The Gujarat Chief Minister, Narendra Modi, has demanded that the Congress-led UPA Government to exempt his state for a year from contributing its share of central tax revenue to the federal kitty and conversely expressing his willingness to forego the state’s share of devoution of resources from the Centre for that period, he has virtually dared the Union Government to lay off his state. If Gujarat were not to contribute to the central pool of tax is, he argues, it would have enough self-generated resources to fund the infrastructure revolution it has unleashed over the past five years.
Gujarat is among the top seven states which together fuel India’s vibrant economy through their handsome contribution to the national revenue via federal taxes. Mr. Modi is upset that despite its consistently impressive performance on the economic front, Gujarat is being starved of its well-deserved share of national revenue because of the Centre’s inequitable formula of devolution. Modi’s demand has been met with a predictable cacophony of protests from various quarters. The Congress, on the defensive over rising inflation, pressed the panic button by booking him under sedition charges. Other critics have pointed out that Mr. Modi’s latest take on Central devolution is old hat and best ignored as a typical Modi publicity stunt.
Other better performing states such as Maharashtra, Tamil Nadu, and Andhra Pradesh have often made cogent cases in the past against the Centre’s convoluted formula, under which states are allocated Central revenue on the basis of their population and not their economic performance. This results in highly populous but badly-governed states like UP, Bihar and Rajasthan walking away with a greater share of national revenue, leaving well-governed but less populous states with crumbs. So in effect, the better governed states have the onerous task of meeting their own development needs besides carrying the burden of ill-governed states.
Gujarat has registered consistently balanced growth in all key sectors, besides providing good roads and reliable water and electricity supply to both urban and rural areas. By contrast, UP and Bihar, for all the money that Centre has sunk in from the national exchequer since Independence, are disasters because of their utter disregard for good Governance and the institutionalization of corruption and crime. The Congress’s knee-jerk reaction to Mr. Modi shows that it has still not grasped the ground realities. From being a ruling monopoly for almost 40 years of independent India, the Congress has now been reduced to its own pale shadow in coalition politics, hopelessly dependent for its survival on smaller political parties which neither fear nor respect it. This is because the Congress consistently undermined the states and its regional satraps to maintain its stranglehold. Disaffection in the state party ranks and growing disenchantment among otherwise loyal voter eventually eroded the Congress national base and gave rise to powerful regional parties. Today old loyalties based on caste and community calculations which sustained big parties like the Congress are fast giving way to what really matters to an average voter-good governance. Mr. Modi-has fired a warning shot.