The state of federalism

Modi, Nitish, Jaya corner UPA on financial autonomy for states


Ajay Singh | October 25, 2011

“I am sure you are not bothered about the price rise and inflation because you have seriously taken your party’s slogan to heart which talks about aam aadmi (common man) and not aam aurat (common woman). Obviously the hardships caused by inflation and price rise largely affect women, hence you are genuinely not bothered to check it.” This was Gujarat chief minister Narendra Modi at his rhetoric best, launching barbs against prime minister Manmohan Singh at the national development council (NDC) meeting last week. He was giving a point-by-point rebuttal to the prime minister’s speech which was delivered in a style of sermon outlining the moral principles of the statecraft.

There is obviously nothing wrong in listening to an exposition by the chief executive of the country on exacting moral and ethical standards of politics. Historically the prime minister is looked upon by chief ministers as a guide and role model to take the country to new heights. But this year’s NDC meeting held to discuss the approach paper of the 12th plan was witnesses a different scenario. The prime minister appeared to be under siege from all quarters.

The chief ministers of the non-Congress states displayed belligerence which was never the characteristic of such meetings. Modi, for instance, took on the prime minister on every issue made in the latter’s speech. He pointed out that Gujarat was being penalised by the centre for its phenomenal growth. He referred to the fact that Gujarat had achieved nearly 90 percent road connectivity in rural areas and said that the centre had been withholding funds under the pradhan manrti grameen sadak yojna (PMGSY). He also mentioned about different ministries working at cross-purposes at the centre and the PM’s inability to contain them. Modi deviated from his written speech to point out that the conflict among the energy, coal and environment ministries had held up several projects. “How can you achieve development without energy?” he asked.

Modi’s ranting against the PM was not in isolation but seemed to be a well coordinated move by the non-Congress chief ministers to put the UPA in the dock over the issue of federalism. This was well articulated by Tamil Nadu chief minister J Jayalalitha who attacked the Congress-led government for reducing the state governments to a “glorified municipal body”. She also questioned the relevance of NDC meetings when the centre had been working on an agenda to subvert the federal structure. Like her Uttar Pradesh counterpart Mayawati who stays away from all such meetings, Jayalalitha too chose to be absent and sent her minister instead to read out her speech.

Bihar chief minister Nitish Kumar employed a less harsh language but conveyed his outrage unambiguously over consistent subversion of federalism by the centre. In his well argued speech, Kumar referred to statistics to bring home his point and said, “I would like to point out that while the gross budgetary support (GBS) for the plan is projected to increase from 4.92 % of GDP in 2011?12 to 5.75 % of GDP by the end of 12th plan period; the increase in the GBS as a percentage of GDP over a five-year period is only 0.83 percentage point.”

Expressing his serious concern over the centre’s efforts to draw its own plan at the expense of the states’ plans, he said, “It is worrying to find that the projection of percentage share of states in the GBS shows a falling trend over the 12th plan period. Thus, whereas GBS to central plan would grow by 19%, GBS to states would grow only by 10%. Contrary to our expectation of a higher support to states as has been articulated at various forums including NDC meetings, central assistance to states/UTs is projected to increase from 1.18% of GDP in 2011-12 to only 1.30% by the end of 12th plan period. On the other hand the central plan is projected to increase from 3.74% of GDP in 2011-12 to 4.45% by the end of 12th plan period.”

Kumar also highlighted a consistent attempt to erode the financial autonomy of the states. He said, “It is still more disturbing to note that the share of the central plan in the GBS has been growing rapidly (36.02% in 1st plan to 75.99% in 12th plan) at the expense of the share of the state plan which has plunged from 63.52% in the 1st plan to 24.01% in the 12th plan.” In a way, Kumar said that the entire approach militated against the very concept of a federal economy and inclusive development.

By all account, the prime minister found his exposition on development, governance and moral principles of politics challenged by non-Congress chief ministers on every point. This marked deviation from the past was certainly not a good beginning for discussion on the approach paper for 12the plan which envisages a 9 percent growth rate for the country.



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