STATE SPLITS AND DEFICITS
After the nod to the splitting of Andhra into Telangana, VIdharba and Gorkhaland are in the wait. And now Mayavati has put the bombshell of UP split. Experts opine that smaller states can be well governed. From language- based states formation, now the move is towards territory based ones. Given the government’s history of creating more debts and deficits which are now ballooning towards 12% of the GDP of both the states and the Government of India put together, the states must see that their deficits are well within the manageable band. Also states clamouring for splits must also have a record of the fiscal management adherence to a preset band of deficits. Splitting of states means more administrative heads are needed, which means more expenditure. In short splitting of States for administrative convenience should not cause them to lose out on financials.
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