KCR decision to skip south India finance ministers' meet strategic and political, but imperils his Third Front plan

In March, K Chandrasekhar Rao dramatically unveiled his plan to float a Third Front, a coalition of regional satraps. He gave expression to resentment among states that too many powers are vested in the Centre, giving them little elbow room. The Telangana chief minister was peeved with having to constantly request Delhi for funds for different projects, making it a very unequal relationship. KCR was batting for a new form of cooperative federalism which envisages limited powers to the Centre and maximum powers to the states.

File image K Chandrashekhar Rao. AFP

File image of Telangana chief minister K Chandrashekhar Rao. AFP

KCR followed it up with a high-profile visit to Kolkata to meet Chief Minister Mamata Banerjee. His decision to send his relative Santhosh Kumar to the Rajya Sabha was also seen as ensuring a trusted aide will be his point person in New Delhi, to facilitate his national ambitions.

Which is why KCR's decision not to send his finance minister to Thiruvananthapuram to attend a conclave of southern finance ministers on Tuesday has raised eyebrows. The meeting came on the back of Siddaramaiah, Chandrababu Naidu, Pinarayi Vijayan and DMK leader MK Stalin expressing their displeasure at the Terms of Reference of the 15th Finance Commission. Their argument was that the southern states would be penalised for doing better on the population control front, as the 2011 population census will reflect. The meeting was attended by economists as well to give it the veneer of a non-political conclave.

States such as Kerala, Karnataka and Andhra feel more funds are devolved to the northern states at the cost of those in the Peninsula. Between 1971 and 2011, while the population in south India went up 85 percent, the BIMARU states in north India (Bihar, Madhya Pradesh, Rajasthan, Uttar Pradesh) went up by 144 percent. This will affect how funds are allocated if only the 2011 census is taken into account. Already in terms of every rupee it gave to the Centre between 2014-17, the south got back 52 paise while the north Indian states got Rs 3.25

Telangana was not the only one to stay away. Tamil Nadu finance minister O Panneerselvam too gave the meeting a miss. This was deeply ironic because according to Kerala finance minister Thomas Isaac, if the 2011 population census is used as a reference, his state will lose Rs 20,000 crore between 2020-21 and 2024-25 while Tamil Nadu will lose Rs 40,000 crore.

KCR's decision to stay away was both political and strategic. According to a back of the envelope calculation by the Telangana finance ministry, the state expects to gain marginally even if the 2011 census is taken into account because of other parameters that will come into play. So the government found no rationale for Telangana to join the pressure group.

"The chief minister feels that there are multiple fora and opportunities for the state to voice its concerns and there is no need to do it at the conclave of south finance ministers", a senior bureaucrat in the finance ministry said. "One such meeting was held by the 15th Finance commission in Hyderabad on 9 February, where we put forth our concerns".

Sources say, more importantly, KCR was not convinced this was a North-South issue as the conclave sought to project. The apprehension was that this was turning into an anti-BJP club, more political than pure economics. KCR's domestic concern is also that this south India pressure group will strengthen the Congress hand given that both Karnataka and Puducherry are ruled by the party. That won't be good news for KCR since his principal rival in Telangana is the Congress.

Speaking in the Telangana Assembly earlier this month, KCR had spoken out against the North-South rhetoric: "Some states are talking about North-South divide and the Centre showing discrimination towards southern states. I do not encourage such things. This is not good for the nation or national integration or national interest. The Centre should take measures to prevent these kind of situations in the future".

Even though Telangana has other concerns, it is significant that it chose not to rub shoulders with its neighbours to make its point. A finance ministry official points out that external borrowings now come with too many conditionalities imposed by the Centre. Telangana feels the decision on how the money should be spent should be left to the democratically elected state government instead of New Delhi dictating terms.

KCR's decision has left a lot many confused. The Telangana Rashtra Samithi's decision to keep up the protests in Lok Sabha, along with the AIADMK, thereby ensuring the speaker could not take up the no-trust vote moved by the YSR Congress and the Telugu Desam, raised suspicions about their intent. It was felt that their deed was in effect, bailing out the BJP government.

With regional parties looking to ensure unity to take on the BJP, KCR's moves in the past two weeks will only increase the trust deficit. For someone who aimed to lead the Federal Front, that will not be good news.


Updated Date: Apr 10, 2018 17:22 PM

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