Coercing into cooperative federalism

On November 30, high-level members of the NITI Ayog descended upon Kolkata. The mandarins of the NITI Ayog came down to impress upon the need for agricultural reforms to West Bengal’s Agriculture Minister. The discussion centered on the Union government’s policy directives of land lease laws as well as agricultural “reform” by which the Union government means the revision of the state Agricultural Produce Market Committee (APMC) Acts in pursuance of Union government's visions. For starters, even the premise is quite astounding since in the Constitution of India, agriculture, land, and intra-state markets – all are state subjects where Union government and its bodies like NITI Ayog have no business to discuss, interfere, inform, or persuade unless specifically asked by a state government; just like the state governments don’t have the Constitutional mandate to interfere in matters of foreign affairs which is solely within the jurisdiction of the Union government. If the NITI Ayog has run out of reasons for existence after doing all could do to provide policy directions to the Union government, so that now it deems fit to extend their ambit to clearly state government affairs who have their own policy-making mechanisms, then maybe it is time for NITI Ayog to take a look at the state list and keep out of matters that may be their brief from the Union government but not their business according to the Constitution. Incidentally, the NITI Ayog is not a Constitutionally mandated body to start with.

The meeting with West Bengal’s Agriculture Minister Purnendu Basu did not have the outcome NITI Ayog intended. He informed them that West Bengal government opposes the Union government’s imposition of land lease laws in West Bengal. The fact that the West Bengal state Agriculture Minister had to explain with data and figures that it was doing fine in the agricultural sector and that NITI Ayog had a flawed perception in this matter is extraordinary in itself as the state government bears no responsibility of explaining state list policy and performance matters to the Union government. This schoolboy explaining performance to visiting school inspector type of scenario is serious. Hence, one should ask, why was a state forced to entertain this Union government appointed band of technocrats? The answer lies in the model of coercive federalism that is being practiced by the Union government, whose more publicised name for New Delhi’s PR purposes is “cooperative federalism”.

Let us understand this coercion model by a few examples. The APMC laws of the different states were developed to minimise exploitation of farmers by middlemen and money-lenders. Thus, state control of the selling ensured a modicum of fairness for the farmer. Post market-globalisation, there have been pressures from international multilateral institutions for trade and big local corporates to “open up” the sector, create an Indian Union-wide common agricultural market and letting big buyers deal directly with farmers to the extent of dictating what crop they should sow. The various state APMC laws prohibit most of this as many state governments contend that these measures will threaten food security and ensure total corporate control of the agricultural market. The system that limits corporate control and dictation of agriculture is what the Union government has long been plotting to dismantle – initially by persuasion and now increasingly by coercion.

Here is the coercion ploy by Union government arm-twisting the states to get state APMC laws changed. Recently, NITI Ayog came up a ranking of states in terms of what it calls an ‘Agriculture Marketing and Farmer Friendly Reforms Index’. It is quite an amazing exercise to name something using value positive words like “friendly” and “reforms” such that a casual observer would pre-assume that the NITI Ayog’s measures that go into making this index some measure of farmer friendliness. Who decided that the parameters used in this ranking are “farmer friendly”? NITI Ayog did. It assumes that there is some universal definition and consensus on whether the parameters used in this ranking give some idea of something being “farmer friendly”. The truth is, there is no such consensus. Many state governments have not changed the state APMC laws to suit the Union’s wishes since they think that the suggested reforms are actually farmer-unfriendly. At the end of the day, in a democracy, whether some provision is farmer-friendly or unfriendly is not a technocratic inference but a matter of politics, in so far as the people are sovereign to decide what is friendly to them and what is not. The example of the now infamous Singur land acquisition of West Bengal is a striking case in point.

Comically but not surprisingly, in that ranking by NITI Ayog of farmer friendly reform, the top 5 ranks were bagged by BJP-ruled states! West Bengal and other states, which had other views regarding the Union government suggested changes to the state APMC laws, performed poorly. Thus this ranking is a ranking of the extent to which a state government is changing laws regarding a state subject in line with the wishes of the Union government. Such rankings typically have little beyond PR value and becoming Delhi-media talking points, but they were not. These rankings will now be used as “benchmark for allocating different Central funds to states for successful implementation of farmer-centric polices”. In short, a state government will be paid Central funds based on how much a state allows the encroachment of Union government’s policy diktats in state subjects! The apt word for this is blackmail.

Such blackmailing represents not only an assault on federalism but on representative democracy itself. The Union government is not in charge of the “country”. It is only in charge exclusively of those functions that are in the Union List. For matters in the concurrent list, it is in dual charge in a spirit of cooperation with the state governments. Thus, the Union government is not superior to the state governments. They don’t have a parent-child relationship. Rather they work on the principle of division of power, more like siblings with different household responsibilities, with mutual non-encroachment being the guarantee of the preservation of the federal structure, which is part of the unchangeable basic structure of the Constitution. What are the consequences of such blackmail that rewards those state governments that toe the line of New Delhi? The people’s representatives in the Vidhan Sabha of any state represent an autonomous expression of the will of the people of that state with regards to the issues under state jurisdiction. Thus, such blackmailing means that political will of the state people with regards to state subjects don’t matter. The state government is thus converted as a local project implementation agency of the Union government. This is as good as rendering people of a state speechless and irrelevant in deciding crucial matters of their political future, taking away the freedom of democratic political expression of the state’s people, that is, people’s sovereign power of real political choice. This is a grave moment for the Indian Union’s federal structure.

Other recent instances of this black-mail based coercive federalism model includes Union government’s Ujwal Discom Assurance Yojana (UDAY) scheme which not only has preferential financial packages for those states who agreed to it but also had punitive threats like denial of coal block resources and forfeiture of grants in case of states that didn’t sign up. The similarity with the APMC reform issue couldn’t be more striking. And when financial carrot and fund-resource denial stick doesn’t work, even this coercive federalism can give way to one-sided approach by the Union government as it hinted on the APMC issue in 2014-15 pre-budget economic survey which has a not-so-veiled threat about disregarding states if there are continuing hold-outs – “If persuasion fails (and it has been tried for a long time since 2003), it may be necessary to see what the center can do, taking account of the allocation of subjects under the Constitution of India”. Those loopholes are the exceptional provisions in the List III of the Concurrent List. This one-sided approach is also behind threats of passing the GST as a money-bill in the Lok Sabha since a majority of state Finance Ministers and the Union government have reached an impasse in the GST council. Thus we see a pattern at work. Union makes model guidelines and laws about matters explicitly in the state list, then pressurises states to follow it, rewards those who do, punishes those who don’t and all of this is possible due to the huge amount of revenue that the Union grabs from states – which its likes to call “Central funds”.

In a recent interview, NITI Ayog CEO Amitabh Kant said, “patience not a virtue anymore”. Bankrolled and driven by a power-centralising Union government, the rise of NITI Ayog represents the power of unelected partisan technocrats over elected federal democrats, the victory of a partisan bureaucratic apparatus over representative democratic politics. And that is a crisis for democratic politics, the only way varying interests tussle with each other without overt war or dictatorship. Any crisis of democratic politics is a crisis for the people. It represents the moment when citizens become subjects. We may have already crossed that moment. The best-case scenario for the future of Indian Union’s federalism and political democracy lies in a fundamental renegotiation of powers between Union and States in favour of the latter.