By: Professor Nisar Ali
Devolution powers and authority upon the grass-root institutions is historically considered as governance efficiency and maturity of democracy quantified in terms of ‘Devolution Index”. An exercise was carried out at IIPA, New Delhi to quantify the grass-root governance and consequent decision making process thereof, in order to estimate the scores for state and district-wise Devolution Index, but could not see light of the day. However, a land mark Constitutional Amendment in 19091-92, that is, 73rd and 74th amendments guarantee the decentralization of governance and the development at national level. Ten year prior to the said constitutional amendments, The Jammu and Kashmir Government, as pioneer in decentralized governance, enacted ‘Panchayat Raj Act, 1989, amended in the year 2000, robust in devolution of powers and authority, including judicial powers to the grass-root institutions, but unfortunately remained partially and half hearted implemented in the erstwhile J&K State. One of the mandates in the 73rd and 74th constitutional amendment is the constitution of finance commissions in states to suggest the criteria for fiscal devolution upon the grass-root institutions, that is, local bodies and the districts. Since then this practice is pursued as constitutional obligation by the states to ensure fruits of growth trickle down to the grass-root in an equitable manner.
The Jammu and Kashmir Government enacted a broad based “J&K State Finance Commission” Act in 2006 with massive mandate, besides, the fiscal devolution of resources including tax proceeds upon the local body institutions. The mandate included the mapping of regions and sub-regions with reference to well developed social, economic, human development and ecological indicators; identification of backward districts, evolving of policy instruments to equalize/balance the dispersal of development across the districts; identification of measures to bring about a paradigm shift in approach for inter se allocation of resources to realize self-sustained growth; formulating a set of administrative measures aiming at reforms in decision making and good governance; identification of employment backlog in the regions, sub-regions with focus on removal of disparities; augment fiscal resources and devolution of resources upon local body institutions; review of state finances and restructuring of public finance to achieve macroeconomic stability and debt reduction; recommend measures for effective implementation of 12th Finance Commission award; etc.
In its report, the Central Government, Department of Administrative Reforms and Public Grievances envisaged to have governance performance quantified and entrusted the assignment to National Centre for Good Governance and Centre for Good Governance, Hyderabad who carried out an exercise to attempt for the quantification of ‘good governance’ and estimate “Good Governance Score” by relying on various development indicators for the period of 2019-2021, that is, two fiscals. These institutions have attempted to analyze the state/district level data to demonstrate development performance of states, UTs and districts and conclude the high score states/districts as qualified ‘good governance’ states/districts. The sub-disciplines in social dynamics, economics, and public administration, etc debated on “Culture of Trust “and “Social Capital” supported by the data base of annual ‘World Value Surveys’, carried out periodically and provide quality data and analytical foundation to arrive at good governance index. The report under reference is based on the data base of social and economic indicators at state/ district level mostly and additional data generation for two fiscals on judiciary and public safety. The data used in the report for two fiscals essentially relate to the development performance of sectors concerned in the states and districts under reference rather than the governance performance which particularly refers to the decision making process. The partially adopted methodology, used by UNDP for Human Development Reports, is used to quantify the development and growth performance under the nomenclature or terminology of ‘Good Governance Index’ is misleading. The report entitled “Good Governance Index Assessment of State of Governance “has taken in to account sectors like, to name a few, agriculture & allied sectors, commerce & industry, human resource development, public health & infrastructure, public finance, etc and indicators of development like, to name few, GDP, per capita income, own tax revenue, fiscal deficit, public debt (under the nomenclature economic governance); growth of food-grains and farm products, growth of industry, changes in registered MSME; in education sector, gender based enrolment, schools with IT infrastructure, skill and placement; for public health sector, indicators like health and wellness centres, IMR, availability of doctors, hospitals, beds; in public infrastructure , access to potable water, household clean energy, etc. The report has taken in to account 50 indicators for two fiscals to arrive at performance of states, UTs and districts. With the given weight-age assigned to the respective indicators of development, the report has used a partial UNDP methodology to arrive at development scores of States and Uts. Therefore, these data demonstrate development performance rather than governance performance. Higher the score value of sector/indicator better the performance and vice versa.
The report categorizes state/UTs in “A” and “B” category and arrives at development performance based on the aggregated score value with differential weight-age assigned to each sector, higher weight-age to output based indicator while the lower weight-age to input/process based indicators. Among the ‘A’ category states Andhra Pradesh appears to get the score in agriculture and allied sectors 0.635, Goa and Punjab has 0.296 and 0.382 respectively; while Madhya Pradesh 0.652, Rajasthan 0.501 and at the tail-end, to name a few states, West Bengal 0.380 and J&K (UT) gets 0.463 score. The J&K ranks high in industry and commerce with score 0.716 followed by Himachal Pradesh 0.669. Similarly education sector in Punjab in (‘A’) group states get 0.698, Haryana 0.696, Kerala 0.692, Telangana 0.443 and among ‘B’ group states Orissa gets 0.590 score, U.P 0.568, while Rajasthan 0.398, M.P 0.380 and J&K 0.462 score value. The report has assessed the incremental changes in identified social and developmental indicators during the period 2019-2021, two fiscal years, and arrived at the final score of the states and UTs. Among the ‘B’ group states M.P, Rajasthan and West Bengal, to name a few, acquire score 4.887, 4.884 and 4.519 respectively while, among ‘A’ group states Gujrat, Maharashtra, Haryana and Punjab, to name a few, get the score 5.662, 5.471, 5.327 and 4.971 respectively. Among other North-East and hilly states, Himachal Pradesh scores a value 5.084, J&K 4.195, Arunachal Pradesh 2.840 and Meghalaya 3.477. The states/UTs and districts can be ranked in accordance with the score value, higher the score better the performance or higher the level of aggregate development.
Quantification of levels of development
The quantification development indicators have become important to ascertain precision and objective assessment of public investment with time and over space to make relative comparison in terms of spatial development (horizontal) and the change from one time period to another (temporal/vertical) development underlying the objective to ensure that fruits of development and growth trickle down in an equitable manner between the spaces (regions/sub-regions/states) and temporal shift of the spaces move from one growth trajectory/one level of development to another growth trajectory/the level of development with time.
The development indices on education, healthcare, decent standard of living (measured in terms of GDP and per capita GDP), industrial growth, social welfare, infrastructure, etc need a sufficient time gap to prepare comparative indices for two different time periods because the official data dissemination takes time to reach to public domain. Secondly the public investments in sectors like power, healthcare, infrastructure, etc usually have significant gestation lag between the investment/process and the outcome, therefore, is not desired to be analyzed just for two consecutive fiscals.
The Jammu and Kashmir Government made a comprehensive exercise (J&K State Finance Commission Report, Vol I-V, 2010), wherein I had a privilege to prepare the entire report for being the only professional member on the Commission and others superannuated senior officers from IAS cadre. The Commission analyzed more than 50 social, economic and human development parameters in addition to the population and area of the region/sub-region/district with reference period 1980-81, as the base period and 2009-10 as the terminal period, setting a goalpost or desired values for each indicator. For example, the desired value/ goalpost for achieving literacy is 100 percent in the region, sub-region or district, as the case may be, and minimum value is zero percent and every government endeavour to achieve the goalpost. Similarly per capita income we set a goalpost and make a comparison between the actual state of the base period and the terminal period, that is, the recent one. The ratio of the value of specific development indicator of the current period minus the base period as numerator to the maximum value of the concerned development indicator minus its minimum value multiple of 100 gives the index value of the development indicator concerned. In this way we are able to get incremental change between the two periods with respect to one variable and can be subject to aggregation to estimate the mean value of score, depending on the objective in question. This demonstrates development performance of indicators like literacy, female literacy, enrolments, etc in case of education. Similarly, the social sectors like healthcare, access to portable water supply, household clean energy, old age amenities, child-care facilities, recreation, access to power supply, communication, standard of living, employment, growth of industry, income, etc are analysed to estimate scores for these sectors.
The whole exercise demonstrates social, economic and human developmental changes between two periods of time for a region, state or district, as the case may be, hence development performance. In respect of governance, the variables like freedom, liberty, democracy, democratic institutions, participatory decision making, least time gap between the process and outcome, delegation of powers and authority to the governing institutions in hierarchy-complete decentralization, etc need to be incorporated in the exercise to arrive at “Governance Index Score”.
“Good Governance index score” or Aggregate development index (ADI) in J&K (SFC Report VlII)
While the commission considered more than 50 social, economic and human development parameters to estimate the score of “Good Governance Index”/Aggregate Development Index for “State, regions and districts, it established the entitlement of each district for devolution of development grants/plan grants, based on UNDP unchallengeable formula ad well laid criteria with appropriate weight-age assigned to each variable. Among the variables, the population was assigned 35 percent weight-age, area was given 20 percent and “Good Governance”/Degree of Development (Degree of Backwardness or Degree of Deprivation, estimated on 50 indicators) was assigned 45 percent weight-age. Based on the said criteria and formula a mere click of command of computer would allocate district/Block development funds without having to undergo a long drawn administrative process with bureaucratic and political red-tape. Some regions and districts demonstrated improvement in some development indicators while some regions and districts lagged behind as per the report, a few scores are given below for some selected districts.
Scores and ranking of selected districts in respect of education and overall development of Jammu and Kashmir for the period 1980-81 and 210-11(date of report submission).
District Education Development Index (EDI) Rank Aggregate Development Index (ADI) Rank
District 1980-81 Rank 2010-11 Rank District Rank 1980-81 2010-11 Rank
- Jammu 2868 1 0.4199 1 Srinagar 1 0.3619 0.4562 2
- Srinagar 1885 2 0.3279 3 Pulwama 2 0.3403 0.4471 3
- Anantnag 1289 6 0.2434 4 Anantnag 4 0.3358 0.3946 4
- Budgam 0.884 12 0.2489 11 Jammu 2 0.3376 0.4801 1
- Kargil 0781 14 0.2659 14 Kupwara 7 0.2798 0.3346 13
- Doda 1050 9 0.2999 9 Kargil 11 0.2491 0.3438 11
- Leh 1050 10 0.2961 10 Doda 14 0.2084 0.3213 14
- Kathua 1670 3 0.3426 2 Kathua 6 0.3171 0. 4262 4
- Pulwama 1670 11 0.3426 8 Bdgam 5 0.3193 0.4252 5
10.Baramulla 0.1251 7 0.2878 9 Baramulla 8 0.2778 0.3889 8
Kashmir Region o.2662 2 0.4398 2 Kashmir region 1 0.3481 0.4349 1
Jammu Region 0.3160 1 0.4398 1 Jammu Region 2 0.3039 0.4333 2
Ladakh Region 3 Ladakh Region 3 0.2432 0.3374 3
The districts or regions have moved from one level of development to another in different sectors and we have aggregated the sectoral development of all sectors/indicators and take arithmetic or geometric mean to arrive at ‘aggregate development index’ reflecting the level of development of region, sub-region or district, as the case may be.
In terms of the devolution of funds, the actual development expenditure for each sector in each region from 1980-81 fiscal, the Commission arrived at a finding that the Jammu and Kashmir regions have been allocated/utilized resources in an equitable manner. Based on the “Good Governance Score” or Aggregate Development Index (ADI) two districts, namely Jammu and Kathua in Jammu region, while districts Srinagar and Pulwama emerged on the top of the level of development in the Kshmir region and district Doda in Jammu region and Kupwara in the Kashmir region emerged at the tail end of the development. In the Ladakh region district Kargil follows Leh district in evelopment score. Hence the question of inequity or disproportionate development between the regions does not arise; the State Finance Commission (SFC), once for all, set the controversy to rest.
Taking regard to the Putnam’s theory and World Value Survey data one could bring in the additional variables to develop governance index, but prior to that the states and district need to develop the ‘devolution index’, testimony to decentralization and devolution of powers to grass-root. The overall state of economy recovering at snails pace. The household real incomes have been shrinking and according to latest NSS Report, September, 2021, 40 percent cultivator rural households are under debt and average debt per indebted urban household stands Rs.5.37 lac. Further, the unemployment rate in Jammu and Kashmir stands, as per CMIE Report, 22.75 percent as against the neighboring state Himachal Pradesh 11.74 percent.
The author is Former Member of the J&K State Finance Commission
