Daily Archives: August 29, 2022

It was the Planning Commission earlier and now the NITI Aayog that presides over Indias economic federalism. While political federalism has been a resounding success, the Centre-state fiscal relations have always been strained, posing a great challenge to the Constitutional guarantees of democracy based on federalism. The recent meeting of the Governing Council of NITI Aayog witnessed boycott and mounting criticism from non-BJP (Bharatiya Janata Party) states. On the issue of extending Goods and Services Tax compensation mechanism demand, even the BJP-ruled states joined the opposition chorus.

There are a number of reasons why states are unhappy with the Centre on revenue sharing. In its efforts to provide economic relief and meet GST shortfall, in 2020, the Centre announced two options of borrowing to be repaid via an extension of the compensation cess beyond the June 2022 deadline. While some BJP-ruled states agreed to consider the proposals, non-BJP states were unwilling to bite the borrow from market at a higher interest bullet. Interestingly, while states do not have to share political power with the Centre, every rupee they earn goes to the central kitty, which is rerouted by the Finance Commission to the states based on certain parameters. This fiscal relationship has never been a happy one.

Also Read:Dont just keep a watch on Chinas spy ship at Sri Lankan port. Emulate the enemy

In the era of transition from a centralised planned economy to a market economy, it has become necessary to identify the challenges before the policy makers both at the Centre and in the states under a federal political structure. Economic federalism and coordinated reform process at all levels of the government are the prime tools to accelerate growth, reduce poverty, remove disparity, and guarantee human development. Such an effort will help offset the disabilities and the disadvantages of new and smaller states.

Smaller states have some unique features large tribal and marginalised population, mountainous terrain that ensure a level-playing field in terms of sharing resources, compensation for providing raw material, and access to market. Failure to comprehend these concerns is germane to issues relating not only to economic woes and political bickering but also to serious national security threats. The economic disparity and faulty benefit-sharing mechanism result in social non-equilibrium, thus posing challenges such as political destabilisation and secessionist and insurgency menace. The solutions to these challenges are, besides political, economic in nature and have to emanate from the political framework through calibrated changes.

Also Read:In Bihar, both BJP and Nitish Kumar camp happy. But Sushashan Babu has invited trouble

The Seventh Schedule of the Constitution specifies the powers and functions of the Centre and the states in the Union and State lists, and those falling under the joint jurisdiction are mentioned in the Concurrent list. There is a clear division of fiscal powers between the Centre and the state governments. The fiscal arrangements have evolved in a quasi-federal system to meet the requirements of centralised planning in a mixed economy structure. Sources of revenue for both the Centre and states were clearly demarcated with regard to the financial relationship and the responsibilities between them.

Two main challenges in the fiscal transfer system pertain to tackling the vertical and horizontal imbalances. So far, the share of the states emanating from the combined revenues has remained more or less stable, thus taking care of the vertical balance. As far as horizontal balance is concerned, some Finance Commissions have addressed the issue of equalisation. With the introduction of the GST, revenue collection and sharing have been further streamlined. Yet, there are concerns relating to the revenue sharing criteria used by the Finance Commission where the relative weights assigned to different criteria remain, by and large, ad hoc. There is an urgent need to develop a more objective framework for determining suitable weights for the alternative revenue sharing criteria, preferably in consultation with the states.

State governments, especially those in South India, feel that criteria like population, forest coverage, poverty and unemployment index are not ideal barometers to decide financial allocation. Tamil Nadu has successfully implemented family planning programmes. But the decline in population will now result in lesser allocation compared to, say, a state like Bihar or West Bengal. Prime Minister Narendra Modi has intervened and suggested that the efforts of southern states in successfully implementing social welfare schemes should be given due weightage.

But the larger question is finding a viable solution by making fundamental changes in the resource allocation process. The constitution of the Finance Commission also can be reworked to include more members and consultative bodies. Alternatively, the mandate of the GST Council could be expanded to include discussions on resource allocation and make suggestions, though such recommendations are not binding.

Also Read:India has moved away from One China policy. Now it must develop independent ties with Taiwan

Given the political advantages of a strong and stable central government, it is possible that the Union government is, at times, tempted to bypass some of the state governments by centralising expenditure on items earmarked in the Concurrent List. While the states can do little to correct this anomaly, the onus of course correction rests on the central government. Successive governments in New Delhi have felt that decentralisation will directly limit their control over the economy. Experiences of different economies, be it controlled, laissez-faire or mixed, suggest that the contrary is true. In the case of China and Indonesia, a politically strong Centre was good for everything except the economy in the last two decades. China had to decentralise its economy and recalibrate its fiscal relationship with states. When it comes to handling economic issues vis--vis states, New Delhi too can take a leaf out of decentralised economic architecture under a politically strong Union government.

It is time to reset Centre-state relations lest we should prove B.R. Ambedkar right when he said, In politics, we will have equality, and in social and economic life, we will have inequality.

The author is the former editor of Organiser. He tweets @seshadrichari. Views are personal.

(Edited by Humra Laeeq)

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Its time to reset Centre-state relations. Onus rests on the central government - ThePrint

Tacking the word denier onto an issue as in climate denier or election denier is one of the dumbest rhetorical devices in modern politics. The purpose, of course, is to insinuate that the underlying position is insidious, beyond the pale, on par with Holocaust denial. One might debate a conservative on the issues, but a denier; well, thats someone who cant be reasoned with.

For starters, the logical and grammatical problem with the denier formulation is that nobody actually denies the existence of elections or climate. A climate denier is often a person who believes in economic tradeoffs and rejects eco-scaremongering. And an election denier is typically someone who believes that a political contest has been stolen, or corrupted, or unfairly implemented. This is the position of Donald Trump and Joe Biden, Doug Mastriano and Stacey Abrams, and Dinesh DSouza and Jonathan Chait.

Certainly, not all election denialism is identical. There are those who maintain Donald Trump was a Russian asset since the 1980s and others who believe that the Electoral College is an antiquated institution. Both positions are wrong, but one is a critique of federalism while the other is bonkers. But the left likes to lump together nuts who believe child-porn rings are operating out of DC pizzerias and the millions who have concerns about the prevalence of low-integrity, mail-in ballot systems or executive actions that allow late, undated ballots to be counted after Election Day.

If these latter concerns make one a denier, then surely someone who believes that asking a citizen to show an ID before voting is tantamount to Jim Crow is also one. Because, if its not dark money stealing democracy, its confusing ballots, or voter suppression, or gerrymandering, or the Ruskies or the Supreme Court, or the Constitution. It has long been the case that Democrats do not accept the legitimacy of elections.

This weekend, Dem operative Jon Karl interviewed the recently deposed Liz Cheney, who promised to work against election deniers, people who do not respect the outcome of the election. Among the people Cheney will reject are Ron DeSantis and Ted Cruzneither of whom, as far as I can tell, deny that Biden is the legitimate president of the United States. Apparently, that isnt enough anymore.

Who won the 2020 election? CNNs Jim Acosta asked Donald Trumps acting Department of Homeland Security Secretary Chad Wolf this weekend.

Obviously Joe Biden is president, Wolf responded.

No, no, Acosta said. Do you believe he won that election fair and square?

Joe Biden is president, Wolf again said before bringing up the possibility of fraud.

Do Democrats believe Trump won 2016 squarely and fairly? Do they believe that Georgia or Texas run fair and square elections? Doubtful. Yet, it is only conservatives who are asked to treat every election law passed by Democrats as a sacrosanct pillar of democracy or risk being smeared as a traitor.

CNNs preening Jake Tapper also loves to throw around the phrase election denier, which he defines as anyone who lies about American democracy in the 2020 election. Why doesnt this go for the 2016 election or 2024 election or 2000? Well, because Tapper spent years spreading the Russia collusion fraud, a concerted effort to delegitimize American democracy. If we accept Tappers parameters for any other election year, not only does he meet the definition of a denialist, but virtually every Democrat qualifies.

It goes for Hillary Clinton, who repeatedly declared Trump an illegitimate president, and claimed that 2016 was not on the level and stolen, is by the definition Democrats embrace an election denier. As are Joe Biden, Kamala Harris, John Kerry, Al Gore, the late John Lewis, the late Harry Reid, Paul Krugman, Jerrold Nadler, virtually the entire Washington Post editorial page, Time magazine, every other major media outlet, the White House Press secretary Karine Jean-Pierre, former DNC chairs, and scores of others.

When asked this weekend why 74 percent of Americans believe the country is headed in the wrong direction, NBCs Washington Correspondent Yamiche Alcindor responded that people are very worried about former President Trump coming back into power, or former President Trump or another Republican stealing the election in 2022 or 2024.

Not only is this astoundingly silly, but its also an example of the kind of preemptive election denialism that was employed by Nancy Pelosi and Adam Schiff, and many others, during the run-up to 2020. Let the election decide, was a dangerous idea according to Pelosi during Trumps first impeachment because the legitimacy of 2020 had already been undermined. The Presidents misconduct cannot be decided at the ballot box, for we cannot be assured that the vote will be fairly won, Schiff said.

When the Washington Post warns us that Election deniers march toward power in key 2024 battlegrounds it isnt talking about Stacey Abrams or Josh Shapiro, it is laying the groundwork for challenging the legitimacy of the next election.

And voters should be able to question the legitimacy of elections if they believe laws have been unjust or cheating has occurred. Even if you contend, as I do, that most election fraud claims are overstated or partisan wish-casting, it is a function of democracy to bring your grievances to the political arena. But, it seems, the only ones tagged as deniersand all the big outlets liberally use the term noware Republicans. Which is just another reason half the country distrusts journalists a vacuum in trust that doesnt only propel skepticism, but gives space for more conspiracies to flourish.

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'Election Denier' Is The Dumbest Rhetorical Device In Modern Politics - The Federalist

Nepal is ruled by a coalition of parties that espouse social-democratism, Maoism, Marxism-Leninism. But all three adhere to just one ideology: extractivism.

Nepals history of the past 60 years has been a struggle between and , the need to balance development and destruction. The songs of the early Panchayat period glorified the destruction of mountains and forests for the country to forge ahead. Nature had to be tamed and sacrificed on the path to development.

Growth would allow South Asias oldest nation state to catch up with the outside world. Along the way, we forgot that growth can also mean malignancy. The pursuit of developmentmutilated mountains and denuded forests, the greed that drives growth has corrupted society, amplifying social inequities.

Whether monarchy or republic, Nepal has been a kleptocracy in which the politics of patronage sets the rules. King Mahendras trans-migration policy to move entire villages from the mountains to the Tarai led to the loss of vast jungles in the plains. King Birendras referendum to safeguard the absolute monarchy bought time, but came at the cost of further destruction of forests.

Read more: The business of politics undermines Nepals democracy, Ramesh Kumar

Federalism was supposed to devolve power to local governments and make them more accountable, but it just decentralised patronage and corruption. In the absence of other resources and a manufacturing base, extraction of nature is the easiest path to enrichment for politicians and businessmen.

After 2017, many contractors became mayors who allocated budgets to rent their excavators to maul mountains. The destruction from quarrying has ravaged the fragile Chure range. Rivers across Nepal have been ransacked by sand and boulder contractors who have paid rural municipalities a pittance in royalty.

Those who stand up against the devastation are threatened, or even killed like Om Prakash Mahato Dilip, who was crushed by a tipper truck nearly three years ago in Dhanusa district for daring to protest against illegal sand-mining. The perpetrators were let off.

Local, provincial and the central government are infiltrated by patronage. The prime minister and leaders of the coalition are forging ahead with building a new international airport in Nijgad, even though numerous studies have shown that it spells economic and ecological disaster to one of the last expanses of native forests in the eastern Tarai.

Read more: The business of politics in Nepal, Shekhar Kharel

There is also an uncontrolled hydropower building spree on rivers across Nepal, and the real destruction will start with proposed new reservoir projects. Elsewhere, quarries supplying limestone to cement factories have disfigured the landscape.

In state and community forests, even national parks, there is rampant encroachment by powerful businesses with political connections to build resorts, ashrams and cable cars. The deals are opaque, and no heed is paid to the environment.

The kindest explanation for this groundswell of destructive development is ignorance or incompetence of those in power. But the more likely reason is the nexus between politics and business that is now so deep that it is impossible to tell apart a contractor and a politician.

This is a well-oiled machinery that is lubricated at election time by pre-paid campaign financing. Natural resources are converted into party war chests that make the nouveau riche richer, and the perpetually poor poorer.

Read also: Crushers of justice, Editorial

B P Koirala was a Gandhian social democrat who wrote 70 years ago that large production centres and industries breed two types of crimes: machines first displace humans, and then business monopolies engender tyrants. B P was far ahead of his time in understanding that nature does not just have intrinsic value, but is inextricably linked to human wellbeing and survival. And that genuine democracy would be inclusive, and deliver social and environmental justice.

Todays Nepali Congress is a far cry from B P Thought. Their Marxist-Leninist and Maoist coalition partners do not even have that ideological underpinning about the need to nurture nature. Forests, mountains, rivers, water, are all there to be harnessed ostensibly for development and economic growth, but those are hollow euphemisms for personal greed and partisan gain.

The ongoing loot by Nepals extractivist politicians is now peaking. Soon, there will be few forests left to log, rivers that have not been mined to death, or mountains not ruined by redundant roads.

The interests of communities completely dependent on natural resources need to be protected, citizens most impacted by the degradation of nature need to rise up against state-sponsored destruction. When essential infrastructure is necessary, it needs to be constructed with minimal impact on the ecology.

Gandhi said earth provides enough to satisfy every mans needs, but not every mans greed. We have to stop what is left before it is too late.

Read also: Purchasing power, Ramesh Kumar

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Need and greed - Nepali times

BISMARCK, N.D. U.S. Senator Kevin Cramer (R-ND), member of the Senate Banking Committee, joined Fox Business Kudlow to compare and contrast the philosophies surrounding the Trump economy, which focused on tax reform and deregulation, and the Biden economy, which focuses on socialist policies and unchecked government spending. Excerpts and full video are below.

On Democrats Socialist Agenda:

[Socialism] hasnt worked in any country where its been tried. It has failed everywhere, so why we want to try it is beyond me.

[The Biden Administration believes] there are too many people making too much money and that all we need to do is take more of their money away from them, redistribute to people that have less, and somehow thats good for the economy all the way around. Of course, thats failed everywhere its been tried, but theyre trying it again.

On President Trumps Economy and Deregulation Efforts:

In my mind, the thing Donald Trump had going for him in his 2016 election was he clearly understood that the federal government was the problem and he articulated thatthe size of the deep state, the size of the bureaucracy. What he underestimated was just how strong that bureaucracy really is. So while he was reducing regulations through the rulemaking process, legislating, as well as guidance, people from the bureaucracy were working against him at every turn. Even at that he was able to accomplish a lot. What we saw was that private sector investment follows lower taxes, fewer regulations, and frankly, even a better environment that manifests itself just in attitude. And now you have exactly the opposite. This changes the investment mind and it changes the relationship with states. I wrote a 22-page essay for the Harvard [Journal of Law and Public Policy] that just came out in June. [It] talks about the heavy hand of the bureaucracy and cooperative federalism. Donald Trump understood the value of states and state regulation and state oversight. That was a game changer in terms of unleashing ingenuity, innovation, and our economy.

On Student Loan Forgiveness:

This crazy idea of forgiving student loan debts at $10,000. Larry, if they took all of that money and just forced every student to take an Economics 101 class or supply-side economics class or study Milton Friedman or Art Laffer, we would do so much more for the economy than what [the Biden Administration is] trying to do. The problem is their constituency is that very government that theyre growing. They love that government, they love the power of it, they love the dependency of it, they love the organization of it, and thats a fundamental difference between us and them.

I think everybody ought to buy Dick Armeys memoirs and read that as well. Youd find out what works best. But we do have an economic illiteracy problem right in our own government. I mean, Jennifer Granholm the Secretary of Energy, every time she talks I swear to God theres a professor somewhere in an economics department going What did I do wrong? Its unbelievable.

On Governments Role in the Marketplace:

As Ive said many times, if you give somebody a $7,500 Tesla tax credit, the price of a Tesla goes up $7,500. Its basic [economics] 101. In fact, Ford just announced that theyre going to do exactly that, and why wouldnt they? Its the most natural incentive in the marketplace. This is why the government should stay out of the marketplace. What happens with all of these ideas is they compound. You end up having a tax credit for one thing, so what theyre competing against has to have a tax credit. You just pile tax credits on top of tax credits. This is why corporate America gets bigger and richer and the government gets bigger and poorer and the middle income wage earner is scratching [their] head going, My paycheck is not going as far as it used to.

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Sen. Cramer, Larry Kudlow Compare and Contrast the Trump Economy and the Biden Economy - Kevin Cramer

One may call it much ado about a candy that half the country hasnt even heard about, but the acrimony about revdi culture has only helped rev up the debate on the existential crisis looming over the cooperative federalism envisaged by our founding fathers. The Supreme Court should, in all its earnestness, turn its attention to the plaque of opaqueness that has accumulated over Centre-state relations instead of so-called freebies. Its time the country and its opinion makers understood the Centres stranglehold over states on almost all fronts, which is leading to a breakdown of trust between the two partners.

The framers of our Constitution were aware of the apprehensions raised when India embraced a federal structure with strong unitary features. But they would have never dreamt of a situation where trumpeting unilateralism is hailed as some kind of a good governance model.

Its interesting to recall how Jawaharlal Nehru defended the unitary slant of our polity. It would be injurious to the interests of the country to provide for a weak central authority which would be incapable of ensuring peace, of coordinating vital matters of common concern and of speaking effectively for the whole country in the international sphere. But B R Ambedkar assured the Constituent Assembly: The Constitution is a federal ConstitutionThe Union is not a league of statesnor are the states the agencies of the Union, deriving powers from it. Both the Union and the states are created by the Constitution, both derive their respective authority from the Constitution.

I will restrict this article to fiscal federalism since revdi culture is the focal point of the debate although the process of centralisation is now all-pervasive. Over the years, the very nature of fiscal transfer has become thoroughly centralised. For a long time, the Planning Commission and Finance Commission were the cardinal pillars of Centre-state relations on the fiscal front. But the ushering in of the Goods and Services Tax (GST), the scrapping of the Planning Commission and non-adherence to Finance Commission recommendations have led to an asymmetrical framework.

The GST that was once hailed as a milestone for cooperative federalism is now touted as a manifestation of the growing dependence of the states on the Centre. When the Planning Commission was disbanded to make way for the Niti Aayog, all the powers of allocation of resources to states were passed on to the Ministry of Finance. Consequently, even the pretence of an objective allocation of resources to states has disappeared, and all decisions were rendered ad-hoc. Under the Planning Commission, the Gadgil formula was used to allocate funds to states. However, after 2015, transfers to states are determined based not on any formula but purely political exigencies.

Consequently, the federal foundations of the Indian polity were also enormously weakened. The National Development Council (NDC), where the prime minister used to regularly meet the chief ministers, has long been abolished. Instead, CMs were made members of the governing council of the Niti Aayog. This was neither a substitute for the discussions between the planning bodies of state governments and the Planning Commission, nor the discussions in the NDC. Even the occasional visits of Niti Aayog members to states have been reduced to a formality: No serious policy discussion, leave alone decision-making, takes place during these visits.

The concerns of CMs over the dwindling state revenues raised in the recently held Niti Aayog meeting presided over by the PM needs to be taken in its right perspective. Its the states that deal with the broad range of aspirations of the people on the ground. As per the 15th Finance Commission, states bear more than 62 per cent of expenditure responsibilities but are given only 37 per cent of revenue raising power, while the Union government owns 63 per cent of revenue raising power to spend on 38 per cent of its expenditure responsibilities.

The share of cesses and surcharges, as percentage of gross tax revenue, has more than doubled: From 6.26 per cent in 2010-11 to almost 20 per cent in 2021-22. Moreover, the Comptroller and Auditor General ( CAG) has pulled up the Centre as it failed to transfer a substantial portion of the money collected from cesses and surcharges to the designated funds which ensures that they are used for the intended purpose. The very idea of a cess is being turned on its head.

Interestingly, whenever confronted with this stark reality Union Finance Minister Nirmala Sitharaman goes on the offensive saying that the Centre distributes these to states via central schemes. She doesnt realise the fact that states are not merely implementing agencies of central schemes. The Constitution empowers the states to conceive schemes to provide sustenance and relief to people. And every study proves that state government schemes are more innovative and appropriate to the targeted groups.

Non-adherence to the recommendations of its own finance commissions is the tipping point in the chaotic Centre-state relations. Despite the last two successive Finance Commissions pegging the share of states in gross taxes to over 40 per cent, the actual transfer never reached this prescribed level. The peak was 36.6 per cent in FY19 and it fell to a meagre 29 per cent subsequently. In effect, the actual share of states has only shrunk.

The Centre invited rebuke when it turned a recent all-party meeting convened to discuss the Sri Lankan issue into a podium to discipline states on the fiscal front. Ironically, the Centres debt burden has shot up from Rs 53 lakh crore to Rs 136 lakh crore since 2015 but it considers states imprudent in fiscal management. The Centres record is even worse on the fiscal deficit front and off-budget borrowing, but the propensity to find faults with states has become a permanent feature.

India is at a crossroads today and the need of the hour is cohesion and not confusion. We need unity and not uniformity, assimilation not extinction. The Narendra Modi government has to find a new narrative instead of usurping the powers of the states and crying foul at the same time.

John Brittas is a Rajya Sabha Member from CPI(M)

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Debate on revdi culture highlights bitterness between Centre and states - The Indian Express