Centre-state relationship in the era of coalition politics.

Das, Sanjaya Kumar

The Centre-State relations have always been a crucial issue. Strengthening the federal system is necessary for preserving the unity of India. The basic structure remains to be one where legislative, administrative and financial powers are disproportionately concentrated in the Union Government with the States having a large number of responsibilities without sufficient autonomy. The period since 1991, which witnessed a paradigm shift in the economic strategy from planned development to a market-oriented one, has also thrown up new issues and challenges for the federal set-up. The need for a thorough restructuring of Centre-State relations, in order to correct existing imbalances and strengthen the federal system by empowering the States with genuine autonomy.

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The breakdown of the national consensus on a parliamentary majority in India, a phenomenon which is characteristic of the function of parliamentary governments in the developing countries has led to a dangerous trend to identify the federal division of powers with sub-national pluralism. In an attempt to seek legitimacy for the coalition governments, which largely depend upon the support of several regional parties, a phenomenon specified to the Indian political system, many of the political parties, which claimed to have demolished one-party dominance have called for the identification of the federal division of powers with sub-national identities representing the pluralist content of the Indian society.

The Constitution of India is federal in form but is more unitary in character. Strengthening the federal system is necessary for preserving the unity of India and meeting the aspirations of the people who are governed through State Governments. Therefore, Centre-State relations, i.e. the arrangements between the Union Government and the States with regard to their powers, functions and responsibilities have always been a crucial issue. The basic structure remains to be one where legislative, administrative and financial powers are disproportionately concentrated in the Union Government with the states having a large number of responsibilities without sufficient autonomy (Bagchi: 2000). Along with significant socio-economic and political changes occurring in the post-independence period, Centre-State relations have also undergone some changes. The period since 1991, which witnessed a paradigm shift in the economic strategy from planned development to a market-oriented one has also thrown up new issues and challenges for the federal set-up. These have an important bearing on the functioning of our democracy as well as the well being of our people. The need for a thorough restructuring of Centre-State relations in order to correct existing imbalances and strengthen the federal system by empowering the states with genuine autonomy is imperative to enable the emergence of a common platform to bring about a restructuring of Centre-State relations.

India has a constitutional and political system which has some federal features. The Constitution provides the Central Government with overarching powers and concentrates administrative and financial powers in its hands. At the same time, there is sharing of powers and resources between the Central Government and the states in a limited fashion. The experience of partition at the time of independence conditioned the Constitution makers to build in various features in the Constitution which worked against the federal principle.

The centre has the power to reorganise the states through Parliament; Governors appointed by the Centre can withhold assent to legislation passed by the state legislature; Parliament can override legislation passed by the states in the national interests; the Governor can play a role in the formation of state governments and the Centre is vested with the power to dismiss the state governments under Article 356; residuary powers are vested with the centre and the major taxation powers lie with the central authority. Alongside these unitary features, there is a division of subjects between the Centre and States and a concurrent list. Judicial review of Centre-State relations exists as in a federal system. On the balance, the Indian political system has federal features which are circumscribed with a built-in unitary core.

The history of federalism and centre-state relations in India is marked by political mobilisation and intermittent struggle to fashion a more federal setup. Even though such efforts have not yet resulted in any major constitutional changes towards a more federal orientation, the struggle has not been entirely fruitless. It will be useful to trace the tortuous course of the movement for federalism. In the first phase lasting till the late sixties, the task of nation building and development was the main concern of India's rulers. There were separatist problems in Jammu & Kashmir and Nagaland in the North-East but these were seen more as challenges to national unity and issues of national security. The drive towards centralisation which began in this period also coincided with the period of Congress dominance in both the centre and in the states.

But this period was not solely dominated by the trend of centralisation. One of the major democratic movements in the post- independence period, the movement for the formation of the linguistic States took place in the 50s which resulted in the formation of the linguistic states in 1956. The Central Government resisted this demand and gave in the face of strong popular movements. This laid the basis for the later assertion by the states for greater powers. The second phase began with the 1967 general elections. The Congress party, for the first time lost in nine states and non-Congress governments came into being, including the Left-oriented United Front Governments in West Bengal and Kerala. The demand for restructuring of centre-state relations picked up momentum. The political response of the ruling party at the centre under Mrs. Gandhi's leadership was to manoeuvre to regain the lost political ground and pursue policies designed to centralise more powers at the centre both political and economic.

The 70s and 80s, therefore, saw a tussle between the Congress party on the one hand and the regional parties on the other for assigning greater power to the states (Arora: 2004). Beginning with the Rajmannar Committee set-up by the Dravida Munnettra Kazhagam (DMK) government in 1969 to the memorandum on Centre-State relations by the Left Front Government of West Bengal in 1977 to the opposition conclave on centre-state relations in Srinagar in 1983--the framework for the restructuring of centre-state relations and a more federal political system was prepared. The Central Government responded by appointing the Sarkaria Commission on centre-state relations in 1983.

The drive for centralisation sought to undo the prospects of democratic decentralisation effected by the formation of the linguistic states in 1956. Resistance to decentralisation and more powers to states had its class dimension. The Indian big bourgeoisie was hostile to any dilution of the unitary character of the state. Their quest for a homogenous market led them to condemn the demand for linguistic states as heralding the "balkanisation" of India.

The political onslaught on federalism found expression in the repeated use of Article 356 by the Central Government to dismiss state governments; most of them were run by parties who were in the opposition. The Governor, in the garb of the Constitutional post, became an agent for the centre. The division of financial resources between the centre and the states, instead of a Constitutional right, became a method to keep the states in a supplicant and subordinate position. The centre sought to transfer subjects from the states list into the concurrent list whenever an opportunity presented itself. Some of these actions reached their zenith during the internal emergency when the 42nd Constitutional Amendment was enacted.

The rigidity of the Constitutional political system with the centre playing a dominant and monopolistic role met with resistance. The rise of regional parties, the DMK and the Akali Dal were the earliest formations and the subsequent proliferation of other regional parties had both economic class, content and a cultural expression (Arora: 2004). The major linguistic-nationality groups in India--of which the most developed were the non-Hindi groups were the first to throw up the regional parties. These regional parties expressed the class interests of the rising bourgeois-landlord classes of that linguistic group and they also tapped into the linguistic-cultural aspirations. In the 80s, the rise of the Telugu Desam Party (TDP) in Andhra Pradesh symbolised this development.

The political contestation between the forces of centralisation and federalism did not result in a clear-cut victory for either side. While there has not been a substantial change in the unitary features of the Constitution and the financial system, the political parties system has evolved on federal lines. The end of Congress one-party dominance by late 80s created an atmosphere to check rampant centralisation.

For the first time, in 1989, a National Front Coalition Government headed by V.P. Singh, which had major regional parties like the TDP, DMK and Assam Gana Parishad (AGP), took office at the centre. Though short-lived, this government took certain steps to strengthen the federal principle. The Inter-State Council was constituted in 1990. The United Progressive Alliance (UPA) Government set up a Commission on Centre-State Relations in April 2007 with former Chief Justice Madan Mohan Punchhi as the chairperson. The terms of reference of the Commission, however did not reflect the long-standing demands of the states for greater devolution of financial powers, especially regarding the increase of the states' share in tax revenue, transfer of Centrally Sponsored Schemes to the states and alleviation of the debt burden of the states. On the other hand the terms of reference included the issue of suo moto interference on law and order and deployment of central forces, which is an intrusion into the jurisdiction of the states.

The provision in the Constitution to set-up such a council was not exercised by the centre earlier. The entry of the regional parties in coalition governments at the centre became a regular feature in 1996 with the formation of the United Front Government and in all subsequent ones--the 1998 and 1999 National Democratic Alliance (NDA) coalitions headed by the BJP and the current United Progressive Alliance (UPA) headed by the Congress coalition. The participation of the regional parties in the central coalition governments has led to checks on the centralisation trend initiated by the Central Government. The political give and take within a coalition precludes the possibility of a roughshod approach to states. Even the BJP, which has no sympathy for federal values, proved adept at responding to the concerns of the regional parties.

One of the obnoxious anti-federal features was the use of Article 356 by the ruling party at the centre. Halting the arbitrary use of this clause by demanding its removal or modification has been the priority for all the forces advocating a more equitable centre-state relation. The Supreme Court, by the Bommai-judgment of 1994, made a significant contribution towards restraining the Central Government from misusing these powers. The Court decreed that the exercise of the powers has been arbitrary and militates against the federal principle. It provided for safeguards by stipulating that a decision to dissolve the state legislature cannot be implemented till both the Houses of Parliament approved the presidential proclamation. Till then, the dissolution should be kept in suspended animation. The judgment also requires the President to set out the reasons and the material on which basis the proclamation of President's rule is made. The Court made this subject to judicial review. The judgment was informed by the Constitutional perspective that federalism and democracy are interconnected and one cannot be violated without harming the other.

Intergovernmental federal relations have undergone substantial changes in the last twenty five years (Arora: 2007, Lawrence: 2002, and Dua and Singh: 2003). The political developments associated with the end of one-party dominance, the rise of regional parties for a more federal system were favourable for the shaping of a federal structure. But this has not happened. This is mainly due to two countervailing factors. The first is the outlook of the two big political parties--the Congress and the BJP. Both share the approach with its emphasis on a strong centre. Congress views democratic decentralisation as only concerning the devolution of powers to the panchayati raj system. It ignores the rights of states and sees it as a diversion from the nation building project. The BJP is philosophically committed to an Akhand Bharat (greater India). It is hostile to strong states or regional forces who do not buy into its "great power nationalism". That is why the BJP is negative towards the idea of consolidating the linguistic States and advocates instead, the creation of small states, on an administrative basis. Such small states will be enfeebled and dependent on the centre.

The second countervailing factor is the process of liberalisation which has been unfolding in the past one and a half decades. It has been the endeavour of the liberalisers and their sponsors in the multilateral agencies to foster a type of "market federalism". In a deregulated economy, with the centre retreating from certain vital economic functions, the states are expected to compete for attracting capital and foreign direct investment. Such "inter-jurisdictional competition" is harmful to the federal spirit. It leads to competition in providing tax incentives and tax cuts which weaken the states' fiscal position. The centre, in turn, seeks to impose neo-liberal policies in centre-state relations. These policies entail passing off of the fiscal problems of the centre to the states; hiking up the interest rates on loans to state governments and using the debt-trap the states land into, to thrust more neo-liberal policies on the states.

All this has led to paradoxically; the weakening of the state's bargaining powers and a deterioration of its financial position at a time when powerful political parties representing these states have emerged as players of the centre. The liberalisation drive has adverse implications for federalism (Bagchi: 2008). The National Development Council, the Inter-State Council and the Planning Commission--all institutions which deal with centre-state and inter-governmental relations have been weakened. The Finance Commission has become an instrument to push neo-liberal policies. The right of states gets translated to mean the right to compete with other states for investments and capital finances.

The 90s have seen widening regional disparities--both inter-state and intra-state. The policies of liberalisation have benefited a clutch of states like Maharashtra, Gujarat, Tamil Nadu, Karnataka and Andhra Pradesh which have received the bulk of foreign direct investment and bank credit. Five states accounted for 51 per cent of the Foreign Direct Investment (FDI) proposals approved from August 1991 to December 1998 (Choubey: 2003). All the Hindi-speaking states put together got an amount which equaled the proposals for Tamil Nadu alone. Maharashtra accounted for one-fifth of the country's bank deposits in 2002 but its share in gross credit was one-third. Major states like Uttar Pradesh and Bihar are falling behind in the socio-economic indicators. More recently formation of three new states--Uttarakhand, Chhattisgarh and Jharkhand in north India region, these continues to exist to atleast 31 additional demands for new states based on sub-regional identities (Arora: 2007).

It is not only the gaps between the states that are widening, the regional disparities within states are also growing. This is fuelling the demand for the formation of separate states by carving out the backward regions. The demand for a separate Telengana state created out of Andhra Pradesh and Vidarbha out of Maharashtra and Gorkha land in West Bengal is based on the backwardness argument. The demand for the break-up of the linguistic states formed in the sixties is not going to strengthen the federal structure. It will weaken the existing strong linguistic states which are better placed to negotiate with the centre.

Despite the centralising drive, parliamentary democracy and popular movements have compelled the centre and the political system to accommodate political, social and cultural diversities (Lawrence: 2002). Apart from the pressure of the regional and Left parties, the Central Government in the 1970s responded to the ethnic and linguistic-nationality aspirations in the North Eastern region by the setting up of seven states. The Constitution provides for regional autonomy for certain tribal areas through the fifth and sixth schedules. Article 370 of the Constitution grants special status to Jammu & Kashmir. Article 371 deals with special provisions such as providing safeguards to customary laws of Nagaland and Mizoram and the setting up of development boards for backward areas in certain states.

For a multilingual country, the recognition and status of languages is an important aspect of federal policy (Sengupta: 2008). The eighth schedule of the Constitution recognises 22 languages as national languages. The recent additions have been Bodo, Dogri, Maithili and Santhali. The UPA government has agreed to consider the demand to declare Tamil a classical language. It is the political and democratic assertion of the people which have given shape or expression to some of these constitutional arrangements, though many of these provisions are limited in scope and require expansion.

The elements of federalism in the state structure have been vital for conflict resolution. The secessionist movement in Nagaland and Mizoram were met by the creation of separate states and other safeguards. The grievances of tribal groups suffering from socio-cultural and economic oppression erupted often into demands for a separate identity. In the case of the Bodo people in Assam, it has been met with an agreement to set up an autonomous Bodo council. For the people of hilly area of Darjeeling in West Bengal a Gorkha Autonomous District Council was formed. It is by the grudging adoption of a limited but flexible federalism-creation of states, setting up of autonomous councils, accordingly special status to certain areas that the Indian political system has sought to resolve ethnic, regional and linguistic problems.

Many of the demands were initially raised by the Srinagar Conference and have not been resolved yet. Some of the demands are new and are being raised on the basis of the experience of the states in the coalition politics period. Therefore, the country requires a strong and effective centre; given its vastness, complexity and diversity. There are 28 States and seven Union territories. It is not enough to have a centre which has a minimalist function of looking after defence, external affairs and a common currency. The centre has an important role in economic coordination, ensuring balanced allocation of resources and meeting the special needs of minorities and border regions. It has to protect national sovereignty and unity and under its jurisdiction federal institutions come which arbitrate and resolve inter-state matters.

References

Arora, Balveer (2007): 'From Reluctant to Robust Federalism: The Development of India's Political Institutions' in John, M.E. and Jodhka, Surinder S. (eds.), Contemporary Contested Transformations: Changing Economies and Identities in India, New Delhi: Tulika Publications.

Arora, Balveer (2004): 'Reviewing the Federal Constitution: States' Rights and National Coalitions', in Singh, Mahendra Prasad and Mishra, Anil (eds.), Coalition Politics in India: Problems and Prospects, New Delhi: Manohar Publications.

Bagchi, Amaresh (2000): 'Rethinking Federalism Issue', Economic and Political Weekly, 35 (34): 19-25 August.

Bagchi, Amaresh (2008): 'Globalisation and Federalism: Uneasy Partners?', Economic and Political Weekly, 43(38): 20-26 September.

Chaubey, P.K. ed. (2003): Fiscal Federalism in India, New Delhi: Deep & Deep Publications.

Dua, B.D. & M.P. Singh, ed. (2003): Indian Federalism in the New Millennium, New Delhi: Manohar Publications.

Lawrence, Saez (2002): Federalism without a Centre: The Impact of Political and Economic Reform on India's Federal System, New Delhi: Sage Publications.

Sengupta, Papia (2008): 'Linguistic Diversity and Disparate Regional Growth', Economic and Political Weekly, 43(33): 16-22 August.

Sanjaya Kumar Das, Research Scholar, Centre for Political Science, Jawaharlal Nehru University, New Delhi, e-mail: sanjaydasjnu@gmail.com.