The ‘Colonial Question’ Returns

The leftists in Bengal once raised the issue of how the Centre was exploiting states almost in a colonial style. They even described the states as greater municipalities in relation to the Centre in terms of financial anomaly. But they abruptly stopped their campaign against the Centre in the middle for reasons best known to them. In other words it was the long-standing demand of revision of center-state relations, particularly in mechanism of fund disbursement. In recent months people have seen vociferous protests from some of southern states on the issue of devolution of resources from the centre to these states.

The argument about unfairness in the distribution of resources emanates from the fact that southern states contribute more to the union revenues and receive far less as transfer through the Finance Commission route, compared with their northern counterparts. Just on the eve of the General Elections some non-Bharatiya Janata Party [BJP] ruled states raised the issue against the BJP’s discriminatory policy. The BJP is basically a north Indian party, having a social base, mainly among traders–the Bania community. They have reasons to keep their voters happy. Since income generation is a spatially interdependent activity, the use of collection for the purpose of tax-sharing would disproportionately benefit the high-income states and seriously undermine redistribution.

Not that Congress regimes were free from center-state controversy. But the center-state drift has only widened under the Modi rule since 2014 despite tall talk of cooperative federalism. The center’s sharing of federal funds through GST and other means has been a bone contention for a long. And the Modi government has aggravated it. The southern states reportedly contribute 31 percent of GDP but they get back only 18 percent of funds allotted to them. India is not a federal democracy. Nor will it be in future because the trend is more about the centralisation of powers at the center.

In many ways, the Modi government looks like the East India Company, looting the resources of some states while ignoring their legitimate demands. The budgetary allocation is not the only area where the centre executes its discriminatory practice. Over the years central investment, rather than public sector investment remained the principal mechanism to create jobs on a mass scale and favour some states. In this regard, eastern states may complain against the centre for its bias toward southern states. Being the Border States eastern and north-eastern states are being denied investment in heavy industry and the defence sector. In today’s modern warfare, the idea of Border State makes little sense. For one thing, the Centre’s discriminatory policy has been going on since the days of Nehru, and in the saffron regime, it has been intensified.

Meanwhile, another simmering discontent is brewing over delimitation. Come 2026 a major change is expected to take place regarding the size of India’s constituencies. The delimitation exercise was to happen in 2001 but the then Atal Bihari Vajpayee government froze it for 25 years. And some south Indian states are going to lose seats. They now blame it on population control. After delimitation, Tamil Nadu may lose 7 seats and Kerala 5 seats while UP may gain 8 seats, Bihar 6 seats and even Rajasthan 5 seats. In electoral democracy what finally matters in parliament is number. And more seats in north India means more seats for BJP.

If the Centre refuses to allocate funds from out of the revenue collected by it from the people residing in various states in a rational and reasonably proportionate measure the logical conclusion will be the rise of multiple separatist tendencies. The pet theme of terrorism and terrorists won’t work.

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Vol 56, No. 45, May 5 - 11, 2024