Congress veteran and former Union Finance Minister P. Chidambaram, Tamil Nadu Information Technology Minister Palanivel Thiaga Rajan and Kerala Finance Minister K.N. Balagopalan on Friday accused the Union government of eroding the powers of the States on a number of key issues.
They were participating at a colloquium, ‘India at Crossroads: Democracy, Growth and Development’, on the topic, ‘The future of co-operative journalism’, at the Asian College of Journalism in Chennai.
Mr. Chidambaram said the recent passage of the three new criminal laws in parliament “blatantly encroach upon public order and police’ reserved for the States”. He said the Congress’s manifesto for the 2024 Lok Sabha election would promise GST 2.0.
Stating that “executive powers are also being centralised”, Mr. Chidambaram likened the actions of Governors, especially in the non-BJP-ruled States, to those of British Viceroys.
“The Finance Commission has been blatantly flouted; the Finance Commission recommended 42% of all Central revenue needs to be devolved to the states. After Jammu and Kashmir was dismembered into two Union Territories, the 42% became 41%. But the effective devolution to the States in the last few years has been only 33%-34%, which means nearly 8% of the funds that should go to the States are not being transferred on one pretext or the other. Over and above this pretext is the rampant use of cesses and surcharges, because cesses and surcharges are not shareable with the States. NITI Ayog Chief Executive Officer B.V.R. Subrahmanyam said in an interview to Al Jazeera that when he joined as secretary in the Prime Minister’s Office, he revealed that the Prime Minister called the Finance Commission, and told them that ‘you must find ways to cut the shareable revenue’ to the State. This is a blatant interference with the independence and autonomy of the Finance Commission,” Mr Chidambaram said.
He added, “The New Education Policy requires every State to open certain number of new schools. Kerala has told them that ‘we are closing schools because we don’t need too many schools in rural areas. There is urbanisation, there is expansion of existing schools in every area and that we don’t need to open so many schools in rural areas’,” he said, adding, “The State governments used to send recommendations to the High Court and the State governments will be consulted before an appointment is made to the High Court. Today, the State governments are not allowed to recommend names; even if they do, they are cast aside.”
Mr. Balagopalan said the interference by the Governors had affected the democracy in the State as passing of Bills was stalled by them and rued how Central government was withholding money owed to the States. “Nowadays Bills are not passed by the Assembly; it is passed only if the Governor accepts it or if it is sent to the President and is accepted. Even Money Bills passed by the Assembly were also kept (without assent),” he said.
He added, “The trend is towards....One country, One Language. For example, in the Centrally sponsored scheme....for which the State is spending close to 80% [in some schemes], we are expected to write the name in Hindi. In India, federalism should not be subordinate federalism.”
Mr. Balagopalan said the major issue is the future of seats for south India in parliament if delimitation was done based on the population data. “If the 2011 population census is taken as the base instead of 1971 census, Kerala was getting around 3.8% of the divisible pool and in the last Finance Commission, we got only 1.8%, which is less than 50%. One of the reasons is the population criteria. They are saying we will give money for more schools, hospitals, and toilets. But, we are saying that we have enough; every household is having a toilet. We have 13,500 schools; we are closing schools because of [lack of] population. We are facing other problems,” he said.
He added, “The share of the Central pool and the introduction of the GST affected the independent functioning of the States. Three years back, the total revenue receipts from the Centre was 46% from Central transfers. Last year, it was 35%. In the current year, it is only 29%. Many other States are getting more than 50%. While States are told that debt cannot increase beyond 3% (of the GSDP), the Centre takes more than 6%.”
He alleged that the Centre wanted to stop Kerala’s social security pension of ₹1,600 to 62 lakh families. It accounts for ₹900 crore a month. As many as 42 lakh families are getting free treatment worth ₹5 lakh a year.
Mr. Rajan said that in the absence of a construct, staff, systems and platform to effectively administer, a centralising authoritarian, boundary-erasing kind of force exacerbates problems for everybody. “Mark my word, it is purely a phyrric victory; the more of this controlling power goes to two hands, the greater the doom that will face this country, at least as a whole and particularly the poorest parts of this country where the greatest support for this kind of authoritarianism seems to be,” he said.
Mr. Rajan said the GST Council exemplifies all the issues mentioned by him and recounted how nobody could provide the list of members of the fitment committee, whose report was tabled. “I went to the meeting one time and we’re talking about what gets done by the fitment committee, what work gets done by the legislative committee, what work is done by the GST Council. What are the laws by which they are nominated; it became very apparent in the course of 10 minutes that nobody in that room — there were 31 State Ministers, the Union Minister, plus all our stuff, plus security, plus the industry secretary — nobody in the room could answer who were the members of the fitment committee whose report was being debated in the Council... I don’t take great pleasure or pride in this, but this is the level of functioning of a government, if it’s not held accountable,” he said.
The session was moderated by T.N. Ninan, former chairman and director, Business Standard.
