Since ancient times, be it the Kings or the Britishers all divided the country into smaller units to have a better administration. Also our Constitution talks about India ie. Bharat is " Union of States"(Article 1) and Article3 gives power to Parliament to create New States. So even our Constitutional makers believed that in future if required for administrative convenience and for the benefits of people new states may be carved out of the existing States.
In 2000, three states were created ie. Chhasttisgarh, Jharkhand and Uttarakhand. Growth of these states have increased comparatively but new issues have also emerged due to division of water, oil and other mineral resources. Also Telangana state creation has reignited the demands for other smaller states like Bodoland, Gorkhland,Harit Pradesh,Bundelkhand, Vidarbha etc. Lets first analyse small states from three perspectives: administrative, economical and developmental implications.
Administrative: yes easy to administer both by political nd bureaucratic bosses nd also convenient fr ppl to visit govt offices nd courts from villages fr day to day dealings, compared to large states lyk UP where nearly 500kms one has to travel to reach the state capital.... so it saves both tym nd money.... plus delay in administration will lead to corruption nd bribery practises. On the negative side, enormous increase in infrastructural nd human power for a new state..... also small state doesn't guarantee good governance.... e. g. Gujarat despite being big state is better governed than Goa.
So political will, quality of bureaucracy nd level of education in society also plays an imp factor. Economically: yes it ll lead to bettr utilisation of available resources ie. Maximising the advantages for the better of states e. g. Green Revolution has turned small states lyk Punjab nd Haryana into most prosperous states. Also funds reaching the beneficiaries wid less leakages...... Parts of state can be developed into service sector hubs like Gurgoan and Industrial hubs like Faridabad in Haryana. On the negative side, lack of adequate resources in small states will discourage private investment.
Large states lyk Maharastra nd Gujarat attract investors as possibility of hubs creation is more as multiple resources are available.... forward-backward linkages r easily formed ie. setting up of SEZ are more economically viable in large states. Developmental: yes bettr implementation of govt. Policies- health, education, sanitation etc. Also better monitoring of these policies.... plus tendency of out migration also reduces considerably. Thus reducing pressures on urban centres. HDI ranking of small states like Kerela, Haryana,Punjab is better than Big states. But we also have examples of North East States which despite small size don't hv development.
States lyk Tamil Nadu despite its shear size is having very good development track record. So implications are both positive and negative. It is not the mere size of state that contributes towards both economic nd social development of a state. THUS govt should consider all equally ie. administrative convenience, economic development prospects, aspirations of the people on case to case basis while deciding for creation of a New State and not the political gain or linguistic basis if they want to see India Shining. Otherwise it could be disastrous for the country.