Demonetization – Building Allies vs Forcing into Action

Ever since the demonetization decision was made public by the Union Government of India, on the 8th of November 2016, lot has been discussed about the pros and cons of the measure. However, not much has been discussed about the measure from the federalism angle. In this article, we try to look at the whole demonetization exercise from the federalism point of view.

Taxation Powers in a Federal Polity
In many mature democracies, the taxation powers are distributed between the states and the union (also called as ‘federal’) governments. Not just the indirect taxes, even the direct taxes like Income tax and Corporate tax powers are with the state governments too. In federal polities like USA, Canada or Australia, this is the norm.

In India however, the powers to levy direct taxes rest solely with the Union Government. This in itself is, over-centralization of powers. When nations like Canada and Australia with population of 20-30 million take fiscal federalism seriously, what stops the highly diverse nation with a population of 1.25 billion from taking fiscal federalism seriously?

The Black Money
In the previous paragraphs, we discussed about direct taxation powers. Because by definition, black money is the amount for which direct tax has not been paid. By retaining the power to levy direct taxes, the union government has kept to itself all the incentives to fight tax evasion. Had the state governments been provided with direct taxation powers, as is the case in mature democracies, the union would have found natural allies in all the state governments in the fight against tax evasion.

Building Allies vs Forcing into Action
The current approach, taken by the Union Government to catch tax evaders, is more like ‘Forcing’ the state governments into action. Quite naturally, when something is forced upon someone, the reluctance levels will be high and enthusiasm levels will be low. Needless to add, that in a federal setup, such moves are against the fundamental principles of federalism. The frequently heard term of “co-operative federalism” appears to be lacking any substance, considering the current approach.

For co-operation between any two elected governments, there must be an incentive at play. Had the direct taxation powers been in concurrent list, the resulting bounty from the fight against tax evasion would have been an incentive, for both the union and the state governments. To tackle tax evasion, whether it is the USA working with Switzerland, or Germany working with Panama, the approach one can see is that of ‘carrot & stick’. That is how co-operation is achieved, and is made effective. “Stick alone” approach, doesn’t build a strong and effective co-operation.

The demonetization exercise by the union government is akin to “stick-only” approach, and is evident that there was no effort to build consensus among the state governments and the union. This one exercise has strained the federalism-fabric so much, that we might start hearing the benefits of common currency across the union of India being questioned.

A NEET Blow to the Autonomy of Linguistic States

Ever since independence, the Union has always tried to accumulate more and more power for itself in all subjects of eminence – quietly and gradually cutting down the autonomy of the states. The subject of education is no exception. In fact, education is a key factor for development, growth and governance, and hence exercising control over the matter is key for any authority to hold on to power and accumulate more of it. The Union, time and again, meddles with the subject in such a fashion that it encroaches into the space of the states, one step at a time, seizing more powers with every single move.

Obtrusion through National Eligibility Entrance Test (NEET) is the Union Government’s latest fiasco. NEET is a common entrance test for admission to MBBS and BDS courses that starting from this year, will replace All India Pre Medical Test (AIPMT) and all entrance examinations to the above courses conducted by state boards and by private institutions. It will be conducted by the Central Board of Secondary Education (CBSE).

As we will see further in this article, in the long-term this will deteriorate into a situation, in which the Union holds complete sway over education, and controls and dictates all learning, and development opportunities of our children. Needless to say, this is quite anti-democratic in nature. The subject of education should be with the states, to ensure the jurisdiction of education remains much closer to people. It makes little sense to drive the all-important subject of education through a distant establishment completely disconnected from them.

As with any Union Government undertaking, support for languages has been a concern with NEET. When it was introduced back in 2013, students could take it up in eight languages, i.e., Telugu, Tamil, Gujarati, Marathi, Bengali, Assamese, Hindi and English. But this year, when it is made mandatory across the Union, non-Hindi students do not have the option to take up the phase one of the examination in the language of their choice. They can only choose between Hindi and English.

But the phase two of the test is being considered to be conducted in the above mentioned languages. The choices are still limited. There are already concerns that question papers could leak if they are translated to these many languages. Denying the choice of a language not just shows insensitivity towards non-Hindi peoples but also clearly demonstrates operational inefficiencies that were unwarranted in the first place.

Why is it that the Union, in most of its undertaking, time and again comes up with operational and executional excuses to deny support to other languages but has enough resources and forethought to support Hindi, any time and at any place?

Take the Railways, for instance. The Railways has enough money and resources to use Hindi in announcements, tickets, boards, signage etc in all non-Hindi regions of the Union. But when asked for tickets to be printed in Kannada, it either comes with the excuse of lack of funds or operational inefficiencies. The pattern with NEET is similar.

It would not be a surprise if in the near future, the CBSE board puts its foot down and says no more support for ‘regional languages’ in NEET. We often come across the rubbish argument that Hindi and English being widely spoken languages are generally understood by a majority across the Union and that other languages are either not needed or may be left optional. This has been the devious stratagem of the Union in administration and general policy making. Education is no exception.

Of course, the Union Government has expressed concerns over phase I of the examination being only in two languages, English and Hindi, citing the reason that it will impact students from non-Hindi states and those from non-English medium background. But it appears that the far-term vision is to gradually converge towards Hindi and English, rather than invest in all the languages in building strong higher education systems in them. 

That the state governments will lose all authority or control over admission to MBBS and BDS courses in their respective states is crystal clear. Take for example, the Gadinaadu Kannadiga and the Horanaadu Kannadiga quota in Karnataka. Will the Government of Karnataka be able to conduct tests and fill-in admission for these quota? Will the CBSE board or the Union Government allow this? Or can the state government submit a plea if it is not permitted as per rules? We do not know for sure. But the state will no more be able to freely take decisions in the interest of its people.

Also, how will the state governments ensure justice to poor and rural students, who mostly do their schooling in the state syllabi? The syllabi of the states are vastly different from each other and from that of the CBSE board. These students are already disadvantaged owing to lack of coaching and guidance. The introduction of NEET will leave them further handicapped.

The states will also lose out the opportunity at restructuring or remodeling the system with novel methods. If a state, for instance, wants to adopt an advanced method of testing, or introduce a new subject it will not be possible any more.

In the long-run the states also stand to lose authority over primary education. With entrance exams coming under the CBSE board, parents would want their children to take up the CBSE syllabus right from early years of schooling. So, this will ensure that there will be very few takers left for the state boards. And the state boards, with decreasing enrollments, will be forced to align with the CBSE board to remain ‘relevant’ and ‘competitive’.

With more schools moving to CBSE, Hindi will be taught more widely in the non-Hindi states. But these schools will not be bound to teach the states’ languages. While the influence of Hindi will increase, the non-Hindi languages will take a beating as lesser and lesser of the young generation of the non-Hindi peoples will have good reading and writing proficiency in their mother tongues.

States like Karnataka, Tamil Nadu, and Andhra Pradesh etc., did raise a few objections against NEET. But they have all mostly been related to operational issues. Very few, unfortunately, has been against what is fundamentally wrong with the initiative.

NEET definitely needs to be scrapped. But that is not enough. We should ensure that the Union leave education to the states and not get into running the affairs of the subject. That requires moving the subject, which is now on the Concurrent List back to the State List (education was in the State List, but was moved to the Concurrent List during the time of emergency).

This is what has given the Union powers to override the policies of the states on education. It is unsure if the current wave of protests will stop NEET. Regardless, the states and its peoples should identify this fundamental fallacy and work towards getting education back to the State List.

(Image: financialexpress.com)

Undemocratic Amendments to the Constitution during the Emergency

Pic source: indiatoday.intoday.in

On 25th of June this year, the 40th year of the Union Government imposed state of emergency was remembered. There have been many discussions around the misdoings of the Union Government during the 21 months' long period of emergency. Several web portals ran stories highlighting what the citizens of present day India can learn from the period of emergency. What went missing in much of these articles/discussions were the changes to the constitution of India that were made during the emergency, and how these changes undermined the fabric of the constitution of India. Not only were the fundamental rights of the people compromised, powers of the states of the union were also taken away by moving some important subjects from the state list to the concurrent/union list. Education was one such major subject that was moved from the state list to the concurrent list, quite understandably without any debate. At Karnatique, we have always argued that education must be a state list, and in this article too a special emphasis has been laid to highlight the movement of education from state list to concurrent list.

Education in state list, as the constituent assembly had wanted
The constituent assembly chaired by B. R. Ambedkar had kept education in the state list. In the meetings of the constituent assembly, a member by name Purnima Banerjee had moved an amendment seeking to move education to the Union list. This move was supported by another member of the constituent assembly Brajeshwar Prasad. But, the move was countered strongly by another member by name Rohini Kumar Chaudhury. The move was finally not accepted by B. R. Ambedkar, and hence education remained in the state list. Rohini Kumar Chaudhury made a strong speech in the constituent assembly insisting that education be maintained in the state list, and a part of the same speech has been quoted below.

Sir, it seems to me to be an age since I spoke last. It is not that my tongue does not reach so long, but I loathe to speak in this House lest I impede the progress of the work here, but today the heart-throbbing speech of my honourable Friend Shrimati Purnima Banerji has aroused me from my slumbers. I come here not to appreciate the speech of my honourable Friend Shrimati Purnima Banerji but to oppose it with all the might that I posses. Sir, we have come nearly to the end of these Lists, I, II and III and what do we find ? What we find is that the position of the States are no longer States or Provinces, but they have been reduced to the position of municipal and other local bodies. All the powers have been taken away either in List I or List No. 3. It reminds me of the words in the Upanishad:

Poornasya Poornamadaya

Poornamevavasishyate. 

     After having taken out everything the same fullness remains : it is as if it is a full Moon. We are taking slices of the full Moon and yet the full Moon still continues as before. That is the position to which we have arrived after going through all these lists.' No power is left to the Provinces and the full Moon remains a full Moon as before.

The 42nd amendment
The 42nd amendment to the constitution of India was brought about during the days of the emergency. It is regarded as the most controversial of the amendments to the constitution, in India's history. Apart from editing the preamble of the constitution and attempting to reduce the powers of the Supreme court and the high courts of India, the 42nd amendment brought such sweeping changes to the constitution that many described the amendment as a mini-constitution. As part of this amendment, education was moved to concurrent list from the state list. It is nothing but a mockery of democracy that such sweeping amendments, ones that curtailed the powers of the courts and reduced the powers of the states, were made during the emergency period without any debate whatsoever among the representatives of the people of India.

The run up to the 42nd amendment
The constitution of India, as drafted by the members of the constituent assembly, had not let so much of power reside at the hands of one person. If the same form of the constitution had continued till 1975, the sweeping changes introduced as part of the 42nd amendment would have been impossible to make. The 24th amendment is what tilted the constitution from the original form towards the current form. If not for the changes made to the constitution as part of the 24th amendment, the 42nd amendment wouldn't have been possible, As part of the 24th amendment, the parliament was enabled to dilute the fundamental rights, yes, the fundamental rights of the people of India. Also, the courts were prevented from doing any review of the future amendments to the constitution that impact the fundamental rights of the people.
When the 24th amendment was made, those members of the constituent assembly who were alive at that time, came out and opposed the amendment. Several of the legal experts had called the 24th amendment as slaughter of the constitution.

Interestingly, both the 24th and the 48th amendments were made when the union of India was in a state of emergency. The 24th amendment was made in the year 1971, at a time when the Bangla Liberation War was going on and the relations between India and Pakistan were tense. The 48th amendment was introduced during the period of imposed emergency, in 1976.

There seems to be larger agreement that the imposition of 21 month long emergency, starting in the year 1975, was detrimental. There is also widespread disapproval of the 42nd amendment to the constitution. The present Union Government of India has made special efforts to highlight the excesses of the emergency period.

To undo the damages done to the constitution during the emergency, what remedial actions is the current Union Government planning, is not very clear. Honest attempts to correct those excesses will have to start from moving education back to the state list from the concurrent list. With that, all the centralization efforts in the field of education will also have to stop. The power to meddle with the fundamental rights of the people, needs to be taken away from the parliament. All the talk about emergency is good, but the remedial actions need to speak too.

Larger Linguistic States Are Important for Democracy in India

source: blogs.lse.ac.uk

Over the past few months, there has been increased talk of dividing the state of Karnataka into two separate states. The division being talked about might result in two entities, the northern part of Karnataka and the southern part of Karnataka. Interestingly, all this talk is emanating from the sitting MLAs belonging to the two political parties that call themselves as 'national parties', the 'Indian national Congress' and the 'Bharatiya Janata Party'. Mr. Umesh Katti, sitting MLA from the BJP, and Mr. AS Patil Nadahalli, sitting MLA from the INC, are the two gentlemen who are at the forefront demanding separate statehood for the northern part of Karnataka.

Shift in the balance of power
While there is a lot of noise about smaller states being good for development, one has to be careful and consider the shift in the balance of power such division of the states is going to result in. The citizens of India will inevitably have to grapple with such an imbalance, if the larger states were to be further divided.

Why is balance of power important?
This is a question of democracy itself. One of the main reason why democratic practice has been successful across the world is, because of the development of a system of checks and balances to ensure that the political power is dispersed and decentralized. Democracy is a system built on the deeply held belief that government is best when its power to abuse is curbed and when it is held as close to the people as possible.

Let us now understand the current distribution of political power in the Indian Union, and the problems that are inherent under such a distribution.

Degree of centralization in the Indian Union
The power of the states and the Centre are defined by the constitution and the legislative powers are divided into three lists

• The union list - consists of 100 items on which the Union Government can legislate. 
• The concurrent list - consists of 47 items on which the state governments can legislate but the Union Government vests the power to override the state laws.
• The state list - consists of 61 items, on which the state governments can legislate. 

While the distribution of power is heavily tilted towards the Union Government in the ratio of 147 to 61, the articles 352 to 360 of the constitution contain provisions that tilt the balance of power all the more towards the Union Government. According to the Article 356 of the constitution of India, states must exercise their executive power in compliance with the laws made by the Union Government. Article 357 calls upon every state not to impede on the executive power of the Union within the states.

What problem can over-centralisation create for India?
With political power centralised at Delhi, the linguistic groups that carry clout at Delhi always have a larger say in policy matters. As was evident in the recent decision by the Union Government to reduce the import duty on raw-silk, the silk weavers from the state of Uttar Pradesh were benefited, while the silk farmers from the state of Karnataka were negatively impacted. The Union Government of India had to give in to the lobby from Uttar Pradesh, at the expense of well-being of the farmers from Karnataka.
Such policy-making inevitably brews resentment among the negatively impacted groups of people. Resentment among the citizens is a problem that no state can ignore.

With states reduced in size, the capability of the states to resist (or even reverse) the policies that impact their people will also reduce. By moving to split the larger states into smaller ones, and by continuing to run the administration in a centralized fashion, India does not seem to acknowledge the importance of balance of power. Larger linguistic states provide the much needed counter-weight to create the balance of power, and for the democracy to thrive. If you take out the counter-weight, all you have is imbalance, which can only lead to instability.