The Hoarding of Prosperity, Karnataka’s Regional Divide and the Governance Deficit That Keeps North Poor Amid Plenty

The Hoarding of Prosperity, Karnataka’s Regional Divide and the Governance Deficit That Keeps North Poor Amid Plenty

For fifteen years, the Government of Karnataka spent Rs 32,610 crore on a mission to correct regional imbalances. It established special development boards, commissioned expert committees, enacted constitutional protections, and channelled billions into infrastructure projects across the state’s most disadvantaged districts. The objective was clear: to lift North Karnataka and other backward regions from structural deprivation and ensure that the benefits of the state’s spectacular economic growth—driven overwhelmingly by Bengaluru’s technology boom—were distributed more equitably across the geographical expanse of Karnataka.

The outcome, meticulously documented by the Karnataka Regional Imbalances Redressal Committee chaired by economist M Govinda Rao, is a damning indictment of this fifteen-year effort. Far from reducing regional disparities, Karnataka today has more backward talukas than before: 177 out of 236, up from an already alarming baseline. Bengaluru Urban’s per capita income remains nearly five times that of Kalaburagi. While the capital city accumulates wealth, talent, and opportunity at an accelerating pace, vast stretches of North Karnataka remain trapped in cycles of low productivity, inadequate public services, and chronic underemployment. The state’s growth has been nothing short of spectacular, the report notes, but its benefits have been hoarded by a handful of districts.

This is not merely a policy failure. It is an indictment of political and administrative incompetence at a scale that demands not incremental correction but fundamental reorientation. Karnataka is not a poor state. It is not lacking in financial resources, institutional capacity, or expert advice. The Nanjundappa Committee mapped backwardness with precision in 2002 and proposed a comprehensive Special Development Plan. Article 371J was inserted into the Constitution to provide Kalyana Karnataka with statutory guarantees of equitable funding, institutional focus, and reservations in education and employment. The money was allocated. The legal framework was created. The committees reported. And yet, two decades later, the diagnosis is more alarming than the original disease.

The conclusion is unavoidable and deeply uncomfortable: interventions failed not for shortage of money or legal cover, but for lack of seriousness. Regional development in Karnataka has been treated by politicians across parties as a slogan to be deployed during elections, not a mission to be pursued between them. Funds were allocated, then diverted. Projects were inaugurated, then abandoned. Schemes were announced, then starved of the sustained administrative attention required for implementation. The machinery of development was set in motion, but its engine—political will—never caught fire.

The Architecture of Failure: How Rs 32,610 Crore Disappeared Without Impact

The Govinda Rao Committee’s findings demand a fundamental reckoning with how development expenditure actually functions in India’s federal polity. The expenditure of Rs 32,610 crore over fifteen years is not a small sum; it is comparable to the annual budgets of medium-sized States. That this level of investment produced no measurable reduction in regional disparities—indeed, that the problem has objectively worsened—is not merely disappointing; it is evidence of systemic pathology.

The Committee’s diagnosis identifies the primary mechanism of failure with surgical precision: funds were channelled into visible civil works that offered quick political dividends. A bridge inaugurated, a road widened, a building constructed—each provides a photogenic moment, a ribbon to cut, a press release to issue. These are the currency of political credit, easily earned and immediately recognisable. What they do not do, in the absence of complementary investments in human capital and economic ecosystems, is generate sustainable prosperity.

Schools without teachers, hospitals without doctors, industrial estates without industries, irrigation systems without water—these are the characteristic outcomes of development expenditure divorced from development strategy. The infrastructure is visible; the absence of functionality is invisible until it becomes chronic. By the time a region’s educational and health indicators have decisively diverged from the state average, another round of civil works is already underway, another set of contracts awarded, another tranche of political credit banked. The cycle perpetuates itself because it serves the interests of those who control the cycle.

The bureaucracy, the Committee finds, “fared no better.” Development boards that were intended to be strategic planning institutions degenerated into spending agencies with no strategic vision, little monitoring, and minimal accountability. Their function became the disbursal of funds, not the achievement of outcomes. Their expertise was deployed in navigating procurement procedures, not in diagnosing development constraints. Their incentives rewarded the volume of expenditure, not the quality of impact. In this institutional environment, failure is not an anomaly; it is the predictable equilibrium.

The Constitutional Guarantee That Wasn’t: Article 371J and the Limits of Legal Formalism

The experience of Kalyana Karnataka under Article 371J offers a sobering lesson in the limits of constitutional law as an instrument of development. Inserted into the Constitution in 2012, Article 371J provides for statutory guarantees of equitable funding, institutional focus, and reservations in education and public employment for the six backward districts of North Karnataka. It was hailed as a historic recognition of regional deprivation and a binding commitment to its redressal.

Fourteen years later, the Govinda Rao Committee finds that backwardness has deepened. Constitutional protection proved insufficient to overcome political indifference and administrative inertia. The legal framework was in place; the operational will was absent. Funds allocated under Article 371J were subject to the same diversionary pressures, the same preference for visible infrastructure over invisible institution-building, the same absence of outcome accountability that vitiated the broader regional development effort.

This is not an argument against constitutional guarantees; it is an argument against constitutional fetishism—the belief that enacting a law is equivalent to solving a problem. Article 371J created enabling conditions for equitable development; it did not and could not create the political determination to use those conditions effectively. That determination must arise from within the political system, not from constitutional text. The failure of Kalyana Karnataka to achieve transformative change despite constitutional protection is therefore not a failure of the Constitution but a failure of constitutional culture—the willingness of political actors to treat constitutional mandates as binding obligations rather than rhetorical resources.

The Expenditure-Outcome Disconnect: From Inputs to Impact

The Govinda Rao Committee’s most significant contribution may be its decisive shift of the policy conversation from expenditure to outcomes. For decades, the primary metric of regional development effort has been financial: how much was allocated, how much was released, how much was spent. The implicit assumption—rarely examined, never validated—was that expenditure equals progress. Spend more in backward regions, and backwardness will recede.

This assumption has now been empirically falsified by Karnataka’s fifteen-year experiment. Rs 32,610 crore was spent. Backwardness increased. The correlation between expenditure and development, it turns out, is not automatic; it is contingent on the quality of expenditure. Money spent on schools that lack teachers does not produce education. Money spent on hospitals that lack doctors does not produce health. Money spent on industrial estates that lack connectivity, power, and investment does not produce employment. Money spent on irrigation systems that lack water does not produce agricultural productivity.

The Committee’s proposed outlay of Rs 43,914 crore between 2026 and 2031 is therefore conditioned on a fundamental reorientation of development strategy. Funding is tied not to inputs but to metrics that actually determine prosperity: per capita income growth, market access, skill development, private investment attraction, and employment generation. The shift is not merely technical; it is conceptual. It recognises that government expenditure is not an end in itself but a means to the end of improved human well-being, and that means must be evaluated by their effectiveness in achieving ends.

The Limits of Government: Enabling Rather Than Delivering Development

Equally significant is the Committee’s recognition of a “hard truth” that development discourse often evades: the government alone cannot deliver development. This is not an argument for minimalist government or wholesale privatisation; it is an argument for redefining the government’s role from direct provider to strategic enabler.

The experience of successful regional development globally, and within India, demonstrates that sustainable prosperity arises not from public expenditure alone but from the interaction of public investment with private enterprise, human capital, and institutional quality. Government can build roads; it cannot compel entrepreneurs to establish factories along them. Government can establish universities; it cannot compel graduates to remain in the region rather than migrate to Bengaluru. Government can offer subsidies; it cannot compel consumers to prefer products manufactured in backward districts.

What government can do is create the conditions under which private investment, talent retention, and market integration become attractive and feasible. This requires a fundamentally different approach to regional policy: not the selection of individual projects for political credit but the systematic strengthening of regional economic ecosystems. It requires investment in skill development that is aligned with actual employer demand. It requires improvement of market access through transport and logistics infrastructure that reduces the cost of moving goods from North Karnataka to Bengaluru, Chennai, Mumbai, and beyond. It requires regulatory streamlining that reduces the compliance burden on small and medium enterprises. It requires, above all, consistency and predictability—the assurance that the policy environment will not shift arbitrarily with each election cycle or each transfer of a district official.

The Govinda Rao Committee’s emphasis on enabling private investment is not an ideological preference for markets over states; it is a pragmatic recognition of fiscal reality. Government does not have, and will never have, sufficient resources to directly employ every unemployed worker in North Karnataka or directly finance every productive enterprise. The only scalable path to prosperity is the organic growth of the private sector, catalysed and supported by strategic public investment. Government’s role is to accelerate and orient this process, not to substitute for it.

The Governance Deficit: Why Political Will Remains Elusive

The Committee’s diagnosis ultimately points to a single, irreducible cause of Karnataka’s persistent regional disparities: governance deficit. This is not a euphemism for bureaucratic inefficiency or political corruption, though both are undoubtedly present. It is a more fundamental failure of the political system to aggregate and act upon long-term collective interests in the face of short-term individual incentives.

Regional development is a classic collective action problem. Its benefits are diffuse, delayed, and difficult to attribute to any single decision-maker. Its costs—financial, administrative, political—are immediate and concentrated. A politician who invests sustained effort in improving the quality of school education in a backward taluka may, if successful, see improved learning outcomes in five to ten years. By then, she may have been transferred, defeated, or retired. Her constituents may not connect their children’s improved literacy to her specific decisions. Her rivals will have ample opportunity to claim credit or assign blame.

By contrast, a politician who awards a contract for a new bridge or a new building can inaugurate it within her current term, issue a press release with her photograph, and claim immediate credit. The bridge may be poorly designed, inadequately maintained, or strategically useless; its contribution to regional prosperity may be negligible. But the political returns are immediate and attributable. The incentive structure facing elected officials is thus systematically skewed against the very activities—sustained institutional development, human capital investment, ecosystem strengthening—that the Govinda Rao Committee identifies as essential.

This is not a problem of individual moral failing; it is a problem of institutional design. The political system generates strong incentives for visible, short-gestation, credit-claiming expenditure and weak incentives for invisible, long-gestation, attribution-resistant investment. Until these incentives are realigned—through greater decentralisation, stronger accountability mechanisms, longer tenures for development administrators, and more sophisticated public deliberation about development outcomes—the governance deficit will persist regardless of how many committees report or how many crores are allocated.

The Roadmap and the Will: What Happens Next

The Govinda Rao Committee has done its work. It has delivered a damning diagnosis, a clear-eyed analysis of failure mechanisms, and a detailed roadmap for correction. Its proposed outlay of Rs 43,914 crore is tied to outcomes, not inputs. Its strategic orientation shifts the paradigm from expenditure to impact, from visible works to invisible ecosystems, from government delivery to government enablement. The technical work of policy design is complete.

What remains is the political work of implementation. And here, the Committee’s own findings offer little grounds for optimism. The same political class that presided over fifteen years of failed expenditure, that treated regional development as electoral slogan rather than governing mission, that diverted funds from schools to bridges and from hospitals to buildings—this same political class is now asked to embrace a fundamentally different approach that offers fewer opportunities for credit-claiming and demands more sustained, less visible effort.

The question posed by the Committee’s report is therefore not primarily technical or administrative. It is constitutional in the deepest sense: whether Karnataka’s democratic institutions possess the capacity for collective learning and self-correction that effective governance requires. Can a political system that has failed for fifteen years to address a problem it repeatedly acknowledged, that has spent tens of thousands of crores without measurable impact, that has constitutional guarantees on its books and deprivation on the ground—can such a system change its own behaviour in response to expert diagnosis and public accountability?

The report offers no answer to this question. It can only present the evidence, articulate the strategy, and await the verdict of implementation. That verdict will be delivered not in committee rooms or budget documents but in the talukas of North Karnataka—in the employment rates of their youth, the learning outcomes of their children, the health indicators of their families, and the per capita incomes of their households. If, five years from now, another committee reports that backwardness has further deepened despite another round of expenditure, the indictment will be not merely of political and administrative incompetence but of democratic failure. For a state as prosperous, as capable, and as richly endowed with expert advice as Karnataka, no other explanation will remain available.

Q&A Section

Q1: What is the central finding of the Govinda Rao Committee, and why is it described as “damning”?
A1: The central finding is that after spending Rs 32,610 crore over 15 years specifically to correct regional imbalances, Karnataka today has more backward talukas than before—177 out of 236, up from the already alarming baseline. Bengaluru Urban’s per capita income remains nearly five times that of Kalaburagi, and the gap has not narrowed despite sustained policy attention and financial commitment. The finding is described as “damning” because it demonstrates that expenditure alone, without institutional effectiveness and political seriousness, does not produce development. It indicts not merely individual schemes or officials but the entire political-administrative system that presided over this fifteen-year failure. Karnataka cannot plead poverty, lack of expert advice, or inadequate legal frameworks; it had all three and still failed.

Q2: What does the Committee identify as the primary mechanism of policy failure?
A2: The primary mechanism is the systematic preference for visible civil works offering quick political dividends over invisible human capital and ecosystem investments requiring sustained effort. Politicians across parties treated regional development as a slogan, not a mission. Funds were channelled into bridges, buildings, and roads—each providing an inaugurable, photographable asset—while schools remained without teachers, hospitals without doctors, and industrial estates without industries. The bureaucracy reinforced this preference, with development boards degenerating into spending agencies focused on disbursal rather than strategic planning, monitoring, or outcome accountability. The system rewarded the volume of expenditure, not the quality of impact. This is not random failure but predictable equilibrium given the incentive structure facing political and administrative actors.

Q3: What is the significance of the Committee’s shift from expenditure-based to outcome-based planning?
A3: The shift is conceptual and paradigmatic, not merely technical. For decades, regional development policy implicitly assumed that expenditure equals progress—that spending more money in backward regions automatically reduces backwardness. Karnataka’s fifteen-year experiment empirically falsified this assumption. The Committee’s proposed Rs 43,914 crore outlay for 2026-31 is therefore conditioned on metrics that actually determine prosperity: per capita income growth, market access, skill development, private investment attraction, and employment generation. Funding is tied to outcomes, not inputs. This recognises that government expenditure is not an end in itself but a means to improved human well-being, and means must be evaluated by their effectiveness in achieving ends. It also enables accountability: if outcomes do not improve despite expenditure, failure cannot be obscured by claiming the money was “spent.”

Q4: What does the Committee mean by the “hard truth” that government alone cannot deliver development?
A4: This “hard truth” is a pragmatic recognition of fiscal and institutional limits, not an ideological preference for markets over states. Government does not have, and will never have, sufficient resources to directly employ every unemployed worker in North Karnataka or directly finance every productive enterprise. The only scalable path to sustainable prosperity is organic private sector growth, catalysed and supported by strategic public investment. Government’s role must shift from direct provider to strategic enabler: creating conditions under which private investment, talent retention, and market integration become attractive and feasible. This requires investment in skill development aligned with employer demand, market access through transport and logistics infrastructure, regulatory streamlining for small enterprises, and consistency and predictability in the policy environment. The recognition is that development is not delivered by government diktat but co-produced by public investment, private enterprise, human capital, and institutional quality.

Q5: The article concludes that the central question is whether Karnataka’s democracy can “change its own behaviour.” What would constitute evidence of such change?
A5: Evidence of genuine behavioural change would include:

1. Budgetary reallocation away from visible civil works towards human capital (education, health, skill development) and economic ecosystem investments, sustained across multiple years and political transitions.

2. Outcome-based monitoring systems with public dashboards tracking per capita income, employment, and private investment in backward talukas, not merely expenditure outlays.

3. Stability of key administrative personnel in development institutions, ending the practice of frequent transfers that disrupt long-term initiatives before they mature.

4. Legislative and executive follow-through on Article 371J’s promise, including transparent reporting on funds allocated, spent, and their measurable impact.

5. Political communication that treats regional development as a complex, long-term mission requiring patience and persistence, not as a series of inaugurable achievements to be announced before elections.

6. Private sector confidence reflected in increased investment proposals for North Karnataka, indicating that the enabling environment has genuinely improved.

The absence of these indicators five years from now would confirm that the political class has once again treated expert diagnosis as a ritual to be undergone rather than a mandate to be implemented.