New Delhi: The Vice President of India, Shri M. Venkaiah Naidu has said that states must focus on long term economic model for the betterment of the people and must not settle for short-term populist measures.
Addressing the gathering after presenting India Today State of State Awards 2018, here today, he said that the relationship between the states and the centre must be built on trust, transparency and mutual respect.
Shri Naidu said both parties should practice openness and should not be limited by narrow political divisiveness. He further said that there is an agenda greater than politics before all of us, the agenda of taking development to the last man, the goal of ensuring Antyodaya. Federals should not end at door steps of State capitals, they must reach to villages, he added.
The Vice President said that political differences must end with the elections and there after the ruling party must not be bogged down by dilatory tactics and the opposition parties must be given the space to offer constructive criticism in the legislature. He further said that a measure of accommodative openness must be practiced by both the centre and the states if we were to build a strong team India where every voice has its own space.
Saying that federalism, cultural & ethnic pluralism gave country’s political system the much needed agility, the Vice President said that continuation of the same requires not simply federalism, but cooperative and constructive federalism. He further said that cooperative federalism has been India’s mantra for centre-state unity, cohesion and harmony and there was every need to continue what the unifier of India, Sardar Patel had said. The spirit of cooperative federalism inspired Sardar Vallabhai Patel’s intelligent and proactive political manoeuvring by which he successfully persuaded the 492 princely states to join the Indian Union, all the while successfully maintaining the unity and integrity of the nation, he added.
Shri Naidu said that only decentralization of decision making and devolution of resources to states and local self governments would pave the way to fulfil the development needs of India. He said that it was heartening to note that the government recognized the need to empower states and created the NITI Aayog by a resolution of the Union Cabinet on 1st January 2015 to provide the quintessential platform of the Government of India to bring States to act together in national interest, and thereby fosters Cooperative Federalism. As a think tank it has been providing developmental strategies, frameworks, innovations and new ideas to states so that they can set their own priorities and goals and chart their own paths to achieve these goals, he added.
The Vice President said that development is a collective process and several factors determine the pace of it. Development also does not always make noise and often does not find space in front pages and prime times, he said.
He stressed the importance of building a ‘Team India’, a resurgent India, a strong India where the states work seamlessly, in harmony, complementing and compensating each other, even while competing with each other. Constructive consensus is the need of the and not disruptive confrontation, he added.
The Vice President has released a special edition of India Today on ‘India’s Best States’ on this occasion. The Chief Minister of Tamil Nadu, Shri Edappadi K. Palaniswami, the Chief Minister of Puducherry, Shri V. Narayanasamy, the Chief Minister of Assam, Shri Sarbananda Sonowal, the Chief Minister of Gujarat, Shri Vijay Rupani, several Ministers from different States and other dignitaries were among the Awardees.
Following is the text of Vice President’s address:
“I am indeed delighted to be with such a group of distinguished persons who have an enduring interest in the unravelling growth story of the States of our country. I offer my heartiest congratulations to all the ‘State of the states’ award winners. The summation of your collective commitment to growth and development is what is driving India forward. India’s growth story is an anthology of the growth stories of its states.
I congratulate India Today Group for doing this survey year after year, promoting a healthy competition among our states. This is not only an acknowledgement but also celebration of the social and economic development across the country. The Media often hold the politicians and bureaucrats accountable for the things that go wrong. Let us take this time to appreciate the countless things that they do right and their contributions towards development and public welfare.
India is progressing at a very fast pace and at the centre of this growth story are the states. It has almost become a cliché to say that the real drivers of growth in India are the states. In all the states which have emerged winners tonight, the agenda of development has formed the fulcrum of political and administrative philosophy.
The Chief Ministers of the states, their able colleagues and faceless bureaucrats who have worked as catalysts in channelizing the efforts of all stakeholders towards achieving inclusive and sustainable development deserve to be applauded.
Sixteen years ago, when India Today recognized the increasing role of states in India’s transformation and started this ambitious task of measuring the pace of their growth, the emphasis was still on a centralized planning for the entire country. The states were provided with a road map that they had to follow.
Today, the states can determine their own destiny. The Centre-state relationship has moved from that of a donor and receiver. Competitive federalism and cooperative federalism have become integral parts of our political lexicon.
According to Granville Austin, the Constitution of India was perhaps the first constituent body to embrace, from the start what was called cooperative federalism. Chief Justice Beg called the Constitution ‘amphibian’, in the sense that it can move either on the federal or on the unitary plane, according to the needs of the situation and circumstances of a case. Federalism and cultural and ethnic pluralism have given the country’s political system the much needed agility. However, continuation of the same requires not simply federalism, but cooperative and constructive federalism.
The spirit of cooperative federalism inspired Sardar Vallabhai Patel’s intelligent and proactive political manoeuvring by which he successfully persuaded the 492 princely states to join the Indian Union, all the while successfully maintaining the unity and integrity of the nation. Since then, cooperative federalism has been India’s mantra for centre-state unity, cohesion and harmony.
Friends, I believe that we live in the times of pragmatic federalism. Our country is a complex one. Its vast size, the variability in its geographical features, thousands of languages, the overwhelming variety and diversity that exists in culture, traditions and ways of life make Indian a great developmental challenge.
This is the reason why ‘Delhi dictated’ dole outs fail to work after a point in time. Decentralization of decision making and devolution of resources to states and local self governments is the only way out to fulfil the development needs of India. The same logic inspired the formalization of the Panchayati Raj system in 1992.
It is heartening to note that the government too has recognized the need to empower our states. The disbanding of the Planning Commission and the creation of the NITI Aayog by a resolution of the Union Cabinet on 1st January 2015 was a right step in this direction. NITI Aayog acts as the quintessential platform of the Government of India to bring States to act together in national interest, and thereby fosters Cooperative Federalism.
It performs the role of a ‘friend, philosopher and guide’ to the states in their quest for growth and development. It serves as a think tank and toils to provide developmental strategies, frameworks, innovations and new ideas to states so that they can set their own priorities and goals and chart their own paths to achieve these goals.
Development is a collective process and several factors determine the pace of it. Development also does not always make noise and often does not find space in front pages and prime times.
Take organic agriculture, for instance. India has around 30 per cent of the world’s organic farmers—the highest in the world. Yet, we fail to tell the story of these farmers. If we must debate and find solutions to bring an end to farmers’ distress farmers, we must popularize such success stories which has the potential to inspire millions of farmers across the country.
Recently, Sikkim just beat entries from more than 50 countries, including agricultural innovation hubs such as Denmark, to win a major United Nations award for its status as an organic food-only destination. The national media must tell this incredible story of Sikkim’s success to the rest of the country so that many more such stories are written in every corner of India.
India’s development story has some worrying trends too, specially the socio-economic disparity among the states. Five states in India—Maharashtra, Uttar Pradesh, Tamil Nadu, Gujarat and Karnataka—account for more than 45 per cent of the country’s GDP. In 1960, the top three states were 1.7 times richer than the bottom three. By 2014, this gap had almost doubled, with the top three States being three times richer than the bottom three.
In the past couple of decades, the main drivers of growth have also been the west and south. Of course the national Capital is an exception. According to 1911 Census, eight of India’s 20 largest cities—Lucknow, Varanasi, Kanpur, Agra, Allahabad, Patna, Bareilly and Meerut—were from India’s northern region. And Bangalore was a small town then. Today, Indian cities account for nearly 65 per cent of the country’s GDP but most of the major growth canters are in the west or south leaving a gap in the northern half of the country and Bangalore is one of India’s top five cities.
The prosperous south and west have a relatively high per capita GDP and lower population growth, while the north and east have low per capita GDP and higher population growth. The northern region, despite political will and resurgent human capital, also gets trapped in the vicious cycle of poor infrastructure, which results in low investment generation. Without big investment, large traditional employment-creating industries such as manufacturing plants, organized services, and IT and IT-enabled services are not possible. Absence of these industries slows down infrastructure development, which eventually keeps the cycle going. The challenge to the political leadership is to break free from this cycle.
One of the major policy initiatives in recent times, which have given a big boost to state’s economic liberty, is the new revenue sharing model between the Centre and the states. The government accepted the recommendation of the 14th Finance Commission to raise the share of states in central taxes to 42 per cent from 32 per cent. This is helping the states to break free.
The states, which were relatively more dependent on Central government grants, were expected to face the heat but a World Bank report published in July 2016 estimated that overall effect of this new revenue sharing model on state finances in 2015-16 had been positive, as the reduction in grants was smaller than expected.
Economically stronger states such as Maharashtra, Gujarat, and Tamil Nadu had small gains while gains were higher in Uttar Pradesh, Odisha, and West Bengal. States such as Kerala, Madhya Pradesh and Haryana spent over 50 per cent of their additional resources on health, education, and infrastructure. All the states together spent 30 per more than the Central government in 2015-16. State expenditure grew faster than central expenditure between 2012 and 2017.
The need now is to bring an end to the disparity in the tax net. Ten Indian states—Haryana, Karnataka, Tamil Nadu, Delhi, West Bengal, Andhra Pradesh, Maharashtra, Uttar Pradesh, Gujarat, Rajasthan accounted for 88 percent of the total direct tax collection in FY18. These are the states, which will have to function as the employment generation centres for the country as well.
With a rapidly rising working age population, India would need about 100 million jobs till 2026, a recent study has revealed. Of these, around 80 per cent or 78 million jobs will have to be generated in just 10 states—Uttar Pradesh, Madhya Pradesh, Chhattisgarh, Rajasthan, Jharkhand, Maharashtra, Odisha, West Bengal, Bihar and Assam— that account for 62 per cent of our population.
Uttar Pradesh has always played a key role in India’s political destiny, but here is the time that the state’s leadership can transform India’s economic fortune too. Take this example from the study—if Uttar Pradesh’s economy remains “business as usual”, it will create about 6 million jobs till 2026. It needs to create a little over 24 million jobs. That’s where the challenge lies for one of India’s most politically significant states.
As I was examining the winners in both “best performing” and “most improved” category, I found that the traditionally laggard states in “best performing” category are the ones showing fastest growth. The top seven most improved states—Assam, Jammu and Kashmir, Madhya Pradesh, Uttar Pradesh, Chhattisgarh, Jharkhand and Bihar—are at the bottom of the other table.
In fact, if we look at the growth rates of the states, BIMARU states such as Bihar and Madhya Pradesh are clocking nearly 10 per cent growth rate, often higher than economic behemoth such as Maharashtra and Punjab. A tiny state like Puducherry has been consistently growing at over 10 per cent.
In the story of economic development, as in various other aspects of life, the higher you climb the steeper is the climb, which eventually slows down the pace. For the traditional table toppers, it becomes difficult to maintain the same rate of growth of the new risers. It’s therefore encouraging to see as many as 27 out of the 31 states and UTs examined for the India Today State of the States survey have been awarded across multiple categories. That explains the intensity of competition among the states.
Our Prime Minister Shri Narendra Bhai Modi said that, “Federalism is no longer the fault line of Centre-State relations but the definition of a new partnership of Team India. Citizens now have the ease of trust, not the burden of proof and process. Businesses find an environment that is open and easy to work in”.
We have a tremendous responsibility placed upon us, the task of building a ‘Team India’, a resurgent India, a strong India where the states work seamlessly, in harmony, complementing and compensating each other, even while competing with each other. Constructive consensus is the need of the and not disruptive confrontation.
States must focus on long term economic model for the betterment of the people and not settle for short-term populist measures. The relationship between the states and the centre must be built on Trust, Transparency and mutual respect. Both parties should practice openness and should not be limited by narrow political divisiveness. There is an agenda greater than politics before all of us, the agenda of taking development to the last man, the goal of ensuring Antyodaya.
Political differences should end with the elections, after which the ruling party should not be bogged down by dilatory tactics and the opposition parties must be given the space to offer constructive criticism in the legislature. A measure of accommodative openness must be practiced by both the centre and the states if we are to build a strong team India where every voice has its own space.
Once again, congratulations to all the winners and best of luck for next year to all who could not make it to the top this time.