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The bubble of cooperative federalism

-Indraneel Agasty

Article 1 of the Indian Constitution states that India, that is Bharat, shall be a union of states. The concept of federalism is imbibed in the very first Article of the constitution. It is also justified to be so since at the time of independence the Indian Territory was comprised of different regions and more than five hundred smaller princely states who had never been governed by a common power before the British. Thus, one way to put it is that the Indian union draws its power from the states.

But in contrast to many other federal unions like the United States or Switzerland, which are referred to as ‘coming together’ federations, India is a ‘holding together’ federation. That means, as opposed to the states coming together and deciding to have one overseeing authority, here the center decides to share power with the states as required.

In holding together federations, the center by convention possesses greater power than the states. The Union government holds control over the major share of the generated revenue and shares it with the states as it deems fit.

This decision by the constituent assembly was primarily influenced by the fact that much of the Indian ‘territory’ had still not amalgamated in the Indian mainstream thus creating demands for higher autonomy amounting to notions of secession.

In essence, this means that the states generate much lesser revenue than they spend making them forever dependent on the center’s grants. Many times this has resulted in India being referred to as quasi-federal unit meaning she is federal in structure but unitary in spirit.

Thus, the line between the two forms has been blurred with respect to India for quite some time now. But recent happenings and decisions by the central government has made the contrast even starker which leads to the question whether the essence of federalism still remains in India’s governance.

The GST regime that began in 2017 was based on projections that reflected a 14% increase in revenue shares per annum and this served as the basis on which the states rode the bandwagon for the new tax regime.

The fall of the Government’s revenue even before the CoViD pandemic due to a recession and unwarranted corporate tax reductions pushed it towards renegading from the promise of compensating the states’ share of the shortfalls in GST revenue last year.

The economic losses due to the pandemic and resulting lockdown were only the final nails in a coffin that was already built over the course of major financial decisions taken through the course of the past few years.

Moreover, the sudden and strict conditions laid to the states for extra borrowing during the pandemic last year also displayed the hard handedness of the union government towards the states who were also facing dire straits on the revenue front and needed all the help from the center that they could get.

In this regard, the decision of the Assam government to open up liquor shops to generate revenue during the lockdown was held comically by many but this also reflects the extent to which the states had to be pushed to manage their finances. Liquor is after all a state subject and excluded from the GST product list.

The second wave of the CoViD pandemic and the release of the vaccines in 2021 bore out even more such images.

Though initially, the union government was bearing the entire responsibility for vaccination of the elderly citizens, vaccine roll out for other age groups were declared to be the responsibility of the states. The fact that the vaccines to be procured by the states would be more steeply priced when compared to the center’s prices (by almost 166%) highlights a very tough scenario for the states.

Especially those states with lesser revenue generation capacity will face a huge crunch as it has been revealed that the eight poorest states might end up spending 30% of their total health budget on vaccine procurement. The fact remains that health is a state subject so the states being left to fend for their own technically doesn’t raise too many eyebrows.

In Punjab, the unilateral decision of the central government to pass the three farm laws without discussion with the states that might be the most affected by them has drawn public ire even leading to the resignation of a union minister to register protest against the said acts. Although the farmer’s protest has huge participation from other provinces like Haryana and western Uttar Pradesh as well, these states being ruled by the same power as that in the center might be the reason behind no major outrage being seen from the state governments here.

The farm laws are still a major bone of contention between the government of Punjab and the Union government with protests still raging and long term BJP ally, Shiromani Akali Dal walking out of the NDA due to these very differences.

The most blatant cases of attacks on the federal nature of the constitution though can be seen in the states where the BJP has faced the most dust biting defeats; Delhi and West Bengal. The passing of the Government of National Capital Territory of Delhi (Amendment) Bill, 2021 which literally translates the meaning of the word ‘Government’ in case of Delhi to the Lieutenant Governor of Delhi thus bypassing the Chief Minister and his executives altogether is only one of the many times the ruling government at the center has used its absolute majority in the Lok Sabha to its benefit without much deliberation regarding the issue. In West Bengal, the Chief Minister and the Chief Secretary missed a meeting with the Prime Minister regarding impact of the cyclone Yaas on the state.

Since the Chief Minister had to attend another meeting at the same time, she had visited the Prime Minister along with the Chief Secretary three hours prior to the meeting. This was later condemned by the BJP and its allies as well as supporters citing that the Chief Minister had done this as a deliberate attempt to be spiteful against her political opponents.

Later, the Chief Secretary, the top bureaucrat of the state was transferred on deputation to Delhi. This situation is unprecedented i.e. it has always been a custom to place an IAS officer on deputation only if he consents for the same. An officer is appointed by the Central government but once placed in a state, he is closely entangled with its activities and if he works under fear of sudden transfer he most certainly won’t be able to perform his duties towards the state with perfection.

In Assam as well opposition parties including newly formed ones have come up with the idea of restoring the federal nature of the country’s polity.

But as a matter of fact, the federal nature can only be upheld by the political goodwill of whoever is in power at the center. Diversity among the people of such a large country can only be unified by making sure interests of all the stakeholders are taken into consideration.

Arbitrary and one handed decisions as the ones discussed above will result in gradual erosion of the federal nature of governance and the concept of cooperative federalism will be left as a bubble. Partisan politics left aside, the Union government has to make sure that the fundamental needs of the states are given importance regardless of whoever rules them. Only then can we be true to the first article and call India a union of States.

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