October 04, 2016

The stark economic divergence between India's states makes a strong case for greater federalism

Praveen Chakravarty, Senior Fellow at IDFC Institute, outlines in this Scroll piece that there has been a growing economic divergence among the Indian states between 1960 and 2015 and esp. post-1990, as per the findings of his briefing paper.


"Levels of income disparity across the big states of India are at an all-time peak. India is currently experiencing a 3-3-3 paradox – the richest three are three times richer than the poorest three large states. The corresponding ratio is two for China, and 1.5 for the US and European Union member states. There is an inherent tension between efficiency and federalism – the former demands commonness and the latter demands acceptance of differences. Whichever camp one belongs to, there is no denying the vast cultural, political and now economic diversity of India. It is then also time to ponder greater legislative autonomy to states, perhaps by transferring some of the concurrent list subjects such as education, land and labour back to the states." 


He further argues that this should prompt us to move beyond financial autonomy, by giving substantive economic and legislative independence to the states.


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Topic : Transitions / In : OP-EDS
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