Why Ambedkar's constitution needs a federal overhaul

Punjab Chief Minister Prakash Singh Badal on Tuesday demanded the setting up of a new constituent assembly to frame a “genuinely federal” division of powers between centre and states. According to a report in The Indian Express, Badal told the state assembly: “The powers are with the Centre but the state governments are accountable on all the issues. Till we have a federal structure we cannot progress. So the constitution has to be recast by a constituent assembly”. Though no one has actually backed the idea so far, this writer believes that a strong rewriting of our constitution is called for if the country is to move forward from its current political paralysis. A nation of 1.2 billion – with its zillion diversities and million mutinies – can only defeat itself if it centralises too much authority. [caption id=“attachment_258700” align=“alignleft” width=“380” caption=“Reuters”]  [/caption] In fact, even though no one other than Badal has so far expanded on the federalism concept, it is an idea whose time has come. In all recent controversies – the Lokpal Bill, the National Counter Terrorism Centre, and even the Food Security Bill – central decisions have be opposed by state-level leaders on grounds of breaching the federal character of the constitution. It is easy to dismiss the idea as emerging from fractious politics, but then which issue is not the result of politics? One can easily see Jayalalithaa and M Karunanidhi, Mamata Banerjee and (perhaps) Mayawati, Mulayam Singh Yadav and Nitish Kumar, not to speak of Naveen Patnaik and Omar Abdullah, agreeing with the Badal line on federalism. Only the Congress and BJP may formally oppose the idea – but then they are the parties becoming increasingly irrelevant. In the next election, neither party looks like a winner. In fact, 2012 may well mark the beginning of the end of the two main national parties. The signs are everywhere. In the recent assembly elections, the two managed to win decisively only in tiny, postage stamp states like Manipur and Goa. Both parties are unable to behave like national parties – with one unable to develop local leaders and the other having only local leaders whom the central party is unable to control. Barring five or six states (Gujarat, Himachal, Rajasthan, Madhya Pradesh and Chhattisgarh), where the two national parties are direct challengers to each other, in the rest of the states they are either bit players playing second fiddle to regional parties, or their main rivals are regional parties. While the decline of the two national parties has been precipitated by circumstances unique to themselves – the Congress is into its fifth generation of dynasts, while the BJP is unable to solve its leadership issue at the centre with a simple honest-to-god inner party election – there are, however, larger macro reasons for their growing irrelevance. Of these, the most important ones are two: the demography-driven aspirational change in the younger generation following two decades of above-average growth, and the concentration of economic powers with the centre. The two issues are, of course, inter-linked. Since governance and actual progress depends on states – land, agriculture, law and order, and effective delivery of services are state-level responsibilities – the aspirations of the aam aadmi can only be addressed regionally. The higher the aspirations of the new generation, the more the pressure on state-level leaders to deliver to their voters. This is the fundamental reason why voters are increasingly giving power to regional parties, who articulate regional aspirations. To the extent the national parties also have strong local leaders – a Narendra Modi in Gujarat, or a BS Yeddyurappa in Karnataka or a Sheila Dikshit in Delhi – they too can connect with voter aspirations. However, the economic resources to fulfil the aspirations of the incoming generation are with the centre. For example, in 2010-11 the total tax and other non-debt revenue and capital receipts of the centre were Rs 1,257,729 crore. But all the states put together had receipts of just Rs 1,155,898 crore. And this state figure includes the money given by the centre to states as their share of tax revenues and grants. Put another way, the centre, which has no real responsibility for delivering services at the state level, earns more money than the states which have to actually do the job. However, despite controlling such a huge chunk of national resources, the centre is running a fiscal deficit twice as large as all the states put together. Even though it is easy to blame Mamata Banerjee for her role in the sacking of Dinesh Trivedi after he presented an eminently sensible railway budget, the question to ask is this: how can she make her political point if her own state is bankrupt and she has only the railways’ money to play around with? This is not to justify her conduct, but to point out the fact that resources are at the centre. But lack of devolution of economic power to the states is detrimental to governance at the central level, too. Take the case of the recent Uttar Pradesh election. Petrol prices have nothing to do with Uttar Pradesh, but the centre still put off an increase – and has still not been able to do so even after the elections. Thanks to a lack of political clout in states, the Congress mortgaged a central policy to curry favour with voters. But it still failed to win in Uttar Pradesh. The policy paralysis is thus greater at the centre than in the states. Nitish Kumar, despite running a coalition, and Jayalalithaa have managed to take tough economic decisions that the centre has been unable to for years now. Even Mamata Banerjee has raised prices of some essentials in Bengal. Continued on next page.. On the other hand, the centre has crucial powers to deter states from fulfilling their local economic mandates. Want an environmental clearance? It depends on the whims of the central ministry of environment and forests (MoEF). Want to start a factory? You need loads of central permissions. Want to open up coal mining for private parties? The centre will decide – even if the mines are in your state. All you get in a share of royalties. The recent scam in coal block allocation shows how centralisation of decision-making power can lead to misallocation of resources and mispricing. If the allocation of coal blocks was done by states, pure revenue considerations would have led to auctions – exactly what the Supreme Court wants. Instead, what we have is illegal mining. The states control all the land in their territories, but it is the centre that is trying to legislate a land acquisition act in a one-size-fits-all attempt that will surely be ruinous for some states. At a World Economic Forum meeting in Mumbai last November, bureaucrats and politicians – from both non-Congress and Congress-ruled states – said the centre was a drag on them. As _Firstpost_ reported at that time, Kerala Chief Minister Oommen Chandy complained about the Centre delaying the Athirapally hydro-electric project. He said: “The project is quite crucial for the state, but despite repeated attempts by the Left Democratic Front and United Democratic Front, the Central government has not yet granted clearance.” Madhya Pradesh Chief Minister Shivraj Singh Chouhan said his power projects were in limbo for want of clearance to coal projects from the ministry of environment and forests (MoEF). “States really have to work hard to get environment clearance. Many irrigation projects don’t get cleared. You need to give (more) rights to the states.” His grouse: even though the state has 30 percent forest cover, MoEF does not give environmental clearance easily. The point is this: our states are bigger than most countries of the world. But they are not free to drive their own economic destinies. They neither control all their resources, nor the policy levers to chart their own economic futures. This is what partly explains efforts by regional parties to bag plum ministries (telecom, railways) at the centre so that they can do both election funding for their parties and divert resources to their states. Put these two facts together – that regional parties are closer to regional aspirations, but they cannot meet those aspirations without power at the centre – and what you get is the steady growth of regional political power at the cost of the national parties. The national parties, despite controlling many of the economic levers, cannot really benefit from it electorally since it is difficult to claim credit for a locally-delivered service just because the money came from the central exchequer. Thus a state government will get as much credit for a NREGA as the centre – and in state level elections, the regional parties (or regional leaders) matter more. To retain its hold on regional power, the dynasty-led Congress keeps throwing money at various constituencies in the hope that it will get some credit for it and obtain power in the states. So far, it has been unable to convert fiscal profligacy into votes. Fiscal power at the centre is wasted. It is better to shift some of it to the states. The Indian Express quotes the Punjab Chief Minister as saying the states have gradually been reduced to the status of beggars: “The Constitution is not in tune with the requirements of the changing times and as a result the country is not able to fully utilise its potential for development and prosperity. The states are the best qualified to understand and address the problems of the people in an effective manner,’’ said Badal. The two national parties can become relevant only if the constitution is rewritten to shift economic power more towards states and the centre’s job is reoriented to national issues like defence, human rights, citizenship, monetary and currency policy, external trade, and diplomacy. But the centre is not even doing this – as the Army Chief’s allegations about bribery and lack of proper ammunition – shows. The argument one will hear is that should we tinker with Ambedkar’s constitution? But Ambedkar himself made it clear that a constitution is not forever. Quoting Jefferson, he said: “We may consider each generation as a distinct nation, with a right, by the will of the majority, to bind themselves, but none to bind the succeeding generation, more than the inhabitants of another country.” Two-and-a-half generations have been born since Ambedkar gave us a wonderful constitution. He did not cast in stone. It is time to rechisel it to make it more federal. True federalism is the only way to make nationalism and national parties relevant again. India is, after all, a Union of States. Over 1,200,000,000 people cannot be led and fed from Delhi.