<p>Rajya Sabha MP MV Rajeev Gowda tells<br /><span class="bold">S. Raghotham</span> of <span class="italic">DH</span> that the Narendra Modi government's terms of reference to the 15th Finance Commission seem to be a political ploy, and hence will face a political backlash.</p>.<p class="Question">What is the Congress party's view on the terms of reference (ToR) of the 15th Finance Commission?</p>.<p>There is no formal Congress view on the subject as of now but the Government of Karnataka has expressed its views based on 2-3 grounds: One, the ToR of the 15th Finance Commission are stacked against the well-performing southern states, which contribute much more already to the national exchequer than the share they receive in return. Two, they have also objected to the 'coercive federalism' being practised by the Centre, and not the 'cooperative federalism' they talk about. When the ToR includes phrases like "check on the performance of states on flagship central programmes", such as Swachch Bharat, Start-up India, ease of doing business, etc., this is an interference in the states' affairs. The states may be doing well on their own programmes, but the ToR doesn't reckon with that.</p>.<p>Three, the notion that if the state government is indulging in 'populist' schemes they should be somehow penalised. Now, when midday meal scheme was introduced in schools, it was called populist; when MNREGA was introduced, it was called populist. Midday meal scheme has worked amazingly in ensuring attendance in school, better nutrition, better health indicators, etc. These programmes are within the prerogative of the state governments, there is no reason for the Centre to make value judgements about them. States have the constitutional right to come up with programmes that suit them. When such are the ToR, you start wondering if the central government has forgotten that the Finance Commission is a constitutional body which is supposed to, in a larger sense, evolve its own ToR, its own formulae. The very reason it exists is so that we have a neutral body of experts that makes decisions that can otherwise be highly political in nature.</p>.<p class="Question">Is there a specific term of reference that is causing this worry?</p>.<p>There are multiple ToR that are really worrisome. The biggest, of course, is the mandate to use 2011 Census data as the basis for fund allocation. There has been a very carefully crafted compromise in the larger federal national interest to keep the 1971 Census as the basis for both the Finance Commission and its allocation of resources and the Delimitation Commission and its allocation of Parliament seats to various states. This ToR runs the risk of upsetting that fragile balance. The response from the southern states suggests they already have.The 14th Finance Commission had already introduced a 10% weightage to the 2011 Census data. Something like that is an appropriate compromise, not going the whole hog on 2011 Census.</p>.<p>Even now, there are criteria that the Finance Commission can come up with. For example, rewarding states for the levels of female literacy, which is something to be prized and promoted in itself and also because it has a correlation with fertility rates. Then, maybe, it can redress the imbalance that using 2011 Census data will cause. Otherwise, the commission runs the risk of the southern states thinking that they are getting shafted.</p>.<p>This is all happening in the context that the southern states all have different languages and cultures that they pride. Financial devolution done this way will get mixed up with the Hindi imposition, which the Sangh Parivar seems bent on, etc. So, you are already seeing the backlash the Bengaluru Metro signboard issue; Tamil Nadu has a long history of this sort of resistance. So, the Centre should be very sensitive to these sorts of sentiments. Instead, it is riding roughshod without often consulting with the state governments. The big picture is that it is unravelling the movement towards a more federal structure that innovations such as the GST Council, etc., had helped us achieve. All that good work that has been done towards federalism is going to be undone by these kinds of ham-handed terms of reference.</p>.<p><span class="bold">But there is some justification for using the latest Census data, isn't there?</span></p>.<p>Sure, but if the existing consensus has to be unravelled in any way, it should be done in a consultative manner. These are all sensitive issues. The last thing you want is national chaos and dissension. India is a federal system, a union of states. You consult the states, you have a debate and discussion, you work out a consensus on this matter. Just like with the GST Council, the states gave up their indirect taxation power to that entity. Similarly, if you sat down with us and said, "let's figure out a way to help those who are falling behind", no state has a problem with some amount of cross-subsidisation. The problem arises when it is imposed on you. There is the grand talk of cooperative federalism, but the actual reality is exactly the opposite -- coercive federalism. These ToR seem like a political ploy to shift resources, and a political ploy will be met with politcal backlash. That is not good for the<br />country.</p>
<p>Rajya Sabha MP MV Rajeev Gowda tells<br /><span class="bold">S. Raghotham</span> of <span class="italic">DH</span> that the Narendra Modi government's terms of reference to the 15th Finance Commission seem to be a political ploy, and hence will face a political backlash.</p>.<p class="Question">What is the Congress party's view on the terms of reference (ToR) of the 15th Finance Commission?</p>.<p>There is no formal Congress view on the subject as of now but the Government of Karnataka has expressed its views based on 2-3 grounds: One, the ToR of the 15th Finance Commission are stacked against the well-performing southern states, which contribute much more already to the national exchequer than the share they receive in return. Two, they have also objected to the 'coercive federalism' being practised by the Centre, and not the 'cooperative federalism' they talk about. When the ToR includes phrases like "check on the performance of states on flagship central programmes", such as Swachch Bharat, Start-up India, ease of doing business, etc., this is an interference in the states' affairs. The states may be doing well on their own programmes, but the ToR doesn't reckon with that.</p>.<p>Three, the notion that if the state government is indulging in 'populist' schemes they should be somehow penalised. Now, when midday meal scheme was introduced in schools, it was called populist; when MNREGA was introduced, it was called populist. Midday meal scheme has worked amazingly in ensuring attendance in school, better nutrition, better health indicators, etc. These programmes are within the prerogative of the state governments, there is no reason for the Centre to make value judgements about them. States have the constitutional right to come up with programmes that suit them. When such are the ToR, you start wondering if the central government has forgotten that the Finance Commission is a constitutional body which is supposed to, in a larger sense, evolve its own ToR, its own formulae. The very reason it exists is so that we have a neutral body of experts that makes decisions that can otherwise be highly political in nature.</p>.<p class="Question">Is there a specific term of reference that is causing this worry?</p>.<p>There are multiple ToR that are really worrisome. The biggest, of course, is the mandate to use 2011 Census data as the basis for fund allocation. There has been a very carefully crafted compromise in the larger federal national interest to keep the 1971 Census as the basis for both the Finance Commission and its allocation of resources and the Delimitation Commission and its allocation of Parliament seats to various states. This ToR runs the risk of upsetting that fragile balance. The response from the southern states suggests they already have.The 14th Finance Commission had already introduced a 10% weightage to the 2011 Census data. Something like that is an appropriate compromise, not going the whole hog on 2011 Census.</p>.<p>Even now, there are criteria that the Finance Commission can come up with. For example, rewarding states for the levels of female literacy, which is something to be prized and promoted in itself and also because it has a correlation with fertility rates. Then, maybe, it can redress the imbalance that using 2011 Census data will cause. Otherwise, the commission runs the risk of the southern states thinking that they are getting shafted.</p>.<p>This is all happening in the context that the southern states all have different languages and cultures that they pride. Financial devolution done this way will get mixed up with the Hindi imposition, which the Sangh Parivar seems bent on, etc. So, you are already seeing the backlash the Bengaluru Metro signboard issue; Tamil Nadu has a long history of this sort of resistance. So, the Centre should be very sensitive to these sorts of sentiments. Instead, it is riding roughshod without often consulting with the state governments. The big picture is that it is unravelling the movement towards a more federal structure that innovations such as the GST Council, etc., had helped us achieve. All that good work that has been done towards federalism is going to be undone by these kinds of ham-handed terms of reference.</p>.<p><span class="bold">But there is some justification for using the latest Census data, isn't there?</span></p>.<p>Sure, but if the existing consensus has to be unravelled in any way, it should be done in a consultative manner. These are all sensitive issues. The last thing you want is national chaos and dissension. India is a federal system, a union of states. You consult the states, you have a debate and discussion, you work out a consensus on this matter. Just like with the GST Council, the states gave up their indirect taxation power to that entity. Similarly, if you sat down with us and said, "let's figure out a way to help those who are falling behind", no state has a problem with some amount of cross-subsidisation. The problem arises when it is imposed on you. There is the grand talk of cooperative federalism, but the actual reality is exactly the opposite -- coercive federalism. These ToR seem like a political ploy to shift resources, and a political ploy will be met with politcal backlash. That is not good for the<br />country.</p>
