On November 19, Prime Minister Narendra Modi, addressing a select gathering of Cabinet ministers, foreign diplomats, industry leaders and senior bureaucrats in Delhi, said the Union government was working towards doubling the size of the Indian economy to $5 trillion as soon as possible and placing India among the top 50 countries in the World Bank’s Ease of Doing Business ranking. To achieve this goal, the prime minister said, his government was strengthening the cooperative competitive federalism framework for which it was continuously in discussion with states to streamline regulatory approvals and expedite clearances.

Driven by this push from the top, Indian states are fast emerging as growth-driven units intent on outperforming each other in the race to reach the top in terms of economic development and social welfare. Chief ministers, cutting across party lines, are positioning themselves as CEOs of their states. They have the micro details of their state on their fingertips, they lead from the front and are ready to adopt innovative, even unconventional means to find solutions to problems.

From ease of indulging in corrup­tion once, the emphasis today has shifted towards ease of doing business. According to the Confederation of Ind­ian Industry (CII), the performance of states in the World Bank and Department of Industrial Policy and Promotion (DIPP) ease of doing business rankings reflects the remarkable progress made in improving the investment climate in the past four years. The innovative partnership between the central and state governments and the spirit of cooperative and competitive federalism in facilitating investments across the country is yielding notable results, CII president Rakesh Bharti Mittal said recently.

In this context, the india today State of the States study has become more relevant than ever. In its 17th year, it has emerged as a comprehensive and robust barometer of the performance of Indian states. This year, we expanded the attributes across categories (see methodology) and, after consulting experts, assigned different weightage to each category. The states were evaluated for a total score of 2,000 across categories. Even for attributes, we assigned different weightage. The logic was simplegeographical and social factors often give unfair advantage to certain states if the same weightage is attributed to all the categories. For instance, Delhi or an industrial state such as Maharashtra may score low against Himachal Pradesh, Kerala or Assam on environment. So, to neutralise any advantage, categories that reflected a state’s own effort more were given higher weightage.

This is not to say environment is less important than other categories. In fact, states’ performance on environment has become even more critical as India, according to The Yale University’s Environment Performance Index 2018, stands at the bottom of the Global Environment Performance Index (EPI) rankings today. In 2016, the country was ranked 141 out of 180 countries. In 2018, it has slipped to the 177th position. With national capital Delhi gasping for fresh air, Kolkata emerging as one of the most polluted states and Assam named as home to the country’s second most polluted rivers, environmental degradation is not restricted to specific cities, zones or regions anymore. If the political leadership and social awareness don’t work in tandem, development will be meaningless.

Sixteen years ago, when india today recognised the increasing role of states in India’s transformation and started the ambitious task of measuring the pace of their growth, the Planning Commission determined the road map of the country’s growth. The states followed the plan New Delhi chalked out. Today, the states are masters of their own destiny or, at the least, moving in that direction. The Centre-state relationship has moved from that of donor and receiver. Now it’s more performance-based reward. In fact, NITI Aayog has pitched for a formula for the central government to share its divisible pool of taxes with states in a way that does not go against the interest of states that have performed well in terms of social development. I think it is clear that the formula (for devolution of taxes to states) has to include some performance-based criteria so that those states which have done better on certain parameters are not punished, NITI Aayog vice-chairman Rajiv Kumar recently said. He, however, warns that it cannot be done overnight and has to be implemented gradually, considering the political sensitivity around resource allocation in a federal set-up.

The disparity in the growth of states is one of the biggest challenges before the country. The uneven growth has spawned several narrativesnorth versus south, coastal versus mainland, stable government versus frequent regime changes. How­ever, development doesn’t always follow these binaries as the india today State of the States study has reflected on multiple occasions. For instance, states which have featured the maximum number of times among the top 10 across categoriesTamil Nadu, Karnataka, Haryana, Himachal Pradesh, Karnataka, Gujarat and Maharashtrareflect an almost uniform progress across all regions. Certainly, there is serious cause for concern: two of the major states of the EastWest Bengal and Odishado not top the table in any of the 12 categories.

What’s encouraging, however, is the ranking of the most improved states. States that have traditionally been laggards in the best performing category have shown the fastest growth in the past five years. The top seven most improved statesAssam, Jammu and Kashmir, Madhya Pradesh, Uttar Pradesh, Chhattisgarh, Jharkhand and Biharare at the bottom of the best performing states. Of course, critics say that given that they start from a low base, their growth rates look good. But this does not detract from the fact that these laggard states are making a valiant effort to change their position. That’s the reason BIMARU states such as Bihar and MP are clocking a nearly 10 per cent growth rate, often higher than economic behemoths such as Maharashtra and Punjab. A tiny state like Puducherry has been consistently growing at over 10 per cent.

For the traditional table toppers, it becomes difficult to match the growth rate of the new risers. It’s therefore encouraging to see as many as 27 of 31 states and UTs examined for the india today State of the States study being awarded across multiple categories.

Yet, it’s just the beginning. Apart from the regional disparitysouth and west India have been the main growth drivers, with the north catching up but the east still performing abysmallythe real big divide is between urban and rural India. Indian cities account for nearly 65 per cent of India’s GDP.

Even among states performing well, it is only a few cities that are driving growth. This rural underdevelopment is resulting in a migration crisis, the most recent example being in Gujarat. According to the Economic Survey 2016-17, which studied internal migration patterns, less affluent states see more out-migration’ while the most affluent states are the largest recipients. So south Indian states such as Tamil Nadu, Karnataka and Kerala have attracted the highest number of migrants while out-migration rates have increased in MP, Bihar and UP. The last two account for more than half of inter-state migrants. In the five years ended 2016, an average of nine million people migrated between states every year for education or work, according to the Economic Survey 2016-17. That’s almost double the inter-state migration recorded in 2001-2011 and captured by Census 2011.

Interestingly, out-migration dipped in Assam, perhaps a reflection of the growing opportunities in the state. No wonder then that it has become the most improved large state, based on its perform­ance across 12 categories in the past five years. In an interview with india today last week, Assam Chief Minister Sarbananda Sonowal claimed that private com­panies offered jobs to around one lakh youth in the past two years while his government absorbed 55,000 people.

Unfortunately, politically motivated rhetoric and unsubstantiated information spreading across social media have often led to xenophobic skirmishes against migrants in several Indian states. But what gets drowned in the noise of prime time and headlines in big type is the story of socioeconomic integrity propelled by migration. For instance, in Surat, migrants make up 70 per cent of the city’s workforce. Municipal authorities in Surat are catering to the city’s migrants by running over 120 special schools for them.

India’s progress is fuelled by such stories and the india today State of the States study is an acknowledgment and celebration of such inspirational nuggets.

Methodology

The 2018 India Today State of the States study was conducted by leading research agency Marketing and Development Research Associates (MDRA). The states were ranked under two broad segmentsBest Performing and Most Improved. In the best performing category, the latest performance of a state specific to a category based on recent data was examined. In the most improved category, improvement of a state over the past five years based on outcome-based positive changes were examined. In order to have a fair comparison, states were divided into big and small. States with a geographical area of over 35,000 square kilometres and population of more than 5 million were categorised as big while the rest were clubbed as small. The performances of the states were examined under 13 categoriesoverall, economy, infrastructure, agriculture, education, health, law and order, governance, inclusive development, entrepreneurship, environment, cleanliness and tourism. Each category was given different weightage. Data was sourced from different reliable databases under various attributes105 for best performing ranks, 80 for most improved ranksfor each category. More than 20 expertsacademia, representatives from NITI Aayog, think-tanks, research organisations, sociologists and economists were consulted to determine the attributes and weightage for categories and attributes. The data collected for each attribute was cleaned, normalised and standardised. Most recent data for each state2016-17 and 2015-16were analysed for evaluation of best performing states while compounded annual growth rates (CAGR) on each attribute for the past five years were used to rank most improved states. Based on the weightage determined for each attribute, rankings in each category were arrived at. Categorywise scores were used to arrive at overall best performing and most improved states. The MDRA research team included Abhishek Agrawal (Executive Director), Abnish Jha (Associate Project Director), Shamik Bandyopadhyay (Assistant Research Manager) and Rajan Chauhan (Research Executive).