From the editor in Chief


	Feb 14, 2000

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Sometimes news is not dramatic. Not a sudden incident or upheaval, but more a slower, significant process that is going to drastically affect our lives. This week's cover story fits that definition. Quite simply, the bad news is that two-thirds of Indian states are bankrupt. Just weeks before the country's annual budget exercise, it's a sobering thought to know how badly managed the financial situation across India really is.

What's worse, it's destroying the fabric of bare necessities that binds a society and ultimately brings it wealth. Education, health and transport services in the states are on the verge of a shutdown. Hospitals and schools are spending over 90 per cent of their budgets on salaries of doctors and teachers, and virtually nothing on medicines and teaching aids. The sad fact is that in the past two years prosperity of state employees -- salaries have gone up by 100-300 per cent -- has directly contributed to the impoverishment of states.

Populism has much to do with it. Punjab awards free power and water to its farmers and brand new Tata Sumos to all its MLAs, so what if it borrows Rs 100 crore a month to keep the administration afloat. Self-indulgent politicians are no help either. Simply transferring officials, often just a case of whimsy, cost Uttar Pradesh Rs 23 crore last year, when five years ago it was just Rs 1.6 crore. In the same vein, it is startling that Madhya Pradesh Chief Minister Digvijay Singh spent Rs 26,000 a day on air travel in 1998 even though his state's tax collection falls below its salary bill.

Alarmed by the deteriorating situation, we got India today correspondents from eight of the most badly managed states to investigate the extent of the crisis, its causes and probable fallout. What they found was disquieting. As Senior Assistant Editor Rohit Saran, who wrote the story, says, "It's startling that the recipe for most states is, earn like a pauper, spend like a king."

And damn the consequences.

(Aroon Purie)

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