Lost in State and Union relations: Federalism amid pandemic
The sharing of power is heralded by some as the bedrock of a successful democratic state with scholars often commending that power-sharing is the essence of a truly democratic setup. While selecting a form of government isn’t as simple as it seems, owing to the plethora of historical, cultural, and sociological factors that influence said choice; India, from the get-go, was against a unitary form of government where the center reigns supreme and that sentiment was shared by the members of the constituent assembly and finds resonance in our constitution till this day. A nation as large and having as much diversity as ours, could not have survived without state and local governments and thus a federal structure was adopted by the framers of our constitution. The word federation is derived from the Latin word ‘fetus which means the treaty or agreement. Here treaty means the distribution of power between the union government and the state government. It is the supreme law of the land as it contains the division of power between the center and state. While the United States shows us the archetype of how federal governments are supposed to look like, a federal structure of government is extremely flexible and can be appropriated by states and governments to suit their socio-political landscape and their requirements.
India is often called a quasi-federal nation with the center occupying a dominant position with the states having a wide range of legislative and executive powers but not being completely autonomous political units. If we travel back in time to the 1940s, when the sun was about to set on the British rule in India, we walked into a very volatile state of affairs. As the British were abandoning the Indian subcontinent and the princely states were determined to remain independent, the saga of unification of states began which was by no measure an easy task. However, with the contributions of the great Sardar Patel and countless others, we were able to unite India into a Union of states. Therefore, the Indian state which was born in such tumultuous times decided to have a strong central government to protect its territorial integrity and unity and barred the members of this newly formed Union of India to secede in the future, thereby ensuring the stability of the nation as a whole.
This special arrangement that is observed in the Indian state is referred to as “quasi-federal” with India being neither completely federal nor completely unitary but rather, a combination of both. While this arrangement has worked quite decently for India since it became independent, there are still a few questions to be answered and problems to be tackled. One of the biggest areas of concern that plagues this power-sharing arrangement is the state of the center-state relations, which have been less than amicable in the past and have even turned adversarial and confrontational lately.
The political bad blood between the center and state has been prevalent since the early days when the Indian National Congress was the dominant political party of the land and had political stalwarts and larger-than-life figures like Nehru and Indira Gandhi at the helm. The practice of imposing Article 356 to impose the president’s rule and getting the elected state governments dismissed was widespread. The first notable instance occurred in 1959 when the communist party which had come to power in Kerala under the leadership of EMS Namboodiripad just two years back was dismissed by the center, and President’s rule was imposed under article 356. The actions of the center became a precedent that was shamelessly followed by the following INC administrations which crumpled the trust between the center and state and sowed seeds of distrust.
It was the mighty apex court then which came to the rescue. In SR Bommai v Union of India, the Supreme Court took up this issue of dismissal of state governments vide article 356 in the backdrop of the larger issue of interstate relations. The nine-judge bench in its judgment declared that Federalism should be understood as part of the basic structure of the constitution and that the president’s proclamation to dissolve the state government should be subject to judicial review. It was the judicial intervention that somewhat stabilized the center-state relation as it became harder for the center to unilaterally dismiss state governments. However, in the present day and age, the situation is not as hunky-dory as one might expect it to be; Center-state relations are plagued by a plethora of issues and the dominant party of the land, the Bharatiya Janata Party has come up with alternative and ingenious solutions to hijack and topple the governments of the state where another party is in power. I call this the “floor test era”, where the BJP dismantles the elected governments from the inside, by engaging in rampant horse-trading of the MLA’s and taking advantage of the loopholes in the existing anti-defection law. The BJP succeeded in maneuvering its way into power in the states of Madhya Pradesh in 2020, in Karnataka and Goa in 2019, all of where the incumbent elected government was reduced to a minority and the BJP was then able to seize power. The constitutionality of such moves has always been doubted and we can only speculate how things are going to unfold in the future.
Having discussed the deficiencies of the political side of the center state relations, another key aspect that should not be overlooked is the financial aspect of the federal relation in India, the concept is referred to by many as “Fiscal Federalism”. The underlying principle of fiscal federalism is simple and innocuous enough, as it calls for equitable distribution of assets and liabilities between the center and state and some degree of economic autonomy for the state governments, which is greatly required for effective and efficient governance. In light of talk about fiscal federalism, I recall the recent dispute between the central and state governments that arose over the issue of GST compensation, which the central government had promised to pay the states when it implemented the 101st Conditional Amendment Act across India which entailed massive overhauling of the existing taxation systems and the implementation of GST. The dispute at hand is over the massive amount of rupees three lakh crore which the central government owes to the states as the funds disbursed in the 5 years power-sharing, short by 2.35 Lakh crore as the GST law contains the provision which entitles the state governments to receive compensation for 5 years after the implementation of said law, the 5 years ending in 2022. The alternative proposed by the center to states was to borrow this massive amount from the RBI for the time being which for obvious reasons was not acceptable to the state governments where the BJP is not in power, which has resulted in a stalemate and the states have threatened the center with legal action. While on the other hand, the central government contends that its resources are stretched paper-thin owing to the coronavirus pandemic, reiterating the unpreparedness and short-sightedness of the center in dealing with this issue.
It would be appalling to not address the new set of challenges that have arisen, courtesy of the coronavirus pandemic. One of the most important of which is the covid vaccine distribution amongst the center and the states. The center has reserved 50 percent of the vaccine stock for itself and the other 50 percent would be sanctioned to the states, however, the problematic aspect of it all is the differential pricing policy that has been adopted by the center. The central government is procuring the vaccine at Rs 150/dose while the states are expected to pay Rs 400/dose. Such differential pricing is extremely unethical and borders on predatory, which would ultimately harm the states’ fiscal deficits which are already precarious as the economy has been battered by the coronavirus pandemic, the effects of which continue to be felt just as sorely in 2021 as they did in 2020.
However, being an optimist at heart, I believe the situation can improve, even though it seems quite bleak at the moment. When trying to visualize a better future for center-state relations, the Japanese art of “Kintsugi “comes to mind. In Kintsugi, the artist restores a broken piece of pottery and puts them back together with gold, built on the idea that you can create something even stronger and more beautiful by embracing the flaws and imperfections. While I realize the center-state relations can never be completely free of friction, the spirit of cooperation should still be the guiding factor between the Union and the states, if, we wish to work towards the greater goal of equity and progress.
Author Shirish Sachdeva is a student of law and co-founder of The Policy Observer.
(The opinions expressed in this publication are those of the author. They do not purport to reflect the opinions or views of The Policy Observer or our members.)
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