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Re-crafting Centre-state ties cannot be a one-way affair

Prime Minister Narendra Modi’s call for re-crafting Centre-state ties is welcome. But to do so, there are challenges that he will meet and have to overcome, writes Kanchan Gupta.

ht view Updated: Jun 18, 2014 01:38 IST

Those of us who came of age during the turbulent 1980s would remember the hysterical denunciation of the Union government by Opposition parties in power in the states. It would be in order to recall for others that berating the Centre, where the Congress was in power, for its ‘step-motherly’ treatment of states where anti-Congress parties ruled was a daily routine and featured prominently on the front pages of newspapers published from Srinagar, Kolkata, Bangalore and Hyderabad. Jyoti Basu led from the front and Kolkata became the hub of ‘Opposition Conclaves’. The states’ complaint was three-fold: Unfair division of taxes, leading to inadequate provision of central funds; political high-handedness of a hubris-prone Congress, resulting in New Delhi riding roughshod over state capitals; and, negation of the spirit of federalism, causing the rise of regionalism.

We have come a long way since those days of caustic attacks on an ‘insensitive Centre’ that dominated popular and academic discourse, best exemplified by the acid-laden essays of Marxist economist Ashok Mitra. Along with several others, he provided statistical validity and intellectual legitimacy to the Opposition chief ministers’ campaign for greater resources and a bigger say in how to manage their affairs. The ‘disinherited states’ too have come a long way and many now boast of a robust economy. The restructuring of sharing of resources between the Centre and the states has addressed the bulk of the grievances and interventions by the Supreme Court have put an end to the abuse of power by misusing provisions of the Constitution, namely Article 356. Coalition politics between 1989 and 2014 has had its effect too, making the Union government more accommodative of regional aspirations.

Yet, Centre-state relations remain fraught, largely on account of increasing realisation among the states that the Centre’s unitary approach stifles soaring aspirations and becomes a barrier to delivery of services. The one-size-fits-all, top-down model around which central policies and programmes have been crafted till now may have been politically beneficial to the party in power (though that’s debatable after this summer’s election) but they have not necessarily served the larger good. This has been most acutely felt during the past decade when chief ministers found themselves largely, if not entirely, excluded from the decision-making process even as a new, more demanding, India emerged with a dramatic demographic shift. The National Development Council became a relic of the past. The National Advisory Council wasn’t quite a substitute.

It is against this backdrop that we need to see Prime Minister Narendra Modi’s emphasis on re-crafting Centre-state relations, as enunciated by him in his reply to the debate on the President’s address in Parliament. There are three salient features of what he said. First, the prime minister should not, indeed cannot, work in isolation if India has to prosper collectively as a nation. He should be the leader of ‘Team India’, comprising him, his ministers and the chief ministers. This does not entail a formal arrangement but an informal yet elaborate process of consultation so that the top-down approach of the Centre in framing policies and programmes, or the central plan for that matter, is turned on its head and becomes bottom-up. Second, New Delhi must discard its one-size-fits-all model for centrally-funded programmes.

States should have the liberty to decide what is in their interest and funds should be reallocated accordingly. Third, states should be clustered according to commonality of interests and requirements — for instance, hill states, coastal states, desert states, etc — and separate policies framed for them. This would correct the discriminatory approach that is the cause of much grief.

As a framework for a new era of federalism based on cooperation and consultation instead of conflict and adversity, what Modi has proposed is unexceptionable and welcome. Having served as a chief minister for more than a decade, he understands the need to kindle and sustain the spirit of federalism, if only to avoid debilitating friction. More importantly, if the world’s interest in the now forgotten ‘India Story’ is to be revived, it can only be done by ensuring the development, growth and prosperity of all the states. The new ‘India Story’ cannot but be the sum total of the stories of its 29 states. The state governments realise the potential of this approach, the opportunities it offers and the prospects it creates. An adversarial relationship with the Centre is equally, if not more, debilitating for the states. A participatory role, on the other hand, not only facilitates the meeting of local aspirations but also ensures a fair slice of the development cake.

There are, however, challenges that Modi will meet and have to overcome. These challenges will stem from three realities that cannot be wished away, no matter how noble the intention of restructuring Centre-state relations. First, state governments that are prone to fiscal indiscipline will see in the new arrangement an opportunity to squander more and deliver less while insisting on diminished accountability. Populism is still seen as a virtue, or else Chandrababu Naidu would not have waived farm loans immediately after taking charge as chief minister. In Punjab, Parkash Singh Badal is regretting the introduction of property tax. Second, unless coupled with rewards for performers, a re-calibrated transfer of funds is unlikely to result in competition among states to out-perform each other. Helping laggard states to get going is one thing, pandering to the demand for ‘special status’ is quite another. Third, the spirit of federalism that Modi so eloquently talks about cannot be a one-way affair, the states must reciprocate in equal measure. Inter-state conflicts and disputes take a toll not only on their economies but on the national economy too. Will states be able to rise above narrow regional, at times even parochial, interests to help shift the paradigm of how India is governed?

Kanchan Gupta is a political analyst
The views expressed by the author are personal