Comments by "Rutvik" (@rutvikrs) on "‘Union government should stop spending on state subjects if it wants to be fair to Southern states'" video.
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This conversation is an embodiment of why data has no meaning without qualitative analysis. He is wrong on several counts(Oh and I am a Kannadiga not from the north):
1. India has chosen states to become "earners". Example: MH's high GSDP is due to the financial center Mumbai. If FDI flows in today, it comes in through the state even if the resulting factory is in Gurugram, Coimbatore, Pune, Bengaluru or Noida. The concentration of Banking/Financial institutions is the reason. Just like that, PB and HR were chosen for the green revolution.
2. Coming to the south, TN was chosen for industrialization via Freight equalization policy. The entire belt between East to Central India lost its industries because of this. That is why TN which has not been the source of ores has the industry, but JH, BR, MP, CH, OR, AP, KR and even MH have the mines but the value add production is concentrated at TN. Another example is Coimbatore's mills are run predominantly by people groups from AP while India's cotton fields are predominantly between AP to GJ.
3. The nativist/regionalist/separatist sections of these selected states like PB, TN, MH have a spurious assumption that their inherent geographical advantages that caused their selection exists everywhere but the other states fail because of their "politics" or "education" or even "ideology"
(Additional points in replies else YT will delete this comment)
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@gireeshgprasad7589 Hey Gireesh! Always a good conversation with you around. (Why does YT block my replies when they get too long, how does one circumvent it? 😂)
1&3. When I use the strong choice of a word "choose", it's more of a compatibilist view. Serendipity, history, geography and other factors were undoubtedly the genesis of the advantage. To accentuate it with policy, ancillary institutions, facilities and infrastructure was the "government choice". Examples: Mumbai got RBI, SEBI, NABARD which sealed its status as the financial capital. Chennai got India's first dedicated Industrial estate in the late 50's at Guindy after many industries propped up. Bengaluru got various central research institutes, the 1985 policy which provisioned software export via satellites.
2. FEP concentrated industries and institutions to two cities, Mumbai and Chennai and none of the coastal states generated industries directly from the policy. Chennai was specifically prioritised over Kolkata in this case despite being older. Capex happened regularly under Nehru, Desai, IG until Rajiv with central funding while Haldia was inaugurated after a full 25 years of FEP. in this case, it was a clear act of planned and implemented prioritisation. Post policy, we actually witnessed the total collapse of the Kolkata-Myanmar, Kerala/Karnataka-Arab and Gujarat-Arab maritime routes.
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@gireeshgprasad7589 5. The states mentioned in OC have severe revenue deficits. A simple perusal of the numbers will confirm it. NIc websites are a good source to confirm it. These states are not being given extra, though their policy choices are condemnable in cases such as farm loan waivers.
6. I don't understand the framing here, the point is not that retention of resources, capital and people automatically leads to outcomes. It is addressing a charged narrative in "earning" states, that they alone are responsible for the generation and association with India loses them money. I am pointing to the same thing you are but with a critical difference, in the FEP era, octroi and inter state taxes were not charged. That is why erstwhile BH, MP and OR were revenue deficit states which is mentioned in every paper on FEP.
8. The only interstate competition that existed pre 2000s is for central institutes and funds. Today, Hyderabad and Noida compete with Bengaluru for BPO and IT. PB, KA and MH compete for biotech and even in the newscycle there was considerable competition for both Tesla plant and Semiconductor Fabs. Also see the microtrends for Textiles(KA and AP competing with TN and GJ), minerals (Borkaro expansion, Vedanta plants), Agro industries and Agro FMCG(moving from GJ, TN, MH and WB to UP and HR with Gurugram emerging as a major center for factories and logistics.) These industries are moving to areas where agriculture and mining are happening.
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