Indian Federalism in the Time of Modi’s BJP

A questionable federal design, the BJP’s sweeping majority in parliament, and the party’s recent track record on cooperative federalism. These are the things Yamini Aiyar and Louise Tillin’s essay looks into. Key takeaways.

An essay by Yamini Aiyar and Louise Tillin examines the implications of BJP’s victory in the 2019 Lok Sabha elections and its political emphasis on “one nation” on Indian federalism. Here are the key takeaways, arranged as presented in the essay (the sub-headings have been renamed).  National and Regional Parties, and Voters

- Since the 2009 Lok Sabha elections national parties have grown politically stronger, compared to regional parties - especially when one contrasts the standing of national and regional parties in this period to what they were in the 1990s and 2000s. But this trend has truly been consolidated since the 2014 Lok Sabha polls, with the BJP’s dominance in parliament and substantial presence in state assemblies. 

- National survey data shows that, between 2014 and 2019, voters are more likely to attribute credit for government policies to the centre, rather than the state. Scholarship from Latin America indicates that in such cases opposition-ruled state governments may be less likely to comply effectively with the implementation of centralized social policies.   A Centralized ‘Federal’ Design 

- The constitutional design of federalism in India places relatively weak checks on the power of a single party with a majority in parliament. There are fewer constitutional safeguards for the rights of states with regard to the central government than countries like the United States or Germany (this initially led to experts labelling India “quasi-federal”).  Eg. The Rajya Sabha mirrors the composition of the Lok Sabha rather than providing equal representation to all states, regardless of size. The Rajya Sabha is weaker than the Lok Sabha. And fewer legislative powers are allocated to the states than is the case in nations where the federation is designed to keep a check on a national majority.  The Promise of Decentralization, Leading to Recentralization

- In keeping with its 2014 election manifesto, the BJP, early in its first term, introduced two reforms that could have shifted India’s federal landscape in a direction more favourable to the states. One was increasing the states’ share in the divisible pool of taxes (gross tax revenue) by 10 percentage points from 32 percent to 42 percent, accepting the recommendation of the 14th Finance Commission. The other was shutting down the Planning Commission - seen to symbolize centralization - and replacing it with NITI Aayog, mandated to create a platform to “bring states to act together in national interest and thereby foster Cooperative Federalism.” The 14th Finance Commission and its 42 percent - The 14th Finance Commission’s recommendation of devolving 42 percent of the divisible pool remained unfulfilled for most of the commission’s term because the centre levied special cesses - revenue that doesn’t need to be shared with the states - on a permanent basis. Though levied for specific purposes, these cesses were drawn into the general pool of the centre’s expenditure.  - It was thought that the 14th Finance Commission’s recommendations might lead to a reform and even reduction in Centrally Sponsored Schemes, one of the most important vehicles for central transfers to states. But in the four years since the implementation of the commission’s recommendations, the centre’s spending on CSSs has actually increased.  The NITI Aayog Story  - The NITI Aayog, instead of acting as a platform to foster cooperative federalism, evolved into a technocratic space responding to a Union government mandate. Chief Ministers play a role in the agency’s work through sub-committees but the chief ministers’ sub-committee report on CSSs has remained unimplemented. 

- The creation of the NITI Aayog has created a loss of institutional spaces for negotiation over central funds. Eg. The Planning Commission and National Development Council provided an institutional platform where states’ representatives - often Chief Ministers - could negotiate with central officials over plan allocations. Now the transfer of resources has been taken over by the central line ministries, especially the Ministry of Finance. These wield enormous power over state bureaucrats, and cannot serve as an effective negotiating space. 

- Instead the NITI Aayog has worked to further centralize. It created mechanisms for establishing direct lines of accountability between New Delhi and administrative districts. Eg. its “Aspirational Districts” program which connected the central government directly to district administrators. While it isn’t possible to establish causation, the BJP won 60% of Lok Sabha constituencies in the 115 districts that the programme covered. Politics and Political Ideology Vs. Fiscal and Administrative Decentralization 

- The BJP’s Hindu nationalist project is more closely aligned with a unitary, than a federal state, best articulated in a slogan adopted by the party to promote greater cultural interaction and exchange between different Indian states: “Ek Bharat, Shreshtha Bharat”. 

- By 2017, BJP strategists began to re-craft Prime Minister Narendra Modi’s image from “Vikas Purush” (Development Man) to “Gareebon Ka Neta” (Politician of the Poor). Welfare schemes - eg. housing, toilets, cooking gas and ‘PM-KISAN’, a cash transfer programme targeted at poor and marginalized farmers - became instrumental in crafting this new persona. Schemes were renamed with the prefix “Pradhan Mantri” to establish a connection. These schemes were implemented as CSS. In such a scenario, centralization was inevitable. 

- Over the years, dating back to the UPA regime, the centre has financed CSSs and CS (Central Sector) schemes by squeezing states of their resources and imposing CSS cost-sharing on states. The 14th Finance Commission sought to correct this. But the centre imposed cesses and continued the CSSs as a means of pursuing their political welfare agenda. 

- Furthermore, these political imperatives of the central government have influenced the ‘terms of reference’ for the 15th Finance Commission’, suggesting that it review the enhanced devolution offered by the 14th Finance Commission against the backdrop of the fiscal health of the centre and the need to continue the “imperative of the national development program, including New India 2022”. 

- In terms of administrative centralization, the PMO created a direct line of communication between itself and state bureaucrats, excluding Chief Ministers. 

- In 2015, PMO introduced PRAGATI (Pro-Active Governance and Timely Implementation), a monthly review of centre-state projects chaired by the Prime Minister, attended by senior bureaucrats in Delhi and the states, again bypassing chief ministers as well as cabinet ministers. 

- It is common, now, for senior central government bureaucrats to interact directly with district-level administrators through video conferencing to monitor progress. While this makes for common sense efficiency, it goes against federal practice. 

- In the last year of the government’s previous tenure, national government officials were mandated to visit India’s poorest districts and “raise awareness” about the welfare schemes. The Prime Minister himself participated in a video conference where he spoke to directly to district magistrates and scheme beneficiaries. In April 2018, as the election drew close, the central government sent its officials across the country to raise awareness and popularize its flagship programmes. 

- In the 1980s when Congress Prime Minister Rajiv Gandhi tried to open a direct line of communication with district magistrates the state governments protested loudly with the slogan: “Prime Minister to District Magistrate without Chief Minister”. But, aided by political alignment across centre and states, the Modi government faced no such protest. 

- Constitutional authorities like governors are entrusted with mediating the federal relationship but, across India, the office of governor has been used instead to impose New Delhi’s political will and encroach on state autonomy. 

- A significant question raised in such a scenario, is whether the Rajya Sabha’s role in the federal architecture should be strengthened to enable it to act as a space for regulating centre-state relations.  You can read the full essay here:

Yamini Aiyar is President and Chief Executive of Centre for Policy Research; Louise Tillin is Director, King’s India Institute and Reader in Politics at King’s College, London.  #indian #policy #commission #centre #government #national #finance #federal #chief #political #schemes #aayog #niti #federalism #development #districts #states #regional #implementation #platform #constitutional #welfare #direct #covid19 #coronavirus #decentralization #fiscal