The new Bahubalis: Where do Indian states stand in the narrative of competitive federalism?

One significant phrase that Prime Minister Narendra Modi has contributed to the Indian political lexicon is competitive federalism. The prime minister, who helmed what came to be known as the "Gujarat Model" of development when he was chief minister of the state, has consistently maintained that states are the real growth engines of the economy and has worked towards encouraging healthy competition among states based on one parameter-development.

But more than a decade before the prime minister adopted it as his guiding principle, India Today had heralded the spirit of competitive federalism in the country through its pioneering project-the annual State of the States study. Based on objective data sourced from government and other authentic sources, the study was aimed at gauging the performance of Indian states across various parameters such as the economy, agriculture, health, education and infrastructure.

Launched in 2003, this annual exercise has over the years come to be regarded as the gold standard in measuring the socio-economic performance of the states. Over the years, chief ministers have proudly displayed trophies-given to them based on the results of the study-in their offices. Goa Chief Minister Manohar Parrikar, before he became defence minister, would carry the trophies his state won in different categories through the entire duration of his flight back from Delhi. He would vow to win more trophies the next year.

Chief ministers who did not win would send angry queries. They would demand data, want to understand the methodology and seek to improve their performance so that they could top the tables the next year. In this, the SoS exercise achieved what it set out to do-instil strong, healthy competition among states for socio-economic growth. The acknowledgment came from none other than the prime minister himself. "India Today has been rating Indian states and giving awards to the best performing one. It soon became a benchmark and others started following that model," he said in Delhi last year.

The accolades and recognition notwithstanding, India Today has constantly striven to improve the accuracy and scope of its SoS study. In the first year of the survey, big and small states were examined together. To avoid unfair evaluation, they began to be segregated from 2004. Between 2003 and 2010, absolute data from the year of evaluation was examined. This gave some large states an advantage as they started from a higher base on several parameters, giving them a significant lead in recent years. Punjab, for instance, emerged as the best state for all the years between 2003 and 2010, except in 2009.

To create a level playing field, we changed the methodology in 2011, and decided to examine improvements states had made over a period of one year. The change intensified the competition, resulting in new winners almost every year-Maharashtra in 2011, Gujarat in 2012, Kerala in 2013, Tamil Nadu in 2014, Gujarat in 2015.

However, there were certain apprehensions about assessing a state's performance based on data for a single year. Several big states complained that their sustained achievements over the years were ignored and that growth at the higher levels is slower than when you start from a lower base. To correct this anomaly, we gave awards in two segments last year-the best performing state and the most improved state. For the best performing states, absolute data of the current year was examined. For most improved states, improvement on all parameters over a period of the last year was taken into account. So Kerala emerged as the best performing state while Tamil Nadu showed the maximum improvement. Among small states, Goa was the best performing while Puducherry emerged as the most improved.

In the 15th year of the SoS study, some new adjustments have been made to make the methodology more robust. Though the states have been clubbed in two big segments, large and small, several states have complained that those with a larger population and economy often won the unfair advantage of big numbers when absolute numbers for a particular year were being considered. On the other hand, while examining improvement over a particular year, smaller states with low base enjoyed an undue advantage when percentage of growth was factored in. To address these reservations about the methodology, we decided to combine the two barometers of evaluation this year-absolute data for a particular year and improvement over a period of time. And since improvement over just a year could be considered insufficient to measure consistency of performance, we expanded the time frame to five years. The results this year, therefore, are a combination of two sets of data-the absolute numbers of a state for 2015-16 and its improvement between the five-year period of 2010-11 and 2015-16.

We also wanted to take into account actual expenditure by the states under various parameters, but uniform data was not available for all states. All numbers examined for evaluation under various parameters were neutralised by taking into account two factors-population and geographical size of the states. A new category-tourism-has also been introduced in this year's study. We have also made a change in nomenclature, from "e-governance" to "governance", broadening the scope of this parameter, and adding cleanliness to the category of environment. For small states, we have not announced results in entrepreneurship, environment and cleanliness, inclusive development and governance because of certain reservation about available data.

The new methodology has thrown up surprise winners among big states-the hill state of Himachal Pradesh, which has been ranked among the top five in seven of the eleven categories, made it to the top. The youngest state of the country, Telangana, earning positions among top five in four out of 11 categories, is the second best performing state. Among other new states, Uttarakhand, boosted by religious tourism, performed well-good show in education, entrepreneurship and law and order-but Chhattisgarh and Jharkhand have fallen behind despite being high on resources.

While north and south India share equal honours in the top 10 best performing states, the complete absence of states from the east is a glaring lacuna in India's growth narrative. Two states from the east-Bihar and Jharkhand-find no place in the top five states in any category, Assam does well only in two categories and West Bengal and Odisha in one category each.

According to a research paper by Praveen Chakravarty and Vivek Dehejia, Senior Fellows in Political Economy at the IDFC Institute, a Mumbai think tank, in 1960, the average person in West Bengal earned

Rs 390 per annum while his counterpart in Tamil Nadu earned Rs 330. In 2014, however, while the earnings of the average person in West Bengal stood at Rs 80,000 in a year, the average person in Tamil Nadu was earning Rs 1,36,000 per year. Tamil Nadu went from being the fourth poorest state in 1960 to the second richest in 2014.

In 1960, the top three states were also 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 three at the bottom of the list. The richest state in terms of per capita GDP in 1960, Maharashtra, was twice as rich as the then poorest state, Bihar. In 2014, the richest state, Kerala, was four times richer than the still poorest state of Bihar. This fourfold gap between the richest and the poorest large state in India is among the highest in the world. Despite showing a high growth rate in recent years, the Bihar story doesn't seem to change-in nine out of 11 categories, it finds itself at the bottom of the pile of five states. As dismal is the story of Uttar Pradesh, arguably India's most politically significant state; it finds no place among the top 10 in nine categories.

When it comes to small states, Puducherry, which was the most improved state in 2016, bagged positions among the top three in five of the seven categories. But our new methodology reveals a shocker in Goa's performance. Except in economy and tourism, the state has not been able to secure positions among the top three in any of the other five categories. One reason perhaps could be the interruption the state has seen in political leadership.

Leadership is the most defining element in the development model of any state. In the past three years, 21 Indian states have seen a change in government and 13 states have got debutant chief ministers. The SoS report card can be a useful tool for them to calibrate their strategies for the state and help them set out priorities. The India Today SoS study will be back to measure and reward their success.

METHODOLOGY

How the States Were Ranked

The India Today Group's State of the States study was conducted by Nielsen, a global information, data and measurement company. The data for the parameters (see table) under every category-agriculture, health, education, infrastructure, economy, law and order, governance, inclusive development, tourism, entrepreneurship and environment and cleanliness-were collected from recognised and highly credible government and academic sources. The parameters are normalised so as to ensure that comparisons across states are meaningful. Two sets of data were examined-the performance of the states in 2015-16 in all the parameters and their improvement between 2010-11 and 2015-16. In the category of entrepreneurship, only the data for 2015-16 was examined, as consistent and reliable data on improvement was not available. While scrutinising the data for 2015-16, every parameter of each category was ranked. The rank varied based on the parameter under consideration. For instance, a higher concentration of households with electricity gets a higher rank whereas a higher incidence of crime elicited a lower rank. The final composite rank is simply the equally weighted average of each of the parameters. This yielded a category-specific rank for each state. The same process was repeated while examining the improvement of states across all parameters. The final results were achieved after combining the ranks (see table) of the states in every category based on the statistics of 2015-16 and improvement shown in data between 2010-11 and 2015-16. In short, the best performing state = Rank (current) + Rank (improvement).