Adverse Changes, Federalism Imperilled

Context: There needs to be a federal coalition to preserve the idea of a plural India in terms of culture and politics

Increasing centralisation tendencies in Indian federalism: A preface for worsening Centre-State relations

• Constitutional bias: Constitutional powers, including fiscal relations inherently biased towards Centre.
  • Vesting of all residuary powers with Centre and giving over-ruling powers to Centre on matters in Concurrent list are primary sources of this bias.
• Political misconducts:
  • There has been a history of the Centre using its powers to dismiss or use Governor to intimidate democratically elected governments.
  • E.g. During the Emergency, education was moved to the Concurrent List, which was until then a state subject under the constitutional division of responsibilities.
• Centralisation in fiscal relations:
  • Gap between the revenue that State governments are allowed to generate, and the expenditure that they are expected to incur has been widening, particularly with implementation of the Goods and Services Tax (GST).
  • Issue has been compounded by shortfall of GST this year and the Centre’s lackadaisical response to demands for compensation.
  • Central encroachments through centrally sponsored schemes: In the education and health sectors where States are required to spend 85% and 82% of public expenditure.
• Centralisation in economic and political power:
  • Through facilitating expansion of few big business groups that are aligned with ruling regime.
  • Centre sought to insulate Indian big business from global competition by choosing not to enter into Regional Comprehensive Economic Partnership (RCEP) but has eroded the power of small businesses through implementing GST.
  • Bigger players are more likely to benefit from the removal of State-level barriers to trade at the expense of smaller regional players.
  • Centralisation in rent-seeking:
    • Regional parties tend to rely on region ­specific rent­-thick sectors for political funding, such as mining and real estate.
    • Centres use of central agencies to check the corruption in states reduced avenues for accumulation of regional capital, thereby weakening the ability of regional parties.
• Institutional transgression
  • Institutions such as the Income Tax Department, the Enforcement Directorate and the National Investigation Agency are being used to intimidate opponents.
  • Centre’s meddling with appointments of vice-chancellors in universities funded and run by State governments.
  • NEET – National Eligibility cum Entrance Test in medical education, which subverts affirmative action policies developed at the regional level in response to local political demands.
  • Direct transfers to beneficiaries of welfare schemes bypassing States is also contributing to this dynamic.
  • In health sector: Imposing national lockdown during the first wave of coronavirus pandemic without consulting State governments, Centre has now put State governments at a disadvantage in vaccine usage by fixing differential pricing for procuring vaccines for them.
• Threatening socio-cultural foundation: Homogenisation agenda ignoring the fact that diversity in cultural foundation of regions sustained Indian federalism.
  • Markers of regional identities and regional socio-cultural practices are now interpreted as belonging to a pan-Indian Hindu tradition.
  • For e.g. ‘Dravidian’ identity is attacked as a creation of British with support from Christian missionaries, emptying the term of its anti-caste politics.

Conclusion

• Recognise the degree of federalism in India: Which has depended largely on two variables: Nature of political coalitions at the Centre and role of States in such coalitions, and the cultural diversity of regions.
• Need of the hour – Regional assertion: Through a federal coalition that looks beyond legal-constitutional aspects of federalism to preserve the idea of pluralism in India.