Sunday, March 14, 2010

Statehood Movements in India


India is comprised of 28 states. Since India gained independence from Britain in 1947 the country’s young democracy has endured many external and internal challenges. The economy was stagnant and closed off from the outside world until 1991 when India enacted a series of economic reforms which opened up their economy to the outside world, and allowed India to begin to become the back office powerhouse that we know of today. Besides poverty, religious, cultural, and language clashes, one of the biggest issues that has faced the young country is the issue of the creation of states. Much as America struggled to conquer territory and establish states, there is infighting in India with different cultural separations manifesting through geographic and political line drawing disputes. There are two major statehood movements that will be addressed in the subsequent sections. Most notable is the statehood movement of Telangana which has been in the news as recently as December, but dates back to the days of independence from Britain. Another important statehood movement to look at historically was the Chhattisgarh, Uttarakhand, and Jharkhand movement of the year 2000.

Telangana Movement:

The Telangana Movement is very interesting for a number of different reasons. First is the history of the region. Dating back to before British independence the Telangana region of the state of Andhra Pradesh has been a source of conflict. During British rule, Telangana (though not the whole state of AP) was an independent province. Indeed even up to 1956, Telangana existed as a separate state. It wasn’t until November of that year that it was absorbed by the state of Andhra to create AP. Needless to say even at that time the citizens were not in favor of the merger. The people of Telangana did not have a majority, and therefore faced persecution by their new majority leaders. They were made promises that the power would not be exploited, but many claim that they have been.

The main economic dispute in this statehood movement comes over the city of Hyderabad, an epicenter of technological innovation with Indian headquarters for many foreign companies located there. Multinational corporations like Microsoft, Google, Motorola, and Dell call this city home. Obviously having these powerhouses in the region should have spurred major economic growth. Unfortunately for the people living in the Telangana region, they have yet to feel the trickledown effect of that economic prosperity. The citizens (in what is an extremely poor region) feel that the large size of the AP state means that the economic success gets distributed amongst a vastly larger number of people. Understandably, the state is in no mood to let Telangana (and the thriving economy of Hyderabad) go without a fight. However the people of Telangana were ready for a change, even if they weren’t so sure it was possible. An unlikely political leader emerged, often slighted by his own political party, K. Chandrasekhar Rao decided that the time for change was now. He led the movement by initiating a hunger strike. It lasted approximately ten days before the government currently in power relented and agreed to start the process of allowing Telangana to become its own independent state. The move has sent shockwaves throughout the country, given the messy nature of the hunger strike which was handled by the government with a heavy hand (Rao was arrested, before being hospitalized). It made national news. More importantly, many people fear the repercussions in other contested statehood movement areas throughout India such as Gurkha in West Bengal. Those favoring a strong, unified national government often change their tune as the government changes hands. What is most important politically to most politicians is the powerful party in a given region. Much as gerrymandering occurs in the United States, with political parties redistricting areas so that they have strong beds of power (allowing them to win more seats in the House of Representatives), many people in the large Indian states feel that if they relinquish power by allowing a state to cede, they will have less national power. The major political parties want to maintain control over areas as large as possible, and breaking up states into smaller regions, especially those which they are in solid command of, makes no political sense. Thus the dispute endures across regions, for both historical and economic, but mostly political purposes. Ultimately, it comes down to power. Don’t cede power if you have it. Those who are not in power will call upon cultural and historical ties to make the case for their own right to statehood. We see this trend all over the world. Whether it be the creation of Pakistan, when it was decided that there needed to be a major separation of Hindi and Muslim countries, or the dispute between Israel and Palestine, the hunger for independence is strong amongst the people who feel oppressed. In the Telangana region, the city of Hyderabad is largely Muslim, and no doubt fuels the state’s disputes. The addition of the 29th state of Telangana has the potential to start a trend amongst India’s millions of poor who feel oppressed. The interesting thing to see in the coming months and years will be to observe the future of Hyderabad and whether or not the new state of Telangana is formed as promised. Given the large size of India as a country, more decentralized government has a chance to make more real gains for people as long as there is a unified message going out to foreigners, especially foreign investors. If they begin to see India as a regionalized entity with no strict control, it will make it very hard to forecast business and costs into the future. The push toward many states will be a positive force for India, especially preserving the culture, and separating religions, so long as the national government maintains strong control, and does the right thing when given the opportunity.

Recent Statehood movements – Chhattisgarh, Uttarakhand, and Jharkhand:

The three states are relatively new, all of which were established in the year 2000. The fascinating thing about these states is that they realize a fact that many parts of India have still failed to embrace. Incentives for businesses to invest in the infrastructure of the region, as well as to build on the land will quickly and efficiently bring the states up to speed with the rest of the nation, and given the relative autonomous nature of statehood, will allow them to surpass many other states if they continue with the pro-business incentives that they currently have in place. The government’s responsibility is simple. Provide basic infrastructure, such as roads and power, and then provide great incentives to business to come to the state, and finally, get out of the way. Doing these things will help catapult the fledgling states to the forefront of business in India. The three states have already garnered large investments from firms such as Tata Motors, Ashok Leyland, Sterlite Optical and Hero Honda in Uttarakhand; Tata Steel, Essar Steel, and MoUs in Chhattisgarh, and Arcelor Mittal, Tata Steel, Essar Steel, Jindal Steel & Power, and RPG Power in Jharkhand. All three states have provided strong economic incentives for companies to invest in both infrastructure and land in their area. Most importantly, because they are relatively new, they can set standards which might not be acceptable to stalwart states in other regions of India. Fresh free market, high incentive, low tax economic policies will quickly develop these new states. These three states can be a great example to Telangana, assuming that it actually does achieve the promised statehood.


Statehood movements present an interesting problem for modern day India. Where India as a nation was fighting for independence as recently as the 1940s, now cultural and religious groups are recognizing the benefits of doing the same for themselves. India’s bloated, gigantic states can lead to inefficiencies in both the economic situation as well as the political operation. Some decentralization seems inevitable as India strives to compete in the world’s economy.


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