However building a new state is not a bed of roses. The government which took the reins of power immediately after its formation in the newly created state of Uttarakhand, was voted out in the recently held assembly election. Chattisgarh was also not bereft of problems. In Jharkhand also the ruling party had to face electoral reverses in the prestigious bye-election. In this backdrop, evolving a developmental strategy without risking electoral reverses, is an extremely challenging task. Building the Indian State, immediately after independence, inspite of vivisection of the country, was relatively easy. The stature of the national leaders were formidable. The Indian national movement had clear strategy and a vision for the post independent India. Marx, Keynes and Fabian socialism were the ideological pole star around which the developmental model was worked out. The success of the Soviet planning further reinforced their strategy. While 'state' was envisaged to be at the commanding height in the economy, the 'market' was also courted which ensured massive capitalist accumulation in the post independent period. Further, the ruling political elite didn't have to resort to electoral populism. Politically and electorally they were secured. The leaders of the newly created states in the Hindi Heartland didn't have those advantages. Over and above, they didn't have the advantage of operating in the protected market. With the opening of the market since the early nineties, the state structures are being slowly dismantled. Henceforth, on the other hand, market centric development strategy will guide India's road map. When new states were formed in fifties, the central government substantially supported them financially. Punjab didn't feel the tremor of division because of massive support from Nehru's Government. Those were the days when scarcity of public finance was not critical issue. In any case, Government of India could not have ignored powerful sub-national stirrings. It continues to be a significant factor even now. When Guzral became the Prime Minister of the country, he wrote off at one stroke Rs.8000 crore loans. The newly formed states, including Jharkhand, were not the result of that powerful regional consolidation. Thus, with the increasing crisis in the 'public finance', populism has become bane in the national polity. Reservation and domicile policy should not be a substitute for hard-boiled development strategy. This may bring temporary dividend but in the long run it may prove to be counterproductive. Thus, in this backdrop, building the edifice of a new state is not an easy task. They need to fine tune on a continuing basis the twin strategy of ensuring public investment and making Jharkhand the destination of private investment, national or global. This is indeed a formidable task.

India is a land of contrast. At one end we have a couple of IIT's producing the best engineers and, at the other end, more than one-third of the population is absolute illiterates and another one-third is just literate. A second example of stark contrast is our food economy - while 45 million tonnes of food grains is looking for buyers even at a subsidized rate, no less than one third of the population remain seriously underfed. This scenario of contrast becomes even sharper when we move to Jharkhand. The per capita income here is roughly the same as the national average, but the poverty ratio in Jharkhand is roughly double the national average. Just take out the five towns of Jharkhand - Ranchi, Jamshedpur, Dhanbad, Bokaro and Hazaribagh - and what remains is an absolute primitive economy, where time has stood still for thousands of years. Only recently the National Commission of Population has prepared development indices for all the 569 districts of the country. Amongst the ten most backward district of the country, as many as five are in the Jharkhand --- Palamu, Sahibganj, Garwah, Pakur and Godda. The state of Bihar, of which Jharkhand was part earlier and with which comparisons are often made, is worse off than Jharkhand in many matters, but not with respect to rural poverty. And for a state like Bihar and Jharkhand, where more than 80 percent of the population lives in the rural areas, this phenomenon of rural poverty is possibly more relevant than most other indicators.

Existence of rural poverty is not the creation of last couple of years. It has a long history, part of it dating back to pre-independence period. Post independent development strategies have only made it worst. One can count a number of reasons starting from the urban bias of Indian planning to lack of emphasis on human resource development as the cause of Jharkhand's backwardness. But one single stroke of discrimination that had played havoc with the economy of Jharkhand was the policy of 'freight equalization'. Jharkhand had poor infrastructure, its agriculture is very traditional, and it is a land locked region ---- none of these disadvantages were compensated for. But Jharkhand had one advantage, namely its rich mineral resources, which it had to forgo thanks to the policy of freight equalization. As regards its rural economy it was allowed to languish because the then government thought that agriculture development should be concentrated in those areas where irrigation facilities, existing or potential, were the highest. So agriculture did not develop in Jharkhand because it is neither in the riverine nor in the coastal plain. And industries could not develop because the advantage of the mineral resources could not be capitalized. Such a story of designed deprivation is unparalleled either in India or elsewhere in the world.

Shadow boxing with policies of the past may not be that relevant but Jharkhand certainly cannot acquire its due place in national economy unless a new vision is raised to overcome the burden of history. The creation of the state two years back had provided the right impetus for identifying this vision. The problems of Bihar are substantially different from that of Jharkhand, both because of differing natural resource base and dissimilar social structure. Separation from Bihar was, therefore, a boon. Secondly, the new state is also a smaller one where the challenges of governance can be met more easily. But one wonders whether the polity in Jharkhand has indeed spent the last two years fruitfully. One would not expect this scenario to change within such a short period as two years, but the initial steps should be indicative of the future development direction. This requires a long-term vision for each of the major sectors. Two of these sectors are of prime importance - rural development and human resource development. The requirements of additional financial resources for these two fields are not particularly high; the intervention in both these fields have to be more in the nature of raising organizational efficiency. That would be the first step towards good governance. The rest would then automatically follow. One need to remember in this context the prophetic words of Tarun Das, General Secretary, CII, in an article in a leading daily recently. Das wrote that "No country of the size of India can be developed without local efforts, resources and action. The focus must be here, local and indigenous. Foreign resources and investment usually gets on a running train; it is not the engine of growth. Therefore, we must focus on internal action across many fronts and look at foreign investment as a supplement, and not as a substitute." What is true for India is also true for Jharkhand. We have to banish duality in the economy. Neglected agriculture should be given priority. Agriculture will provide not only food but will also create market. This will give fillip to industrialization as well. In the twenty first century, we will have to alter our strategy. Instead of waiting for foreign investment, Jharkhand need to work out a reverse globalisation, where her product gets a place 'under the sun'.