Does Decentralization Matters For Human Development?

1 Does Decentralization Matters For Human Development? J. Nagaraj Tejbir Singh Soni

2 Does Decentralization Matters For Human Development? Abstract: The objective of this paper is to answer the question that whether decentralization matters for development? It has been often cited that decentralization is the panacea for underdevelopment. The paper seeks to find out that are these two variables correlated and the extent of their correlation. The methodology used to answer the above objective is to consider two National Human Development Index scores (2001 and 2011) prepared by planning commission of India and consider the devolution index scores of 2009 as being brought forward by National Council of Applied Economic Research (NCAER). What the analysis yields is that there is moderate positive correlation between the human development index of 2011 and Devolution Index of 2009. Further considering the performance of states with respect to Human development Index within the decade there are some states which have deteriorated in their scores over time despite them being having better devolution index ranks. Consequently to answer the question whether decentralization matters for development and taking into picture the moderately positive correlation between the two we come up with some of the likely factors which are pre-requisite for not just decentralization but effective decentralization. The main finding of this paper is that states which have prioritized social capital have also yielded better results with respect to decentralization. Decentralization, in common parlance, means transfer of authority and responsibility from higher levels to lower levels of government. It involves the relocation of decision making authority with respect to political and administrative issues from central to local levels. In India there had been various committees appointed which explicitly or implicitly talked about the linkage between decentralization and development. To mention some of these committees Balwant Rai Mehta Committee (1957) to examine the working of Community Development Programme and National Extension Scheme; G.V.K.Rao Committee (1985) on Administrative Arrangement for Rural Development and Poverty

3 Alleviation Programme; L.M.Singhvi Committee (1986) on Revitalization of Panchayati Raj Institutions for Democracy and Development. In development discourse it is the belief that decentralization would ultimately lead to better social development. The stress on decentralization stems from its impact in improving service delivery to marginalized with respect to education, health and social security by improving accessibility, reducing delays, it develops self-respect among the lower levels of the government, tweaking development programmes according to local needs, providing voice to the people, encouraging participation which would strengthen democracy at the grass roots that would ultimately enhance accountability. It would lead to better targeting of the poor and would help to reduce the inequities prevalent in the state. These inequities would be addressed by better prioritization of development programmes. This paper would examine the relationship between decentralization of Indian States after the emergence of 73 rd constitutional amendment act or Panchayati Raj Act and their relative position in Human Development Index () report for various Indian states prepared by Planning Commission of India. The ranking of various states with respect to decentralization is found in the Devolution Index (DI) which is prepared by the National Council of Applied Economic Research (NCAER). Rationale The purpose of this paper is to find out whether the buzz word decentralization is the answer to all the problems of under development. It has been often cited that the best means of development is through democratic self-governance or decentralization. This paper would try exploring that whether there is any correlation between decentralization and human development index of various Indian sates. If there is not a perfect correlation between the

4 two scores then the report intends to focus on various likely factors that might be contributing to differential ranking of states in devolution index and human development index. The subsequent parts of the paper would be presented in three sections the first section would cover a brief note on the concept of devolution index. The paper will explain what we mean by the transfer of functions, funds and functionaries. It would also explain the concept of human development index. Second section would focus on the comparative ranks of the states of India with respect to both the indices. Third section would focus on some states where a gap exists in the two indices. This section would show why despite having better devolution index these states have witnessed downfall in human development index. The fourth section would conclude by suggesting what should be the preconditions for effective devolution. 1. Methodology To find out the relationship between Devolution Index and National Human Development Index the data used is taken from planning commission. Supporting secondary data is collected from the magazines, newspapers and government sources. Devolution Index is defined as an aggregate of the number of functions, funds and functionaries transferred by the state governments to the Panchayati Raj Institutions (PRI s). It was been calculated to measure the relative ranks of states and the extent of democratic decentralization. Devolution Index had been prepared primarily based on the research paper of Alok and Bhandari (2004). It has been in usage since the year2006-2007. The original index was revised in 2009 which along with including the above mentioned 3F s (functions, funds and functionaries) also included framework. The concept of framework seeks to rank states in accordance with their adherence to the four basic constitutional mandates as

5 enshrined in the 73 rd Amendment Act. These four components include the presence and functioning of (i) state finance commission (SFC); (ii) regular elections (in a span of five years); (iii) state election commission (SEC) and (iv) district planning committee (DPC). These four components within the framework are not comprehensive enough to accommodate all the provisions envisaged in the Act but it has been assumed that the other mandatory provisions had been adhered to by all the states. These four requirements have to be fulfilled by the states for the purpose of calculation of devolution index from 2008-09. In the revised version of calculation of devolution index NCAER has made it a stage-wise process and the first stage is the fulfilment of framework criterion. The second stage evaluates the devolution of funds, functionaries and finances. The table below highlights the functions, finances and functionaries that are used while calculating the devolution index. Table 1. Indicators used for calculation 2008-09 Devolution Index and Sub-Indices. Functions Finances Functionaries 1. De facto transfer of 29 functions listed in 11th Schedule. 2. Detailed Activity Mapping conducted for these 29 functions. 6. Authorization of PRIs to collect taxes, duties, tolls etc. 7. PRIs own revenue as percentage of PRIs expenditure 21. Expert Institutions and entities to support PRIs for the preparation of their Annual Plans specified 22. Expert institutions and entities to support capacity building/ training of elected officials of PRIs specified

6 3. Whether DPC is involved in the preparation of District Plan? 4. Are GP implementing the major Flagship Programmes? 5. Are GP fully empowered to sanction expenditure? 8. Timely action on latest SFC s major recommendations. 9. Percentage of funds devolved to PRIs that are untied.(plan) 10. Percentage of funds devolved to PRIs that are untied. (Nonplan). 11. Promptness with which Twelfth Finance Commission Funds transferred to PRIs. 12. Allocation of funds to PRIs based on apportionment formula 13. Are GP fully empowered to prepare plans for expenditure? 23. Amount of money provided for the capacity building/ training of elected officials of PRIs 24. Amount of money provided for the capacity building/training of appointed officials of PRIs? 25. Annual Report for last fiscal year released 26. Functionary wise accountability to PRIs: GP 27. Functionary wise accountability to PRIs: IP 28. Functionary wise accountability to PRIs: DP 14. Whether there is a separate budget line for PRIs in the State Budget for 2007-08? 15. Devolution of finances corresponds to functions? 29. Average days of training of Functionaries: Elected Officials; GP 30. Average days of training of Functionaries: Appointed Officials; GP

7 16. Percentage of PRIs whose accounts are audited(gp) 17. Percentage of PRIs whose accounts are audited(bp) 18. Percentage of PRIs whose accounts are audited(dp) 19. Specify the registers in which the accounts of GP are updated 20. Do any funds directly go to the GP with respect to the functions? 31. Average days of training of Functionaries: Elected Officials; IP 32. Average days of training of Functionaries: Appointed Officials; IP 33. Average days of training of Functionaries: Elected Officials; DP The National Human Development Index () is calculated by Planning Commission of India. There are three components covered in the which includes education, health and living standards. The component of education has two sub components which includes (i) Mean years of schooling for adults aged 25 and (ii) Expected Years of schooling for children of school entering age. The second component of life expectancy is calculated using the minimum value of 20 years and a maximum value of 83.4 years. The maximum age is the observed maximum amongst all the countries within a time span of 1980-2010. The third component with respect to wealth component or living standard has a minimum of 100$ PPP and a maximum of 107,721$ PPP. This is calculated for a span of 1980-2010.

8 In this paper we intend to show the relative position of states in India with respect to their scores in Devolution Index of 2009 and Human Development Index of 2001 and 2011. The primary reason for choosing two reports of Human Development Index is to compare the change in the Human Development Index over a decade with Devolution index. In this report we wish to focus on specific states and analyse empirically whether the states which have got better in decentralization scores have also got better human development scores? In short we would be focussing on the question that does decentralization and human development go hand in hand? Or are there certain other residual factors which determine better human development scores? It is out of scope of this paper to cover all the states of India so our objective would be to focus on some specific states and provide insights into the factors which determine any change in human development index over the decade. Table 2. and Devolution Index of various Indian States. Devolution 2011 Index 2009 STATES Scores Ranks Scores Rank KERALA 0.79 1 74.3 1 KARNATAKA 0.52 12 69.45 2 TAMIL NADU 0.57 8 67.06 3 WEST BENGAL 0.49 13 66.51 4 MAHARASHTRA 0.57 7 61.49 5 MADHYA PRADESH 0.38 20 59.78 6 GUJARAT 0.53 11 53.07 7 ANDHRA PRADESH 0.47 15 50.1 8 HIMACHAL PRADESH 0.65 3 47.01 10 HARYANA 0.55 9 43.23 11 ORISSA 0.36 22 42.93 12

9 UTTAR PRADESH 0.38 18 41.73 13 BIHAR 0.37 21 41.2 14 RAJASTHAN 0.43 17 37.56 16 GOA 0.62 4 34.52 17 CHHATTISGARH 0.36 23 34.24 18 PUNJAB 0.61 5 31.54 19 UTTARAKHAND 0.49 14 29.92 20 ASSAM 0.44 16 28.31 21 2. Analysis This section of the paper will focus on the comparative ranks of states in both the indices and would try to find out the correlation between the two scores. Table 3. Net Scores (2011-2001) Percentage Change (2001-2011) Devolution Index scores STATES 2001 2011 KERALA 0.64 0.79 0.15 23.82 74.73 KARNATAKA 0.48 0.52 0.04 8.58 69.45 TAMIL NADU 0.53 0.57 0.04 7.34 67.06 WEST BENGAL 0.47 0.49 0.02 4.24 66.51 MAHARASHTRA 0.52 0.57 0.05 9.37 61.49 MADHYA PRADESH 0.39 0.38-0.02-4.82 59.78 GUJARAT 0.48 0.53 0.05 10.02 53.07 ANDHRA PRADESH 0.42 0.47 0.06 13.70 50.1 HARYANA 0.51 0.55 0.04 8.45 43.23 ORISSA 0.40 0.36-0.04-10.40 42.93 UTTAR PRADESH 0.39 0.38-0.01-2.06 41.73 BIHAR 0.37 0.37 0.00 0.00 41.2 RAJASTHAN 0.42 0.43 0.01 2.36 37.56 PUNJAB 0.54 0.61 0.07 12.66 31.54 ASSAM 0.39 0.44 0.06 15.03 28.31

10 The above table shows the scores of Indian states in two human development reports (2001 & 2011) and the scores of these states in devolution index for 2009. On the basis of the above table we have classified the states into three categories. 1. States which have a positive percentage change in their Human Development Index over the decade by more than 10 % and simultaneously have scored more than 50 in devolution index scores. These states include Kerala; Andhra Pradesh and Gujarat. Table 4. High % Change High Devolution Index Net Scores (2011-2001) Percentage Change (2001-2011) Devolution Index scores States 2001 2011 KERALA 0.64 0.79 0.15 23.82 74.73 GUJARAT 0.48 0.53 0.05 10.02 53.07 ANDHRA PRADESH 0.42 0.47 0.05 13.70 50.1 2. States which have a positive percentage change in their Human Development Index over the decade by less than 10 % and simultaneously have scored more than 50 in devolution index scores. These states include Karnataka, Tamil Nadu and West Bengal.

11 Table 5. Low Change High Devolution Index Net Scores (2011-2001) Percentage Change (2001-2011) Devolution Index scores States 2001 2011 KARNATAKA 0.48 0.52 0.04 8.58 69.45 TAMIL NADU 0.53 0.57 0.04 7.34 67.06 WEST BENGAL 0.47 0.49 0.02 4.24 66.51 3. States which have a positive percentage change in their Human Development Index over the decade by more than 10 % but ironically have scored less than 50 in devolution index scores. These states include Assam and Punjab. Table 6. High % Change Low Devolution Index Net Scores (2011-2001) Percentage Change (2001-2011) Devolution Index scores States 2001 2011 PUNJAB 0.54 0.61 0.07 12.66 31.54 ASSAM 0.39 0.44 0.05 12.82 28.31 Amongst the first category of states we have considered Kerala, Gujarat and Andhra Pradesh to come up with certain reasons for their better performance in devolution index and. Amongst the three states taken into consideration we would not focus on Andhra Pradesh since it started in 2001 with quite low scores of 0.42 and even in a decade its score has achieved a modest growth of 13.7% to reach 0.47. This 2011 score of Andhra Pradesh is almost equal to or below the 2001 scores of Karnataka (0.48); Tamil Nadu (0.53) and West Bengal (0.47).

12 Table 7. Percentage Change (2001-2011) Devolution Index Scores STATES 2001 2011 Net Scores 2011-2001 KARNATAKA 0.48 0.52 0.04 8.58 69.45 TAMIL NADU 0.53 0.57 0.04 7.34 67.06 WEST BENGAL 0.47 0.49 0.02 4.24 66.51 ANDHRA PRADESH 0.42 0.47 0.06 13.70 50.1 Similarly amongst the second category of states Karnataka, Tamil Nadu and West Bengal are important to analyse, because these states have done well in devolution index than the rest of the states. The paper tries to find out the reasons why the above mentioned states irrespective of having respective ranks of 2, 3 and 4 on devolution index 2009, have not achieved substantial growth in their scores over the decade(2001-2011). With respect to states in the third category which includes Punjab and Assam this paper would not focus on Assam because it started in 2001 with a low score of 0.39 and has achieved a score of 0.44 in a decade ( 2011). This is quite low comparing the of other states in 2001 for example Karnataka (0.48); Tamil Nadu (0.53) and West Bengal (0.47) Table 8. Percentage Change (2001-2011) Devolution Index Scores STATES 2001 2011 Net Scores 2011-2001 KARNATAKA 0.48 0.52 0.04 8.58 69.45 TAMIL NADU 0.53 0.57 0.04 7.34 67.06 WEST BENGAL 0.47 0.49 0.02 4.24 66.51 ASSAM 0.39 0.44 0.06 15.03 28.31

13 Taking into consideration the states mentioned in Table 2 the correlation between the ranks of devolution index (2009) and human development index (2011) is 0.30. This moderately positive correlation states that it is not necessary that by improvement in decentralization human development would automatically improve. Rather there might be certain other variables which determine the relationship between these two ranks. Infact this moderately positive correlation forms the basis for finding the causes why certain states despite having high decentralization scores or ranks have deteriorated in their human development index scores or ranks. 25 Comparison of 2011 and 2009 DI Scores 20 15 10 2011 Rank 2009 DI Rank 5 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 3. Reasons This section would focus on contemplating reasons for relatively slow performance with respect to states in the second category which includes Tamil Nadu, Karnataka and West Bengal. The absence or presence of these set of factors are the reasons for better performance of states in the first category.

14 3.1 Caste Inequalities Considering the case of Tamil Nadu we find that caste and gender inequalities are still prevalent and even though the act ensures reservations there are various informal mechanisms in which a caste conscious society dilutes the reservation provision of the act. S.Viswanathan cited in The Hindu that In Tamil Nadu rich and powerful caste Hindu groups either forced Dalit aspirants to keep off the polls, or fielded handpicked farm workers as candidates, or auctioned the PRI posts to the highest bidder. Even if Dalits wins the election there have been various forms of discriminations and un-cooperative behaviour towards them. There are several instances in Tamil Nadu where they have been disrespectfully treated. There are five village panchayats in Tamil Nadu that are reserved for Dalits but there have been no elections conducted in these panchayats for initial two-five years term due to resistance from upper caste group. So what comes out of this case is that not merely by having a constitutional provision, rather there are certain other residual factors responsible for the effective functioning of the Acts. In one of the study being conducted by Evidence, a Madurai based organization, in Tamil Nadu amongst the 171 Dalit Panchayat Presidents interviewed there is evidence that un-touchability still prevails. Since most of them were not even allowed to sit on chairs; there was severe discrimination and most of the Panchayat presidents were ignorant about their constitutional rights with respect to un-touchability. The reality of the matter is that after a decade of passing Panchayati raj act, the caste Hindus have not co-operated with respect to conducting elections in Pappapatti, Keeripatti and Nataramangalam village in Tamil Nadu. These village Panchayats are reserved for Dalits, finally the Scheduled Caste/Scheduled Tribe Commission intervened and elections were held with great challenges for the state government. This clearly shows how even operationalizing

15 the constitutionally recognized duty of conducting regular, free and fair polls might be tweaked on the lines of caste. Amongst one more reason for relative decline in the position in index of Karnataka is the role of caste based politics. It has deepened its roots in village, the big national politics like Bhartiya Janta Party, Congress and Janta Dal(Secular) are also playing caste politics, particularly BJP and JD(S) polarised the Vokkaligas and Lingayats. 3.2 Gender Inequality There are several cases where Dalit women who cook food for mid-day meal scheme faces discrimination and social boycott. This was being reported for various villages in Kadayampatti Union in Salem district, Tamil Nadu. Parents have been voicing their boycott for these Dalit women by preaching their children not to have food cooked by these women and it is a sin to eat food cooked by them. Another evisdence for the prevailing gender inequality comes from the Human Development Report conducted by Gandhigram University for the period 2003-2007. The study shows how Deeply rooted gender inequality has led to denial of access to women access to health care in Nagapathinam, Tamil Nadu. The study shows how gender inequality has led to vicious cycle of poverty of health. There were several issues which were highlighted in the study which includes the patriarchal structure, multiple pregnancies, and preference for sons and women not having voice to take a stand against their families. This report highlights high incidence of still births, Infant mortality rates, maternal mortality rates and antenatal anaemia in Nagapathinam.

16 3.3 Caste & Gender Discrimination: Double Marginalisation There are also cases amongst second category states where there is not just discrimination due to caste but it has been further intensified when gender component is added to it. This leads to dual burden of being a women and belonging to lower caste. A specific case of a Dalit woman named A.Kalaimani, a village Panchayat president of Kara Vadatheru village Panchayat near Vadakadu, Tamil Nadu. She was being denied the rights to hoist the national flag on republic day from the Panchayat office by the people from Kallar Community. This case highlights how caste restricts the freedom of people even with respect to some of the basic rights. There is yet another case of Valli Deivanai, a Dalit woman, who is the president of Pasuvapatti village Panchayat in Chennimalai block, Erode district. She was not allowed to occupy the chair allotted for the elected president. 3.4 Inequality in Literacy Another factor which needs to be taken into consideration while comparing the ranks of states in devolution index and human development index is the rate of literacy prevailing in these states. If we take into consideration the literacy rates in Kerala it is higher in comparison to Tamil Nadu and Karnataka. Table 9. States Literacy Rate (2011 Census) Literacy Rate 2011 census Literacy Rate Male (2011 census) Literacy Rate Female (2011 census) Gap (Male- Female) Kerala 93.90% 96.00% 92.00% 4.00% Tamil 80.30% 86.80% 73.90% 12.90% Nadu Karnataka 75.60% 82.80% 68.10% 14.70%

17 From the above table we can observe that the gap between male and female literacy is higher in the case of Karnataka in comparison to Kerala. This higher gap highlights the extent of gender inequality prevalent in the society. 100.00% 90.00% 80.00% 70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% 93.90% 96.00% 92.00% 86.80% 80.30% 82.80% 73.90% 75.60% 68.10% Literacy Rate 2011 census Literacy Rate Male (2011 census) Literacy Rate Female (2011 census) Kerala Tamil Nadu Karnataka Yet another variable that needs to be taken into consideration while discussing the literacy rates is the spending of these three states with respect to education. The underlying table shows the proportion of developmental expenditure on education of these three states. Table 10. Proportion of developmental expenditure on education States 1980/81-1984/85 1985/85-1989/90 1990/91-1994/95 1995/96-1997/98 Kerala 44.34 42.75 42.91 40.1 Andhra 27.67 26.27 26.2 24.36 Pradesh Karnataka 28.64 29.38 29.53 28.27 Tamil Nadu 27.67 29.79 27.05 31.6 West Bengal 33.15 35.92 38.7 37.94 Source: Calculated from data given in RBI bulletins (various issues) The above chart clearly highlights that the proportion of developmental expenditure on education is high in Kerala compared to other states. The social welfare spending pattern could directly contribute to higher human development index.

18 3.5 Intra-state Variations. There are variations even among the states for example within Karnataka gender and income inequality is relatively higher in the northern and north eastern part. The Human Development index of these regions such as Yadgir, Raichur, Bagalkot, Bijapur is very low. Table 11. Districts Literacy (2001 & 2011 census) Karnataka. Literacy % (2001) Literacy % (2011) Districts Literacy % (2001) Literacy % (2011) Bangalore 82.96% 88.48% Yadgir 39.90% 52.36% Dakshina 83.25% 88.62% Raichur 48.81% 60.46% Kannada Udupi 81.25% 86.29% Chamarajanagar 50.87% 61.12% Uttara Kannada 76.60% 84.03% Gulburga 54.34% 65.65% Taking into consideration the gap with respect to literacy within Karnataka, the picture that comes out is that there is huge variation within the state from Bangalore s (84.48%) and Yadgir s (52.36%) the gap is 36.12%. Even the gender gaps within the district shows that there is regional variation for example it is lowest for Bangalore 7.02% and is highest for Yadgir 22.02%. Table 12. Districts Literacy %(Male) Literacy (2011 census) Karnataka. Literacy % (Female) Districts Literacy %(Male) Literacy % (Female) Bangalore 91.82 84.8 Yadgir 63.33 41.31 Dakshina 93.31 84.04 Raichur 71.35 49.56 Kannada Udupi 91.69 81.41 Chamarajanagar 67.88 54.32 Uttara Kannada 89.72 78.21 Gulbarga 75.11 55.87

19 The above table shows the variation within the state with respect to male and female literacy. The most dramatic picture comes for the Yadgir district especially with respect to female literacy. According to Karnataka state Human development report 2005 there are huge variations within the state. Comparing the Human Development Scores of Raichur 0.547 with Bangalore urban with a score of 0.753 what comes out is that within the same state there is a difference of human development score of 0.206. a. Health Care Table 13. Health Care spending in India, 2004-05 Percent Spent by Per capita expenditure (Rs.) Household Public Other Per capita Public expenditure State Kerala 2952 86.3 10.8 2.9 318.82 Gujarat 1187 77.5 15.8 6.7 187.55 Andhra Pradesh 1118 73.4 19.4 7.2 216.89 Karnataka 997 70.4 23.2 6.4 231.30

20 Tamil Nadu 933 60.7 26.6 12.7 248.18 Punjab 1813 76.1 18 5.9 326.34 Assam 1347 80.8 17.8 1.4 239.77 All India 1377 73.5 22 4.5 302.94 Source: Report of National Commission on Macroeconomics and Health, Government of India 2005 The above chart shows that maximum per capita public expenditure on health care is in case of Punjab followed by Kerala in the year 2005. This has helped Punjab to achieve high health index component of Human development index. Even though the devolution of powers in case of Punjab being as low as 31.54 (according to devolution index 2009) in comparison to Kerala s devolution score of 74.73 the state has provided better support with respect to health care. Table 14. States Human Development Index and its Components by States, 1999-2000 & 2007-2008 Health Index 2000 Health Index 2008 Income Index 1999-2000 Income Index 2007-2008 Education Index 1999-2000 Education Index 2007-2008 1999-2000 2007-2008 Kerala 0.782 0.817 0.458 0.629 0.789 0.924 0.677 0.79 Gujarat 0.562 0.633 0.323 0.371 0.512 0.577 0.466 0.527 Andhra Pradesh 0.521 0.58 0.197 0.287 0.385 0.553 0.368 0.473 Karnataka 0.567 0.627 0.26 0.326 0.468 0.605 0.432 0.519 Tamil Nadu 0.586 0.637 0.285 0.355 0.57 0.719 0.48 0.57 West Bengal 0.6 0.65 0.21 0.252 0.455 0.575 0.422 0.492 Punjab 0.632 0.667 0.455 0.495 0.542 0.654 0.543 0.605 Assam 0.339 0.407 0.152 0.288 0.516 0.636 0.336 0.444 Source: India Human Development Report 2011.

21 1.00 0.90 0.80 0.70 0.60 0.50 0.40 0.30 0.20 0.10 0.00 Health Index 2008 Income Index 2007-2008 Education Index 2007-2008 According to the above mentioned table and graph with respect to Gujarat the contribution from health index to human development index has been much more compared to its other components. Gujarat with respect to health care have come up with innovative plans for maternal health, child health and reducing disease burden. There are some of the successful schemes for example Chiranjeevi Yojana (a public private partnership); Bal Sakha Yojna; Mamta divas; beti vadhavo; E-mamta etc. Taking into consideration the case of Punjab their health index in 2000 itself was very high (second among above mentioned states), further there has been an improvement. In Punjab income index is also very high form the year 2000 and has further improved consequently yielding better scores. Punjab has also got a better score in Education index it ranks third in the education index 2007-08 of the above considered states. So the case of Punjab clearly shows that decentralization does not necessarily yield better Human Development Index score. The decentralization index score for Punjab is as low as 31.54 but it has been able improve its score from 0.54 to 0.61 over the decade.

22 Table 15. & I for specific Indian States State I Ratio Loss (%) Rank Rank I Difference Kerala 0.625 0.52 0.832 16.78 1 1 0 Karnataka 0.508 0.353 0.696 30.44 10 9 1 Tamil Nadu 0.544 0.396 0.727 27.28 6 5 1 India 0.504 0.343 0.68 32 The above mentioned table highlights the inequality adjusted human development index (I) clearly shows that first category states namely Kerala have no difference in their rank and Inequality adjusted Human Development Index ranks which is an evidence of low levels of inequality here in comparison to Karnataka and Tamil Nadu. Table 16. Key Indicators: Indian States PPP Income per capita (PPP 2008 $) Life Expectancy at birth. (years) (2002-2006) Mean Years of Schooling (years) (2004/05) School Life Expectancy (Years) (2007/08) State Kerala 5262.89 74 6.19 11.33 Karnataka 3269.76 65.3 3.95 9.75 Tamil Nadu 3835.05 66.2 4.79 10.57 India 3337.33 63.5 4.1 9.62 The above table shows the Purchasing Power Parity income has a direct relationship with the other three components namely life expectancy at birth, mean years of schooling and school life expectancy. However the caveat that needs to be considered is that this might be two way relationship like mean years of schooling contributing to improvement in purchasing power parity per capita. Decentralization will not help all societies in improving human development unless presence of certain favourable condition to accommodate decentralization. The society which

23 has higher inequality particularly gender inequality, caste discrimination, caste domination in the village politics are not going to improve the Human Development Index. Kerala has been able to benefit from decentralization in comparison to Tamil Nadu and Karnataka, because the first category of states has some favourable social, political and economic condition. In Kerala the gender inequality is less; female literacy rate is high, not much caste politics in village level and so on. And in Gujarat they have focussed more on health care than other states, and caste politics has been losing it importance due to more urbanisation. Conclusion This paper started with the purpose of finding the correlation of devolution index (2009) with human development index (2011) and the results from this exercise revealed that there is a moderate positive correlation between the two variables. However to further find out the reasons behind not so better performance of some states which are high on decentralization the paper considers that there are certain preconditions or pre-requisites requires benefiting from decentralization. These set of preconditions of ground work includes certain favourable social political and economic conditions that were typically present in the first category of states. Which means even before the introduction of decentralization the initial endowments with respect to social capital was high in these states and so they were better able to absorb the benefits from decentralization and further improve on their human development index. There was relatively less inequality prevalent, caste politics was less active and high female literacy in the states considered in first category. Even considering the proportion of developmental expenditure on education (table 10) the analysis that comes forward is that category 1 states (Kerala & Andhra Pradesh) are spending more that category 2 states

24 (Karnataka, Tamil Nadu and West Bengal). As is being shown in Table 11 there is also high variation within the state of Karnataka (category 2). With respect to health care spending also Table 13 clearly comes out that category 1 states are spending more in comparison to category 2.

25 References- 1. Planning Commission, Mid-term Appraisal of the Eleventh Five Year Plan Governance.http://planningcommission.nic.in/plans/mta/11th_mta/chapterwise/chap3 _gover.pdf 2. National Council of Applied Economics Research, An Index of Devolution for Assessing Environment for Panchayati Raj Institutions in the States, Ministry of Panchayati Raj, New Delhi. http://www.indiasanitationportal.org/sites/default/files/devolution%20index.pdf 3. State Ranks Second in Devolution of Power to Panchayat Raj Bodies. The Hindu. http://www.thehindu.com/todays-paper/tp-national/tp-karnataka/state-ranks-secondin-devolution-of-power-to-panchayat-raj-bodies/article3517629.ece. 4. Constitutionally Empowered Act. The Hindu. http://www.thehindu.com/opinion/readers-editor/article3540068.ece. 5. Now, the Food They Cook Is untouchable. The Hindu. http://www.thehindu.com/news/states/tamil-nadu/article3855760.ece. 6. Gender Inequality Fails Women s Access to Healthcare. The Hindu. http://www.thehindu.com/news/states/tamil-nadu/article2109983.ece. 7. Literacy Rate In Indian State: Census 2011. TheOnlineGK. http://theonlinegk.wordpress.com/2011/04/02/literacy-rate-in-indian-state-census- 2011/. 8. Gender Gap in Literacy Still a Matter of Concern. The Hindu. http://www.thehindu.com/news/states/karnataka/article3873679.ece. 9. Panchayati Raj Update, Our panchayats- Our Future. Institute of Social Science. Nineteenth Year of Publication (February 2012), viewed on 21 September 2012, http://www.issin.org/pru-english-february-2012.pdf 10. http://www.carawanmagazine.in/story/1504/sliding-rule.html, viewed on 01 September 2012.

26 List of Tables. 1. Indicators used for calculation 2008-09 Devolution Index and Sub-Indices. Table 1 2. and Devolution Index of various Indian States. Table 2 3. Scores (2001 & 2011); Net Scores; Percentage change & DI Scores. Table 3 4. High % Change High Devolution Index. Table 4 5. Low Change High Devolution Index. Table 5 6. High % Change Low Devolution Index. Table 6 7. scores 2001 & 2012, Net Scores, percentage change and DI Scores (Karnataka, Tamil Nadu, West Bengal & Andhra Pradesh) Table 7 8. scores 2001 & 2012, Net Scores, percentage change and DI Scores (Karnataka, Tamil Nadu, West Bengal & Assam) Table 8 9. Literacy rates 2011 (Kerala, Tamil Nadu and Karnataka) Table 9 10. Proportion of developmental expenditure on education. Table 10 11. Literacy (2001 & 2011 census) Karnataka. Table 11 12. Literacy (2011 census) Karnataka. Table 12 13. Health Care spending in India, 2004-05. Table 13 14. Human Development Index and its Components by States, 1999-2000 & 2007-2008. Table 14 15. & I for specific Indian States Table 15 16. Key Indicators: Indian States. Table 16.

27 Abbreviations. 1. Devolution Index DI 2. Human Development Index- 3. Inequality Adjusted Human Development Index- I 4. National Council of Applied Economic Research NCAER 5. Panchayati Raj Institutions PRI s 6. Functions, funds and functionaries 3F s 7. State Finance Commission SFC 8. State Election Commission SEC 9. District Planning Committee DPC 10. Gram Panchayat- GP