When the British finally realised in 1947 that they must leave while they could still keep their upper lips stiff, there were close to 600 princely states in India that were not nominally part of “British India”. Just the titles of the potentates alone offer a fascinating study in variety—Maharaja, Nizam, Nawab, Mirza, Peshwa, Thakur, Baig, Khan, Jaam—not to mention their vastly different cultures, costumes, languages, and cuisines. By 1949, almost all of these small monarchies had been coaxed to merge with the newly independent nation, the rest were persuaded less gently, and by the 1950s older allegiances had been replaced by newer identities and demands, soon leading to the country’s linguistic reorganisation along the lines of the States that exist today.
In short, when the Constitution states that “India, that is Bharat, shall be a Union of States” it means exactly that several disparate units came together to form a larger unit but did not in the process renounce any of their fiercely individualistic cultures, idiosyncrasies, or loyalties.
But let us go back further. To St Thomas and the first Jews washing up on these shores in the 1st century to the Arabs and Parsis and Armenians trading and settling here from the 7th century onwards to the waves of Muslim dynasties from the 8th to the 18th century to the Dutch, Portuguese, Danes, French, and British, each leaving behind bits and bobs of their DNA and ethos. Both global and native threads have for centuries spun the rich weave that makes up India today.
Respecting and celebrating this diversity is the true spirit of federalism. The Constitution makers acknowledged this by choosing the state architecture of cooperative federalism; by rejecting a single sovereign governing authority for territorially, politically, and culturally distinct communities that conceded specific functions (say, Defence or External Affairs) to a unifying Centre.
Economically, too, the States had different personalities and, therefore, varying development priorities and growth rates. Some bounded ahead, some stalled, some had to be helped along. Planning and Finance Commissions were set up so that funds could be devolved from Centre to States as well as distributed among the States in such a way that imbalances were addressed and the whole moved ahead smoothly. To now create artificial rifts and systematically strip States of fiscal rights, as the Centre is doing, is destructive.
It is true that from Jawaharlal Nehru’s time the inclination has been towards strengthening the Centre and keeping the States in check because of the instabilities that threatened the fledgling nation. But by the time of Indira Gandhi, this centralising impulse had been corrupted to a point where Central grants and funds became tools with which to control not only State governments ruled by opposition parties but also the Centre’s own regional satraps who grew recalcitrant horns. Despite this, the distribution of funds was broadly based on norms and patterns evolved and modified by economists such as D.R. Gadgil and Finance Ministers such as Pranab Mukherjee, and they were not entirely flouted.
We have now, however, entered a new era. One minus Planning Commission and plus NITI Aayog, minus economists and visionaries and plus corporate honchos and technocrats. An era where the Centre not only plays stepmother to States ruled by opposition parties but does so flagrantly to further its “double engine” electoral project. One of the most egregious of these tactics is the systematic increase in cesses and surcharges that has led to the States losing more than Rs.5 lakh crore between 2015 and 2019.
As the spirit of federalism becomes ever more vaporous, a team of economists and writers analyses for Frontline the fiscal aspects of this fallout.
COMMents
SHARE