India’s deepening federal discord: Why the states’ pushback matters

A new opportunity has emerged for reshaping India’s fraught federal compact. On April 15, Tamil Nadu Chief Minister M K Stalin announced a three-member committee led by Justice Kurien Joseph to review and recommend measures to safeguard the rights of states. The announcement comes against the backdrop of growing discord over India’s federal compact, heightened recently with concerns over delimitation, and the Centre’s increased encroachment on state rights. After the settlement of the language question with the States Reorganisation Act, this is the first serious political challenge to the post-independence federal consensus. Stalin has been leading the charge – the new committee marks a constructive step forward in the ongoing political battle.

The committee, however, confronts three key fault lines that are shaping this federal discord. The first relates to India’s diversity of language, religion, and region. The principle of federal accommodation was baked into the Indian constitution as a necessary mechanism for negotiating and preserving India’s diversity within the nation-state framework. Federalism’s first big test was the linguistic settlement arrived at through the States Reorganisation Act. It underlined federalism as necessary for meaningfully accommodating diversity. The BJP is ideologically impatient with this principle of accommodation, seeking instead to impose a monistic culture within a “one nation” framework. This is placing new pressures on a once-settled idea and sharpening the divide. The battle with Tamil Nadu over the imposition of Hindi is just one illustration of this.

The ability to navigate this political moment is limited by the second fault line – the capitulation of our institutions of federal mediation to the central government. As Ambedkar put it, “India’s constitution can be both unitary and federal, according to the requirements of time and circumstances”. This flexibility was necessary at India’s founding moment, when we confronted the formidable task of nation-building against the backdrop of partition. However, it has left federalism vulnerable to unitary impulses, particularly when national politics is dominated by single-party majority governments. The BJP’s misuse of federal institutions like the governor’s office and penchant for using its fiscal powers to centralise finances are an extension of tools used by Congress governments in the pre-coalition era. Indeed, several commissions such as the Sarkaria Commission which led to the establishment of the constitutionally mandated inter-state council were set up to respond precisely to this challenge.

However, the BJP’s unitary impulse is more insidious. Stripping autonomous state governments of powers and bringing them under central control – first in Jammu and Kashmir and later in Delhi – were unprecedented. But what made this more significant is the complete abdication of the courts, that have historically protected the federal impulse. The recent judgement on the governor issue is a welcome reprieve but the Supreme Court’s vacillation on the statehood of Jammu and Kashmir makes it a weak defender of the federal principle. In the absence of guardrails to the unitary impulse, the union government lacks the political credibility to negotiate complex governance challenges that require Centre-state and inter-state coordination.

This brings us to the third fault line – the wide economic gulf between states. In fiscal and administrative realms, the equity principle (poorer states receiving a larger share of national taxes) was the glue for India’s federal architecture. In the political realm, socio-economic inequality was managed via a representational compromise: freezing the allocation of seats for Parliamentary and Assembly constituencies to the 1971 census. This is no longer tenable. Richer states are asking for what they argue is their “rightful” share of resources and worry that delimitation will skew representation sharply in favour of poorer and more populous states.

Economic divergence notwithstanding, India today is an increasingly integrated market. Goods, services, and people are moving and transacting across jurisdictions. Managing this integration requires states to coordinate and cooperate, with the Centre in a mediating role. The coming-together of states for a consensus over the goods and services tax was perhaps the finest example of this coordination. However, the BJP’s penchant for one-nation politics and subversion of federal institutions have raised the stakes for states. The federal fault lines have sharpened, making it harder to find common ground between states.

It is against this backdrop that Stalin’s committee can play a significant role. But for it to take the debate forward and find a way out of this federal impasse, it needs to arrive at a new modus vivendi for states to deliberate and negotiate with each other.

In 1996, a group of chief ministers and regional leaders issued a powerful statement on federalism without the Centre. This statement offers a starting point for Stalin’s committee. It will add a roadmap for reviving the inter-state council as the institutional means to arrive at this new federal compact.