Fresh Stirrings on Federalism as a New Politics

POLITY/ GOVERNANCE

Topic:

• GS-2: Functions and responsibilities of the Union and the States, issues and challenges pertaining to the federal structure, devolution of powers and finances up to local levels and challenges therein. 

Fresh Stirrings on Federalism as a New Politics

Context: Tamil Nadu State re-introducing the term Union into the public discourse and other States pushing back against increased fiscal centralisation.

Issues with Indian Federalism

• Coalition Politics yielded little results for federalism: Fiscal and administrative centralisation persisted despite nearly two decades of coalition governments. Ex: Aadhar, NFSA, GST, MGNREGA.
• Electoral Pragmatism undermining Federalism: The contingencies of electoral politics have created significant impediments to creating a political consensus for genuine federalism. Ex: Toppling coalition government by misusing Governor & Central agencies
• Federalism diluted under garb of Nationalism: Union governments have diluted with federalism in the grammar of development and nationalism. Ex: One nation – one market, one ration card, one grid’.
• Misreading Federalism: In present context, federalism risks being equated with regionalism and a narrow parochialism that is anti-development and anti-national.
• Centralisation at State Level: Also, most regional parties have failed to uphold principles of decentralisation in their own backyard. This shows that States themselves are not following the spirit of Federalism.
• Silence of States on other State’s Federal issues: For ex: downgrading J&K status, NCT of Delhi (Amendment) Act, 2021 that undermined Federalism hardly witnessed protest by parties that were not directly affected by these. 
• Divergence among States: Growing divergence between richer (Southern & Western) and poorer States (Northern & Eastern), remains an important source of tension in inter-State relations that has become a real impediment to collective action amongst States.
• Dilution of Fiscal Federalism: The Union’s response, in the wake of fiscal crisis unleased by Pandemic, has been to squeeze revenue from States by increasing cesses (not shareable with States) that is against federal spirit.

Conclusion

Beyond principles, a renewed politics of federalism is an electoral necessity. No coalition has succeeded, in the long term, without a glue that binds it. Forging a political consensus on federalism can be that glue. 

Connecting the dots:

• Federalism and India’s Human Capital

• CAG Report on Cess Pool 
•  Atmanirbhar Bharat Abhiyan
• Economic Stimulus Package under Atmanirbhar Bharat Abhiyan 3.0