Q12. Discuss whether the formation of new states in recent times is beneficial or not for the economy of India.
Model Answer:
Introduction
The formation of new states in India, aimed at addressing regional aspirations and administrative efficiency, has significant economic implications that merit careful examination of its benefits and challenges for sustainable development.
Body
Benefits
- Targeted Governance: Smaller states allow for more focused administration and governance.
- Local Representation: Enhanced representation for local communities improves decision-making processes.
- Resource Management: States can better manage and allocate resources according to regional needs.
- Infrastructure Development: Increased attention leads to improved infrastructure, enhancing connectivity and growth.
- Economic Growth: Smaller states can foster regional economic development tailored to local strengths.
- Employment Opportunities: New states can create job opportunities through focused industries and local initiatives.
Drawbacks
- Administrative Costs: Formation leads to increased administrative expenses for new governments.
- Resource Redistribution: Potential conflicts over resource allocation between existing and new states may arise.
- Economic Disparities: Smaller states might struggle with economic viability and sustainability.
- Potential Instability: New states may face political instability affecting economic confidence and investments.
- Fragmentation: Excessive fragmentation can lead to weaker collective bargaining power on larger economic issues.
Conclusion
While the formation of new states can drive localized economic benefits, challenges such as administrative costs and disparities need careful consideration.
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