Nepal's rulers and planners may not need to go on governance junkets to the West to figure out how to run this country. The model is right there across our eastern border in Sikkim.

The erstwhile Himalayan kingdom that once lagged behind Nepal in every development parameter is now surging ahead in literacy, child survival, health services and infrastructure. And not just Nepal, Sikkim is overtaking other Indian states as well.

Sikkim is one-tenth the size of Nepal and has one-fortieth our population, and that makes it easier to get results. In terms of ethnic diversity, topography, culture and traditions there is no other place more similar to Nepal. So, theoretically, what works in Sikkim should work in Nepal. But it doesn't. Sikkim's formula is good governance, grassroots democracy, and a strong, visionary leadership. The can-do state secretariat in Gangtok couldn't be more different from the officialdom one encounters in Singha Darbar.

Sikkim's Chief Secretary, Sonam Tenzing, receives us in his oak-panelled room, and seems well-briefed about goings-on in Kathmandu. Tenzing's wife is from Nepal, but that is not the only reason. "What happens in Nepal touches us," he says. "In Sikkim's development we're trying to do everything Nepal didn't do and should have done, and what Nepal has done and shouldn't have done."

Sikkim's formula for success is appropriate planning, good governance, true devolution of power and decision-making to elected grassroots councils, and an idealistic and accountable leadership.

Sonam Tenzing gives full credit to his boss, Chief Minister Pawan Chamling. "It is the vision of one man who believes in delegating responsibility but expects results."

We are ushered into the Chief Minister's official residence on a ridge overlooking Gangtok, and Pawan Chamling speaks in colloquial peoples' Nepali, not the Sanskritised officialese one is used to hearing in Kathmandu. He exudes the confidence of a man who knows where he wants to go, and what to do to get there.

It has helped that this former monarchy and Indian protectorate is one of ten special category states which receive central assistance from New Delhi. But things haven't been easy for Chamling. After ousting his mentor, Nar Bahadur Bhandari in the 1994 state assembly elections, he had to battle for political survival. After being nearly voted out himself, critics say Chamling used the ethnic card to divide the opposition. This, they say, has irreversibly harmed Sikkim's communal harmony. But his critics grudgingly admit that Chamling's strategy worked, and he is now an almost unopposed leader. Today, Chamling's SDF party has a virtual run of the 33-member state assembly, the lone opposition MLA is Bhandari himself.

Chamling exudes the down-to-earth charm of a self-made grassroots leader. He never went to college, and a conversation with him does not go into high-flying political theory or nebulous concepts of democracy. It is about what is do-able, how long it will take to do it, and how much it will cost.

"What the man has is a lot of common sense," says PD Rai, an engineer-turned-politician whom Chamling convinced to head SIDICO, a one-stop shop to entice investors to Sikkim so new jobs could be created. "He has a group of managers who implement his vision, and he has deliberately staked his political career on the promises he made to the people."

And what is this vision? Chamling counts them out on his fingers: "Ethnic harmony, sustainable development, security and environmental protection." The fact that the ethnic issue still looms large is an acknowledgement that the divisiveness of the 1994 elections bruised ethnic relations between the Bhutia, Lepcha and Nepali-speakers, who are collectively known as "NBC" (Newar, Bahun, Chhetri).

Chamling's long-term development goals are ambitious, but not unrealisitic in a state with a population of only 500,000: universal literacy, eradicating poverty and near-zero unemployment by 2015. By that period, he wants Sikkim to be a hydropower exporter and wean itself away from special subsidy packages from the federal government in New Delhi.

Chamling has no illusions that development is linked to security, and says to his visitors: "Just look at Nepal. The security problem is actually a result of a failure of development, the lack of jobs and opportunities." Chamling's instruction to the bureaucracy is to implement development goals on a war footing.

Sikkim's literacy is higher than Nepal (see table, p5), but like in Nepal female literacy has lagged behind. The government's priority is girls' education and it has a unique program of financial incentives: the state deposits Rs 2,500 into a bank account of every girl student every year from the moment she enrolls in high school. She gets a bonus Rs 2,500 when she graduates. But she can only take out the money when she is 21, and only if she is still single at that age. If she drops out of school or gets married, she forfeits the money.

"The idea is to keep girls in school, and to delay the marriage age, and when she does decide to get married she already has some money of her own and is more independent," explains the speaker of Sikkim's state legislature, Kalawati Subba. "Women don't need affirmative action, they need support to stand on their own feet and be treated equally," she says, citing that nearly 40 percent of all elected village leaders in the last local elections were women.

Subba is convinced the demand for development must come from the grassroots, and says this is what the chief minister is trying to do with his pro-poor programs. "Politics must come from every household, every Sikkimese must feel powerful enough to demand these services and get them from the people they elected."

When Chamling stood for re-election in 1999, his campaign slogan was: "Janata ko raj ma janata nai raja" and "Afno gaun, aphai banaun." (Speaking to visitors from Nepal, Chamling spontanously crafts a slogan for Nepal's own future: "Maharaja euta, raja dui karod janata.") This strong emphasis on devolution and self-reliance may just have been a slogan elsewhere, but Chamling seems to mean it. He called 2002 "The Year of Implementation" in which all projects were rushed to completion.

To outsiders, it appears as if Chamling is still on election-mode. PD Rai agrees: "As a matter of fact, he is already campaigning for the 2004 elections, by proving to the people that he has kept his promises to them." The Chief Minister has been going around the state attending a series of Janata Mela, development jamborees where the people get a chance to ask their elected representatives and bureaucrats about progress on health, education, roads, rural housing, or their old age pension. They can even grill local officials where the money for development projects is going, or why a road project is still stuck.

To be sure, Chamling faces a lot of hurdles. Not the least of which are opposition politicians who think he has an autocratic streak, has a history of hanging out with questionable figures including some Nepali Maoists and is someone who doesn't hesitate to use the ethnic card. Corruption is still said to be rife.

Admits one senior government official: "Our biggest bottleneck is the delivery mechanism for development. The bureaucracy is still too laid back, and motivation levels are not as high as we want them to be."

Sikkim's development has always been driven by populist-minded politicians with pork-barrel funds, and Chamling came from that tradition. But he has tried to change course and do it systematically by commissioning economists and sociologists to write the Sikkim Human Development Report released in 2002. JNU professor Mahendra P Lama helped write the report, which is now the state's development blueprint. "There was very poor understanding about the needs of mountain people, and a belief that the same development model will work everywhere" recalls Lama. "This report is completely indigenous and looks at baseline local parameters for the first time and makes recommendations."

Lama concluded that past subsidies were used as government handouts and had spoilt the people by killing local initiative and traditional self-help. The state is implementing Lama's recommendations, and is now focussing on loans for entrepreneurship, skills-building and microcredit for farmers.

In the village of Rong, three hours from Gangtok, the roofs of Darjeeling can be seen glinting on a ridge across the valley. There is evidence that the plans are being translated into real development on the ground. The secondary school in Rong has a new building, well-kept facilities, a drinking water system. A nearby health post vaccinates all children and keeps records, most basic medicines are free. Children of poorer families go to a nearby day-care centre which provides a daily free meal, while their parents work in the fields. Health worker SB Gurung knows almost every child by name, and tells us: "There is nothing more satisfying than working in your own village to motivate people, and see the effect of your work."

Back in Gangtok, Tourism Minister, K T Gyaltsen says there are lessons for Sikkim in the way Nepal has handled tourism-some worth emulating, others not. "We don't want to rush headlong into mass tourism," says Gyaltsen. "We are satisfied with the present level of traffic and we will let it grow slowly." Sikkim gets 300,000 Indian tourists annually and 50,000 international tourists for whom it has relaxed the requirement of interline permits. Many tourists in Gangtok today are those who cancelled Nepal and came here instead. Many tourists in Gangtok today are those who can celled Nepal and came here instead.

A new airport at Pakyong, expected to be completed in 2004, will handle ATRs and connect to Calcutta, Bagdogra and even Kathmandu. At present the only alternative to driving up from the plains is to take the daily Jetranger ferry from Bagdogra, and the helicopters also operate mountain sight-seeing flights. But while mountaineers can climb Kangchendzonga from the northern Nepal side, climbing the world's third-highest peak is banned from the Sikkim side. Many holy mountain lakes are out of bounds for tourists, and the state is promoting rural tourism by giving villagers loans to convert parts of their homes into pensions for trekkers.

Sikkim's location on the border with China and Nepal, and astride the Chumbi Valley makes it an area of great strategic importance to India, a fact that is evident in the heavy military presence along the mountain highways which are maintained by the army.

AT SIDICO's office in Gangtok, PD Rai's staff is busy conducting courses for young entrepreneurs (many of them women) keen on starting businesses through a project called the Chief Ministers' Self-help Scheme. "New kids are coming into the job market, and we need to create opportunities so they are kept busy," he tells us.

Preference is given to women and families below the poverty line. So far there hasn't been a single defaulter."
A generation after its annexation by India, Sikkim is being promoted as a model state. Its rulers want to develop without the separatist violence and security problems that plague other northeastern states. "The only way Sikkim can absorb the tensions of modernisation and a multi-ethnic society is by focussing on genuine human development in its own unique way," says Mahendra Lama. So far, it looks like there is a lot the rest of India, too, can borrow from the way Sikkim has gone about ensuring peace through development. That is why Chamling likes to say: "India is learning a lot from Sikkim. India is merging with Sikkim, not the other way round."