M Govinda Rao
Credit: DH Illustration
Since 2007, Karnataka has spent over Rs 32,000 crore to implement the D M Nanjundappa Committee’s report on addressing regional imbalances in development. In March this year, the Siddaramaiah administration formed a new commission headed by economist M Govinda Rao to study regional imbalances. The new commission aims to submit its report by September 2025. In a chat with DH’s Sujay B M, Prof Rao discusses historical reasons for regional imbalances, the impact of the Nanjundappa Committee, and what his commission will do. Excerpts:
Twenty-two years after the Nanjundappa Committee report and having spent Rs 32,000 crore, why does regional imbalance persist?
The Nanjundappa Committee has rendered yeomen service to Karnataka. Based on its recommendations, the government created a special development programme and invested heavily. However, private investment is also crucial. Development includes both public and private investments. The nature of institutions determines the structure of incentives. We will study the progress since 2002 and act based on that.
Why is the Kalyana Karnataka region backward? Is it due to the earlier macro-economic approach to planning in the Nehruvian era, as the Nanjundappa committee said, or are there colonial reasons?
Well, if we are to blame the planning era, why was the region still underdeveloped in 2002, over 10 years after the markets opened up (liberalisation)? Secondly, we should remember that in the planning era, the government had primacy over investments in large-scale industries, but the small scale was left untouched, as the Industrial Policy Resolution states. So, the basic question remains about incentives. Of course, the import-substituting industrialisation strategy of the early pre-independence era was unsuitable for the country.
Since Kalyana Karnataka and Kittur Karnataka were part of the erstwhile Nizam rule and Bombay presidency, respectively, the Nanjundappa report argued that they did not have priority in those regions as linguistic minorities. Do you think that’s the root cause of the backwardness?
This is true to a considerable extent. While the backwardness could have been due to the lack of spending in those regions before the 1956 reorganisation of states, places like Coastal Karnataka flourished even without government investments as the structural incentives were very good. For instance, Devaraj Urs’ land reforms were most successful there.
It’s argued that infrastructure development without improving education and healthcare is insufficient. Do you agree?
I don’t agree. We should walk on two legs and cannot walk on one and race on the other. Physical infrastructure is necessary to create enabling conditions for private sector investment. In simple terms, either capital should go to the region or people in that region should go in search of capital. People will move out if capital is scarce. However, migration of unskilled labour doesn’t lead to a huge rise in income. Thus, education, health care, and skill development are very important.
Why have successive governments ignored education and health?
Politicians, irrespective of political affiliations, do not see direct electoral benefit from these sectors. Also, there is a perception that private education is better than public education. For public education to grow, teachers must have sufficient incentives. Similar is the problem for health care. While 6 per cent of the gross domestic product is recommended for education, we only spend around 3.3 per cent. As per the Health Ministry’s norms, we must spend 2.5 per cent of the GDP on creating sub-centres and health centres alone. However, only 1.2 per cent is spent on health. These issues must be addressed.
Do you agree with the Nanjundappa Committee’s contention that the taluk is the basic development unit? If yes, will you continue with the same methodology?
Yes. It was an important contribution of the Nanjundappa Committee report to bring taluks to the forefront, as approaching development from the perspective of decentralisation is critical. However, it’s risky since the quality of information available at the decentralised level is not as good as at the centralised level, though things have improved. State finance commissions have to step up their game. The report has set an important benchmark, and we need to see how far we can go from there.
Will you again identify backward taluks? If yes, will the model be still based on the Comprehensive Composite Development Index (CCDI)?
I have some conceptual problems with the 35 development indicators of the Nanjundappa Committee report. For instance, the report doesn’t consider the standard of living as a factor. Also, those indicators included both input and output variables. For instance, a poor teacher-student ratio is an input, while the resultant literacy is an output. Both must be studied separately, and then we must search for similarities. We will revisit the 35 development indicators and work out a new CCDI.
The Nanjundappa Committee conducted district development dialogues. They went to different districts, spoke to the people there, elicited their responses, and formed their policies based on that. Will you also do something similar?
We have prepared questionnaires for political leaders, administrators, chamber of commerce and industry members, educational institutions, and prominent citizens. These will be circulated and discussions will be held with various stakeholders.