Pandemic and Federalism

CONTEXT: Response to Covid-19 shows carving out roles through consensus can address challenges to federal governance.

Positive Aspects of Centre-State relations in India: enhancing cooperative federalism:

• Response during the Pandemic: The exigency response will help us a great deal in under- standing Centre-state relations as well as in improving mechanisms of federal governance.

• For E.g. while the Centre chose to work carefully with the states, the most cynical chief ministers professed working with the Centre.

• Goods and Service Tax Reforms: The GST reforms is the most recent instance of such reworking of the Centre-state roles for a greater and collective goal.

• It involved a tortuous, but a new consensus building approach to implement the reforms.

• Centrally Sponsored Schemes: Centre extends support in sectors pertaining to the State List under CSS, reducing horizontal and vertical imbalances among states.

• Principle of Comparative Advantage: 

• The centre is obligated to address the externalities of the states’ developmental efforts under the subjects allocated to them.
• States play their part of the execution.

• Presence of Concurrent List: Emerging risks of sustainability are linked to either the State List subjects or the ones that rely on actions by states — water, agriculture, biodiversity, pollution, climate change.

Issues with the Central State Relations:

• Segregation of Functional Roles: has neutralised the impact of principle of comparative advantage, which although followed, couldn’t provide expected results in handling of the pandemic.
• Presence of Acute Sub-nationalism, deep territorialism and competitive federalism puts pressure over collective actions.

Way Forward:

• Review and Revisit the roles of the Centre and the states: to address hitherto disregarded and emerging concerns — a viral pandemic or climate change.

• Rationalise CSS: Need for an appropriate forum to discuss the complex and contentious issue of reviewing the federal organisation of powers and restructuring of central transfers.

• Need to organise federal responsibilities on a functional basis.

• Expanding Concurrent list: To extend the role of the Centre in ensuring the sustainability of common-pool resources.

• The High-Level Group, constituted by the 15th Finance Commission, recommended shifting health from the State to the Concurrent List.
• Ashok Chawla Committee recommended shifting water earlier.

• Strengthen Inter-State Council: It is time to revisit the proposal for an elevated and empowered Inter-State Council in order to fulfil the need for an appropriate forum to discuss contentious issues.

Conclusion: The ongoing friction between the Centre and the states over GST reforms tells us that consensus-building is not a one-time exercise.