New States and the small States debate

The first principle

A State is a unit of government, so the right size for it is the size at which it can be governed well and can pay for itself. Very large States can leave distant regions neglected, while very small ones can lack revenue and depend on the centre. Since the 1990s the basis of new States has shifted from language to development and administrative reach, and whether a new State helps the economy depends less on its size than on its resources, its politics and the terms on which it was carved out.

The core

From language to development

• The States of 1956 to 1966 were formed mainly on language. The States of 2000, Chhattisgarh, Uttarakhand and Jharkhand, shared a language with their parents, Madhya Pradesh, Uttar Pradesh and Bihar, and were formed instead on claims of regional neglect, tribal or hill identity and distance from distant capitals.
• B R Ambedkar, in Thoughts on Linguistic States (1955), had already argued that very large States such as Uttar Pradesh, Bihar and Madhya Pradesh should be divided for the sake of good administration, even within one language.
• Telangana, formed on 2 June 2014, combined both arguments: a Telugu speaking region that felt the promises made at the merger of 1956 on jobs, water and funds had not been kept. After the agitations of 1969 and the movement led by the Telangana Rashtra Samithi from 2001, the Srikrishna Committee (2010) set out options and Parliament passed the Andhra Pradesh Reorganisation Act, 2014.

The criteria debate

• Language and culture. Still important, but no longer enough on its own.
• Administrative efficiency. A smaller State brings the capital closer and lets officials know the ground.
• Development. A region that feels its resources fund someone else's growth, as in Jharkhand's minerals or Telangana's rivers, claims a separate budget.
• Ethnic and tribal identity. Tribal and hill peoples seek control over land and forests, as in Jharkhand, Chhattisgarh and the Bodo areas of Assam.
• Viability and national interest. A new State should be able to raise a fair share of its revenue and should not threaten security in border areas.

Dimensions

• Economic. Separate budgets let new States invest in their own priorities, but division imposes once only costs of new capitals and recurring disputes over shared assets.
• Political. New States give regional elites power and can calm agitations, but they also fuel copycat demands elsewhere.
• Administrative. Smaller units make supervision easier; the shortage of trained staff in the first years can cancel this gain.
• Federal. Article 3 lets Parliament create States even against the wishes of the parent State's legislature, as happened with Telangana, which raises questions about consultation.

In practice

Has the formation of new States helped the economy?

• The case for. Several studies of the decade after 2000 found that Uttarakhand and Chhattisgarh grew faster than their parent States and faster than before division. Uttarakhand drew industry to its plains with a special package of tax concessions for hill States from 2003, and Chhattisgarh used its mineral and power base with stable governments. Telangana has become one of the highest income large States, built on Hyderabad's services economy and investment in irrigation.
• The case against. Jharkhand, though rich in minerals, saw frequent changes of government and spells of President's Rule in its first fifteen years, and its gains lagged; this shows that a new State does not by itself bring good governance. Andhra Pradesh lost Hyderabad, its main source of revenue, and has spent a decade unsettled over its new capital at Amaravati. The two Telugu States still dispute the sharing of Krishna waters and of the Srisailam and Nagarjuna Sagar dams, which the Krishna River Management Board, set up under the 2014 Act, was meant to manage.
• The verdict. The evidence suggests that new States benefit the economy where they are viable and well governed, and that the costs are front loaded, falling in the first years after division.

Case: dividing Andhra Pradesh

The 2014 Act divided assets and liabilities broadly in the ratio of population, about 58 to 42, made Hyderabad the common capital for up to ten years, gave the Polavaram irrigation project national project status, and created river management boards for the Krishna and Godavari. Ten years later disputes over institutions, staff and water continue, which shows how much the terms of division matter.

Issues and way forward

• Demands without criteria. New States have been created in response to agitation and electoral calculation, not to agreed standards. Many parties and scholars have called for a Second States Reorganisation Commission to lay down criteria such as viability, administrative need and the views of the people of the region and the parent State.
• Pending demands. Vidarbha, Gorkhaland, Bodoland, Harit Pradesh, Saurashtra and Bundelkhand differ greatly. Where identity is the main issue, autonomous councils under the Sixth Schedule or special arrangements, such as the Gorkhaland Territorial Administration (2012) and the Bodoland Territorial Region (2020), may meet the need without a new State.
• Terms of division. Assets, debts, water and staff should be divided by an independent body before the new State starts, to avoid a decade of disputes.
• Governance first. Decentralisation to districts and panchayats under the 73rd and 74th Amendments can bring government closer to people without redrawing the map.

Common confusions

• Linguistic and developmental States. The States of 1956 were mainly linguistic; the States of 2000 were mainly about development and identity within the same language.
• Uttaranchal and Uttarakhand. The State was created as Uttaranchal in 2000 and renamed Uttarakhand in 2007.
• Autonomous council and State. A council such as the Bodoland Territorial Council has limited powers inside a State; a State has its own legislature, government and High Court.
• SRC of 1955 and a Second SRC. The first SRC drew the 1956 map; a second has been demanded but never appointed.

For the exam

• Keyword bank: small States, administrative efficiency, regional backwardness, viability, Andhra Pradesh Reorganisation Act, Krishna River Management Board, Second SRC, Vidarbha, Gorkhaland, Bodoland, Article 3.
• Previous year questions: Practise the previous year questions on this topic →
• Use in an answer:
  • Introduction (data): In 2014 Andhra Pradesh's assets and debts were divided broadly in the population ratio of about 58 to 42, a reminder that every new State begins with a bill to settle.
  • Introduction (judgement, quote or report): As early as 1955, B R Ambedkar argued that very large States should be divided for good administration, even if their people shared one language.
  • Conclusion: New States help the economy when they are viable and well governed; size is a tool, not a solution.
  • Conclusion: A Second States Reorganisation Commission with clear criteria would let India judge future demands on merit rather than on the strength of agitation.