Why in News?
There are factors, which if harnessed well, that can create a political moment for a principled politics of federalism.
Syllabus— GS 2 Federalism
- In India, federalism has always had political significance, although it has rarely been an axis of political mobilisation, with the exception of the States Reorganisation Act.
- Even in the days of coalition politics, when state politics played a role in national electoral outcomes, this was true.
- Despite nearly two decades of coalition governments, fiscal and administrative centralization has continued.
- Ironically, rather than deepening federalism, electoral politics has posed enormous obstacles to reaching a political consensus for true federalism.
Federalism and Nationalism –
- Following 2014, the BJP has couched its dissatisfaction with federalism in the language of development and nationalism, both of which have broad electoral appeal.
- India must become “one nation, one market,” “one nation, one ration card,” and “one nation, one grid” in order to expedite progress.
- Federalism, as a notion important for managing multiple political situations and identity demands, risks being conflated with regionalism and a limited parochialism that is anti-development and anti-national in this environment.
- A deepening federalism politics would have to overcome nationalist rhetoric that sets federalism against nationalism and progress.
- This is a tall order, especially given that most regional parties have failed to preserve decentralisation principles in their own area.
- Federalist politics has remained conditional rather than principled.
- Federal principles have been twisted in all kinds of ways to co-produce a political culture of flexible federalism, as Pratap Bhanu Mehta has pointed out over the decades — “federalism for me, but not for thee.”
Diversity between States –
- Since liberalisation, economic growth paths have been marked by increasing regional divergence.
- Southern (and western) India has outpaced most of northern and eastern India across all key indices, resulting in a bigger divergence rather than the expected convergence with growth.
- The arguments around the 15th Finance Commission (FC), when the Government of India compelled the commission to utilise the 2011 Census rather than the longstanding practise of utilising the 1971 Census to estimate revenue allocation between States, revealed hints of these growing tensions.
- At one level, the BJP’s ideological objective of cultural homogenization risks causing new forms of cultural alienation and regional tensions, similar to the Citizenship (Amendment) Act protests in Assam.
- The creation of new types of regional sub-nationalism is a very real prospect, as evidenced by glimpses of it during the last Assembly elections, particularly in West Bengal.
Financial Federalism –
- Weak fiscal management has pushed the Union government to the brink of a “hidden fiscal disaster,” according to economist Rathin Roy.
- The Union’s answer has been to increase cesses on states in order to wring more revenue from them.
- Its insistence on offering states GST compensation in the form of loans (after lengthy delays) and increasing state participation in government initiatives.
- This has only been exacerbated by the pandemic-induced economic crisis.
Way Forward –
- As Suhas Palshikar has observed, regional identity politics is inherently isolationist.
- This risk will have to be overcome if a collective political action for federalism based on identity issues is to succeed.
- Richer states must find a means to share the economic burden with poorer states.
- If states are to negotiate existing tensions and win the collective war with the Union, they will need to display political maturity and make essential sacrifices.
- An inter-State platform that brings States together on a regular basis to discuss fiscal federalism issues could be a good place to start developing trust and a shared agenda.
- The seeds of this were sown during the 15th Finance Commission and GST debates.
- Finally, beyond ideas, a reinvigorated federalism politics is a political need. Without a glue that holds it together, no coalition has ever succeeded in the long run.
In this version, federalism is reduced to a game of political chess and is confined to a partisan squabble rather than a genuine desire for accommodation on the side of the regions. Discuss.