4.2.2. Does Small State Mean Better Governance?

Secondly, a new commission might ask whether smaller states are likely to improve governance. One thing that the creation of new states is likely to do is to increase the density of the states. New states require new capitals, administrative structures, courts and personnel to man them. While this idea of a "gravy train" is one of the reasons that critics sometimes rail against the expense and inefficiency of creating new states, an increase in the depth of the state may improve its capacity.

India has one of the lowest rates of public sector employment among G20 countries. Gaps in the public workforce undermine the ability of the Indian state to tax, deliver justice, security and basic goods like education and healthcare. Yet, filling vacancies depends critically on improving skills and higher education — new states hold no guarantees in this regard.

There is no necessary connection between reducing the size of states and improving

governance. Those who see a link between state size and governance often do so on the assumption that smaller states will be more geographically compact, more socially cohesive and thus will help to improve the efficiency of public spending.

It is also assumed that smaller states can improve accountability by reducing the distance between elected representatives and voters. Yet if one looks at the states that perform better in terms of economic growth, or in terms of poverty reduction, we do not see a clear relationship between state size and performance. Nor is it the case that the "newness" of a state is likely to give a boost in itself — the mixed experience of India's newest states, Chhattisgarh, Jharkhand and Uttarakhand, demonstrates this.