Federalism and fairness

Federalism and fairness

What has happened?

Federalism is once again the focus of political discourse in India. Karnataka Chief Minister Siddaramaiah set the cat among the pigeons when he highlighted Kannada pride by unveiling an official state flag last month. Then in a Facebook post on “Regional Identity & Federalism”, he advocated the need for States to have both financial and cultural autonomy

Concerns of the South

Dependant Northern states: Taxing the southern States to spend on the northern States

Terms of reference for the 15th Finance Commission: The Centre’s direction to use the 2011 Census instead of the 1971 Census for population data has riled the south. As the population in these States has stabilised, the concern is that their share of tax allocation would reduce

Constitutional context: An indestructible union of destructible States

• The Federation is a Union because it is indestructible
• Political scientist Alfred Stepan classified India as a “holding together” as opposed to a “coming together” federation
• The units of Indian federation have undergone multiple transformations since 1947. This is because Article 3 of the Constitution empowers Parliament to create new States
• While such a provision can be seen as giving the Union too much power, it has arguably been central to holding India together since it allows the federation to evolve and respond to sub-national aspirations.

Hence, from a constitutional perspective, it would not be accurate to say that India is moving from a union to a federation of States

The Larger question

Whether there is a need to reconsider the distribution of powers between the Union and the States?

Removing Article 356:  The President’s Rule

• While the flexible nature of federalism under the Constitution has served India well, the continued existence of provisions such as Article 356 (President’s rule) goes against the grain of federalism
• Any serious political movement around federalism should question the necessity of retaining such constitutional provisions which are vestiges of colonial rule.

Shift in political and economic power to States

• While some have felt that this trend would reverse after the formation of a Central government with a simple majority for the first time in 25 years, Prime Minister Narendra Modi has sought to assuage such concerns by invoking the idea of “cooperative federalism”
• The 14th Finance Commission, in 2015, recommended raising the share of States in the divisible pool of Central taxes from 32% to 42%

However, beyond this measure, the Centre has not inspired much confidence regarding its commitment to federalism

Recent Issue with Finance commission

• States such as Karnataka have asserted their linguistic and cultural rights in the wake of the Centre’s interventions such as a promotion of Hindi.
• Skewed terms of reference of FC: Now, the skewed terms of reference for the 15th Finance Commission have brought the south together in making a strong case for fiscal federalism
  • The Commission has been using the 1971 Census for population data to ensure that States that have been successful in family planning are not penalised
  • This came in the wake of the 42nd Amendment to the Constitution which froze the distribution of Lok Sabha seats among States for 25 years, which was extended for another 25 years, in 2001. This prudent political compromise is now being tested

Deepening fault lines

• Federalism is ultimately based on trust between its various constituent units
• If a set of States perceive that their progress is being penalised, the viability of such a federation comes into question
• While the southern States contribute to the nation economically, they don’t occupy a central space politically and are further marginalised culturally

Conclusion

Finally, unless the concerns regarding fairness are addressed from constitutional, financial and cultural fronts, the fault lines developing in our federation could deepen further.