Diversification in Parliament potentially strengthens democracy and federalism

Source: The post diversification in Parliament potentially strengthens democracy and federalism has been created, based on the article “The Centre is notional, the States the real entities” published in “The Hindu” on 8th June 2024

UPSC Syllabus Topic: GS Paper2-Polity-Functions and responsibilities of the Union and the States, issues and challenges pertaining to the federal structure, devolution of powers and finances up to local levels and challenges therein.

Context: The article discusses how the 2024 general election in India led to more regional parties in Parliament, potentially strengthening democracy and federalism. It highlights ongoing conflicts between the central government and states over resource allocation and suggests ways to improve cooperation and fairness.

What does the 2024 General Election result mean for India?

1. In 2024 general election more regional parties gain seats in Parliament. This diversification in Parliament means that both the ruling coalition and the opposition will include a mix of regional parties, potentially leading to more representative governance.
2. The success of regional parties suggests an electorate seeking to address local concerns more directly, challenging the dominance of central parties.
3. The election outcomes reflect a response to central policies perceived as undermining state autonomy, as seen in the tensions over resource allocation and political statements during the campaign.

What are the major issues between the Centre and states?

Resource Allocation Complaints: States governed by the opposition have accused the central government of unfair treatment regarding resource distribution. Specific examples include Kerala’s complaints about inadequate transfer of resources, Karnataka’s concerns over drought relief, and West Bengal’s issues with funds for the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS).

Legal Disputes: The Supreme Court of India has highlighted that a “steady stream of States are compelled to approach it against the Centre,” pointing to a rise in legal disputes between the states and the central government.

Bias in Finance Commissions: The states argue that the Finance Commissions, which are tasked with allocating funds between the Centre and the states, often favor the Centre. This is seen as a source of conflict, with states feeling the need to inflate their financial requirements to ensure they receive adequate funds.

For detailed information on issues between the Centre and states read Article 1, Article 2

What are the implications for poorer and richer states?

Resource Distribution: Richer states generate more revenue but receive a smaller share relative to their contributions. For instance, Mumbai, as a financial hub, contributes significantly to national taxes but doesn’t proportionately benefit from these contributions in local investments or services.

Development Disparities: Poorer states rely on greater resource allocation to accelerate development and reduce inequality. The Finance Commission aims to distribute funds more fairly, yet historical disparities persist.

Market Dynamics: Richer states benefit from markets in poorer states, fostering their own growth. For example, poorer states provide larger consumer bases that richer states rely on to expand their economic activities.

How could federalism be improved?

Increase Resource Devolution: Boosting the percentage of resources devolved from the Centre to the States beyond the current 41% could empower states, allowing for more tailored local governance.

Fair Finance Commission Practices: The Sixteenth Finance Commission should aim for equitable treatment of all states. This could reduce friction and improve resource distribution, particularly favoring poorer states to address inequality.

Enhance State Autonomy: Reducing the central government’s dominance in programs like the Public Distribution System and MGNREGS would affirm the constitutional roles of states as equal partners in governance. This will prevent the central government from overshadowing state efforts.

Question for practice:

Discuss the implications of the 2024 General Election results on the relationship between the central government and regional parties in India, including the major issues between the Centre and states and potential improvements to federalism.