One of the abiding irritants of the Congress electoral strategy in many state elections that has been commented upon (but not enough) is this imperious statement made by Sonia and Rahul Gandhi, “We send money from Delhi, but it has been wasted by the State Government”. Of course, this statement is made by them only if the state government is a non-Congress one.

The shamelessness of the statement aside (as if they are sending money from their own pockets, or worse still from their rumoured “secret accounts”), it stinks of the implication that the Centre is doing the States a mighty favour by “sending” them money, and the people of that state should be grateful to the Centre (or the Congress Party) for the same.

Well, the people of the states that recently voted showed the Congress party exactly what they felt about this “imperial” approach, and more particularly the people of the Gandhi pocket-borough of Amethi, Sultanpur and Rae Bareilly.

But this post is not about “Congress-bashing”, in as much as I enjoy it. This post is about how one can have a more egalitarian approach towards distributing resources between the Centre and the States, and also eliminating the arbitrariness and favouritism with which the Centre shares resources with its “preferred” States.

The three main problems existing today with allocation of resources at present are:

  1. States of the same party as the party ruling at the Centre get preferential treatment in terms of additional resources (funds received by Maharashtra when Congress was ruling in the state and when BJP/SS were ruling, tells a sorry tale)
  2. Regional parties that support the ruling coalition at the Centre are able to literally blackmail the Centre into giving more resources (Mamta Bannerjee is a classic example)
  3. States where the opposition is in power get short shrift and have to literally beg the Centre for more resources (Bihar and Gujarat are examples)

This kind of ad-hocism is not only sic, but also damages our federal polity. India is becoming increasingly more federal, and this needs to get reflected in how this important issue of sharing resources is handled.

There is a wonderful body created by Nehru called the National Development Council (NDC). It consists of the PM, the Union Council of Ministers, the CM’s of all states, representatives of Union Territories, and the Planning Commission. Unfortunately, its importance has been going down over the past few decades, and except for a brief resurgence in the time of ABV, it has all but become defunct under the present government. It is my proposal to make this organization the de facto clearing house as far as sharing of resources is concerned.

The allocation of plan resources is currently done as per what is called the Gadgil formula (please Google it and read more about it, it’s actually very fair and nice). Unfortunately, the process of finalizing the plan is still a bit imperialistic in the way it is finally approved by the Planning Commission. It is my proposal that the NDC become the final approving authority for sharing all Centre-State resources, both Plan and Non-Plan.

The process can work as follows:

  • The total pool available for allocation and “proposed allocation” for each state be prepared by the Planning Commission and presented to the NDC for its consideration.
  • Each member of the NDC be asked to allocate resources for each state and union territory, based on their own individual judgement of what this allocation should be, so that the total adds up to the final allocatable pool.
  • The voting sheet from each NDC member will be confidential
  • The average of all these allocations should be taken as the “final allocation” for each state/union territory for plan expenditure
  • A similar process should be followed for non-plan allocation as well as extraordinary grants for calamities, etc.

While a state might tend to over-allocate to itself, and maybe to other states where its own part is on power, all these individual biases will tend to cancel each other out. It has also been noticed that when people are trusted and asked to vote on an issue, confidentially, they largely do so with a complete sense of responsibility (please read a lovely book on this subject called “The Wisdom of Crowds”).

Essentially what the above process proposes is to take away the power of ad hoc allocations from the Central government and the Planning Commission, as we have seen that it not only gets grossly misused, but is also used for open and shameless black-mailing by regional parties. Given the fact that our polity is so diverse and regional parties are not going to go away in a hurry, the NDC gives the greatest possibility to most fairly allocate resources for the greatest common good.

This will also force all regional parties to start thinking about the rest of the country and the smaller states, and not just about their own states’ needs. The good part is that a large state will have the same vote as a small state (one vote), which will give a greater sense of empowerment to the smaller states.

On a lighter note, even a Mamta Bannerjee would find it difficult to blackmail all the members of the NDC, as opposed to a Manmohan Singh-led effete UPA.

The general thrust of the above suggestion is also to create systems and processes, where a greater amount of power is shared with states, and frankly, further down with the local governments also. The days of a “command performance” by the Central government are long gone!

On another note, I can see an approach like this only being championed by the BJP, which is more amenable to accommodating India’s federal structure, as opposed to the Congress, which hungers for absolute power and would love to ride rough-shod over the oposition/regional parties.

BJP, listening?

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Rightwingdian is a Mumbai based Resident Commentator of CRI

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