Harish Palaniappan's

I was having a normal, hot discussion with some collegues today about the way India is growing, and whether growth leads to rising costs, which itself is blocking growth as a cycle.

Our discussion drifted towards the political division of the country into States and Union Territories. During this discussion each one of us had differernt definitions for the difference between an Union Territory and a State in India.. like "Union territories are those developed territories which are small and can't be eligible to be state", "States are larger areas of governance, and union territories are smaller", "union territories are so created, because they need separate administration but are not big enough to generate revenue and support themself"... and so on.

Actually, I had a feeling only one of the views is right, but it turned out to be that all of them were in one way or the other correct. That's when I searched the internet for more difference of definitions, and landed up strangely in "wikipedia" - the new popular encyclopedia on the web.

Wikipedia had another definition, that, an Union territory is a region of governance directly ruled by the national government (or central government of India) unlike States which have their own ruling bodies.

I derived then.

Union territories are small areas of governance identified by the national government based on many factors as,
-Growth and Economic attributes of the region.
-Special consideration on the region due to its resources or location in India.
-For administrative constraints due to compactness and its difference in culture/heritage from its surrounding regions.

Union governments are ruled by the national government and at times (as felt appropriate) by the President of India or by an Appointed Governor for the territory.

In comparison to states,

Union governments, most of the times enjoy tax benefits on sales, and might have faster development in its economy or infrastructure (If the national government is interested in developing it).

Also, Union governments don't have the huge administrative overheads like a State has, since States have local governing bodies.

Another big difference is, unless a State government is formed by the same political alliance ruling the national government, the State governments lack good coordination with the centre and this leads to delay / almost stoppage of development and reforms in the State. This doesn't happen in the Union Territories since administration is directly done by the Centre.

Useful Links:
States & Union Territories in India
What's a National Capital Territory? - New Delhi
Popular union territories of India: Goa
Popular union territories of India: Pondicherry
Directory of India Govt. Websites
Maps of India