UP and Bihar claim that they are being discriminated against and if
only they had more money from the centre, they could also make faster
progress. This has some validity if population is used as the criteria
� and it is not clear that it must always be the determinant. Even so,
the question that UP and Bihar must ask of themselves is why in spite
of their great political clout over the years, they have been unable
to get these so-called injustices removed.

The real reason why UP and Bihar are different is because politics in
these two states is different from that in the rest of the country.
Unless the basic political mindset changes here and unless the political
class becomes more concerned with fundamental administrative, social
and economic issues, there is really no hope for these two states.

That the people of UP and Bihar are no different or no less industrious
than their counterparts elsewhere is clearly borne out by the contributions
that migrant labour from these two states is making in other states
like Punjab. UP and Bihar are also among the more richly endowed states
in terms of natural and mineral resources. Yet these are the most backward
states. Some of the problems they face are the burdens of history. But
this �burden of history� argument is beginning to wear thin. The rest
of India is unwilling to be dragged down by UP and Bihar.

In a recent book, Quest for Power, Zoya Hasan says that the national
Congress leadership has made colossal mistakes in UP. She lays the blame
for the Congress�s present miserable position in UP at the doors of
the national leadership that saw UP as a �jagirdari�.

Hasan�s thesis is that on the three critical issues of class, caste
and community, the Congress has destroyed itself. The reason why it
waffled was that the UP Congress was dominated by conservative upper
castes who played to the tune of New Delhi and were simply unwilling
to share power with new, emerging groups. According to Hasan, the Congress
lost the class issue relating to farmers� interests to Charan Singh,
the caste issue to Kanshi Ram and Mulayam Singh and community issue
to the BJP and Mulayam Singh.

The upper caste character of the Congress in UP reflects the numerical
strength in the state. Upper castes in the south and in states like
Maharashtra constitute just 3-5 per cent of the population and hence
the social transition was relatively easier. But in UP these castes
account for anywhere between 15 and 25 per cent of the population and
unlike in other states have been powerful landowners as well. But while
acknowledging this demographic reality we must also acknowledge that
no serious effort was made to develop and sustain new leadership across
all communities. The growth of the BSP in the state is a direct reflection
of the Congress�s unwillingness to give positions of authority to dalits
who account for 21 per cent of the state�s population.

Harold Gould has shown how the Congress repeatedly made compromises
with communal ideologies in UP. Even great personalities like G B Pant
are not spared in Gould�s books and the way Pantji used communal elements
to destroy Acharya Narendra Deva in 1948-49 is a chilling reminder that
there has always been a strong communal strain in the UP Congress. The
compromises made by the Congress while fighting communalism in UP, particularly
in the way it has managed the law and order and police administration,
have also been studied in detail by other scholars like, for example,
Paul Brass in his recent book Theft of an Idol.

The Congress suffered its first serious electoral reverse in UP in 1967.
But no lessons were learnt from that since very soon it returned to
power in a national wave. After that, UP got caught up in the politics
of waves � sometimes these waves worked in favour of the Congress and
sometimes they went against it. There are many in the UP Congress who
are fervently praying for another wave. This may or not happen. But
this dependence on �charismatic� figures will get the Congress nowhere.
The party faces a deep institutional crisis in UP that no one individual
can resolve.

In recent months, there has been much thinking on how to rebuild the
Congress in UP. But there is need for a mindset change in quite another
dimension. And this relates to the economic agenda for UP. Liberalisation
and privatisation are important but are not the solutions to UP�s real
problems. They are important to create an environment for investment
and growth but the most critical requirement is a new vision for public
investment, for the structure and role of government and for governance
itself. Kerala is noted for its literacy programmes, Tamil Nadu for
its nutrition schemes, AP for its hi-tech zeal, West Bengal for land
reforms and decentralisation, MP for its commitment to primary education
and rural development, Maharashtra for its employment guarantee scheme
and its pro-business approach and Gujarat for its dairy co-operatives
and its entrepreneurial environment. In 50 years, is there anything
that stands out in UP? Is there one �big� idea that is UP�s contribution
to the theory and practice of development? Is there one programme that
makes UP an example to the rest of the country? The answer, sadly, must
be in the negative.

Too Big and Unwieldy?

Any discussion on the future of Uttar Pradesh must begin by addressing
the question � has UP simply become too big and unwieldy to be able
to be administered effectively? There is a growing sense of frustration
with UP’s size and the constraints it appears to be imposing on effective
governance. This is a state of almost 1,600 lakh population and growing
by about 30 lakh every year. This is a state having 83 districts and
18 lakh employees, the same number as that in the central government
if railways and P and T employees are excluded. This is also a state
of enormous diversity.

In his note of dissent to the report of the States Reorganisation Commission
way back in 1955, K M Panikkar had pointed out that for the successful
working of any federation, the constituent units should be fairly evenly
balanced. Unfortunately, Panikkar wrote, the Indian Constitution contains
no provision to counteract the dominant influence of one powerful state
and expressed his apprehension that the recommendation to keep UP together
as one unit would, in the long run, prove detrimental to the interests
of both UP and the country. He demolished the arguments that formed
the basis of the recommendation � that UP forms the citadel of Indian
civilisation, that UP is homogeneous and that large size will lead to
economy in administration.

Panikkar’s alternative proposal � a state of Agra consisting of the
Meerut, Agra, Rohilakhand and Jhansi divisions of UP and the districts
of Datia, Bhind, Morena, Gwalior and Shivpuri from the present MP �
itself seems impractical and infeasible. Size by itself does not guarantee
efficiency. We have the example of many small states in the country
where politics is unstable, the administration incompetent and the economy
in a mess.

But the question we must address is whether UP’s present size has crossed
the limit of manageability even after allowing for the formation of
Uttarakhand. Even assuming that UP cannot and should not be broken up
further, the issue of how to govern such a large state remains. It is
assumed all too easily that panchayats and nagarpalikas will solve the
problem. Decentralisation is essential and if we have administratively
and financially strong local bodies in rural and urban areas, no doubt
many of the disadvantages of large size will be overcome to a large
extent.

UP is a variegated land. Each region of the state has its own political,
social and economic history. One of the mistakes made in national planning
in the last 50 years is to view UP as one undifferentiated mass. Within
UP itself, there has been hardly any correlation between resource flows
and the degree of backwardness of a region or a district. Thus, even
if the further reorganisation of UP is ruled out, we must begin to look
at solutions to UP’s problems in a more regionally-focused manner than
has been done so far. It is true that two Vikas Nidhis � one for Poorvanchal
and another for Bundelkhand � were set up in 1990. But these nidhis
have been able to mobilise less than Rs 50 crore so far. The question
is whether in the present structure of UP, the problem of regional disparities
within the state will ever get addressed on the scale it ought to?

Large parts of UP are backward. There are 17 districts that are among
the 100 poorest and the most backward in every respect in India. These
include Sitapur, Hardoi, Unnao, Rae Bareili, Jalaun, Lalitpur, Hamirpur,
Banda, Fathepur, Pratapgarh, Bahraich, Barabanki, Siddharthnagar, Maharajganj,
Jhansi, Mau and Kanpur Dehat. In addition to these districts, all social
indicators � age at marriage for girls, proportion of married females
in the 15-19 age group, infant mortality, birth rates and female literacy
� are lagging behind severely in Basti, Budaun, Etah, Gonda, Jaunpur,
Lalitpur, Pilibhit, Shahjahanpur, Deoria, Azamgarh, Mirzapur, Moradabad,
Rampur and Bareily. These 31 districts are a complete zone of darkness
where the progress on social indicators is very, very slow which brings
no credit to us as a country. The current administrative structure is
totally inadequate to deal with the enormous challenges in these districts.

Demographic Disaster The second basic issue that looms large in any
discussion on UP relates to population growth. Our entire economic and
political system is based on population. More the population, more the
money that flows from the centre. More the population, greater the representation
in parliament. The incentives for population control are conspicuously
absent. Yet, states like Kerala, Tamil Nadu, Himachal Pradesh, Goa and
Andhra Pradesh have surged ahead and are controlling growth in population
in a humane and democratic manner. They are now worried that they will
be penalised for their successes while Uttar Pradesh gains in every
way from the inexorable rise in its population.

UP’s population growth rate is just not declining in any significant
manner. A growth rate of 2.29 per cent during 1971-81 declined to 2.27
per cent during 1981-91. According to present trends, UP will not reach
the replacement level of fertility of 2.1 in the next 100 years. About
20-25 years after reaching this replacement level of fertility, the
population stabilises and stops growing. UP’s population does not look
like stabilising till the year 2140, at least. Even Bihar will reach
the transition point by 2060 or so. This is a recipe for disaster on
all fronts. We are now looking at a UP of around 25 crore by the year
2025, that is in just 25 years from now.

Kerala, Tamil Nadu and Andhra Pradesh followed different routes to controlling
population growth but what is common to them is the extraordinarily
high degree of commitment made by the politicians to the cause of family
planning, primary education, nutrition, food security, women’s welfare
and public health. These issues do not figure in the agenda of the politicians
of UP and it is a colossal tragedy that even the parties that claim
to be the advocates of social justice and empowerment in UP � the BSP
and the SP � do not speak this language. This is a paradox for which
we must find an explanation. In the south and the west, empowerment
has meant education and social reforms. In UP, it means political power.
One of the reasons for this is that the elite in UP, unlike in Tamil
Nadu and Maharashtra, have themselves not been great champions of education
and social reforms.

Surveys show that women across the state cutting across caste and religion
desire smaller families but this demand is just not being met. Population
planning is just not about government schemes and social programmes,
important as they are. It is fundamentally about social mobilisation,
about engaging community leaders in continuous dialogue, about networking
with social activists and NGOs, about spreading public education and
creating greater awareness and fostering a political environment that
sends signals down the line that UP just cannot survive, and by definition
India also cannot survive, if present demographic trends continue unchecked.
The world’s largest family planning project is being run with US assistance
in UP. But the project has made little headway. UP’s demographic trends
are reflecting themselves in diverse ways, the most dramatic of which
lies in the continuous fall in the average size of farm holding which
today is less than 2.4 acres. In the eastern region of the state, the
average size is just 1.5 acres. Seventy five per cent of farmers in
UP are marginal farmers with holdings below 2.5 acres. These need a
special focus. This also shows that off-farm economic activities need
to be promoted on a very large scale since there are limits to what
farms can absorb.

UP’s demographic disaster is also reflecting in the grim employment
situation. According to projections made by the Planning Commission
recently, UP faces the prospect of increasing unemployment and a high
rate of growth in the labour force over the next eight to 10 years,
the only other states in this category being Bihar and Rajasthan. The
nature of unemployment is also changing � already, close to half of
those unemployed in UP are ‘educated’ showing that mere expansion of
special wage employment generation programmes like the JRY will not
be sufficient.

In order to provide full employment over the next five years, UP has
to create some 160 lakh additional employment opportunities or about
32 lakh additional jobs every year. During the Eighth Plan (1992/93-96/97)
rough estimates are that 6 lakh additional employment opportunities
were generated. Thus, on a conservative basis, the annual rate of employment
generation has to increase fivefold to keep pace with the increase in
population. This is highly unlikely and most impractical. The rate of
economic growth during the Eighth Plan in UP was 3.4 per cent. At this
rate of growth, UP is sitting on a volcano. At a very minimum, the state’s
economic growth must be 7 per cent per year. Even at this rate, the
state will not be able to generate more than 14 lakh jobs every year.
Thus, it will take another 10 years for UP to start generating employment
on the required scale. But a beginning has to be made now. States that
showed a growth rate in excess of 7 per cent during the Eighth Plan
were Gujarat (12.1 per cent), Maharashtra (9.6 per cent) and Rajasthan
(7.8 per cent). West Bengal and Kerala registered a growth of 6.7 per
cent, while Madhya Pradesh recorded a 6 per cent growth rate. Thus,
a doubling of UP’s growth rate is perfectly possible. A special employment
plan for UP must be prepared. Public sector employment is not the answer.

Pathetic Social Indicators

Amartya Sen has written extensively on the social deprivation of Uttar
Pradesh in relation to Kerala. Jean Dreze has been documenting the pathetic
state of school education in UP. Dreze has written that the most sobering
feature of the educational situation in UP is the persistence of high
levels of illiteracy in the younger age groups, particularly in rural
areas.

The figures are well known. Female literacy is probably around 30 per
cent now and at this rate it would take UP another 70 years to reach
Kerala’s levels and another 20 years to reach where Tamil Nadu is at
present. Normally female life expectancy should be higher than that
for males. In south India, this gap is over three years but in UP the
picture is just the opposite and female life expectancy is over two
years lower than that for males. Gender equality is among the worst
in Uttar Pradesh reflected in the female-male ratio of just 0.84 in
western Uttar Pradesh which, incidentally, is agriculturally the most
prosperous region in the state. If migration is taken into account,
UP’s female-male ratios are even worse than what is published.

UP’s pathetic social indicators do not need repetition. They are worse
than those of some African countries. But the issue that we need to
tackle is why this has happened. It is convenient to locate the causes
of UP’s social distress in its poverty. This will not do. If this were
so, then why are social indicators in western UP no better than in the
eastern part of the state? Indeed, economic prosperity in the western
region of the state has made virtually no dent on social indicators.
The main reason for the pathetic social indicators is that political
parties have not espoused or championed these social issues that relate
at a most fundamental level, to the status of women.

While Kerala is spending about 6.3 per cent of its GDP on education
and Tamil Nadu around 4.4 per cent, UP’s ratio is around 3.7 per cent.
Over 77 per cent of this expenditure is on primary and secondary education,
a proportion that is on par with Kerala. But spending is not all since
as a proportion of the state’s GDP, Maharashtra and Punjab are at levels
lower than UP. About 20 per cent of UP’s budget is spent on education,
compared to 30 per cent in Kerala, 27 per cent in Andhra Pradesh and
24 per cent in Tamil Nadu and Karnataka. But UP’s proportion is on par
with Maharashtra and Punjab with vastly differing outcomes. We must
focus on this aspect of expenditure efficiency as we call for greater
investments in the social sectors.

Ensuring that existing investments are being utilised effectively is
also a matter of political commitment and mobilisation. Dreze’s studies
have shown that the most serious problem that UP’s school education
system faces is teacher absenteeism. Attendance rate of teachers, a
formidable political lobby that enjoys the protection of all political
parties, is no more than a bare one-third. Over 40 per cent of primary
school teachers in south India are women, while this proportion in UP
has declined from 21 per cent to 18 per cent in recent years. This is
the lowest proportion among all Indian states. Pupil-teacher ratios
have increased by almost 50 per cent in the last decade. Thus, rather
than money, it is the management system that is holding back progress
on the education front.

Financial Mess

Another vital issue is the awful state of UP’s finances. It is this,
more than anything else, that is killing increased investments in education,
health and the social sectors. Indeed, other than population, the reform
of the state’s finances is the most critical challenge in UP. Without
this reform, UP will not be able to move forward. The Eighth Plan (1992/93-1996/97)
outlay for UP was around Rs 21,000 crore in constant 1991-92 prices.
But the actual expenditure was less than Rs 16,000 crore, an achievement
of less than 75 per cent. In other states like AP, Tamil Nadu and Maharashtra,
this proportion exceeds 95-100 per cent. But let us keep this aside
and focus on just what was spent.

Where did this Rs 16,000 crore come from? Over Rs 9,000 crore came from
the central government which means that the state generated just 40
per cent of the resources. This proportion has declined from around
60 per cent in the Sixth Plan (1980/81-1984/85). This level of dependence
on the centre is simply not sustainable and UP has to make a major effort
at mobilising resources for development. But this is only part of the
picture. The real shocker is that whatever taxes and revenues the state
is able to generate on its own are simply eaten away by its non-plan
revenue expenditure, that is by interest payments, by salaries, by losses
of its commercial establishments, etc. In 1997-98, salaries, pensions
and interest payments exhausted all the revenues of the state. In 1997-98,
the total expenditure on salaries, pensions, interest payments and the
like was around Rs 10,500 crore whereas the state’s own tax revenue
and non-tax revenue amounted to Rs 8,300 crore. This then forces the
government to borrow which, in turn, increases indebtedness. The state
borrows from the centre and from the market but in recent years, it
has started borrowing from its own provident and insurance funds.

The difference between what the state mobilised through taxes and other
means and its non-plan revenue expenditure which, in large part is non-development
expenditure, during the Eighth Plan was minus Rs 6,800 crore. This is
what is called the balance from current revenue (BCR) which ideally
should be positive. This large negative BCR means that the state has
to borrow more which compounds its financial problems. The large negative
BCR is a political creation and requires a political effort to correct.
The entire sales tax system, the main revenue source, is in a mess and
sales tax collections are less than in states like Andhra Pradesh and
Tamil Nadu. Sales tax as a proportion of the state’s income (SDP) has
remained stagnant since 1986. The high level of BCR calls for a fundamental
relook at the very structure of the government in all its various institutional
forms. Resources are being pre-empted to keep the government itself
going. This is happening in all states as well at the centre, but not
on the scale it is happening in UP. More money and more investment without
fundamental institutional changes will be a waste.

Another related issue is that of subsidies. A study carried out by the
National Institute of Public Finance and Policy reveals that in 1993-94,
total subsidies in UP amounted to over Rs 9,000 crore, two-thirds of
which were ‘non-merit’ subsidies, that is subsidies that just cannot
be justified on economic or social considerations. With this level of
subsidies and with a 3 per cent average recovery rate in the provision
of public services, UP just will not be able to invest more in physical
and social infrastructure. This level of subsidies in a state where
50 per cent of the villages do not have all-weather roads, for example,
is neither justifiable nor sustainable. A recent World Bank report on
UP’s finances places the level of subsidies in the state in 1997-98
at around Rs 6,000 crore or roughly 5 per cent of the state’s income
(SDP). Of this 5 per cent, just about 0.3 per cent is going to the really
poor. The overwhelming proportion of the subsidies is being enjoyed
by the relatively better-off sections of society. For example, power
subsidies and subsidies on higher education account for about half the
subsidies in the state.

UP is gifted with fertile land and abundant water resources. But full
use is not being made of this wealth. The gross irrigated area as a
proportion of gross cropped area in Punjab is 95 per cent and almost
80 per cent in Haryana. In UP, this ratio is around 65 per cent. But
not more than one-third of this is able to be provided with the required
number of irrigations. There are around 30,000 state tubewells but reports
indicate that most of them are in a state of disuse. Over 75 per cent
of the irrigation outlays go into establishment costs. Thus, a complete
revamp of the UP irrigation system is essential if irrigation is to
expand in the state. 16 per cent of the tubewells in UP are energised,
the rest are diesel-operated, reflecting the poor state of power supply.

It is in this context that the proposed reforms of the UPSEB assume
special significance. UP agriculture and UP’s finances will not improve
to any significant degree without a fundamental reorganisation of the
UPSEB. UPSEB’s accumulated losses now have crossed Rs 7,000 crore and
it is a huge drain on the state’s finances. In 1997-98, the subsidy
provided by the state to UPSEB was Rs 1,750 crore which was the amount
spent by the state on public health, family welfare, water supply and
sanitation. Over 40 per cent of UP’s outstanding debt is on account
of the UPSEB. There will undoubtedly be opposition from the over 93,000
employees of the UPSEB to the restructuring programme. Without sustained
political commitment, this programme will not succeed. If this does
not succeed, then UP can say goodbye to increasing investments in the
social sectors. Like the UPSEB, there are 49 other state-owned enterprises,
23 of whom are loss-making. The total employment in these public sector
companies is around 1.5 lakhs. Privatisation is an option. Auto Tractors,
a loss-making manufacturer of diesel engines and tractors, was privatised
some years back and is now making profits. Closure is the only option
for some of these units. Possibly, UPTRON falls in this category. Some
other companies will need to merge and restructure. The point is that
no great social purpose is being served by most of these corporations.
In fact, not only is no great social purpose being served but these
49 companies are sucking in scarce resources from the budget and not
helping the cause of the poor in the state. Their annual losses in 1997-98
exceeded Rs 210 crore and their cumulative losses total Rs 3,300 crore.

Agriculture Hampered by Politics In recent years, UP’s agriculture has
done well. This is one area that has not been affected seriously by
political instability. In Eastern UP, thanks to the consolidation of
landholdings, yields have improved substantially, although the gap between
UP and Punjab and Haryana is still considerable. In rice, for example,
UP’s yields are about 1.9 tonnes/ha, as compared to 3.1 tonnes/ha in
Punjab and 2.2 tonnes/ha in Haryana. The gap is wider in wheat where
UP’s yields average 2.5 tonnes/ha, as compared to 3.9 tonnes/ha in Punjab
and 3.7 tonnes/ha in Haryana.

In fact, what has saved UP during the last decade of political instability
is its performance in agriculture. But land reforms have not run their
full course in UP. Although the situation is not as bad as in Bihar,
there is still a pressing need for an Operation Barga type of West Bengal
effort in UP that will detect concealed tenancies, give security of
tenure to tillers and record their titles to land. In fact land consolidation
cannot proceed further without updating land records and keeping them
up-to-date. In UP, modernisation of revenue administration assumes special
significance. This, as the West Bengal experience has demonstrated,
is an intensely political task, a task that depends crucially on political
mobilisation and organisation of beneficiaries.

There is another aspect of UP’s land situation that needs urgent political
attention. 47 lakh hectares face special problems (like salinity, alkalinity,
waterlogging, etc) and another 68 lakh hectares are facing erosion.
Thus, something close to 50 per cent of UP’s cultivable area is facing
some type of erosion or degradation problem or the other. Technologies
to combat these problems have been developed but have not been introduced
on a large scale. An ‘usar’-land reclamation programme will have major
economic and social consequences as well. UP is worst affected by floods.
Only about 27 per cent of the flood affected area is under some form
of protection. The most effective and long-term solution to perennial
problems caused by floods, particularly in the eastern part of the state,
is a joint water and land management plan involving Nepal and India.
But few UP politicians have championed this case.

Another example of how politics is coming in the way of UP’s agricultural
progress is how sugar co-operatives function in UP as compared to Maharashtra.
Sugarcane yields in the eastern part of the state are around 50 tonnes/ha,
as compared to the national average of close to 70 tonnes/ha and the
80-100 tonnes/ha recorded in the southern states. Maharashtra has no
real comparative advantage in sugar but thanks to the co-operatives
it has become a major producer. These co-operatives have also emerged
as major agents of rural transformation.

The demography of caste does not explain fully why Maharashtra’s co-operatives
have succeeded, while UP’s have not. The reason is to be found in the
way the cane supply unions have been organised in UP and the way they
function under political and bureaucratic control without the full involvement
of farmers themselves. It is also because of the politicisation of the
co-operatives that UP has been unable to participate fully as it should
and can in the white revolution in the dairying sector. Dairying has
great potential for improving income distribution and generating gainful
employment but that potential is waiting to be realised if only the
politicians have the courage to professionalise and democratise co-operatives
along the lines of Amul and other such organisations. Even in the area
of handlooms, Cooptex in Tamil Nadu has been able to make a significant
impact and this has considerable relevance for handloom concentrations
in UP as well. Even though commercial banks have expanded, the main
source of farm credit remains the co-operative credit system. In UP,
the financial health of this system is very poor reflecting political
interventions and if this continues then agricultural credit will not
expand.

UP has enjoyed great clout in Delhi. But what has that clout been used
for? Gujarat is the largest producer of edible oils in the country and
also draws the maximum allocation from the PDS. Kerala has 3 per cent
of the country’s poor and draws over 10 per cent of cereal allocations
from the PDS. Uttar Pradesh has almost 18 per cent of India’s poor but
gets just around 8 per cent of cereal allocations from the PDS. Never
has this been made an issue by UP politicians. Of course, UP does not
lift all that is allocated to it � less than 50 per cent of the wheat
allocated to UP under the PDS actually gets taken by UP. Kerala MPs,
for example, will do anything to keep their share in the PDS going.
And that is perfectly natural. The PDS is a political instrument and
represents bargaining between the state and the centre. UP has been
most unconcerned about the low level of PDS coverage. This is not to
suggest that the PDS as it is presently conceived is an effective anti-poverty
instrument. It needs major changes.

Political Mindset: Basic Malaise

But this example is given to highlight the point that is being made
� that the basic malaise in UP is political mindsets and attitudes.
MPs from other states cut across political boundaries and aggressively
push their projects in Delhi. But not those from UP. There is also no
political pressure to implement what is already sanctioned. It is well
known that UP is unable to utilise many grants that are given to it
both by the central government and international agencies in, for example,
the field of primary education. But under-utilisation has never evoked
a public protest from political parties. It is strange that on the one
hand we say that we need more projects in UP but when money is allocated
it is not spent and there is no pressure to spend it expeditiously.
There is also no pressure from the political system for the implementation
of socio-economic legislation like laws relating to minimum wages, minimum
age at marriage, etc. UP has made much of the fact that the credit-deposit
ratio of banks in the state is just 32 per cent, as compared to an all-India
average of 57 per cent. This means that of every Rs 100 of bank deposits
in UP, Rs 32 is being lent in UP. This figure can go up to Rs 57. On
the other hand, the credit-deposit ratio in AP is 78 per cent, indicating
that deposits are flowing into AP from outside the state. Now, there
is no anti-UP conspiracy in this. It only reflects the lack of an investment
climate and lack of absorptive capacity brought about by poor infrastructure.
Infrastructure means not just power and roads but also law and order
and overall governance.

There are many reasons why communalism in UP has reared its ugly head
in recent years. The vernacular media has played a pernicious role.
The role of the state police has also been highly dubious. But there
is another aspect that needs attention. The nature of urbanisation in
UP has been such that there has been a proliferation of small and medium-sized
towns, particularly in the decade of the 1970s. Between 1961 and 1971,
the number of towns with population below 50,000 increased from just
244 to 293. But between 1971 and 1981, the number zoomed from 293 to
659. By 1991, the number had crossed 700. These towns account for about
a third of UP’s urban population.

We have yet to come to grips with the consequences of this growth. These
towns are by no means poor. They often are the locus of activities in
trade, service, transportation and household manufacturing. These towns
are also the recruiting places for organisations like the Bajrang Dal.
There is a related issue on urban growth. There are also many medium-sized
towns and cities that are centres of major household and artisanal industry.
These towns generate exports and are booming economically. But the lack
of basic infrastructure and changing patterns of inter-community relationships
is fuelling social tensions. Moradabad and Khurja are prime examples
of this phenomenon. This again reflects a failure of political awareness
and mobilisation.

There was a time when UP’s development administration was the envy of
the rest of the country. Paul Appleby in his report of 1951 was encouraged
by what he saw in UP and Bihar. But over the years, the administration
has been politicised thoroughly. Mayawati’s transfer spree was not unique.
During president’s rule in UP following the 1992 incidents, it was well
known that the UP Congress had made transfers and postings a lucrative
business. There is just no continuity in development administration,
particularly in the districts. It is not uncommon to find young officers
who have served four districts in two years. Planning Commission officials
have remarked how in areas like rural development they see the same
faces for years in states like Tamil Nadu and Karnataka but how the
turnover is so rapid in UP. Perhaps a time has come to rethink the entire
administrative set-up. At times it appears that the only way backward
districts in UP will develop is if the centre takes over the responsibility
directly, creates a new development cadre to challenge youth from rest
of the country to come and work for UP’s progress in an uninterrupted
manner. People coming from the outside will at least not fall prey to
local caste politics as the insiders have in states like UP and Bihar.