Business magazines often struggle to select topics for special focus. So these settle to certain routine issues. You would notice frequent articles on rating business schools or the best colleges. Along with mass media these also take up rating states on their competitiveness. These of course provide interesting insights into the relative strengths and performance of states.

For long, Maharashtra and Gujarat used to top the list; the former due to historical reasons of the well-established industrial and infras- tructure strengths. From the 1970s when oil and gas were struck on the west-cost, these two states also benefited immensely by this rich mineral resource. Over these three decades, both the states made good use of off-shore and on-shore oil and gas production, refining and converting these to valuable petrochemicals. The familiarity on the use of these invaluable hydro carbon resources also helped these states to set up a good number of flourishing petrochemical industries, augmenting supplies from outside.

When the south caught up...

Tamil Nadu, Karnataka and Andhra Pradesh joined these states making use of their rich human resources and better developed infrastructure and stable government. The southern states also had advantage of an efficient bureaucracy and a vast reservoir of educated manpower. Among these, there are over 750 engineering colleges, hundreds of arts and science colleges and polytechnics that provide copious supply of educated young men and women. These have helped the states to ride the IT boom from the mid 1990s and the manufacturing expansion since 2000.

Liberalisation of the economy that dispensed with licensing, permits and quotas also enabled states to attract investments. There emerged a welcome competitive spirit among these; what was initially the preserve of Maharashtra and Gujarat, spread rapidly to AP, Karnataka and Tamil Nadu in the south to Rajasthan, Punjab, Haryana and Delhi in the north; even West Bengal that missed out on investments for close to three decades under the Leftists changed the track under Buddadeb Bhattacharjee. Utilising its rich mineral resources, Chhattisgarh, Jharkand and Orissa also attracted fresh investments on a large scale, Himachal Pradesh and Uttarkhand have been making good use of the special tax incentives provided by the Centre and are also leveraging their rich hydel resources.

While it makes interesting reading to know more about the specific endowments of the different states, in the rat-race for rating one often comes across a good deal of inaccuracies and absurdities. In a recent survey done by Business World the report refers to “Tamil Nadu, like Maharashtra, well-endowed; mineral deposits are rich and agriculture is a key contributor to state's GDP."Maharashtra as pointed above, enjoys the oil and gas bonanza through the Bombay High; it has also large deposits of coal in its eastern parts in the Nagpur - Chandrapur belt. Thanks to its focus on sugarcane and horticulture, the state also performs well in its agri-horticulture sector.

Tamil Nadu is poor in terms of its mineral resources; excepting lignite and small quantities of oil and gas, minerals do not contribute overmuch to the state's GDP (GSDP). In regard to agriculture, the record of the state is outright dismal; the share of agriculture in GSDP has declined steeply from 25 per cent in 1990 to 13.4 per cent in 2007-08. Growth rate of agriculture through the last decade and more has been a little over one per cent per annum, much less than even the poor national growth rate.

Over emphasis on distribution

The over-emphasis on distribution, by the Dravidian Parties have starved investments on crucial sectors. The state has no difficulty committing around Rs 2000 crore for the distribution of colour television sets free to large sections of the population nor offering rice at just a rupee a kg to all sections of the population, provide free power for agriculture through the last three decades… Political parties compete vigourously with each other to expand this list. Add to this a bloated bureaucracy: around 12 lakh are employed with the government and quasi government bodies–much, much higher than the numbers employed by larger states like Maharashtra and UP. These of course account for a large chunk of revenue expenditure through salaries, pensions and other benefits. Cumulatively these leave little money for development in vital sectors like power, ports, road, transportation and other infrastructure and industries. Through the Eight, Ninth and Tenth five year plans, negligible resources were spent on adding to power generation capacity in the state sector plunging the state into severe shortages.

Selective offer of privileges...

Even in regard to the fast track clearance of industrial investments, these are highly selective. Few special projects like Ford India have received special concessions in the form of assured supply of power at modest rates; hefty sales tax concessions (nil taxes for 14 years). The IT sector extended similar benefits; in addition to the tax-free status accorded by the Centre the state offers a much higher free space index (3.75 against 1.5 for other industries) and provides of land. Incontrast at modest rates; hundreds of small and medium industries are not extended similar privileges. Handsome investments promised by large corporates like Nissan, Renault and Ashok Leyland are not taking place.

The fast track also does not seem to work with a couple of large Indian corporates like the Tatas and L&T largely due to land procurement and cost factors. The Rs 2500 crore Tata Titania project mooted and cleared in 2002 is stuck with land procurement problems; L&T's shipyard cum port project has also been affected by the high cost of land, of around Rs 21 lakh per acre; land cost alone on this project amounts to around Rs 250 crore. Just compare it with the speed and modest cost of such land offered by Narendra Modi for Tata's Nano project. The politically divisive nature of the Tamils is at the bottom of arriving at a consensus on such vital issues. Political parties like AIADMK and PDMK are ever ready to be hyper critical on allotment of land to corporates at modest prices; of course the DMK did this while it was in the opposition.

Now you can understand the difficulty of rating states on their performance and competitiveness; but undaunted, the caravan marches on.