THE GIST of Editorial for UPSC Exams : 06 March 2020 (The current state of cooperative federalism in India (Mint))

The current state of cooperative federalism in India (Mint)

Mains Paper 2:Polity
Prelims level: Cooperative federalism
Mains level: Role of Cooperative federalism in India

Context:

• The ongoing budget season is the right time to carry out a realistic assessment. After the Union budget for 2020-21 was presented on 1 February, at least four state governments have released their budgets: Odisha, Tamil Nadu, Rajasthan and Uttar Pradesh.

Background:

• Despite being a functional democracy for more than seven decades, India cannot ignore the role of the parties in power while reviewing the dynamics between various pillars of governance.
• A .....................................................

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State budgets cover these issues:

• The Odisha government follows a practice of presenting its budget in two parts, with the first part dedicated to agriculture and allied activities.
• To promote tourism, the Rajasthan government has proposed implementing a policy on the Ease of Travelling.
• The Uttar Pradesh government is in the process of establishing 21 new medical colleges and a medical university.
• The Tamil Nadu government is likely to launch a new industrial policy shortly that will provide incentives compatible with the goods and services tax regime to attract investors.

Reduced the transfer:

• Under the Union budget, the total estimated transfers to states from the Centre for the ongoing fiscal year have been reduced by around Rs.1.41 trillion.
• This is because of a decrease in the estimated transfers to states on account of their share in central taxes and centrally-sponsored schemes.
• The Congress-run Rajasthan government, in its budget, has blamed the Centre for economic mismanagement and the consequent reduction of the state’s share in central taxes by more than Rs.10,000 crore.
• It argues that while the Centre has several .....................................

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Way ahead:

• Unlike other states, this substantial reduction did not find mention in its budget speech, and was quietly slipped into one of the budget documents.
• Despite the transfers to states during the current fiscal year being revised to Rs.11.87 trillion under the Union budget, such transfers are estimated to increase by more than Rs.2 trillion to Rs.13.90 trillion in the next fiscal year, which is perhaps unrealistic.
• Unfortunately, states have accordingly projected a substantial increase in funds to be received from the Centre and have planned their expenditure on that basis. These may need to be trimmed in the future.

Conclusion:

• Politics has trumped economics and the greater good thus far in India’s story of cooperative federalism. This needs to be fixed before it is too late.
• Greater transparency and stakeholder participation in the budget-making process of the Centre as well as states could go a long way in this regard, as also institutionalized mechanisms for better Centre-state coordination.
• Above all, political parties need to rise above their electoral mindsets and act in favour of the country’s greater good for India to realize the true potential of cooperative federalism.

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  General Studies Pre. Cum Mains Study Materials

Prelims Questions:

Q.1) With reference to the National Security Guard (NSG), consider the following statements:
1. The Kolkata Regional Hub campus of NSG is the fourth to have permanent infrastructure after Mumbai, Chennai and Hyderabad.
2. It was raised in 1993, following the assassination of Rajiv Gandhi.

Which of the statements given above is/are correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2

Answer...........

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Mains Questions:
Q.1) Politics must not trump economics if we are to make real progress on Centre-state cooperation. Critically examine the statement.