We like to think that our State of the States report challenges established norms-and shakes up the establishment. The idea of the report, now in its third year, is to identify good governance on the ground and create a consensus on issues of national importance. Even though a good number of chief ministers either personally attend the report presentation or send senior bureaucrats, some make their presence at the function conditional to receiving an award. It could only mean that they take the rankings very seriously.

PICTURE SPEAK

Our 2004 cover on the State of the States

And rightly so. The State of the States report is put together meticulously and thoroughly. It reveals the numbers that uncover the hard facts of a state government's performance, irrespective of peripheral issues like party politics or personality cults. Last year we expanded our report to include all 30 states and five Union territories and this year we have added some new parameters.

In keeping with the Central Government's mantra that "outlays must match outcomes", we have rated the efficiency of government spending. For the first time, we have used an index of pro-poor growth to see which state has adhered closest to the tenet of "reforms with a human face". We have developed an Economic Freedom Index in order to rate states on the business environment that they offer entrepreneurs. India is in an ideal position to buck a trend seen across most of Asia-and prove that economic and political freedom can co-exist, that a surfeit of one does not exclude the existence of another. The economists behind the State of the States report, Bibek Debroy and Laveesh Bhandari, are out-of-the-box thinkers who have once again given us several new mirrors to hold up to Indian governance.

As part of our package, we also looked at the three new states created five years ago to see how they were faring in economic and human development terms. For governance, we found again, small is indeed beautiful.

While the overall rankings for the better-performing states are largely the same-Punjab and Goa being No. 1 states-some of the results contained in the report are startling. They tell of dramatic shifts that indicate how the demographics of India are changing. Kerala no longer leads the country in development indices like education and health. Punjab finds itself being pushed by Gujarat when it comes to investment environment. Executive Editor Rohit Saran, who coordinated the cover package, says, "There are unmistakable signs of a new order emerging as old states are being elbowed out by more aggressive performers." Obviously, the Darwinian maxim of survival of the fittest continues to hold good everywhere.

Index