OCTOBER 07, 2015

By Naresh Minocha, Our Consulting Editor

DELHI Chief Minister Arvind Kejriwal has frittered away a golden chance to give a failure certificate on cooperative federalism to his bete noire - Prime Minister Narendra Modi. This is evident from Kejriwal megaflop show called Chief Ministers' conclave on Centre-State Relations organized recently.

Both Kejriwal and West Bengal Chief Minister Mamata Banerjee, the only other participant, turned the conclave into a launch pad for taking potshots at Mr. Modi. By confining their speeches to diatribe against Modi and the Centre, they failed to turn the conclave into a big picture on Modi's colossal credibility deficit.

The two CMs did disservice to immense opportunities in cooperative federalism identified by Commission on Centre-State Relations (CCSR) and Finance Commission. The recommendations made by these commissions in April 2010 and February 2015 did not figure in their speeches.

They thus allowed Mr. Modi's chest to remain bloated with pride after receipt of triple laudatory certificates : 1) India's "best leader with best policies" certificate from global media tycoon Rupert Murdoch, 2) the Promises delivered certificate which he solicited from NRIs in Silicon Valley and 3) the "decisive leader" certificate from Finance Minister Arun Jaitley.

If Kejriwal had applied his mind, he could have nullified three certificates by flaunting several instances of unfulfilled promises, indecisiveness and persistence of policy paralysis & projects holdups.

He could have sent a powerful message to Aam Aadmi by focusing on just one issue: Mr. Modi's duplicity on cooperative federalism. Mr. Modi raised certain issues on cooperative federalism as Gujarat CM but shunned them like plague after becoming PM.

Very few people would remember that Mr. Modi had articulated his stance on ‘Indian Federal System' while delivering a lecture at Indore in March 2012.

Speaking under the auspices of Dr. Om Nagpal Memorial talk series, he had "demanded Sarkaria Commission's report on Centre-state relations and Justice Madan Mohan Punchhi's report on Centre-State's financial relations to be implemented. He stated that an inter-state Council (ISC) should be called immediately and it should meet twice a year."

The ground reality is that Mr. Modi, as Chairman of ISC, has till today not constituted this constitutional body. Nor has he composed ISC Standing Committee (ISC-SC) under the Chairmanship of Union Home Minister Rajnath Singh.

Says ISC Secretariat website: "Reconstitution of the council following the formation of new government after general elections is under process." It carries an identical disclosure on ISC-SC.

ISC has not met for almost nine years. It is required to meet at least thrice a year as specified in the Presidential Order constituting ISC issued in May 1990 under Article 263 of the Constitution.

Consider some more gems of wisdom from Mr. Modi that he dished out as CM.

Making a presentation to Planning Commission on 18th June 2013, Mr. Modi stated: "Gujarat has been drawing attention to the Justice Shri M. M. Punchhi Commission Report on Centre - State Relation submitted in March, 2010. The Commission had recommended that the additional expenditure liabilities on States on account of the implementation of central legislation should be fully borne by the Central Government. As more such legislation is being contemplated, states face uncertainty as to the impact on their finances. An early decision on this recommendation is sorely needed."

Nine days later, he again pitched for execution of the recommendations of Sarkaria and Punchhi panels. Mr. Modi said at a Mumbai conference: "India will never become powerful until the states become powerful. Centre-State relationship must be viewed under the light of our federal and democratic values. Those sitting in Centre should not act as big brother but as colleagues of the States."

Mr. Rajnath Singh has apparently taken at face value Mr. Modi's speeches on cooperative federalism delivered in his capacity as Gujarat CM.

Chairing a meeting of Northern Zonal Council on 25th April 2015, Mr. Singh thus articulated the need for convening meeting of ISC. He also for implementation of Punchhi Commission report (wrongly mentioned as Tulsi Commission in an official release).

It is here pertinent to recall what Mr. Singh's associate, Minister of State for Home Affairs Kiren Rijiju said in Lok Sabha on 22 nd July 2014 to drive home Mr. Modi's credibility deficit.

Replying to a question, Mr. Rijiju disclosed: "It has been decided by the Home Minister that necessary ground work for convening further meetings of zonal councils and the Inter-State Council's meeting to be chaired by the Home Minister and the Prime Minister respectively would be done to complete all meetings within October 2015."

ISC Secretariat has shed further light on this sphere. More than a year back, it had received feedback on CCSR's 273 recommendations from almost all union ministries and States. It was also in the process of preparing agenda papers on these for consideration by ISC-SC and later by ISC. The Secretariat has not update its note on this subject available on its website.

The CCSR's recommendations and FFC's unimplemented suggestions, if taken together as a package, can bring about paradigm shift in inclusive development of all parts and all sections of the society. The package's impact on economic growth would be several-fold more than the cut in interest rates on loans for businesses and introduction of lame-duck goods and service tax would have on economy.

As put by FFC, ISC has the "the potential to become the forum for outlining, discussing and strategising the goals, objectives and direction for the national economy. It can set out the important national priorities through negotiation, bargaining and consensus building where all stakeholders will have ownership and participation. It has the potential to be a forum for sharing of experiences and exchange of important initiatives taken up by States. It can also serve the purpose of enabling disadvantaged States to achieve a measure of equality in competing with other States by providing and monitoring incentives."

It called for development of "a new institutional arrangement, consistent with the overarching objective of strengthening cooperative federalism, for: (i) identifying the sectors in the States that should be eligible for grants from the Union, (ii) indicating criteria for inter-state distribution, (iii) helping design schemes with appropriate flexibility being given to the States regarding implementation and (iv) identifying and providing area-specific grants."

FFC added: "despite some differences of opinion, there is virtual unanimity on one issue - that there is universal dissatisfaction with the existing system of transfers from the Union to the States outside the awards of the Finance Commission."

Instead of paying heed to this recommendation, Mr. Modi unilaterally unveiled a special package for Bihar in August this year. He did not even sound State Chief Minister Nitish Kumar on this issue, leave aside consultation.

This brings us to the need for Mr. Modi to move beyond sloganeering and do actual work on building Team India. He might perhaps like to take a leaf from the consultative approach followed by late V.P. Singh.

As Prime Minister, he consulted chief ministers on various issues. He also wrote letter to members of Parliament (MPs) apprising them of Government's decisions.

In a letter dated 30th May 1990 mailed to all MPs, Mr. Singh stated: "In order to ensure that issues of national importance are properly considered and decisions taken through a process of consultation and consensus, an Inter-State Council under Article 263 of the Constitution has been decided to be set up…"

All this is suffice to say to both Mr. Modi and Mr. Kejriwal that they should let their action speak louder than their respective demagogy.

Mr, Modi should read and reflect on what former Chief Justice of India, Justice Madan Mohan Punchhi, observed in the foreword to CCSR report.

He wrote: "In the seven volumes of the report, the present Commission has tried to address a range of complex issues which have come up in Centre-State relations in the context of social and economic developments that have taken place over the years since the report of the Sarkaria Commission of 1988. The dream appears to have been disturbed and the invocation to the Indian people to enjoy the great festival of life with others gone hollow."

To avoid getting such a certificate from electorate, Mr. Modi should rely on wider consultations rather than on advice from cronies.