Karma of Growing Divide Between Centre and States

Context: Not keeping states in good humour may nix the Centre’s structural reforms plan.

Possible outcomes of the GST meeting

• Simmering tensions between Centre and state will spill over
• Will formally acknowledge the split within the Council
• Will cement the transition from consensus to a partisan stance

Challenges between the Centre-State relations

• Nature of federalism in a democracy: national goals may not align with local priorities of states.

• Big brother attitude of the Union government: Some states accuse Centre has a big brother attitude where the Centre often link bailouts to unpopular conditions like One Nation One Ration Card

• The Centre’s move last week to partially link additional borrowing with the roll-out of reforms. 
• Five states—Andhra Pradesh, Telangana, Karnataka, Goa and Tripura—became the first batch to be extended this facility.
• The similar attitude is depicted by the World Bank and the International Monetary Fund, where these institutions force economic regulations for additional borrowings on countries.

• Coercive federalism instead of cooperative federalism: Critics argue that the Centre is pursuing ‘coercive federalism’ while espousing the cause of ‘cooperative federalism’.

• Impact of Pandemic: lockdowns have plunged the economy into an unprecedented slide, leading to evaporation of tax revenues

Conclusion: The trick is to manage the frictions without a serious fissure—like the one we are witnessing in the GST Council. And, for this, the onus is on the Centre; it is after all the anchor of the federation—the first among equals.