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

Middle class fed up with coalitions

By Swapan Dasgupta

As 2011 draws to a close, this may well turn out to be the year the Indian Establishment lost faith in itself. The unwavering optimism of the past decade and particularly the self-confidence that marked India’s upward economic trajectory has yielded way to a sense of dejection and nervousness. The reasons are more than the worrying GDP statistics, the boo-boos of the Reserve Bank of India and the UPA Government’s political drift. 

There is a growing feeling, echoed in all the drawing rooms during the festive season, that India has shot itself in the foot once again — aiming, a high Government functionary put it to me so evocatively, not merely at the feet but at each individual toe. There is a growing feeling, echoed in all the drawing rooms during the festive season, that India has shot itself in the foot once again — aiming, a high Government functionary put it to me so evocatively, not merely at the feet but at each individual toe.

In moments such as this there is the irresistible temptation to explore the roots of the growing dysfunctionality. In the US, there is a raging debate about the need to make the fat cats pay a larger share of their wealth in taxes; in Europe there is concern that a centralised Eurozone will squeeze out the last vestiges of national sovereignty from the member states; and, in China, the lessons of the ongoing Wukan uprising may well be an indication of the things to come. In India, apart from a growing sense of disgust with politicians, some old chestnuts are being drawn from the fire in the form of a revival of the debate on a presidential system of Government.

The features of the debate are still hazy. But underlying the disgust with coalition politics is the desire of a section of the metropolitan elite to usher a regime dominated by a no-nonsense strongman (or woman) that can take decisions in the national interest and inject purposefulness into governance. It is felt that the disproportionate influence of regional satraps such as Mamata Banerjee has to be curbed and the smaller parties shown their place in the larger India. No one wants to formally attack democracy because that is politically unacceptable. Yet, the chaotic underbelly of one billion arguments is sought to be tempered by identifying minimum standards of responsibility.

The demand for a presidential system to replace the parliamentary shambles is not anti-democratic per se. But in today’s context it assumes that too much democracy is bad for the country and an impediment to India fulfilling its Great Power destiny.

A presidential system can also be said to contain a measure of exasperation with India’s political federalism. Why, it is asked, should Mamata Banerjee with 20 Lok Sabha MPs be in a position to veto decisions that have a bearing on the entire economy? The assumption is that she should confine her interest to West Bengal and the Railways and not threaten the Government’s survival with her opposition to foreign investment in multi-brand retail.

The discomfiture with Luddite politics may well be warranted. There is, after all, a similar sense of foreboding with the smaller coalition partners in the United Kingdom and Australia. The question is: Why would Mamata, or for that matter the DMK, relinquish its strategic clout at the Centre voluntarily? What does it get by way of compensation?

The answers are awkward. A State Government in India has limited powers and, more important, a limited revenue base. Even these limited powers to govern and tax are constantly under threat from a Government whose political signature is best seen in gigantic, one-size-fits-all Centrally-dictated schemes such as the MNREGA and the proposed Food Security Bill. Even in the relatively non-contentious area of national highways construction, States ruled by the non-UPA parties complain that they are discriminated against by a vengeful Centre. In the sphere of environment, there is a new clearance raj that has been put in place by the Centre and used selectively to target projects — as happened in Lavasa.

During Indira Gandhi’s time, non-Congress State Governments used to complain against the misuse of the overriding political powers of the Centre, notably its power to unilaterally dismiss unfriendly regimes in the States. Today, almost all the non-Congress Governments in the States complain bitterly about the lack of powers and financial shortfalls — at a time when the Centre is flush with funds.

These are complaints that are insufficiently heard and appreciated in New Delhi. Unlike the Centre where a majority Government has been tottering since the Commonwealth Games scandal erupted in August 2010, most State Governments are relatively stable. Indian democracy is not dysfunctional at the State level. And yet, ironically, the States are unable to reach to their full potential because the constitutional division of powers is heavily weighted in favour of the Centre.

This is an anomaly that is yearning to be redressed. There should have been no earthly reason why a State should have to take the Centre’s approval to undertake a policy on, say, roads, retail and environment. These are areas which are best resolved locally and keeping in mind local interests.

The excessive centralisation of India was a product of socialist planning — an idea that no longer finds favour. Why, in that case, should the principle of a redistributive Centre be allowed to remain as an instrument of political discretion?  If Gujarat has the potential of growing at above 10 per cent per annum, should it be thwarted for the sake of priorities dictated by the nominated National Advisory Council?

India is better served as a Union of States, a federation with a common market and a common currency.

Sunday Pioneer, December 18, 2011