Federal Restructuring
UF and the Centre-State Relations

The widespread illusions originally witnessed when  the UF government came into office are slowly beginning to get dispelled. Deve Gowda government is unable to summon necessary political will to substantially alter the federal equations. They are at it doing some minor tinkering job. This much was evident from the Inter-State Council meeting held in the middle of October. Low key voices of displeasure are being heard from within UF, mostly from the Federal Front partners. The Tamil Nadu Chief Minister, M. Karunanidhi, found the recommendations of the sub-committee set by Inter-State Council to go into Centre-State relations in the light of Sarkaria Commission's report `quite disappointing'. Chandrababu Naidu, his counterpart in Andhra, has come up with his own charter of 10 points which he says would be forwarded to the Standing Committee of ISC on behalf of the Federal Front. Sooner or later, the issue may become a sore point in the internal relations of UF. To keep track of what is happening on this front, let us take a look at the indications so far.

Convening of this ISC meeting is the biggest step so far by UF in this direction. The tangible outcome of this meeting is next to nothing. But the demands raised by different chief ministers belonging to all major political formations and the contending views in this forum indicate the growing sharpness of the battle of ideas on this question. How far they will develop into actual political battles over this highly contentious issue remains to be seen.

There was a virtual clamour from every chief minister, irrespective of his political hue, for greater devolution of powers. But Deve Gowda chose to engage in sermonising on 'cooperative federalism'. Views change probably because of the vantage point one occupies. JH Patel wanted 40% of the central revenues to flow to the states. Naidu put it at 50% P. Chidambaram, as the finance minister, had nothing but empty hands to offer to the states this year in place of greater devolution of funds. He rather chose to give a lecture to the assembled chief ministers on the fiscal irresponsibility of the states. Someone reminded him about the Centre's unfulfilled commitment on transferring the centrally-sponsored schemes to the states on which he himself personally reneged.

Regarding institutional restructuring of Centre-State ties in the light of Sarkaria Commission recommendations, the above-mentioned sub-committee - as promised in CMP - is reported to have considered 190 recommendations out of 247 and accepted 155 with or without modifications. The numbers may sound big but they are trivia. Karunanidhi put it mildly when he called them disappointing. On the crucial and most contentious issue of repeal of Article 356, the fiery federalists of yesterday who have turned into 'cooperative federalists' today and the much mellowed state autonomists belonging to the same UF camp were at loggerheads among themselves. Surprisingly, their leftist colleagues hailing from same party but from West Bengal and Kerala were seen to be on different wave lengths. The saffron unitarists who are making so much noise outside about the misuse of Article 356 and the role of the Governor were strangely subdued. The Congress CMs, including the one from Punjab however struck to their guns over this imperial weapon.

Only four chief ministers - from Tamil Nadu, Andhra, Kerala and J&K - demanded repeal of Article 356 and all of them belonged to UF. While Kerala CM Nayanar outrightly demanded repeal, his West Bengal counterpart Jyoti Basu differed from his party colleague and suggested that the Article be invoked only after consulting the Inter-State Council. It is up to the informed reader to infer which would be the 'official' party line. One would still be at a loss to figure it out how this will be done because India has not become that federal yet where Inter-State Council takes overriding decisions on majority basis. God - or Basu - only knows what this 'consultation' would amount to.

But the two Marxist CMs reached unanimity soon on a related issue. On appointing governors, both shifted stance but together: "Ideal course would be to abolish the post, but if that is not feasible then the selection should be made by the President from a panel of three eminent persons suggested by the CM". But this was only a humble suggestion because the sub-committee had already accepted Justice Sarkaria's suggestion in this regard that gave no say the CM. This however was not challenged by CPI(M) CMs. Mahanta, JH Patel and many others wanted checks on the discretionary powers of the governors and the Centre to prevent misuse of the Article 356 but they offered no concrete proposals that might go beyond Supreme Court's verdict in Bommai case even which the UF government or the governors in Gujarat or UP are not inclined to follow.

Ironically, barely within 24 hours after the heated, but largely academic, discussions at ISC on curbing the discretionary powers of the governors with regard to Article 356, it was invoked in UP generating greater political heat outside.
The only tangible thing that the states got was the assurance that the bills passed by the state legislatures and sent for presidential assent will be disposed of - either accepted or returned - within four months. Deve Gowda's pet legislation on reverse land reforms thus may soon see the light of the day but one cannot be so sure about progressive legislations on land reforms from other states that are pending.

The Karnataka CM JH Patel demanded that a national credit council be set up for ensuring equitable flow of institutional finances to different states, a demand which should have been raised by Laloo who, thankful to an obliging Centre and a CBI that have come to his rescue in AH scam, was not in the right mood to attend.

Nothing was said about bringing the Planning Commission under National Development Council, i.e. under the direct supervision of the states also. Rajiv Gandhi called Planning Commission a 'bunch of jokers'. But the UF has reduced them to a 'bunch of unemployed'. When the Planning Commission started discussing state plans this time they were already half way down the fiscal year and Chidambaram has given them no say either on central plan expenditure of his proposals for assistance to state plans. Naturally, demands were voiced in the ISC meeting that the state plans be kept out of the purview of this useless body.

Virbhadra Singh voiced the demand of the hill and special category states for special central assistance as they were not constituted on considerations of financial viability, but for various other reasons, including backwardness. One is not sure yet whether a chief minister from Uttarakhand would be able to join him in this demand in an ISC meeting in near future.

Strangely enough, neither Cauvery nor Alamatti disputes figured in this Inter-State Council meeting though such inter-state disputes were also to be brought under this forum. Both Karunanidhi and Chandrababu Naidu accused Deve Gowda of acting like 'Prime Minister of Karnataka'. Plentiful rains have averted a crisis this year on the Cauvery front. And Alamatti in fact helped Naidu to divert the people's attention in his state from his ruthless revenue measures. Despite routine politiking both the regional parties seem to be happy with power sharing through cabinet berths rather than through devolution.

There were some thorny issues however. Naidu wanted Gowda to declare the cyclone havoc in Andhra as a 'national disaster'. Though such a declaration would make no difference to the quantum of peanuts that would go the state's way, he was very much insistent upon it. He couldn't conceal his anger at Gowda's refusal and interpreted this as a discrimination by a callous Centre in a lopsided federal set up. But the comprador mentality of this man who made an audio-visual presentation to the visiting World Bank Chief to seek a direct State Assistance Strategy from the Bank soon became evident as he was only hoping to get in touch directly with foreign governments and institutions to beg for relief assistance.

There were other dimensions and examples to liberalisation-aided federal measures. There has been no review of concurrent list in the Inter-State Council meeting - a long-pending demand which also figured in Sarkaria Commission's report. The chief ministers had to return content with the promise that it will be taken up next. Even this much was conceded after the demand was getting strident. But Gowda had a substitute offer that is in tune with the liberalisation times. In his inaugural speech, he cited the case of Centre permitting the states to set up power projects - with private participation including foreign - up to Rs.1000 crore investment without clearance from the Centre. He promised more such offers if there are takers. Thereby he seemed to be telling the CMs that these are different times and sending an unambiguous signal: Why bother about concurrent list or institutional restructuring and other shibboleths of olden days. Of course, nobody can doubt his commitment to this different brand of federalism.