West Bengal’s battle for federal autonomy

Withholding Central funding under various pretexts is a crude instrument used by the Modi government to hurt “recalcitrant” States like West Bengal.

Trinamool Congress MP Abhishek Banerjee leads a protest demanding that the Centre release MGNREGS funds for West Bengal, at Jantar Mantar in New Delhi in October 2023. | Photo Credit: SHASHI SHEKHAR KASHYAP

During the United Progressive Alliance years (2004-14), the then Chief Minister of Gujarat, Narendra Modi, led the brigade of States on each and every issue that he felt militated against the federal structure of the Constitution. When he was elected Prime Minister of India in 2014, we naturally expected him to strengthen the rights of States and were certain that he would take away several controversially acquired powers of the Centre. Within a month or so, it became abundantly (and shockingly) clear that the new Prime Minister had no plan to decentralise the Centre’s powers. Officers were instructed not only to retain those powers that already favoured the government of India—whether fairly or unfairly was not the issue—but also seek frequent explanations from “errant” and “difficult” States.

The Central government was soon taken over by highly paid consultants, corporate lobbyists, advertising agencies, and dubious intellectuals on easy rent. Among their briefs was to repackage every existing welfare scheme, play scrabble with the alphabet and come up with catchy acronyms, like ad agency tag lines. And almost every one of these “new” schemes had to carry the prefix “Prime Minister”, even when States were made to fund as much as 40 to 50 per cent of these schemes. This was followed by a host of parallel media-directed and bhakt-oriented campaigns that declared that no Prime Minister (including Atal Bihari Vajpayee) had ever done anything at all for India in the preceding 70 years. This “narrative” was repeated every day by the Prime Minister and every Minister, MP, government functionary, and regime-admirer for the next decade.

It is just as true that our Constitution, framed by liberals, contains certain streaks of Central domination with respect to a few select issues of federal relations. The terrible disturbances of post-Independence India, when the British left behind two hostile nations, 14 major provinces, and over 565 princely states (many with separatist agendas) may have called for a hard “centralising” spirit. Liberals expected that many of these provisions would be hollowed out with increasing maturity of the Indian state.

Governor as an irritant

Among the chief irritants in federal relations between the Centre and opposition-ruled States is the institution of the Governor. Article 153 empowers only the Centre to appoint Governors with no mandate to consult the State. While the Governor functions normally on the aid and advice of the Council of Ministers of the State, Article 163 says he/she has his/her own powers of “independent action”—which have proven to be camouflage for the Centre’s domination through its hand-picked appointees. Article 200 empowers the Governor to withhold assent to a State’s Bill passed by the Legislative Assembly or to reserve it for the consideration of the President (read “the Centre”).

Trinamool supporters line the route as Governor C.V. Ananda Bose’s convoy passes in North 24 Parganas on February 12, to protest the Centre not releasing funds to West Bengal. | Photo Credit: Saikat Paul/ANI

Several Governors have been withholding Bills on numerous pretexts just to assert the Centre’s powers even after they have been admonished by the Supreme Court. The Governor of West Bengal has blocked the appointment of regular Vice Chancellors to universities all over the State for well over a year, and the orders of the apex court to resolve this deadlock are moving at a snail’s pace. He and his predecessors have converted Raj Bhavan into a cosy party office to launch broadsides against the legitimately elected government—perhaps to repay the BJP for appointing him. A simple issue like changing the name of West Bengal to Bangla has been held up indefinitely by the Centre.

Crude measures

Withholding Central funding to States on different pretexts is a crude instrument used by this Central regime (and some past ones as well) to hurt recalcitrant ones. While the devolution of the State’s due share of taxes cannot be stopped (it can only be delayed), what is less visible is the Centre’s increasing tendency to augment its own share of revenue by adding “cesses” on tax or “additional duties”. These are non-divisible and appropriated by the Centre alone and then used to reward its “own” States or those governments run by parties that support the BJP. Opposition-run States are usually deprived of these funds.

With much larger wealth at its disposal, the Centre has more than enough to fund beyond its own critical sectors such as Central police, defence, external affairs, infrastructure, national highways, railways, aviation, ports, water transport, postal services, and communications. Instead of passing on untied funds to States, it has developed a gargantuan network of Central Sector Schemes and Centrally Sponsored Schemes to reach out directly to the last voter.

The Central Sector Schemes, like the National Rural Health Mission, are fully funded by the Centre but often come with strings attached. For instance, funding to West Bengal has been withheld because it refuses to colour the health centres saffron and call them Arogya Mandirs. Even the health grant of Rs.870 crore allocated to West Bengal by the Fifteenth Finance Commission is yet to be released to the State as the Centre has placed several uncalled-for conditionalities.

Prime Minister Narendra Modi with Chief Minister Mamata Banerjee at the launch of three flagship social security schemes (Atal Pension Yojana, Pradhan Mantri Suraksha Bima Yojana, and Pradhan Mantri Jeevan Jyoti Bima Yojana) on May 9, 2015 in Kolkata. | Photo Credit: ASHOKE CHAKRABARTY

While Union Finance Minister Nirmala Sitharaman never tires of announcing her scheme of Special Assistance to States for Capital Investment, which offers a lucrative 50-year interest-free loan for capital investment, it is subject to a whole series of requirements called the “branding guidelines”. The Central sanction of funds amounting to Rs.4,138 crore for 2024-25 has been kept on hold, while another Rs.5,000 crore for the previous two years show no signs of release. Even the food subsidy of Rs.9,290 crore under the Pradhan Mantri Garib Kalyan Anna Yojana has been held up from 2021-22 onwards on the trivial ground that the scheme’s logo had not been inserted in the receipts being provided to beneficiaries.

With the Central Sector Schemes, the Central government has also entered areas meant for the welfare of farmers, animal husbandry, and fisheries. The Centre’s relentless march to reach the voter directly is also quite evident in other programmes such as the Mudra Yojana, the Credit Guarantee Fund Scheme for Micro and Small Enterprises, the Prime Minister’s Employment Generation Programme for unemployed yout,h and the Pradhan Mantri Ujjwala Yojana, which provides LPG connections and gas cylinders for the poor. These areas are better served by the States as the Centre does not have an army of grassroots fieldworkers, which the States have, and pay for. In Narendra Modi’s regime, facts and propriety do not matter as these are his last-mile schemes to reach citizens and voters for his own branding and publicity campaign.

Highlights

• The Narendra Modi government’s attitude towards the opposition-ruled States manifests in multiple ways.
• One of these is through the office of the Governor. The Governor of West Bengal has blocked the appointment of regular Vice Chancellors to universities all over the State for well over a year.
• The withholding of Central funds and subsidies, and the stoppage of Central anti-poverty schemes in West Bengal has increased the misery of the rural work force and compelled it to find work outside the State as migrant labourers.

Allocation of Central funds

The patently unfair attitude towards the opposition-ruled States also manifests in multiple ways, including the allocation of Central funds for sports infrastructure. For instance, while Gujarat received a substantial Rs.609 crore under the Khelo India scheme, Haryana, which has a proven track record in producing Olympic medallists, got only Rs.89 crore. As one may recall, out of the six medals won by India in the last Olympics, five were from Haryana and none from Gujarat. Moreover, Haryana sent 24 athletes to Paris, whereas Gujarat sent just one.

Then come the Centrally Sponsored Schemes that are designed to compel States with meagre resources to come up with substantial funding in order to avail themselves of their benefits. Most of the schemes are prefixed with the words “Pradhan Mantri” (Prime Minister), like the Pradhan Mantri Awas Yojna and Pradhan Mantri Gram Sadak Yojana, conveniently hiding the fact that States too contribute substantially to these initiatives.

The Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS), too, has emerged as the new battleground of federal relations, with the Centre accusing West Bengal of irregularities in this vastly decentralised programme. Although the same irregularities were found in eight other States, West Bengal was singled out, and all funds under Section 27 of the MGNREG Act were stopped for non-compliance.

An unfinished pond in Tuima village, Purulia district in September 2022. Work remains incomplete since the women have not been paid, like millions of others who have not received wages for MGNREGS work in West Bengal since December 2021.  | Photo Credit: DEBASISH BHADURI

The Action Taken Reports (ATRs) submitted by the State were rejected by the Centre. To date, Rs.6,966 crore is yet to be released to the State. The State has put in place every measure of transparency required, including social auditing, the appointment of ombudspersons, Aadhaar-based payment system, public grievance redressal mechanisms, and digital interventions. Even so, funds have been choked, and voters have seen through this purely political move.

Tales of deprivation

The Pradhan Mantri Awas Yojana is another bristling point. The Centre has withheld its share to the tune of Rs.8,140 crore since 2022-23, citing reasons such as minor administrative corrections and variations in the execution of the schemes. Scores of Central teams were sent to the State, and thereafter, the State submitted ATRs on every comment, along with the necessary utilisation certificates and audit reports. Even so, the Centre is yet to release the funds due to the State. Similarly, the release of funds under the Samagra Shiksha scheme has been completely stopped since the end of 2023-24 as West Bengal did not sign the Centre’s one-sided MoU that insists that the new schools be named PM-SHRI (PM Schools for Rising India). A whopping amount of almost Rs.20,000 crore stands as “receivable”.

Federal relations do not end with these tales of deprivation. There are no major Central projects or public sector units coming up to boost industry and jobs in the State. The stoppage of Central anti-poverty schemes in West Bengal has increased the misery of the rural workforce and compelled it to find work outside the State as migrant labourers.

Bank credit is always higher in those States where the political bosses are the same as at the Centre. West Bengal has been off the radar of bank managers for half a century now. Big investments call for major involvement of the Centre that still clears foreign direct investment proposals, gives nods to large loans by a consortium of lenders, and sanctions colossal amounts of subsidies as Production Linked Incentives. One needs to look at these benefits showered on Gujarat for obvious reasons. West Bengal is squarely out of these smart games. Even startups that are flush with venture and other kinds of capital are concentrated in Delhi, Mumbai, and Bengaluru, where plutocracy honeymoons with politics.

Not only West Bengal but other States that disagree with Modi are also paying the price. We have purposely avoided discussing the hegemonic use of Central forces in States and the vindictive assaults by Central agencies. On August 6, the Minister of State for Finance informed Parliament that the Enforcement Directorate had launched 132 money laundering cases against sitting and former MPs and MLAs, apart from other political leaders, since 2019. In five years, it succeeded in bringing just one conviction. Under Modi, federal relations have reached an unprecedented nadir. 

Jawhar Sircar is a Member of Parliament from West Bengal. He was Secretary, Ministry of Culture, Government of India and CEO, Prasar Bharati.