The former deputy chairman of the erstwhile planning commission shared his views at a fireside chat with economist Salman Anees Soz on “Resilient Pathways: Charting Economic Growth Amid Global Challenges” at the Global Investors’ Meet here.

“We should seriously consider cutting down many of the larger states into two or three,” he said.

He recalled that former UP CM and BSP leader Mayawati had suggested splitting her State into three. Had this been done, there would have been a political willingness instantly to create three new good cities, according to him. People have said this could be done in many other states. In Maharashtra, for example, there are people who said that the Vidarbha region should be made a separate state with Nagpur as its capital.

He acknowledged that interesting reforms and tough decisions such as this are not politically easy. Ahluwalia also noted that all our States are highly centralised.

There is evidence to suggest that performance of new states has improved, he said.Responding to a question on rising public debt, he said the States have all become fiscally very weak because of the scale of debt relative to both revenue generation and their gross domestic product is too high.The nature of reforms needed for India to achieve 8% annual growth for two decades to realise its vision of ‘Viksit Bharat’ by 2047 have not been clearly spelt out and said there are some challenges to achieve this goal. If India is to grow at 8% then the urban population has to grow very rapidly, he said.

Earlier in 1991, initiating reforms was easy because the world was speaking one language.

“We started the reforms after Eastern Europe had abolished communism…there was only one thing to do which was integrating with the global market. That has become much more complex now.”

Geopolitical tensions are now rising, the US has its own problems not only with its closest allies, like Canada and Mexico, but also with China. China is cozying up to Russia. Russia is becoming more dependent on China. Europeans are very scared of Russia. They are not so bothered about China. “India is faced with a world that is now fragmented. We didn’t have that problem in 1991 at all.”

Gandhiji had said India lives in its villages. and many people still regard that as a sort of romantic vision, he said. “I think you have to recognise that India will not be ‘viksit’ if it does not largely reduce the numbers staying in villages.” Good Gandhians should recognise that this is not undermining the views of Mahatma Gandhi, who expressed these views 100 years ago but did not mean that it will continue to do so 100 years later, Ahluwalia said.