Union government is not superior to state governments

Garga Chatterjee   The 2017 Union budget presented by Indian Union government’s Finance Minister Arun Jaitley has many aspects. His speech touched upon some of them. I will not discuss all of them as there is nothing transformative or game-changing there. But from the standpoint of federalism, the Union budget speech represented many grave dangers, both in intention and implementation. This has serious implications for the Union-State relation in a scenario where a series of unwarranted intrusions by the Union government into State government affairs have already made the relation very fragile and strained. Let me touch upon a few basic points that were apparent in the Union budget speech itself.   In his speech, Mr. Jaitley mentioned model acts regarding contract farming aspect of Agricultural Produce Market Committee (APMC) as well as Shops and Establishments. He said that the model laws for these two subjects will be circulated among the states for adoption. This is wrong at multiple levels. First of all, changing of acts has nothing to do with Union budget. Secondly, on what subject is this ‘model law’? It is about a state subject. This means, the constitution of India empowers the State governments exclusive power on this subject and this matter does not fall into the purview of the Union government. Why does the Union government think that it has the power and the license to “advice” State governments on how to frame State subject laws? Did all State governments collectively petition to the Union government that they need advice from Delhi on this subject? Why then this clear encroachment of the Union government in exclusively State government matters? Does any State government similarly advice the Union government of how the Union government should frame its laws on Union list subjects?   The Union government is not in charge of the country but only in charge exclusively of those functions that are in the Union list. Matters in the concurrent list comprise subjects that both the state and the Union can legislate upon, and they do so in the spirit of cooperation. Thus, the Union government is not superior to the state governments, and the Union and states do not have a parent-child relationship. Rather, they work on the principle of division of power, more like siblings with different household responsibilities, with mutual non-encroachment being the guarantee of preservation of the federal structure and part of the unchangeable basic structure of the Constitution.   On the APMC issue and various other issues, Union government’s unelected body of technocrats called NitiAyog has been lecturing State governments about how they should manage their affairs. From which article of the constitution of India does the NitiAyog get its powers to interfere, lecture and demand accountability from State governments? From nowhere, since the NitiAyog itself is a body that does not figure anywhere in the constitution. It is not a constitutionally mandated body. Why did the Union government’s Finance Minister waste precious Lok Sabha time and people’s time by deliberating on State list matters? The Union Finance Minister will be presenting two more budgets before 2019. He will do well to stick to matters regarding the Union and matters regarding budget, so that when he presents the Union budget, he does just that.    

Mischief against States

This mischief against States continues in the Union budget.   Those individuals who have taxable income over Rs 50 lakh up to Rs 1 crore will be paying a flat surcharge of 10% on the total tax payable by them. And individuals with income over Rs 1 crore would pay the surcharge at the rate of 15% on the income over and above 1 crore. So, in short those at various levels of income over Rs 50 lakh per year would have to pay a larger amount out of their income. However, this amount has not been put in as an increased rate of tax on their income but as surcharge. It did not increase the tax rate but decided to extract a surcharge from the income tax payer. There is no difference from the standpoint of the payer since they pay out of their pocket but this classification of tax or surcharge matters as far as the Union government is concerned. What is the difference? If it were included as a higher rate of income tax, then this money would have to be shared with States. A surcharge on the other hand is something that the Union government does not have to share with the States. Thus, this extra revenue is something that the Union government has decided to cheat the States out of, by taking the surcharge route. In the proposed GST slabs, the Union government has done the same mischief by taking the cess route in the highest tax slab category. The mischief is predictable and has the stamp of the same set of brains. The States are not fools and they have seen through this fraud called cooperative federalism, which is nothing by centralization with sugar-coated rhetoric about cooperation. That’s good for PR but not good for Centre-State relations.   Early in his speech, Union Finance Minister Arun Jaitley said, “I also thank the State Governments for resolving all relevant issues in the GST Council.” Surely Amit Mitra, the Finance Minister of West Bengal and Thomas Isaac, the Finance Minister of Kerala and many others would say thanks, but no thanks. This is because this claim of all relevant issues having been resolved in GST council is patently untrue. The truth is that the negotiations in the GST council are in a deadlock due to the intransigent attitude of the Centre of dual control on service tax, taxes on coastal seas and various other unresolved issues. Either Mr. Jaitley thinks that these issues are not ‘relevant’ or he just misled the citizens of the Indian Union on the matter.    

Language matters

Finally, in the Union budget speech, Indian Union's Finance Minister declared that learning foreign languages is a skill that gives rise to economic and employment opportunities. He said that Pradhan Mantri Kaushal Kendras (PMKK) ‘would offer advanced training and also courses in foreign languages. This will help those of our youth who seek job opportunities outside the country’. This is an extraordinary statement coming from the Finance Minister of a government that actually pays cash to people who learn Hindi but pays nothing to anyone to learn Bangla or Kannada or Tamil or any other language. Huge internal migration has threatened to destabilize the social and political fabric in various states of the Indian Union. Before going abroad, shouldn’t the Union government solve domestic linguistic problems, that is, provide local language training to internal migrant job-seekers? Does the learning of Kannada not increase the economic and employment opportunities of a migrant to Karnataka? Yes, it does. The Hindi imposing Union government hates this state of affairs. Hence, it has been working overtime since 1947 to do social, cultural and political engineering to impose its Hindi on non Hindi peoples of the Indian Union. This present Union government has accelerated the process. It considers our languages as irritants at best and national security threat at worse. The Union government would do well to remember that the Union belongs not only to Delhi and Hindi, but to all languages and States. Whether he likes it or not, Indian Union is a Union of States, with States formed largely on the basis of language. Let’s get real and respect State rights and the linguistic rights of all ethno-linguistic groups that comprise the Indian Union.