Opinion

Centre State Relations Deteriorating?

It is a paradox that Centre State relation are deteriorating more on political grounds rather than on sound economic principles

(TN Ashok)

Prime Minister Narendra Modi ‘s philosophy of cooperative federalism, under which the centre devolves more powers to states, especially in terms of financial allocation, seems to have been put to the acid test, judging by the logjam the nation’s highest legislative body, Parliament has been put into .

For more than a fortnight, parliament, both Lok Sabha and Rajya Sabha, has been paralysed by opposition parties mainly the TDP, YSR Congress and AIADMK

First it was the TDP led by its CM Chandrababu Naidu, which felt piqued by the FY 2018-19 budget proposals, which did not allocate in the 1st place the resources it wanted.

TDP an important ally of the ruling BJP led NDA front as a result walked out of NDA.

modi thackeray
modi thackeray

The NDA has been seeing fissures off late with allies such as Shiv Sena in Maharahtra and TDP in Andhra Pradesh with both complaining either of not being consulted on important decisions or not being given due respects an ally deserves in a coalition government Or not being given the financial allocations the states had been promised but reneged later by the centre.

The Modi government has an absolute majority of over 282 seats to run the lok sabha, so in real terms, it does not really depend on the allies for any great support, but treat them as mere fellow riders in politics.

This is vastly different from the UPA regime where the then Prime Minister Dr Manmohan Singh had to depend on fractious elements such as Laloo Prasad Yadav and the DMK, which embarrassed the government with the 2G scam and fodder scandal , for support.

BJP has no such obligations. And yet as political observers say the “ arrogant and hoity attitude” of the BJP towards the allies Is definitely not in keeping with the principle of cooperative federalism propounded by the charismatic PM of 2014 “ David (MODI) the giant killer of goliath ( Congress)”.

modi naidu
modi naidu

Today we have a situation, where allies are fighting with the ruling party, the AIADMK, though not an official ally, but an unofficial one as promoted by the then CM Late Jayalalitha, so much so, political observers claim the Edapadi-Ramaswamy – OPS AIADMK regime is an A team of the BJP with the ruling party simultaneously promoting an B Team in Rajnikanth, the superstar of Tamil filmdom.

We also see a non BJP non-Congress front being promoted in the south among the states there. But TMC leader WB CM Mamta Banerjee would rather join a front where Congress gives its backing.

Congress’ major battleground now is Karnataka, which goes to polls in May this year with popular sentiment swinging towards the incumbent Sidhharamiah’ regime, which seems to have delivered to the people on welfare schemes, while the BJP is trying to divide the votes among the vokkaligas and lingayats, two different sectors of Shiva worshippers in the Hindu pantheon of goods.

BJP Is betting on Yedurappa to swing the votes and promised him chief minister ship despite the Reddy brothers controversy still hounding him.

It is a paradox that Centre State relation are deteriorating more on political grounds rather than on sound economic principles though the latter is being touted officially by the allies and opposition parties.

TDP’s argument of not getting adequate financial allocations is being punctured by unofficial sources, which claim that the NDA government had been allocating the resources to Andhra Pradesh, but the ‘TDP leader Naidu had been diverting the funds to his pet schemes to regain his popularity with no official accounting for the same.

So they are falling short of funds promised to the people, who have to see a new state being formed at Amravati , thanks to the division of Telengana and Andhra Pradesh.

While TDP is under threat from the YSR Congress led by Jagan Reddy , who has moved a no confidence motion against the NDA government,the ruling TRS led by Chandrasekhar Raois under no threat from any viable opposition.

Though TRS gained substantially from the Congress prior to 2014 poll, it is no longer swinging with the Congress.

The AIADMK is revolting against the puppeteer Modi at the Centre with the threat of a contempt petition against the central government on the Cauvery issue for not appointing a new body or implementing the recommendations of the Supreme Court on the river water sharing issue.

The BJP Is showing political maturity or rather political interests in not taking a decision before the Karnataka assembly polls, which it wants badly to win as Congress seems to be firmly in the saddle.

Any decision in favour of TN could upset the political equations with the ryots in the states demanding their share of Cauvery waters.

Both BJP and Congress seem to be running neck to neck in the state with the former PM Deve Gowda with his JD emerging as the king maker without whose support any party would be unable to form the government.

Given this political scenario, one has to understand how the centre state relations progress. The south from its stand point seems to be asking for a larger share of the cake (financial resources) as it has shown much better results than the north in terms of population control and higher literacy rates.

The GST though its implementation seems faulty was actually based on the sound principles of cooperative federalism of giving a larger share of the tax revenue to the states than before.

The contentious issue is whether to base the calculations on the 1971 census or wait for the 2011 census.

So the question to address now Is: Should centre state relation be judged on political grounds or sound economic principles. The former seems to be ruling the latter.

Let’s look at what some experts feel on the matter. Celebrated journalist TN Ninanhas in a column in the leading economic daily of Delhi Business Standard posed the question:“Does the south protest too much? Chief Ministers and ministers of southern states are getting together to protest against the terms of the latest Finance Commission.

For the uninitiated, such a commission recommends every five years how much of central tax revenues should be shared with the states and, within that, what should be the share of each state.”

The brief given to the new commission is that it should take into consideration the 2011 Census, and not the 1971 Census numbers, which were considered in previous Commission reports.

The last Commission had given weight to both 1971 and 2011.SaysNinan:“The change has generated some heat because the southern states fear a triple whammy.

First, they have a better record of population control, and therefore will suffer in terms of their share of the tax revenue to be devolved from the Centre if 1971 is replaced by 2011.

Second, they already lose out because greater weight is given to poorer states (income has so far got about twice the weight given to population). And third, the goods and services tax, being a consumption tax, will deliver more revenue to the non-producing (i.e. poorer) states.

One writer has even said it is becoming “almost untenable” for Kerala and Tamil Nadu to thrive in the union.

Ninan puts a context to this. Bihar, he says, gets a one percentage point extra share of central revenue, relative to its share of population.

But that isn’t the end of the world, especially when it involves the poorest state in the country. Besides, every Finance Commission creates its winners and losers.

Between the 11th and 14th commissions, three of the southern states (the exception being the combined Andhra Pradesh) were significant losers in terms of share of central taxes.

But northern and eastern states were also losers: UP, Bihar (including Jharkhand), West Bengal and Odisha.

The gainers included the western giants Maharashtra and Gujarat. “So one should not jump to facile north-south conclusions — especially since the commission has also been asked to reward fiscal performance and population control,” says Ninan in his carefully studied analysis.

Alarm bells are ringing today because in 2026, when the state-wise allocation of Lok Sabha seats is reviewed, the use of the 2021 Census as the population base could result in the southern states losing out in terms of the number of seats, or share of an expanded seat total, in the house.

“This too is an alarmist view”, says Ninan adding,” Most states had between 1.4 million and 1.6 million electors per Lok Sabha seat in 2014, reflecting the national average of a little over 1.5 million.” Other than the north-eastern states, there were few stand-outs, like UP with 1.74 million and, at the other end, Kerala with 1.2 million.

Equalisation of seats in 2026, on the basis of population, could reduce Kerala’s representation from 20 Lok Sabha seats to 15. Unfair, you say? Yes, because you penalise success.

But how fair is the current reality: For every 3.6 million electors, Kerala gets three seats, but UP only two? Still, this is not a straight north-south issue. Karnataka has slightly more electors per seat than Bihar. Himachal Pradesh and Jammu and Kashmir have the same figure as Kerala: 1.2 million electors per seat. Goa has barely half a million.

“Taking the picture in its totality, there is little reason to expect radical change in the levels of Lok Sabha representation, such as to create a north-south cleavage”, says Ninan.

The Narendra Modi government had virtually cleaned the dust of the justice MM Punchhi commission report that laid a clear roadmap for redefining Centre-state relations. It discussed the issue at various interstate council meetings.

Several other key suggestions, including one for a model anti-conversion law — a demand supported by the ruling BJP — and powers to suo motu deploy central forces in states during emergencies were debated.

So politics rather than economics seem to be coming in the way of a better definition of centre state relations that could impinge on the future of the states’ rights and obligations of which the states are justifiably afraid of Better counsel should prevail to sort out this issue haunting the centre and state from time immemorial.

([email protected]@gmail.com)

T N Ashok is a Corporate Consultant, Resident Editor and Writer of Economic Affairs.

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