The two biggest examples of backward states are Bihar and Uttar Pradesh, which together have 300 million people, as many as the
entire United States. Others include Madhya Pradesh, Rajasthan, and Odisha. These states are what make India home to more subsistence-poor people than
any country on earth.
The most celebrated leader of a backward state is Nitish Kumar, chief minister of Bihar, who has used his power to see to it that
Bihar defies many of the expectations we have about such states. Kumar oversees the lives of more than 103 million people, who occupy three quarters of
the land area of Arkansas, while numbering 35 times the population of Arkansas. Nine out of 10 Biharis live off the land.
Bihar state Chief Minister Nitish Kumar shakes hands with a crowd during an election rally in Maner, India, October
AP Photo/Prashant Ravi
I spent an hour-and-a-half with Nitish in his understated, unguarded office. Known universally by his first name, Nitish
wears a simple white long-shirt kurta, and comes across as a secular monk-wonk in the religion of rural development. He has helped turn around what was
once a nearly failed state.
Nitish’s first priority was to crack down on lawlessness. He got help from the Congress Party-led central government even
though his own party (Janata Dal United) is in the opposition coalition. In marked contrast to the power-mongering, score-settling crackdown Bo Xilai
led in Chongqing, Nitish’s was open, by-the-book, and expeditious. As a result, India’s most crime-ridden, corrupt, and poverty-stricken
state is now one of the better governed and more effective in fighting corruption.
Nitish paved roads and invested in schools. His efforts helped cut female illiteracy nearly in half. That accomplishment helped him
forge a coherent and reliable constituency of women from multiple castes.
Woman carrying load on head, Pushkar, Rajasthan, India.
Getty / Danita Delimont
Enormous challenges remain. Only one in five Bihari enterprises is connected to the electric grid. While many use diesel generators or small solar
units, the vast majority still get power the old fashioned way—burning dried cow dung. And in a place so densely populated with subsistence farmers,
acquiring land for new factories is extremely difficult and expensive. Lack of skilled workers, inadequate banking services, and poor infrastructure all
make investors wary.
Still, Nitish’s brand of politics, of caring for the poor, has doubled average Bihari’s income to about $500 a year. That
has made him extremely popular within Bihar, leading to an easy reelection in 2010. Many in India hope that he might head a national opposition
coalition in 2014 parliamentary elections. Under Nitish, several smaller, regional parties might together advance a new politics of economic
At the other end of the development spectrum from Bihar are what might be called the forward states, such as Gujarat, Maharashtra and
Tamil Nadu. Those three have nearly three times the per capita income of Bihar, and a longer history of urbanization, commerce and foreign trade. In
each of the three about half the people now live in cities—well above the country’s average of only 31 percent, and there has been significant
investment in the infrastructure of modern manufacturing. The forward states tend to have the highest rates of literacy, household electricity, access
to health care, and up-to-date roads, bridges, sewers, and ports.
Above: In Maharashrta, a laborer carries a bowl of onions inside Shivshankar Trading Co.'s onion storehouse at a wholesale market in Lasalgaon,
India, August 2013.Getty / Dhiraj Singh / Bloomberg
Below: Indian technicians work in the Sikorsky S-92 helicopter cabin manufacturing facility at Tata Advanced Systems Limited (TASL) in Hyderabad, April
2012.Getty Images/ Noah Seelam / AFP
Leaders in the forward states feel more confident about a more open global trading system. Being in a location that hugs
India’s coast—Gujarat and Maharashtra in the west, Tamil Nadu in the southeast—encourages such openness.
Maharashtra and Gujarat face west to Iran and the Middle East, and northwest to Europe. Gujarat takes oil from the Middle East,
refines it, and sends it across India, and all around Asia. The Gujarati diaspora works in the Gulf States, in London high finance, and in American
service businesses from high-tech to hotels. Maharashtra makes everything from cars to chemicals. The state’s capital, Mumbai, has its own share
of factories and ports, and is also the center of Indian finance and film.
Over 1,000 miles to the south, Tamil Nadu exports east to Singapore, Thailand, Indonesia, and the rest of Southeast Asia—thanks in
part to connections forged by the Tamil diaspora in those countries. And there is a serious enough investment in information technology and biotech
businesses, particularly in southern Tamil Nadu and neighboring Karnataka, to warrant efforts to obtain the highest level of intellectual property
Caught between the forward and backward states are India’s swing states. The two most important are Andhra Pradesh, in the
southeast, and West Bengal, in the northeast. Rather than proceeding in a straight line toward economic development, both these states often vacillate
between forward and backward motion. Although they are home to major global cities and other urban corridors, they have about two rural dwellers for
every city resident—quite close to the national average. The result is that in both Andhra Pradesh and West Bengal, state governments are split between
addressing the needs of the rural poor and investing in the building blocks of a modern, urban economy. Globally-focused cities such as Hyderabad and
Kolkata have prospered in recent years, but with twice as many people still living in the countryside, politicians have not necessarily benefited when
their constituents went to the polls. Rural voters have turned out in large numbers to vote when they’ve felt ignored.
West Bengal epitomizes the challenge of being a swing state. Once a shining star in India, its capital, Kolkata (formerly Calcutta),
was the seat of the British Raj before 1911. For most of the 20th century, it was India’s manufacturing capital—and also India’s most
cosmopolitan city, producing great works of literature, cinema, and scholarship.
Yet for over three decades West Bengal was also synonymous with public mismanagement. Led by the world’s longest-serving
elected Communist Party—the communists remained in office from 1977 until 2011—the state government eroded the state’s industrial base, stalled
and undermined investment, and drove manufacturers to other, rising states.
But in the early 2000s, having witnessed a decade of growth elsewhere in India (not to mention in China), the communists began to
court investment. They promoted their top-tier universities to attract software developers such as Wipro, Infosys, and Cognizant, and tried to use
eminent domain to acquire land for major manufacturing plants.
The communists were turned out of office, however, by West Bengal’s rural poor—presumably for too much capitalism too quickly.
The opposition Trinamool party won a sweeping landslide under their charismatic leader, Mamata Banerjee.
Above: A slum dweller walks past shanties being reconstructed after they were demolished by the government in Kolkata, April 2012.Reuters / Rupak De Chowdhuri
Below: Mamata Banerjee, chief minister of West Bengal, addresses her supporters at a rally in Kolkata, July 2011.
Reuters / Rupak De Chowdhuri
Banerjee is by all accounts personally ethical and committed to her job. She appears focused on cleaning up one of India’s most poorly run and
corrupt states, and brings a passionate attention to rural poverty. She has fought against Maoist rebellions, protected West Bengal’s 25 percent
Muslim minority, and urged the economic and tourist development of the spectacular and prosperous tea-growing hill region of Darjeeling.
However, outside investors fear her—and therefore tend to steer clear of West Bengal. More than that, they fear her impact on Indian national politics.
Using her party’s 19 seats in the national parliament to play the role of power broker, she has prevented the Congress Party from forming a
parliamentary majority in New Delhi. More dramatically, she blocked India from concluding a water agreement with Bangladesh; and in late 2011 she
opposed a new national foreign investment law that would allow foreign retail giants, such as Walmart, to own a majority stake in supermarkets and
department stores, a move that nearly brought down the current national governing coalition.
The central government is by no means powerless in this game. When Mamata Banerjee withdrew her support for the governing coalition over investment
reform, Prime Minister Manmohan Singh played an ace card to save his coalition. He recruited Akhilesh Yadav to support the investment reform. Yadav is
the new chief minister of Uttar Pradesh, a previously non-aligned backward state which had just voted Mayawati's BSP party out of office in
state-wide elections — also delivering a stunning blow to Prime Minister Singh's Congress Party, which finished a distant fourth. With this move, Singh sent a signal that the central government could play one regional party off against another to get things
done, and for his part Yadav sent a signal that state-based leaders are willing to band together across party lines to support pro-growth policies.
While it won’t be easy, the nation-wide empowerment of leaders at the state level may ultimately be for the good of all of India. In making
national policy aimed at attracting foreign investment, strengthening interstate commerce, and improving infrastructure, New Delhi will benefit from the
input of experienced local leaders. These are the people who have a direct feel both for what makes India work, and for how to rally support for the
needed reforms among their constituents. In the long run, India’s ultra-pluralistic, highly federalized democracy can work only as well as its
individual parts work.