Socio-economic impacts on newly formed states

Socio-economic impacts on newly formed states

Socio-economic impact on newly formed states is a complex issue. While there are some positive sides to the change, there are certain negative implications as well. From passionate debates regarding the current formation of Telengana to the discourse after states like Jharkhand and Chattisgarh were established, the question that tends to rise is the impact on socio-economic matters.

While forming new states can have certain advantages, it is important to research the economic, social and political ramifications before making any changes that can create a bigger problem than the solutions they present.


Negative Socio-economic Impact Of Formation Of New States

• Sometimes, what looks good on paper turns out very differently in reality and there are many issues that crop up once state boundaries are redrawn. Coastal Andhra Pradesh was able to get water from canals for irrigation from the Godavari and Krishna rivers. But Telengana has now garnered the water rights. This leaves coastal Andhra with the difficulty of solving the water scarcity that will now arise.

• Revenue generation also becomes an issue. Coastal Andhra may not be able to run the state due to insufficient funds, as Hyderabad has been separated from it. Hyderabad is also a thriving commercial centre and youngsters from coastal Andhra will now be deprived of job opportunities within their state.

• If successive governments keep on giving in to the demands for new states, pandemonium can ensue. Bodo tribal group wants to divide Assam. West Bengal has also has its share of disputes regarding state division.

Certain groups in Maharashtra continue to demand the formation of Vibhadra. While arguments are made that creating new states will spur better economic development and governance, the unique socio-economic and political climate of each state is the reason why such positive beliefs do not turn out to be reality.

• Business proposals also get stymied if new states are formed. About 27 industrial parks which were to come up in Andhra Pradesh are now in a quandary because of the formation of Telengana. Andhra Pradesh has 319 industrial parks and 76 SEZs currently. The new parks were really needed as the current ones are facing saturation. Several of the proposed parks were for women entrepreneurs.

• The bifurcation of the state will also delay the implementation of the NIMZ (National Investment Manufacturing Zones). Numerous strikes and disruptions have emerged due to the formation of new states such as Telengana.

Positive Socio-economic Impact Of Formation Of New States

• Formation of new states may also provide fresh impetus for growth. For instance, cement plants in Andhra Pradesh were running at lower than 50% capacity because installed capacity has doubled in past years and there was a fall in local consumption. Formation of Telengana will increase the demand for cement consumption in Coastal Andhra.

• New business activity can reach less affluent districts. For instance, Prakasam may develop and attract investors from Guntur, Nellore and other states.

• Linkages between the new and parent state can improve infrastructure and knowledge transfer in less developed areas. Coastal Andhra will benefit from knowledge infusion through linkages to developed parts of Telengana such as Hyderabad.

• Not all choices for bifurcating states have dismal results. Chattisgarh is doing well after its separation from Madhya Pradesh. Jharkhand has to work to catch with Bihar when it comes to development and growth. Uttarakhand is outperforming UP on several counts. Political leaders and administration need to involve key business leaders and activists to discuss the implications before forming a new state.

• Many of India’s states and UTs have extremes when it comes to population. States like UP have massive population. The logistics of handling a larger state require an able administration which can cope with the challenges. If this does not occur, it is better to divide the states rather than to let the situation continue further.

Everything has its own flipside. From political decisions to social movements, there are variable factors that influence the final outcome in a way that is unpredictable. But the administration and the leaders would be well advised to be democratic about their decision making process.

This enhances transparency and gives the citizens of India the conviction that its leaders and administrators are objective in their decision making.
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  • Socio-economic impacts on newly formed states -Lubna Lakdawala (04/02/14)
  • Socio-economic impacts on newly formed states

    Recently the government has given its approval to the formation Telengana as a separate state. Since Independence, there have been many new states formed. Sometime back Jharkhand, Chhattisgarh and Uttarakhand were formed from Madhya Pradesh Bihar and Uttar Pradesh respectively. Formation of new has always been a dicey situation where some people are for it where as some people are against.

    Formation of new states is like a coin has two sides to it. There are both advantages and disadvantages associated with it. The states are often formed on basis of a bigger state breaking up into smaller parts. The reason for this is often given that smaller states are easier to govern and prosper. It is often justified that smaller state show better economic development and better utilization of resources.

    In the past when new smaller states were formed some have shown exceptional economic development where as some have struggled. Forming Uttarakhand has proved to be successful as it has shown rapid economic growth and higher tourism rate. Since Uttarakhand is a hilly terrain it is now gaining reputation as a tourist place.

    Chhattisgarh is another example of a new state showing good economic growth. Chhattisgarh once when joined with Madhya Pradesh was not doing as good as it’s doing today. Rich in resources a little socially backward Chhattisgarh is quickly developing.

    Jharkhand also has a similar story - after its separation from Bihar this state has shown economic growth higher than Bihar and is rapidly makes its presence known.

    The economic success of these newly formed states is not entirely their work achievement. These states were formed at a time when the economic growth rate in India was itself very high giving them increased opportunities. It not an indefinite fact that smaller states are more manageable also there is proper utilization of recourses. But new states should be formed in a more organized manner. They be just separated and formed the government should make certain allocations and provide them sufficient funds for proper development. If it is not done in an organized matter it can have severe repercussions.

    Formations of new states are always opposed sometimes by the people, sometimes by social activist. The present states in India are formed on the basis of linguistic similarities, when a state is separated into smaller states it can be detrimental to the religious as well as emotional sentiments of the people. When a proposal to form a new state is given it shall be review properly whether it justifies the formation of a new state also the sentiments of the people here play an important role.