Smaller the better?

Print edition : December 16, 2011

UTTARAKHAND CHIEF MINISTER B.C. Khanduri (right) coming out of the Assembly building along with former Chief Minister B.S. Koshiyari. - VIRENDER SINGH NEGI

The growth registered by Uttarakhand and Chhattisgarh in the 11 years since their birth has not translated into human development.

UTTARAKHAND, Chhattisgarh and Jharkhand, the three small States that redrew the map of India in 2000, were the most backward regions of Uttar Pradesh, Madhya Pradesh and Bihar respectively on the eve of the States' formation. The parent States themselves were so underdeveloped that, along with Rajasthan, they were referred to as BIMARU States, indicating their utter backwardness. It cannot be denied that 11 years later, the new States have shown signs of significant economic development although the social and health indicators are not so encouraging.

Development drive

Uttarakhand, which was carved out of 13 hill districts of Uttar Pradesh, has emerged as a major growth story, but at a huge environmental cost.

The State's growth rate today is pegged at 11.3 per cent compared with 2.9 per cent in 2000. In the past 10 years, it has notched up an average growth rate of over 10 per cent, while Uttar Pradesh has been lagging behind at 5-6 per cent. Since more than 90 per cent of the State's land area is mountainous and 60 per cent of its land is covered by forests, Uttarakhand lacked road connectivity at the time of its formation. The governments that came to power subsequently gave utmost importance to developing infrastructure and set about building roads. In 2000, the State had 13,500 kilometres of roads. Now it boasts a road network of 32,000 km.

FOR ITS GROWTH, Uttarakhand has paid a heavy price in terms of environmental destruction. Here, the river Bhagirathi, on which the Tehri dam is being built, at Devprayag in January 2011.-VIRENDER SINGH NE

The State launched a development drive, and it has been among the top three States recording the highest growth rate in the past few years. The per capita income increased from Rs.14,300 a year in 2000-01 to Rs.55,870 in 2011, which is better than the national average, of Rs.54,835. The local economy, before the creation of the State, was described as money order economy as most of the employable youth sought work outside the State, either in the defence forces or elsewhere and would send home cash by money order. This was the mainstay of the economy. Not anymore. Since the State came into being, more than two lakh youth have found employment. This became possible as industrial investment went up from Rs.5,000 crore to Rs.30,000 crore. Industrial giants such as Hero Honda, Mahindra & Mahindra, Hindustan Lever, the ITC group, the Birla group and Tata Motors have set up shop in the State, with an estimated combined investment of Rs.20,000 crore.

The industrial boom was made possible by the 10-year concessional industrial package granted to the State in 2003 by the National Democratic Alliance (NDA) government, which included a tax holiday and capital investment subsidy. Now, industry-friendly policies of the Congress government in the State are expected to give a fresh impetus to the process of industrialisation.

Between 2003 and 2010, the annual industrial growth rate in the State was over 24 per cent; now it is still a respectable 8-9 per cent. In March 2010, the Congress-led United Progressive Alliance government at the Centre ended the industrial incentives to Uttarakhand.

True, the State's development had a lot to do with the special package given by the Centre. Similar incentives were given to Himachal Pradesh too, but we have surpassed that State in all ways, former Chief Minister Ramesh Pokhriyal Nishank said. Speaking in favour of smaller States, he said they were more manageable as it was possible for the government to have direct dialogue with the people and frame policies accordingly.

Uttarakhand has been a tourism hub. The State was declared the best tourism destination in 2005. It also boasts of a good school education system. In the past decade, Uttarakhand also emerged as a centre for higher education. Universities imparting specialised professional education, such as the University of Petroleum and Energy Studies, which is the only one of its kind in Asia to give technical education specific to the energy sector needs, and other institutes of technology, law, and oriental studies, have been established.

But the growth has been achieved at a huge environmental cost. Frenetic road construction, exploitation of the hydroelectric potential and the rush to achieve industrial development have also meant that forests are cut with impunity and rivers have been diverted into tunnels for the generation of hydel power. The local population is up in arms against the environmental degradation. Following one such agitation, the government stalled the work on many hydropower projects, including one executed by the NTPC at Loharinagpala on the Bhagirathi.

According to Hemant Dhyani, a research scholar in nanosciences at the Jawaharlal Nehru University, Delhi, who is also a Ganga Ahvaan (a campaign to save the Ganga) activist, the mad pace of construction in the hills has done irreparable damage to the ecology of the State. The government seems to be totally unmindful of the long-term damage the present development strategy could cause.

According to Nishank, in a State which is covered by forests and rivers, the government has to walk a tightrope. We have to depend on whatever natural resources we have so at times people do get antagonised, but then at times there is no alternative either, he says, admitting that sometimes the ecological costs are actually high. That is why, he says, the Centre should have a separate policy to provide special funds for Himalayan States as they cannot exploit their natural resources fully. But we still have to handle problems such as employment creation and development, so a fine balance has to be maintained, he says.

Mineral strength

Chhattisgarh has managed to achieve a high growth rate owing to its immense mineral and natural resources. As it turned 10 last year, the State posted the highest economic growth rate of 11.49 per cent among all Indian States, followed by Gujarat at 10.53 per cent.

But the growth story is a study in contradictions. While mining and mining-based industries, specifically steel and power, have helped push up the State's gross domestic product, one really has to look hard for qualitative improvement in people's lives. With an area of 1,36,000 sq km, Chhattisgarh is the 10th largest State. More than half the State is covered by thick forests (56 per cent) and its population density is 189 per sq km, much better than the national average of 382 per sq km. Its literacy rate of 71.04 per cent is close to the national figure of 74.04 per cent. Its sex ratio, at 991 per 1,000 males, is much better than the national average of 940.

The State, which harnessed its massive coal reserves to generate power, has a per capita energy consumption of 1,547 units as against the 779 units at the national level. It is an energy surplus State today, which was not the case when it was part of Madhya Pradesh. The State has managed to maintain an average growth rate of 10.05 per cent for the past six years, which is the highest for any State in India. Its annual plan size has increased more than 13 times since 2001-02: it rose from Rs.1,216 crore in 2001-02 to Rs.16,268 crore in 2011-12. The State's growth story is reflected in the per capita income too: from Rs.12,483 in 2000-01, it has now risen to an impressive Rs.33,952.

POLICE COMMANDOS UNDERGOING operational training at the Counter Terrorism and Jungle Warfare College in Kanker, Chhattisgarh, in April. Although the State has shown good economic growth, Left extremist violence and poor human development indicators have tarnished its image.-VIJAY KUMAR JOSHI/PTI

This feat has been possible despite the fact that 10 out of its 18 districts are affected by left-wing extremism, more than 40 per cent of its population is below the poverty line, and over 75 per cent of its population can be categorised as small and marginal farmers.

Chhattisgarh's growth can be attributed to its rich mineral resources. The State accounts for 27 per cent of the steel/sponge iron production in the country, 30 per cent of aluminium and 15 per cent of cement. It has managed to electrify 97 per cent of its villages, has ensured power for all 24x7, has harnessed solar and biomass power to meet its energy needs, and has been able to energise 1.34 lakh pumps in the past five years. The State has an ambitious target of adding 30,000 MW in the next five years, with an investment of Rs.1,50,000 crore. The city of Korba will have an installed capacity of 10,000 MW by 2013, making it the energy capital of India.

Every big steel company is active in the State. The National Mineral Development Corporation (NMDC), Jindal Steel, and the Tata, Essar and Bhushan groups are setting up steel plants with a cumulative capacity of 20 million tonnes a year and a total investment of more than Rs.1,00,000 crore. The State ranks first in industrial investment in the country, with $63 billion in 2010.

The State has not done badly in the agricultural sector too. It is a major rice-producing State, the second largest in India in terms of procurement. It procures approximately 50 lakh tonnes of paddy annually. The State has achieved a 75 per cent increase in the outlay for agriculture and allied sectors, which stands at Rs.1,385.02 crore.

The procurement process in the State is done online, which ensures total transparency. Details of every farmer are available online and nearly 10 lakh farmers receive computer-generated cheques without delay. Fifty lakh cheque leaves, worth Rs.16,777 crore, have been given to farmers since 2007-08.

The State has received accolades for putting in place an effective public distribution system (PDS) as well. It has 10,846 fair price shops, which means one in each gram panchayat. The State has ensured that by the sixth of every month, commodities are supplied to fair price shops. Steps have been taken to prevent pilferage.


Although it has some bad social indicators 52.9 per cent of the children are malnourished as against the national average of 48 per cent and 63 per cent of the pregnant women are anaemic as against the national average of 58 per cent the State has managed to reduce the infant mortality rate from 76 to 57 in 10 years. Its institutional deliveries increased from 20 to 41 and the State's midday meal scheme has been a huge success.

The small size of the State has ensured that governance reaches the doorsteps of its people. For 10 days every year, all government officials, from patwaris to secretaries and even Ministers (sometimes even the Chief Minister), visit the villages to clear all the pending applications and cases. Direct feedback is taken from the villages and new schemes are formulated on the basis of the feedback.

No wonder, Chief Minister Raman Singh is a contented man today. He told Frontline recently that Chhattisgarh was a model State that had the right size, natural resources and political stability. Today there is talk of smaller States because of the success of Chhattisgarh. None of our planning is for five years. Our plan on power, PDS, mining, social sector and other things are framed keeping in view the long-term needs of the State, he said.

If the development indicators are real, it is hard to explain the naxalite problem, farmers' suicides, and rampant poverty in the State. Chhattisgarh is grappling with the problem of Left extremism in 10 of the 18 districts and has become a crucible for naxalite activities. The State has not shown any political will to tackle the problem at the socio-economic level. Instead, the budgetary allocation for the Police Department has gone up from Rs.97.48 crore in 2000-01 to Rs.1,434 crore in 2011-12.

Political observers see this inaction as a deliberate ploy. The government is not interested in tackling this problem at all as this ensures unchecked and unaccounted flow of funds, says M.K. Nandy, State secretary of the Communist Party of India (Marxist). In his opinion, the State's failure to tackle the basic land-related issues, employment problems and exploitation by the forest mafia has only added to the problem.

According to the development scientist Shaibal Gupta of the Asian Development Research Institute, after the State's creation the problem got magnified and this, he says, is a blessing in disguise because it can probably get resolved in due course. But these are pan-Indian problems and should not be seen as State specific, he cautions.

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