In a recent judgment on the GST Council, the Supreme Court noted that Indian federalism was a dialogue between cooperative federalism and uncooperative federalism. Ruling that the recommendations of the GST Council were not binding on State governments, the Supreme Court said that States had leeway to either collaborate or contest with the Union government. Such contestation, the court observed, was a legitimate part of uncooperative federalism.
Indian federalism has see-sawed between the contestation and collaboration paradigm over the last eight decades. This is because the constitutional architecture governing federalism had been left deliberately vague. B.R. Ambedkar described the Constitution as “both unitary as well as federal according to the requirement of time and circumstances”. The needs of developing fledgling state institutions and pursing economic development demanded that the constitutional structure remain flexible and the Union be given the bulk of the powers.
This meant that the actual working of Indian federalism was always more a function of political culture rather than legal architecture. Thus, in the first phase of Congress dominance (1947-67), the federal system worked rather smoothly on the whole as the Central government and most State governments were under the control of the Congress. Many contentious issues were collaboratively settled within the forums of what Rajni Kothari described as “the Congress system”.
The second phase (1967-1989) was one of contestation, especially under the centralised regime of Indira Gandhi, who unabashedly used state instruments to undermine opposition governments. Next came the coalition phase (1989-2014), the high point of Indian federalism, where regional parties amassed massive power as “kingmakers” and helped push through substantial reforms in financial and administrative devolution. Under the Narendra Modi government, the return to one-party dominance has meant that the pendulum has swung back to contestation.
Much of the debate in media paints the main political battle raging in India as between a secular and a communal idea of India. Yet, this impression is off the mark. The BJP’s Hindu majoritarianism already enjoys hegemonic status in the country’s political culture. Few parties contest Hindu majoritarianism in a direct manner. In recent electoral campaigns, the response of parties such as the Trinamool Congress (TMC) in West Bengal or the Samajwadi Party (SP) in Uttar Pradesh to the BJP’s shrill Hindutva rhetoric has not been in a secular idiom but by burnishing their own Hindu credentials.
Rahul Gandhi, the de facto leader of the Congress, has framed the ideological contest between the Congress and the BJP as between a monolithic idea of India and a “Union of States” idea of India. | Photo Credit: PTI
Indeed, the main political battle is between a federal and a unitarian idea of India. Regional parties such as the TMC, the Aam Aadmi Party (AAP) and the Telangana Rashtra Samithi (TRS) have been banding together to attack the BJP’s authoritarianism that undermines the rights of the States. Even Rahul Gandhi, the de facto leader of the Congress, has framed the ideological contest between the Congress and the BJP as between a monolithic idea of India and a “Union of States” idea of India.
This is because opposition parties have realised that regional pride has proved so far to be the only antidote to Hindutva. The BJP has unlocked the caste barrier in the “Mandal States”, attested by its storming back to power in Uttar Pradesh recently. But even in this era of dominance, the BJP has not managed to defeat a regional party based on a linguistic identity. The last major attempt, against the TMC in West Bengal, ended in resounding failure. So, are we back to the politics of the 1970s, when a constellation of regional parties formed the main opponents to the domineering regime of Indira Gandhi? In many respects, yes.
Firstly, the sheer level of centralisation recalls the Indira years. Partly, this flows from the authoritarian instinct of Narendra Modi, who, like Indira Gandhi, treats the deliberative processes of democracy and constitutional conventions with barely disguised contempt. Important laws have been rammed through with little debate. The whole State of Jammu and Kashmir was extinguished with an executive fiat. The office of the Governor has been used as a device to frustrate opposition governments. In fact, in Goa, Karnataka and Maharashtra, the Governor felt confident enough to invite the BJP to form the government even when the party did not have the numbers.
This political centralisation also has a structural cause. These excesses were also part of the Congress playbook during its dominant phase. They were largely stopped during the coalition era, not because of a new enlightened outlook, but simply because smaller regional parties became either actual or potential parts of the governing coalition. The respect for democratic norms and decentralised governance was thus part of a political bargain. The BJP now commands an absolute majority in the Lok Sabha, and the National Democratic Alliance (NDA) is only four seats short of a majority in the Rajya Sabha. The opposition, meanwhile, is weak and fragmented. With the Congress reduced to two seats, there is no alternative pole around which the opposition can coalesce. The ruling BJP thus does not feel the need to pursue an accommodative path.
Business centralisation
Secondly, political centralisation under Modi has given way to a level of business centralisation not seen in the past few decades. There is an obvious mutuality between politics and business—business conglomerates prefer dealing with a powerful political centre, and vice versa. Although Indira Gandhi tightened state control of the economy in the name of socialism, it allowed her to dispense patronage to chosen capitalists through licences.
The start of the coalition era (1989-2014) roughly coincided with liberalisation of the economy. Lalu Prasad, Mulayam Singh Yadav and H.D. Deve Gowda join hands for an alliance in New Delhi on March 25, 1996. | Photo Credit: PTI
The start of the coalition era (1989-2014) roughly coincided with liberalisation of the economy. The loosening of centralised controls proved beneficial to regional parties as they could court capital and generate investment opportunities. This created an array of regional business elites who operated in concert with regional political elites. Andhra Pradesh and Gujarat are good examples. In some respects, that process has now been reversed. There is a new capital concentration at the national level. In 2021-22, India’s 20 most profitable companies accounted for nearly 65 per cent of all corporate profits in the listed space, as against 62.4 per cent in 2020-21 and 52 per cent a decade ago. The skyrocketing wealth of the Adani group on the back of lucrative government contracts is a case in point.
The Modi government’s centralising drive on finance, labour, land and agriculture (although the big “reform” legislations on the latter two hit roadblocks) must be seen in this light. The rhetoric of reforms and opening up new domains to competition goes hand in hand with a sophisticated nexus with certain business elites. It is no wonder that the BJP outspends its political rivals by orders of magnitude in every election.
But there are important differences, too, between the Indira model and the Modi model of centralisation.
Former Prime Minister Indira Gandhi (centre). | Photo Credit: PIB
Firstly, whereas the centralisation under Indira Gandhi was mostly an instrument of power politics, the centralisation under Modi has a substantive ideological grounding. The BJP’s ambivalent attitude towards federalism flows directly from the “one nation” ideology of Hindu nationalism, going back to the days when the RSS under M.S. Golwalkar opposed the linguistic reorganisation of States. Power here is meant to be concentrated not for its own sake but in the service of a vision to transform the nation. For instance, the centralising framework of the New Education Policy (2020) is linked quite explicitly to the goal of “Indianisation” of education. As many critics have rightly pointed out, Indianisation here is a euphemism for “saffronisation”.
Secondly, the mechanism of using fiscal and administrative centralisation for partisan advantage is different. Indira Gandhi operated in a rather straightforward way, using discretionary funds of welfare programmes to favour Congress-ruled States and punish opposition-ruled ones. “The distributive politics (of welfare) under Indira Gandhi was intended to cause the opposition parties who formed State governments to fail both to meet popular expectations and repeat electoral victories,” wrote Chanchal Sharma and Wilfried Swenden in their book, Understanding Contemporary Indian Federalism.
The arena where Prime Minister Narendra Modi seeks partisan advantage is administrative centralisation. | Photo Credit: PTI
Modi operates in a more subtle manner. For starters, the space for allocating discretionary grants in a partisan way has become severely constrained, following the rules handed down by the 14th Finance Commission. The transfers from Centre to States now mostly take place according to set rules and criteria. Although this government has instituted its own share of fiscal centralisation (the GST regime, for example), the arena where Modi seeks partisan advantage is administrative centralisation.
This is done through the device of manipulating “credit attribution” of welfare schemes, as political scientists Neelanjan Sircar and Yamini Aiyar have explained. What this means is that centrally sponsored schemes (CSS) are so closely implemented and monitored through central agencies and so aggressively marketed with the name and image of the Prime Minister that it creates popular support for the Central government and Modi. It must be remembered here that centrally funded schemes are not fully funded by the Centre. In fact, after the 14th Finance Commission, the share of the Centre in most of these schemes changed from 80-90 per cent to 50-60 per cent. Yet, owing to the messaging power of the BJP, people are giving credit for these schemes to the Centre far more than before. This undercuts the appeal of Chief Ministers, including those from the BJP. In fact, Sircar and Aiyar argue that this “credit attribution” is a major reason why the BJP performs worse in State elections.
Indian federalism has survived for so long because it is the only model that can accommodate the staggering diversities of identities that comprise India. As the present spate of violence in Kashmir shows, subduing ethnic or regional aspirations by force can have terrible consequences. Even in its present truncated form, the federal structure allows resentments against a dominant Centre (such as in Tamil Nadu or Kerala) to be expressed through democratic channels of contestation. To some extent, certain regional parties might even welcome some amount of friction with the Centre as a way to build their own political capital as doughty defenders of regional/linguistic identities. This form of contestation between regional identity and national identity is likely to remain the dominant paradigm not just of federalism, but also of Indian politics for the foreseeable future.
Asim Ali is a political researcher and columnist based in Delhi.
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