Sunday, October 07, 2012

Straining at Central leash

In the past few months, West Bengal chief minister Mamata Banerjee has emerged as the juju woman of Indian politics. When, after a spell of opposition from within, she finally walked out of the UPA-2 government last month, there was both a sense of relief and anxiety. There was relief because her exit gave Prime Minister Manmohan Singh a political space to push through overdue reforms in the economy. At the same time, optimism was laced with the fear that a resurgent Mamata, unflinchingly committed to populist politics, would now give an impetus to revanchist tendencies that may come into play if the next general election produces a hung Lok Sabha.

The looming threat of political chaos is giving sleepless nights to all those who have a stake in India's future. It is one thing for the Centre to alternate between a Congress-led UPA and a BJP-led NDA, but what would happen if there is a government comprising six or more regional parties incapable of distinguishing the national from the local? Will it signal the end of the India story?

Present trends indicate that both the Congress and the BJP, the two poles of politics, are undergoing a geographical shrinkage. Opinion polls indicate that the two parties between them will barely occupy half the Lok Sabha seats. This implies that the strategic hold of the regional parties will be greater than ever before. Of course things may change in the coming months. But assuming today's snapshot of a precarious future becomes tomorrow's reality, is there any ray of hope? Must political fragmentation involve administrative disarray?

Paradoxically, interactions with chief ministers and regional leaders indicate that there is an unexpected convergence of thought on the parameters of governance. On the face of it, there is nothing to bind Bihar's Nitish Kumar and Gujarat's Narendra Modi. Yet, a closer look at the Bihar chief minister's adhikar yatra seeking a special status for Bihar and Modi's repeated declamations against a "Delhi Sultanate" which is dismissive of Gujarati aspirations suggest a common link: exasperation with the present role of the Centre.

The dissatisfaction runs deep. The states of eastern India rue the systematic manner in which their locational advantages were negated by the steel and freight equalisation scheme which ran till 1991. Jharkhand and Orissa complain that the stupendous gains from the global minerals boom have not accrued to the states. Orissa is miffed that a partisan Centre has either delayed or derailed important steel and bauxite projects in backward areas. And many states feel that centrally-funded measures such as the rural employment guarantee scheme was designed by people who don't realise that one size just cannot fit all India.

If the poorer states are unhappy, the states which are driving India's GDP growth are equally resentful. Gujarat, Tamil Nadu and even Goa rue the fact that very little of what they contribute to the national exchequer is ploughed back into their states. Gujarat resented the whimsical ban on cotton exports by the Centre. Goa, which has contributed so much to tourism, is miffed over having to do with a thoroughly inadequate airport. And Mumbai keeps wondering what happened to the PM's "second Shanghai" promise.

For the states, there are two concerns. First, there is mounting anger over the arbitrariness of centrally-funded schemes. Development projects, they feel, should be determined, designed and executed at the state level. Above all, they seek an end to the politically-inspired, discretionary use of national resources. Secondly, the states want the proportion of revenues disbursed by the Finance Commission (which are non-discretionary ) to be considerably enlarged, if necessary by whittling down the Planning Commission's role. In short, the states are pressing for a drastic revision of the federal relationship.

Undertaking the shift from a centralised system to a more federal system necessitates action at the Centre. There is a wide-open political space for different parties (even those which are politically antagonistic) to agree to a common minimum programme of federal restructuring that will bind any formation that assumes charge after the next poll. If the Centre proves fragile, it would be prudent to put the onus of progress on the states by giving them a greater stake.

Sunday Times of India, September 7, 2012

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