The coronavirus is a real blue agent of change. Look at Russia, the Putin-style bastion of socialism, which now opens its doors to vaccine tourism: come to Moscow, get your shot and, as a bonus, enjoy the view. Even as an agent provocateur, the Sars-CoV-2 virus has upset the fragile economic equilibrium of the past 40 years, disrupted the tenuous political order and wreaked havoc on social networks and kinship. General imbalance, anyone?
Among other disruptions, the second wave exposed gaping flaws in governance capacity and public health infrastructure, in addition to exposing questionable practices of some constitutional authorities. While the Center has failed in managing the rise in infections and deaths, a new breach has arisen in the country’s federal framework. The signals are clear: there is an urgent need to upgrade state finances and discuss whether the Seventh Annex to the Constitution – which delimits the responsibilities of the Center and the States – needs to be revamped. Will the Center be obliged?
While the new loopholes in the federalism framework are a direct consequence of governance failures, they have also emerged as a result of the government’s pursuit of political goals by capitalizing on the pandemic and lockdowns. This does not mean that the federal structure was foolproof before (see: bit.ly/3yq2cWY and bit.ly/3hKUctV); the covid virus has only manipulated existing loopholes in the structure, just as it exploits co-morbidities, and exposed the void of the slogan “cooperative federalism”.
This is true for all forms of federalist structures. The Goods and Services Tax (GST) Council has not met for seven months despite rules requiring quarterly meetings, depriving states of resources to fight covid. This is important because the absence of the Center from the front lines in the fight against the second wave has shifted the burden of health spending to states. In politics, the governor of West Bengal has seen fit to bypass a popularly elected chief minister and endorse the defamation by the recently elected Trinamool Congressional State Legislators Center, despite their previous partners in the same violations. presumed were spared because they changed allegiance. Here’s another example of federal imbalance: The Election Commission’s insistence on 8-phase elections for West Bengal, amid a raging pandemic, could be seen as not-so-subtle partisan signals from a body. constitutional to voters.
The issue of federalism arose when the Centre’s mismanagement of the immunization program forced states to launch global tenders for the purchase of vaccines. An avalanche of articles subsequently appeared discussing the state of Indian federalism. States are also not looking to the Center for advice and instead have implemented their individual lockdown protocols, all separate from each other. These individual state responses have come up against the unstable and unequal form of Indian federalism and therefore something must give. It is this column’s hope that a framework currently biased in favor of a stronger Center will give way to a kinder, gentler, and more impartial federal structure, one that will not perpetuate or worsen the relationship. patron-client between the Center and the States. The starting point for this should be public finances.
As noted above, the second wave squeezed state finances and, in the absence of additional central funds, limited states’ pandemic efforts. After much pushing, the GST Council finally meets and is expected to discuss the GST revenue shortfall in the current fiscal year and how to compensate states. When the GST was introduced in 2017, states were assured of a 14% increase in their annual revenues until 2022, provided that revenue shortfalls were offset by a tax levied on luxury goods (such as alcohol, cigarettes or automobiles, among others). .
The Centre’s previous estimate that States would need ₹The compensation of 156,164 crores in 2021-2022 now needs to be revised as the second wave impacted economic activity. There was a similar shortfall in 2020-2021, and the Center had agreed, after much coercion, to borrow and transfer part of this unpaid amount to the states, repayable against future indemnities to be paid. In the absence of economic activity and commensurate tax revenue inflows, the Center will now have to find new ways to transfer additional revenue to states, even if this implies an increase in debt.
The frayed federalist structure also demands a makeover to the Seventh Schedule; this has become particularly pressing, with the Center increasingly encroaching on state territory. And now, states are competing in the global vaccine security market, which should have been centralized at the Center.
After that? Can states develop their own foreign policy? For example, West Bengal – which shares borders with Nepal, Bhutan and Bangladesh – is currently hostage to the shifting foreign policy quirks of the Center, lacking agency and unable to intervene for its own benefit. Maybe foreign policy is too extreme a step, but that shouldn’t prevent a reassessment of the Seventh Schedule, especially the power imbalance in health, education, agriculture or government. job.
The lessons of the pandemic are clear and clear, but there is no question of whether the overt centralist tendencies of this government will continue to stifle them.
Rajrishi Singhal is a political consultant, journalist and author. His Twitter handle is @rajrishisinghal.
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