Rethinking Indian federalism

Author: Amitabh Mattoo, University of Melbourne

Indian federalism has always been contested by those who view with understandable scepticism the overarching constitutional powers that are given to the federal parliament and federal government in New Delhi. One political scientist described India’s constitution as being ‘federal in form but unitary in spirit’, and another critic described India as being only ‘quasi-federal’.

This photo from 2009 shows protestors demanding the formation of a new state called Telangana in the northern part of Andhra Pradesh state. The protestors lie on the road in Hyderabad. Four years later and Telangana has become the 29th state of India. (Photo: AAP)

The time has come for India and Indians to reflect and review the federal idea, and to see how a better balance can be struck in centre–state relations.

The messy politics of Indian federalism was witnessed in October as the Indian cabinet hurriedly decided to approve the creation of a new state of Telangana, by dividing the state of Andhra Pradesh. Although the demand for a separate state had been longstanding, there was political uproar from opponents of the partition.

After sitting on the demand for years, the cabinet took the decision for what seemed to be purely tactical electoral considerations dictated by the political interests of the ruling Indian National Congress party. The Telangana case reflects the ad hoc way that states have been created in India over the past four decades, and is symptomatic of the lack of a federal balance.

A strong case can be made for more states in India — where a country of over one billion people has only 29 states and a few federally governed territories — and for a further decentralisation of political power. That smaller states are easier to govern well, and that their residents are likely to be more satisfied with public services, is intuitively obvious, although there are notable exceptions.

In India, however, almost every creation of a new state has been mired in controversy. In part, this is a function of three contradictions in Indian federalism vis-a-vis the redrawing of internal boundaries.

First, India is the most diverse country among all the world’s federations, yet states have virtually no role to play in the creation of new states or, indeed, even in their own division, were that to happen. The Constitution of India has given supreme powers to the Indian parliament to create new states and change the borders of states by enlarging or decreasing their area. The view of the affected state is considered, but there is no obligation to act on it.

Second, there has always been tension over the criteria that should determine the creation of a new state. In the early years after independence, and even in the initial discussions within the States Reorganisation Committee (whose recommendations helped to create the first 16 states in 1956), there was a view that states should be organised on the principle of administrative efficiency and after consideration of what would be best for their economic development. These principles were, however, sidestepped and a linguistic criterion that gave preference to a common language as being the basis for statehood was adopted.

But instead of settling issues, the reorganisation on the basis of language strengthened linguistic chauvinism. Be that as it may, this linguistic criterion continued until the creation of Telangana as the 29th state. The irony is that when the Telengana region was merged with the Telugu-speaking areas to create Andhra Pradesh in 1956, the criterion was a common language. But last month the decision to separate it from Andhra was ostensibly taken on grounds of history, a distinct identity and economic needs.

Third, because there is neither closure on the number of states, nor even a linguistic criterion now, there is a perverse incentive for nearly every distinct linguistic, religious and ethnic identity to demand statehood.

What is the way forward?

Clearly, many Indian states would be better governed if more manageable administrative units were carved out of them and fashioned into new states.

But what should the criterion be for the creation of new states?

The time is ripe for a ‘New’ States Reorganisation Commission to identify a set of criteria based on best practices across the world and consults deeply and widely within India to determine the basis upon which new states should be created.

In India the federal principle would work best if there was real devolution of power, not just to the states but also to the villages, as Mohandas Gandhi had envisioned. So far, this has only been achieved in a very small measure. Here, each state would become the facilitator of political decentralisation to the grassroots.

And while each state would ultimately enjoy autonomy within its administrative space to articulate macro policies aligned with the priorities of its residents, and to secure their distinct cultural identity, there would be no economic firewalls between states.

An India that is economically integrated as one great free market and politically decentralised as millions of empowered villages in several facilitating states would be a formidable country, in every sense of the word.

Amitabh Mattoo is Director of the Australia India Institute and Professor of International Relations at the University of Melbourne.