Something unique and rare in Indian political history happened recently. Karnataka Chief Minister Siddaramaiah, Deputy Chief Minister D K Shivakumar, and many senior cabinet ministers went to Delhi and sat in a dharna for a My State My Tax protest. They were joined by ministers and leaders from the other southern states of Kerala and Tamil Nadu and supported in spirit by Telangana. It was an extraordinary development where democratically elected heads of Indias states were forced to go to Delhi to demand their share of tax revenues and taxation rights. No taxation without representation was the slogan for the American independence struggle against the British. Southern states in India are now protesting against Representation without taxation!
With the southern states protests and the Supreme Courts recent ruling, the late BJP finance minister Arun Jaitleys contribution of the phrases cooperative federalism and electoral bonds to Indias political lexicon have been rendered dubious and hollow by the Modi government.
Elected governments across the world rely on direct and indirect taxes for revenues to implement schemes and fulfil their electoral promises. As per the Constitution, state governments in India do not have powers to levy direct income and corporate taxes, unlike in other federal nations. After GST, state governments lost their exclusive powers for indirect taxes, too. They are only left with powers to tax sin goods, fuel, property, electricity, and agriculture, which constitute a small slice of overall tax revenues. To put it simply, post-GST, democratically elected state governments in India are forced to be almost entirely dependent on the Union government for resources.
To make matters worse, the Modi government, true to its governance style, has politicised Indias federalism through duplicitous means of cesses and surcharges to garner greater share of tax revenues for itself and minimise states share.
When a Karnataka resident buys a certain good or service and pays Rs 100 as central taxes on it, the Union government keeps Rs 58 of it and shares Rs 42 with the states. But for the same transaction, if Rs 100 is charged as cess by the Union government, then it gets to keep all of it and not have to share it with the states. This is a quirk and a relic of Indias historical taxation laws. So, a cooperative federalism-minded Union government will try to minimise cess and maximise tax revenues which can be shared with state governments for their governance. Unsurprisingly, the Modi government did the exact opposite in its decade-long tenure.
Cesses and surcharges have nearly doubled as a share of revenues from 12% to 20% of overall tax revenues during Modis tenure. In 2014, overall tax revenues collected by both the Union and state governments was Rs 18 lakh crore, which rose to about Rs 46 lakh crore by 2023. But a whopping 10% of this increase came from cesses and surcharges, depriving state governments of nearly Rs 3 lakh crore. This is a huge amount, and hence state governments are crying foul. This has impacted every state government but because of the extreme high-command culture and imposition of their will on BJP-ruled states, BJP Chief Ministers can only grumble in private rather than join Karnataka, Kerala, Tamil Nadu, Bengal and Telangana in an overt protest. The Modi governments cess mess has stained Indias fabric of federalism.
This deceit by the Modi government is what has angered the high tax-contributing southern states and prompted them to question the transfer of their tax revenues to poorer northern states. The average person in Karnataka or Tamil Nadu pays Rs 20,000 annually in taxes while the average person in Madhya Pradesh or Uttar Pradesh pays just Rs 4,500. But the average person in Bihar, UP or Madhya Pradesh get back Rs 260 for every Rs 100 they pay in taxes, while the average Kannadiga gets back only Rs 40. Over the course of Modis tenure, this gap has only widened, and little progress has been made in bridging either the fiscal or the development gap between the richer and poorer states. Now, the contributing states are questioning the need for such an extreme skew in the distribution of tax revenues.
The very idea of India as a Union of states is now precarious. There is a complete breakdown of trust and trustworthiness between the Union and states. This growing banyan tree of distrust between states was sown by the duplicitous fiscal approach of the Modi government, watered by the imposition of a one nation one policy framework, branched by the extreme politicisation of institutions such as ED, CBI, Income Tax, Election Commission, and tended by governor politics. It is no secret that most states harbour deep disenchantment with the Modi governments anti-federal style of governance. It so happens that the more developed southern states, which are not ruled by the BJP, are able to express their resentment more freely than their Maharashtra, Haryana and Gujarat counterparts.
Finance Minister Nirmala Sitharaman exemplifies this disdain for states, especially those that are governed by non-BJP parties, with her scornful public rebukes and shallow pomposity, evident in the white paper she released in parliament recently. It claimed that Indias economy and infrastructure have grown in the last decade, all due to the untiring efforts and the inordinate skills of Narendra Modi. It was like parents celebrating the growth in age of their child from 5 to 15 after a decade. Even if cricketer Ravindra Jadeja or actor Akshay Kumar had been Prime Minister in this period, GDP would have grown, more toilets and houses constructed, more airports, ports and highways built, and India would have been the Chair of the G-20. The real question is not whether the child has grown in age, which is largely inevitable, but how tall, healthy, and happy is the child for her age. Ask the states!
(Published 17 February 2024, 20:21 IST)
Go here to see the original:
Siddaramaiah vs Modi: The 'cess-y' mess in fiscal federalism - Deccan Herald
- 2024 Lok Sabha Elections: Need to pitch for Federalism and Special Status for Goa - Herald Goa - April 6th, 2024 [April 6th, 2024]
- 1999 constitution and the quest for true federalism - Nigerian Observer - April 6th, 2024 [April 6th, 2024]
- Federalism is not Apartheid The Mail & Guardian - Mail and Guardian - April 6th, 2024 [April 6th, 2024]
- Modi has delivered confrontational federalism: Congress | Siddaramaiah highlights 'injustices to K'taka | Inshorts - Inshorts - April 6th, 2024 [April 6th, 2024]
- Lebanese Pro-Federalism Activist Alfred Riachi: Prior To October 7, The Standard Of Living In Gaza Was Pretty ... - Middle East Media Research... - February 22nd, 2024 [February 22nd, 2024]
- The Potential Impact of 'Disease X' on Federalism in the U.S. - Medriva - February 22nd, 2024 [February 22nd, 2024]
- 'People's Charter' Puts Federalism at The Heart of Myanmar's Democratic Future - The Irrawaddy - February 22nd, 2024 [February 22nd, 2024]
- Ideas Of India: Devendra Fadnavis To Take A Deep Dive Into Role Of Collaborative Federalism In Nation-Building - ABP Live - February 22nd, 2024 [February 22nd, 2024]
- Potential of federalism should be realized: PM Dahal - The Himalayan Times - February 22nd, 2024 [February 22nd, 2024]
- Sensible education policy needed - The Kathmandu Post - October 9th, 2023 [October 9th, 2023]
- Both cooperative federalism and competitive federalism have their ... - Insights IAS - August 18th, 2023 [August 18th, 2023]
- Federalism to poll promises: South India CMs bring up host of local ... - South First - August 18th, 2023 [August 18th, 2023]
- Justice Mitchell (Alabama): "The New Bar Exam Puts DEI Over ... - Reason - May 20th, 2023 [May 20th, 2023]
- Season of instability - The Kathmandu Post - May 20th, 2023 [May 20th, 2023]
- Trump Indictment Tests Congress's Role in State Investigations - Bloomberg Law - May 20th, 2023 [May 20th, 2023]
- Big Business' New Plan Would Create Fifty New Immigration Policies - Federation for American Immigration Reform - May 20th, 2023 [May 20th, 2023]
- Senator decries move to block bill loosening Wisconsin abortion law - Milwaukee Journal Sentinel - May 20th, 2023 [May 20th, 2023]
- "Illegally buying time": Congress leader Abhishek Singhvi chastises ... - ANI News - May 20th, 2023 [May 20th, 2023]
- Baby Ninth Amendments Part IV: All the Rights but Not ALL the Rights - Reason - May 20th, 2023 [May 20th, 2023]
- Amid the Fight for Myanmar, Federalism Rises from the Grass Roots - United States Institute of Peace - May 18th, 2023 [May 18th, 2023]
- Lesson from Karnataka respect states and India's federalism - Deccan Herald - May 18th, 2023 [May 18th, 2023]
- Dr. Paul Nolette named director of Les Aspin Center for Government ... - Marquette Today - May 18th, 2023 [May 18th, 2023]
- Sen. Cramer Welcomes ND Witnesses, Discusses Water ... - Kevin Cramer - May 18th, 2023 [May 18th, 2023]
- Utilities, Transmission, and the Grid: An Interview with Ari Peskoe - Brown Political Review - May 18th, 2023 [May 18th, 2023]
- Six months after elections, provincial governments are still incomplete - The Kathmandu Post - May 18th, 2023 [May 18th, 2023]
- NON-FICTION: WHY FEDERALISM ENDURES IN PAKISTAN ... - DAWN.com - May 6th, 2023 [May 6th, 2023]
- Justice Scalia's Unpublished Dissent in Kelo v. City of New London - Reason - May 6th, 2023 [May 6th, 2023]
- Citizens, civil society hold the ruling party, BJP to account ... - SabrangIndia - May 6th, 2023 [May 6th, 2023]
- ED Proposes Title IX Athletics Rule Requiring Participation Based ... - The Federalist Society - May 6th, 2023 [May 6th, 2023]
- The Mysterious Case of the Imposition of Article 355 in Manipur - The Wire - May 6th, 2023 [May 6th, 2023]
- Non-BJP State Governments Not Exercising Accountability, Allowing ... - Daily Excelsior - May 6th, 2023 [May 6th, 2023]
- Two years of Stalin government in Tamil Nadu: Two steps forward - Times of India - May 6th, 2023 [May 6th, 2023]
- What is the issue of gubernatorial inaction in the legislative process ... - Insights IAS - April 29th, 2023 [April 29th, 2023]
- World Bank Approves $100 Million to Strengthen Nepal's Healthcare ... - ReliefWeb - April 29th, 2023 [April 29th, 2023]
- Canada's federal transfer payment system badly needs a tune-up - The Conversation - April 29th, 2023 [April 29th, 2023]
- 50 years of basic structure doctrine | Only safeguard against majoritarian govt: Sr Advocate Ramachandran - The Indian Express - April 29th, 2023 [April 29th, 2023]
- Federalism - Definition, Examples, Cases, processes - Legal Dictionary - February 20th, 2023 [February 20th, 2023]
- What is federalism? | State Policy Network - February 5th, 2023 [February 5th, 2023]
- UPSC Key- January 19, 2023: Learn about Annual Status of Education Report, Federalism and State Legislatures - The Indian Express - January 19th, 2023 [January 19th, 2023]
- Advantages and Disadvantages of Federalism American Government - January 6th, 2023 [January 6th, 2023]
- fiscal federalism | public finance | Britannica - December 26th, 2022 [December 26th, 2022]
- About ALEC - American Legislative Exchange Council - December 12th, 2022 [December 12th, 2022]
- Canadian federalism - Wikipedia - November 23rd, 2022 [November 23rd, 2022]
- U.P. bags top honours at PMAY-U Awards 2021 - The Hindu - November 23rd, 2022 [November 23rd, 2022]
- Political Line sc views on conversions rajiv convicts and federalism and more - The Hindu - November 21st, 2022 [November 21st, 2022]
- Byron Williams: The court is poised to rewrite federalism - Winston-Salem Journal - October 17th, 2022 [October 17th, 2022]
- Why Hindi may set the tone for 2024 - Deccan Herald - October 17th, 2022 [October 17th, 2022]
- A Myanmar roadmap: Charting the path to federal democracy - International IDEA - October 17th, 2022 [October 17th, 2022]
- Next generation of reforms should focus on reducing cost of doing business - Economic Times - October 17th, 2022 [October 17th, 2022]
- Nigeria And The Intrigues Of Insecurity -By Kene Obiezu - Opinion Nigeria - October 17th, 2022 [October 17th, 2022]
- Trudeau's aggressive federalism may leave Ottawa weaker than before - The Globe and Mail - October 15th, 2022 [October 15th, 2022]
- What is Federalism? | CSF - October 15th, 2022 [October 15th, 2022]
- Kerala Against Hindi Imposition; Terms Recommendations Attack on Federalism and Diversity of Nation - NewsClick - October 15th, 2022 [October 15th, 2022]
- 2023: Well Vote for Candidate Committed to Federalism, Diversity, Says UPU - THISDAY Newspapers - October 15th, 2022 [October 15th, 2022]
- Attorney General Knudsen fights Biden administration rule requiring states to reach net-zero highway emissions - Montana Department of Justice - October 15th, 2022 [October 15th, 2022]
- How Scotland can learn from Quebec's third way on constitution - HeraldScotland - October 15th, 2022 [October 15th, 2022]
- Federalism and Why Presidents Fail - THISDAY Newspapers - September 22nd, 2022 [September 22nd, 2022]
- Vedanta and the missing spirit of federalism - The New Indian Express - September 22nd, 2022 [September 22nd, 2022]
- Federalism Most Suited Idea For India In View Of Its Diversity, Centralising Whole Things Will Lead To... - Live Law - Indian Legal News - September 22nd, 2022 [September 22nd, 2022]
- Urging the Use of One Federal Decision Rule to Speed Up Bipartisan Infrastructure Law Projects - Kevin Cramer - September 22nd, 2022 [September 22nd, 2022]
- Constitution Day 2022: Celebrating the right to govern ourselves - Yellowhammer News - September 22nd, 2022 [September 22nd, 2022]
- From Augusta Constitution Day: What does it mean to you? - Press Herald - September 22nd, 2022 [September 22nd, 2022]
- Explained | The office of the Governor: its origins, powers, and controversies - The Hindu - September 22nd, 2022 [September 22nd, 2022]
- Geography Professional Speaker Series kicks off with alumnus from Ohio EPA on Sept. 23 - Ohio University - September 22nd, 2022 [September 22nd, 2022]
- Vector-borne diseases trouble Nepal every year as there is not a single entomologist - Online Khabar (English) - September 22nd, 2022 [September 22nd, 2022]
- The Gujarat factor in the development project - Hindustan Times - September 22nd, 2022 [September 22nd, 2022]
- The downslide in federal relations - The Indian Express - September 22nd, 2022 [September 22nd, 2022]
- Competition between states to attract investment will boost Indias economy - Moneycontrol - September 22nd, 2022 [September 22nd, 2022]
- For state of the nation, look at states of the nation: Niti Aayogs new chief says it will help states learn - Times of India - September 22nd, 2022 [September 22nd, 2022]
- Letters to the Editor: Queen injected vitality, vigour into lives of many - The Kingston Whig-Standard - September 22nd, 2022 [September 22nd, 2022]
- Climate action that runs on cooperative federalism - The Hindu - September 15th, 2022 [September 15th, 2022]
- The spirit of federalism - The News International - September 15th, 2022 [September 15th, 2022]
- Javier Perez Sandoval Receives the 2022 William Anderson Award - - Political Science Now - September 15th, 2022 [September 15th, 2022]
- A new Constitutional Convention is a very bad idea | Opinion - Knoxville News Sentinel - September 15th, 2022 [September 15th, 2022]
- Rodney Hero Receives the 2022 Barbara Sinclair Lecture Award - - Political Science Now - September 15th, 2022 [September 15th, 2022]
- Department of the Interior, Fish and Wildlife Service: Migratory Bird Hunting; 20222023 Seasons for Certain Migratory Game Birds - Government... - September 15th, 2022 [September 15th, 2022]
- Increasing Threat To Federalism From Centrally Sponsored Schemes- Need To Form A Federal Front - Countercurrents.org - September 3rd, 2022 [September 3rd, 2022]
- Breakenridge: Supporting federalism is the only way Alberta can be a partner in LNG exports - Calgary Herald - September 3rd, 2022 [September 3rd, 2022]
- Two tools for tracking the American Rescue Plans local and national impacts - Brookings Institution - September 3rd, 2022 [September 3rd, 2022]
- Opinion | Will election candidates co-operate with CN over intermodal hub? - Toronto Star - September 3rd, 2022 [September 3rd, 2022]