Union government’s unhappiness with some states not cooperating with central schemes underscores the importance of better Centre-state relations. Prime Minister Narendra Modi is reported to have flagged Maharashtra’s slow progress on the bullet train project and the failure of some states to enrol street vendors for the PM-SVANidhi microfinance scheme. Differences of opinion have always persisted between Centre’s developmental vision which is generally holistic, and state governments having their own local imperatives and funding priorities. Politics also plays its part, with states governed by parties different from the Centre more likely to voice objections.
The bullet train impasse stems from the Maha Vikas Aghadi government unwilling to expend political capital on the project, over which the alliance partners had expressed misgivings while in opposition. Frequent run-ins between BJP and MVA constituents aren’t helping either. An extensive network of bullet trains enabled China to speed up its growth. Unfortunately, India is failing here and blame lies with the politics of demonisation, which no side is immune from. The enviable bullet train network across China’s length and breadth and India’s snail paced progress on Mumbai-Ahmedabad high speed rail corridor and Delhi Mumbai Industrial Corridor could be used as metaphors for the development trajectory of the two countries.
A revival act depends on the Centre conjuring up the original spirit of cooperative federalism, that saw such steps as the 2015 approval of the 14th Finance Commission recommendation devolving 42% of tax receipts to states. But non-shareable cesses and surcharges in the central kitty have remained beyond the pale of this 42% devolution. Meanwhile, public debt of states as percentage of GDP spiked between 2014-15 and 2019-20 while Centre’s declined during this period. States must take the onus for fiscal responsibility, but they are just as likely to blame inadequate tax devolution and GST compensation for their plight.
Now the recession is forcing states to cut expenditure with development spending taking large hits. Greater Centre-state coordination is needed now. Besides funds, it requires mitigating political mistrust, at its peak with central agencies actively pursuing only non-BJP leaders and opposition governments fearing for their stability. Brinkmanship over cornering credit for schemes hurts too: Andhra CM Jagan Reddy has renamed the PM-SVANidhi after himself. BJP’s domination of the political and economic narrative, evident from the Bihar results, should put the party at ease. Cordial Centre-state relations can elevate economy and development instead of culture wars and partisan politics as national obsessions.
This piece appeared as an editorial opinion in the print edition of The Times of India.