Avoiding a dearth of innovation

Today many states and their Chief Ministers have an interesting dilemma as to whether they should continue the lockdown further, leading to a depletion of state resources or should they open up their economies even given the potential human cost. Despite the Centre and the PM issuing their directives on the same, many states have their ideas on how long the lockdown in their territories should last. Meanwhile, the Union Government announced the extension of limited lockdown throughout the country till May 17, 2020, with a rider that areas will be divided into red, orange and green zones.

The Protagoras Paradox concisely captures the paradox of our times in the sense as to who is the winner in the current dilemma touching the aspect of Centre-states relations in India. The Paradox of the Court, originating in ancient Greece, is based on the story of Protagoras who took on a student, Euthalos as an apprentice of law on the understanding that the student pays Protagoras for his instruction after he wins his first court case.

When the student defaulted, the teacher decided to sue the student in the court of law. His idea was if he wins the case, he will get payment from the student and if he loses, the student still has to pay because he would have won his first case. Euthalos thought otherwise, reasoning that If he wins the case, he won't have to pay the teacher, as the case is about his non-payment of fees. and if he loses the case, he still does not have to pay him since he did not win his first case yet.

Thus, this paradox is one that exists based on both sides of the argument being equally valid. Incidentally, the Protagoras Paradox has not been resolved till date. This is exactly the Centre-state relations in our so-called cooperative federalism of Indian subcontinent in the context of Coronavirus pre, during and maybe post lockdown!

India has a unique federal structure. While subjects of national importance like macroeconomic management, defence and external relations are with the Centre, all the subjects that matter to people's everyday lives such as law and order, education, health, agriculture are all with the states, though some of them also appear in the concurrent list. Even where policies are set at the Central level, it is the states that implement those policies.

While states have important responsibilities that matter so much to the livelihoods of people, they do not have adequate financial resources to discharge those responsibilities. They collect some taxes but these are not sufficient to meet all their responsibilities. That is the reason our Constitution provides for the Centre giving a share of its taxes to the states as per a formula determined by the Finance Commission which is appointed every five years. Also, states borrow money from the market but states cannot borrow as much as they want. As per the Constitution, states can only borrow the amount permitted by the Centre.

This crisis has brought to the fore, the challenges of Centre-state relations in both administrative and financial dimensions. It is the states which are at the forefront of managing the pandemic. However, they are starved of funds. Both the Centre and states are indeed in financial distress because of the crisis but the states' distress is deeper. While GST collections have fallen short both for the Centre and states, the Centre has other big sources of revenue like income tax, corporate tax and customs. A big source of revenue for states apart from GST is the excise duty on the sale of liquor. Because of the lockdown, that source has completely gone dry. States now need to borrow more but they cannot do so unless the Centre permits.

Groupthink is is a phenomenon where a group of people start to think collectively with one mind, often resulting in poor decision making. Groupthink occurs in groups when individual thinking is subverted to stay within the comfort zone of the consensus view.

Groupthink leads to bad decisions because it encourages members of the group to ignore possible problems with the group's decisions and discount the opinions of outsiders. It influences decisions most when there are no clear rules for decision making. The impact of groupthink includes among others, bad decisions due to lack of opposition and lack of creativity. Overconfidence in groupthink negatively impacts the profitability of an organisation with a lack of feedback on decisions.

Cohesiveness or the desire for cohesiveness, in a group, may produce a tendency among its members to agree at all costs. This causes the group to minimise conflict and reach a consensus decision without critical evaluation.

When it comes to avoiding the trap of groupthink, there can be no better example than CM KCR of Telangana. In managing this crisis, he has shown the courage to dissent from the dominant view. For example, when everyone was veering towards lifting the lockdown after three weeks, KCR dared to differ from that view and decided that in Telangana, the lockdown will be extended till May 7, 2020. Ultimately KCR was proved right when the Union Government extended the lockdown till May 17, 2020.

In video conferences with the PM, KCR has demonstrated innovative and imaginative thinking going beyond groupthink. Instead of just asking for additional Central financial support, he has also indicated to the PM some ways of raising additional funding through 'Quantitative Easing' and 'Helicopter Money'. Perhaps the PM should give some thought to this.

The writer is Chief Public Relations Officer to Chief Minister of Telangana. The views expressed are strictly personal