In a recent speech in Telangana, PM Narendra Modi asked the states to vie with one another and with the Centre in the matter of development as it was the only answer to meet the growing needs of the country.
In a recent speech in Telangana, PM Narendra Modi asked the states to vie with one another and with the Centre in the matter of development as it was the only answer to meet the growing needs of the country. “The Centre will join hands with the states in working towards the goal since it is possible only with cooperative federalism,” he said. Southern states, however, are not seeing signs of cooperation. They have begun to throw accusations against a central government that believes in keeping a tight control on the states. N Chandrababu Naidu, the chief minister of Andhra Pradesh, threw the gauntlet first by pulling his Telugu Desam Party out of the NDA government after the latter refused to confer special category status on his state. He accused the Centre of diverting the tax revenues collected from the south to the development of northern states. Both Karnataka and Tamil Nadu have jumped into the act. For them, the provocation, among other things, comes from the constitution of the 15th Finance Commission. One of its Terms of Reference (ToR) mandates that figures from 2011 Census be used instead of 1971 Census. This mandate, the south feels, will benefit north Indian states at the expense of their south Indian counterparts.
Both Siddaramaiah, the chief minister of Karnataka, and MK Stalin, the leader of the opposition in Tamil Nadu assembly, have put forth their points of view quite eloquently. Siddaramaiah, in a post on Facebook, has said, “In 1947, India was a young nation and we needed to be cautious of any divisive or secessionist tendencies. India, therefore, became a union of states with a strong centre. Today, 70 years down the line, we have done admirably well as a nation. From a union of states, we are evolving into a federation of states. Therefore, I don’t think the demands for greater federal autonomy and recognition of regional identity are inconsistent with our nation … Relatively well-developed states like Karnataka, Kerala, Tamil Nadu, Andhra Pradesh and Maharashtra contribute more to central taxes than what they get in return from the Centre. What we get from the Centre comes in the form of state’s share in devolution of central taxes and grants under centrally-sponsored schemes. The grants under centrally-sponsored schemes come with strings attached. Schemes are designed keeping the entire country in mind and we are forced to implement them and provide our share. We need a system where states receive larger portion of the taxes collected from our states and the share of centrally-sponsored schemes must go down. The central schemes, if at all needed, need to be flexible so that we can tailor them to our needs.” The NITI Aayog has effectively dismantled the erstwhile National Development Council (NDC). No effective consultative mechanism has come in its place. Even the NDC was a talk shop. We urgently need a mechanism where the states get a greater say in making of the nation’s policies. Stalin, in his letters to the chief minister of Tamil Nadu and the PM, makes several valid points regarding ToR under the 15th Finance Commission. He says, “The central government has, for the first time, without consulting the states, stipulated an entirely different approach in the ToR.
To be specific, in Term 4 that the commission may (inter alia) consider proposing measurable performance-based incentives to ‘efforts and progress made in moving towards replacement level of population growth’, and in Term 5 that ‘the commission shall use the population data of 2011 while making its recommendations’. These ToR will negatively impact the allocations to many progressive states like ours in a compounded way. On one hand, we will be losing disproportionally by the use of 2011 Census data as the basis, and on the other, we will also be deprived of any incentive under Term 4, as we achieved (or exceeded) the neutral net reproductive rate target long ago. Taken together, these must be construed as the most counter-productive measures taken hitherto with regard to population control incentives provided by the central government. These drastic ToR changes will reduce the distribution of central revenues to progressive states by a substantial margin, which will not only be a travesty of justice, but an ill-conceived effort to systematically divert resources to states that have never made serious attempts at population control.” He adds that “the ToR also proposes, using an incentive measure of ‘achievements in the implementation of flagship schemes of the government of India…’ Progressive states have already implemented their own socio-economic programmes in accordance with the requirements of their respective states and achieved exemplary results well in advance of the government of India promoting equivalent schemes.
States like ours, which perhaps not coincidentally have been governed by non-BJP parties for almost our entire history, have already achieved objectives like universal electricity connection, road connectivity to all villages, comprehensive cooking gas connections and free rations to families below BPL, well before the government of India’s schemes were even proposed in such areas, let alone implemented with any success. Therefore, it is condemnable that such a regressive ToR focused on government of India’s programmes alone is included, as opposed to a more neutral ToR which referenced progress towards the target outcomes of such programmes, irrespective of whether the programme originated at the Centre or the state.” Stalin makes several other such points. This issue won’t fade away. The finance minister of Kerala, TM Thomas Isaac, has called for a meeting of the finance ministers of southern states in the second week of April to discuss the 15th Finance Commission and its ToR. These are all states ruled by regional parties, barring Karnataka. The ruling BJP has to re-look its relationship with regional parties if it wants to make any inroads into the south, which has long felt that it is ignored by the north.