Shankkar Aiyar
Author of Aadhaar: A Biometric
History of India’s 12 Digit Revolution,
and Accidental India
E conomics is a political argument — Ha-Joon Chang
The essence of the pithy expression, articulated by the Cambridge economist, is playing out in India’s political theatre and on screens, angst propelled by the power of the networks. A narrative of north versus south, them versus us, Centre versus states with splices of rationality riveted with rhetoric has come to occupy centre stage.Context crafts the contours of dissent, discord and discourse. The immediate provocation is the change in the terms of reference of the 15th Finance Commission, set up to design devolution of funds to states. Population is and has been a determinant of allocation. Hitherto, Finance Commissions used the 1971 data. The 15th FC will use 2011 data. States with lower population assert that they will be shortchanged.
On Thursday, Kerala Chief Minister Pinarayi Vijayan used Facebook and Twitter, no less, to state: “Presently, Kerala receives only a paltry 25 paisa for every rupee of tax it contributes to the Union, Tamil Nadu’s benefit is a mere 40 and Karnataka gets only 47 paisa. In comparison, Uttar Pradesh receives `1.79 for every rupee they contribute. The new move will further aggravate this disparity.”Karnataka Chief Minister Siddaramaiah, tagging the CMs of Kerala, Tamil Nadu, Andhra Pradesh, Telangana, Maharashtra and Puducherry, tweeted: “This will further affect the interests of the south: we need to resist.” DMK leader M K Stalin charged the Centre with unilateralism and wrote to 10 CMs, including those of the south, Punjab, West Bengal, Odisha and Delhi.
Andhra Pradesh Chief Minister N Chandrababu Naidu, already in a face-off with the Centre, called out, “There is nothing called Centre’s or State’s money. It is the taxpayer’s money. Southern states contribute the maximum tax revenue to the Centre, but they are diverting the money to the development of the north.”Assertions aside, the actuality is that states with smaller populations and lower rates of growth in population could be affected. It is also true that use of data from 1971, when India had 54 crore people, in 2018, when the population is 131 crore, is irrational. Besides, population is only one of the factors—others, including progress in moving towards a replacement rate of population growth, will deliver compensatory dividends.
Political narratives are rarely linear. The southern states have delivered better outcomes and the anger is about the incentive structures and the lack of disincentives. The articulation and the underlying angst is less about who is getting more and more about how states that do less get more.
In 1960, the government of India identified the 100 most backward districts. Over 80 of them were from the Hindi heartland—Bihar, Uttar Pradesh, Madhya Pradesh and Rajasthan. Four decades later, a study on the 100 worst districts by this author found that laggards continued to lag. After much was said and done, little had changed. In 2001, a study by N J Kurian found that not a single district from Bihar, Rajasthan, Madhya Pradesh, Orissa and Uttar Pradesh figured among the top 100 districts of India.
It is true that the Constitution obliges governments to deliver a minimum level of public goods and services. Ergo population matters. But so does governance. Poor governance is best illustrated by the level of vacancies in the fields of education, health care and security. The largest numbers of teacher vacancies are in Uttar Pradesh and Bihar. The largest number of vacant posts for police personnel is in Uttar Pradesh. In Bihar, the hospital bed to population ratio is one bed per 8,681 persons. Bihar has 40,043 registered allopathic doctors for over 10 crore persons, Uttar Pradesh has 65,343 for over 20 crore people.
Governance requires interventions, and some of the most transformative interventions have been in the south. It is, therefore, shocking to find “Control or lack of it in incurring expenditure on populist measures” among the terms of reference of the 15th FC. Fact is what is populist today most often than not becomes policy sooner or later.
When M G Ramachandran introduced midday meals in Tamil Nadu in 1982, it was considered populist. It became policy in 1995. The 1983 two-rupee rice scheme of N T Rama Rao led to the National Food Security Act. The 1960s EGS was born south of the Vindhyas in Maharashtra, and became MGNREGS. Amma canteens are now sprouting in Rajasthan, Madhya Pradesh, Odisha, Andhra Pradesh and Karnataka, as are fair price medicine shops.
The schism is not necessarily geographic—it is about performers and non-performe0rs. On October 29, 2013, Gujarat Chief Minister Narendra Modi met the 14th Finance Commission and urged a paradigm shift in the approach. He argued that the Centre share 50 per cent of the divisible pool and that fiscal discipline, revenue collection and contribution to national growth be factored in for allocation. The argument is just as valid in 2018.
Article 1 of the Constitution states, “India, that is Bharat, shall be a Union of States”. This is us. That said, there is no mistaking the discontent bordering on alienation born out of a real and perceived sense of discrimination coloured by social, cultural, religious, political and economic interests. Perception is a high-octane volatile cocktail of facts, fancies, finger-pointing and frailties. Embedded therein are questions that demand dialogue, debate and a détente of thoughts. To argue that much of it is political is to state the obvious. There is no politics without economics. shankkar.aiyar@gmail.com