But many are badly located and horribly maintained. Specialized technical education has not fared much better. It's not surprising that when a poorly administered state like Uttar Pradesh sets up 25 new computer science academies in two and a half years, quality is likely to suffer. Agencies in Delhi have increasingly used carrots and sticks to get states to change their ways. The commerce ministry, realizing that state-level bottlenecks stunt India's export potential, has instituted an incentive program to reward states for the export performance of their firms.
Additional resources go directly into earmarked funds for improving export-related infrastructure.
Carrots of this kind are only mildly controversial, but only because the funds involved are modest. Far more incendiary are the sticks, especially those recently wielded by India's Finance Commission, the body responsible for determining the distribution of revenue between the central and state governments, and among each of the individual states. In late August, high political drama ensued when the commission announced that the new formula for dividing the kitty would for the first time punish states that do not improve their fiscal discipline. Chief ministers from adversely affected states organized meetings and complained to Prime Minister Atal Behari Vajpayee. But partisan differences between rich and poor states caused the protest to fizzle.