A common notion is that a larger share of central funds would flow into a new state compared to when it is a region in a larger state. Most also believe that a new capital city would provide better living conditions. Arguments are set forth that a smaller state with less number of districts would diminish the span of control of state-level functionaries. And that reduced distances between the state capital and peripheral areas would improve the quality of governance and administrative responsiveness and accountability. However, this can easily be achieved with strong regional administrative units in larger states.
Evidence shows that both large and small states have fared well and that poor performance is not necessarily linked to size. In fact, today, technology can help make governing larger territories easier and bring even far-flung areas closer.
Much more than the size of a state, it is the quality of governance and administration, the diverse talent available within the state’s population, and the leadership’s drive and vision that determine whether a particular state performs better than the others.
A small state is likely to face limitations in terms of the natural (physical) and human resources available to it. Moreover, it will lack the kind of agro-climatic diversity required for economic and developmental activities. It would also be restricted in its capability to raise resources internally. All these factors would only make it more dependent on the Centre