States of the Union

The Indian Express, January 19, 2015

Cooperative federalism was a prominent theme on Narendra Modi’s agenda even before he became prime minister. As chief minister, he often accused the UPA of “coercive federalism”, violating the federal spirit and reducing the states to a “subservient” position. His position was that India required a “vibrant and functional federal structure” where states are given their due. However, the question worth asking is whether the government will walk the talk, given that party incentives often change with location.

Barring the institutionalisation of local self-government, Indian federalism has rarely seen any deliberate redesign in terms of its structure or in the arrangements with regard to power and resource distribution. Even a cursory reading of the reports of the commissions set up to examine Centre-state relations in India reveals a conservative streak rather than innovative zeal. Further, governments have also acted according to their convenience. The tragedy of the Inter-State Council says it all.

Most changes in Indian federalism have been evolutionary and have come in the form of tweaks and adjustments. Consequently, the structure remains the same but new processes are worked into it. Much of the federalisation of the Indian polity in the 1990s that we often refer to was in the form of new practices and patterns of interaction. Given their informal status, they are contingent on the existing power relations. More importantly, the changes are largely unintended and have been brought about by social, political and economic currents affecting the political system as a whole.

For instance, the emergence of a competitive multi-party system and the institutionalisation of a coalitional system not only made it tough for the Centre to play hardball with the states but also fulfilled some of their longstanding demands. The participation of state-based parties in Central governments fulfilled their desire to have a greater say in national-level decision-making. The Supreme Court, in the Bommai judgment of 1994, made Article 356, often used to dismiss state governments controlled by political parties opposed to the ruling party at the Centre, judicially reviewable. The court’s observations, and the fact that Central governments depended on state-based parties for survival, made Article 356 extremely tough to use, thus removing a major irritant in Centre-state relations.

Similarly, the embrace of economic reforms helped transform financial dynamics between the Centre and the states. With greater discretionary powers, states competed for market-based investment and this marginally reduced the Central government’s influence over a state’s development trajectory. This access to new revenue sources fulfilled the persistent demand for more financial resources and autonomy. If states today have greater political and economic autonomy than the period before the 1990s, it is probably an incidental benefit rather than the result of concerted efforts. Read Fullstory>>

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