- Created on Wednesday, 09 September 2015 15:32
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Enact law on Pre-Poll promised goodies as mooted by Apex Court
(Nitish Welcoming Modi- Edited Image Courtesy: PIB)
The Indian political rope trick over electoral freebies & spoils has entered a new phase. It has moved from freebies incorporated in electoral manifestos to pre-manifesto Centre-State war over offering capital & consumption investments.
It is perhaps for the first time that the citizens are witnessing a pre-manifesto battle of special investment packages (SIPs) for Bihar. And the battle has been masterminded by Prime Minister Narendra Modi against the ruling alliance in the State led by Chief Minister Nitish Kumar.
The battle for political control over Bihar through SIPs should trigger a national debate over institutionalized mass bribery that threatens to reduce democracy to a farce. This is a grey area in the Constitution and the Statute that short-sighted, power-hungry leaders exploit to the detriment of national interest.
Mr. Modi’s Bihar SIP marks another low in cooperative federalism. It makes a mockery of recommendations of two august bodies. And arbitrary SIP is bound to fuel simmering discontent among the special category states (SCS) as we find later in this column.
The intensity of the Centre-State battle can be gauged by these two headlines: (Modi’s) ‘Special Package for Bihar just a Chimera to lure the Electorate, says Nitish Kumar’. ‘Nitish Trying to Cheat Bihar with Parallel Package: Modi’.
Both Mr. Modi and Nitish are fooling, if not cheating, people in the run-up to State Assembly polls. The elections are likely to be organized in early November as the term of present assembly expires on 29th November 2015.
Consider first how NDA Government is fooling the voters by offering a Rs. 1.25- lakh crore SIP spread over more than 90 projects for development of Bihar. On 18th August, PM said an additional Rs. 40,000 crore was also being invested in the state through various projects under implementation.
How and in what form Modi Government would chip in funds for SP, which is loaded with repackaged old projects as pointed out by Mr. Kumar? Mr. Modi has not yet answered specific questions posed by Mr. Kumar and certain analysts on his open-ended package. Mr. Modi’s top-down approach towards Bihar development is far worse than the one followed by Planning Commission, which he disbanded last year. At least, Planning Commission undertook bilateral consultations before firing a volley of project proposals in the State.
More pertinent here is the U-turn by Modi Government, which till last year denied funds to Bihar/state projects on various grounds. Mr. Modi should have revealed the reason for sudden change of heart towards Bihar. The change can be discerned by comparing SIP with the replies to parliament questions given prior to unveiling of SIP.
Answering a question on railway line projects in Lok Sabha on 24th July 2014, the Minister of State for Railways, Manoj Sharma said: “Railways have a huge throwforward of ongoing projects and limited overall availability of funds. State Government of Bihar has been requested to come forward for participation in Railway projects in the form of cost sharing for their expeditious completion.”
The projects list incorporated in the reply has certain projects that are more than a decade old and have been allocated paltry funds.
This is not an isolated case of tight-fisted approach towards sanction of funds for Bihar’s development. Consider another instance. Replying to question on national highways in Lok Sabha on 31st July 2014, the Minister of State for Road Transport, Krishanpal Gurjar, said: The State Government of Bihar had intimated that they have, on their own spent Rs. 970 Crore on maintenance of National Highway. However, Ministry could not reimburse this amount as the requisite approval of Ministry / financial sanction was not taken by the State Government which is a pre-requisite for National Highway works carried out under the agency system.”
Upset by Mr. Modi’s SIP, Mr. Kumar unveiled a counter but bigger package envisaging investment of Rs 2.7 lakh crore over five years. The package, among other offerings, provides for supply of free power and water to every household with toilet for every home as icing on freebies cake!
Whether and how Bihar would sustain this consumption expenditure/subsidy bill is an issue for which no answers are available at present.
Bihar CM has obviously outsmarted PM in his own game. Both leaders are, however, keeping silent on Bihar’s core problems. These include unsustainable population growth, deep caste divide and resulting social strife and bleeding state-owned public enterprises.
Neither Modi’s SIP nor Kumar’s mention Bihar’s success stories such as cooperative dairy revolution and litchi farming. They must be amplified and emulated in other sectors to improve the State’s investment climate and image.
Both leaders have turned blind eye on excess population that results in lower capital investment per head, in spite of substantial weightage given to population in devolution of resources to States by Finance Commission.
According to a study on Bihar undertaken by Asian Development Research Institute at the behest of Fourteenth Finance Commission (FFC), “the Per Capita Development Expenditure (PCDE) in Bihar was only Rs. 4651 in 2011-12, compared to the all-state average of Rs. 7609 and Rs. 11,857 for Haryana, where it is the highest.”
This shows that population load requires manifold increase in investments, far higher that offered by Mr. Modi or Mr. Kumar. Pumping money in Bihar, will alone not suffice.
The challenges of developing Bihar are multiple as have been aptly discussed by a World Bank study in April 2006. Captioned ‘Bihar: Towards a Development Strategy’, the Study notes: “The challenge of development in Bihar is enormous due to persistent poverty, complex social stratification, unsatisfactory infrastructure and weak governance; problems that are well know, but not well understood.”
It says that Biharis “struggle against an image problem that is deeply damaging to Bihar’s growth prospects. An effort is needed to change this perception, and to search for real solutions and strategies to meet Bihar’s development challenge.”
The Prime Minister obviously showed lack of concern for such issues. He announced SIP like a king throwing money before his subjects from a public rally. Modi’s brash style is poles apart from Statesmanship shown by the then PM Atal Bihari Vajpayee in presenting a SIP for Bihar in Lok Sabha in December 2003.
Unveiling infrastructure-focused SIP, similar to Mr. Modi’s, Mr. Vajpayee had stated: “With the joint efforts of the State and the Central Government, I am hopeful that the initiative taken through the special Plan under the Rashtriya Sam Vikas Yojana will help trigger the development process in the State.”
While Mr. Vajpayee talked in true spirit of ‘Team India’, Mr. Modi pays only lip service to ‘Team India.’ Mr. Modi is indeed making mockery of recommendations on cooperative federalism made by FFC in February 2015 and Commission on Centre-State Relations (CCSR) in April 2010.
The Finance Commission’s recommendations primarily deal with sharing of the Constitution-specified divisible tax resources between the Centre and the States (vertical transfers) and among the States (horizontal transfers). It also makes recommendations relating to a few specified grants.
In addition to this constitutional framework for devolution of resources, the Centre has been transferring funds to the States under formula-based systems laid down by erstwhile Planning Commission, which has been replaced with National Institution for Transforming India (NITI) Aayog.
The transfer of funds from the Centre to the States outside the constitutional framework of Finance Commission fall in three domains: plan assistance, non-plan assistance and ad hoc discretionary special packages.
The plan assistance includes Normal Central Assistance (NCA); Additional Central Assistance (ACA) for specific-purpose schemes and transfers; Special Central Assistance (SCA) for SCS and Special Plan Assistance (SPA).
Mr. Modi has also hurt Bihar’s pride by not disclosing as why he unilaterally opted for one-time SIP instead of accepting the State’s demand for declaration of Bihar as SCS.
NDA Government had initially indicated that it was considering State’s SCS demand, which UPA did not fulfil. Reply to a question on the subject on 17th July 2014, the Minister of State for Planning Rao Inderjit Singh said: “Special Category Status for plan assistance has been granted in the past by the National Development Council (NDC) to some States that are characterized by a number of features necessitating special consideration. These features include: (i) hilly and difficult terrain, (ii) low population density and / or sizeable share of tribal population, (iii) strategic location along borders with neighbouring countries, (iv) economic and infrastructural backwardness and (v) non-viable nature of state finances. Earlier, an Inter-Ministerial Group (IMG) came to a finding that the case of Special Category Status for Bihar is not made out based on the existing NDC criteria. Another request has been received from the Government of Bihar recently for grant of Special Category Status to Bihar. The request of Bihar for Special Category Status is under consideration.”
Modi Government has arbitrarily diluted the concept of SCS by stopping allocation of SPA to SCS in the 2015-16 budget. SPA and certain other grants collectively referred to as block grants have been discontinued with effect from 1 April 2015.
The Centre has done this under the garb of implementing FFC’s recommendations.
As put by NITI Aayog in its maiden brief, “An important recommendation of FFC is the devolution of a significantly higher share of 42% of the divisible pool to States compared with the 32% share recommended by the Thirteenth Finance commission. Accordingly, the total devolution to the States in 2015-16 will be Rs 5.26 lakh crores, which is Rs. 1.78 lakh crores more than in 2014-15.”
It says: “Central Assistance to State Plans 2015-16 stands reduced to Rs 2,04,784 cr as compared with Rs 3,38,408 cr budgeted in 2014-15 i.e Rs. 1.33 lakh crore less offset by higher devolution from the divisible pool to States.”
It affirms: “The Block grant component has been reduced from Rs.78,126 crore in 2014-15 (BE) to Rs.27,233 crore in 2015-16 (BE). The allocation for Block grants given by the erstwhile Planning Commission to States/ UTs in terms of Normal/ Additional Central Assistance/ Special Plan Assistance, etc. has been discontinued in 2015-16.”
FFC did not recommend discontinuation of NCA, ACA, SCA and SPA. Modi Government has taken the Nation for a ride on this issue which is of special importance to backward States and backward regions within other States.
FFC stated: “We, however, believe that the existing arrangements for transfers between the Union and the States need to be reviewed with a view to minimising discretion, improving the design of transfers, avoiding duplication and promoting cooperative federalism, insofar as such transfers are required to be made outside of the recommendations of the Finance Commission.”
It added: “we recommend for consideration the evolution of a new institutional arrangement, consistent with the overarching objective of strengthening cooperative federalism, for: (i) identifying the sectors in the States that should be eligible for grants from the Union, (ii) indicating criteria for inter-state distribution, (iii) helping design schemes with appropriate flexibility being given to the States regarding implementation and (iv) identifying and providing area-specific grants.”
Instead of misleading the Nation by repeatedly referring to 10% increase in divisible share of tax revenue to 42%, Modi Government should disclose whether it has failed to fulfil TFC’s norm for the Centre to transfer 49% of its gross tax and non-tax revenue receipts per annum to the States.
PM must realize that the Centre-State relations are deteriorating under his leadership despite all noise about Team India/Cooperative Federalism.
It is here pertinent to point out that Chief Ministers of the North Eastern Region have already communicated to the Centre their joint resolution demanding restoration of NCA, SCA and SPA. The Chief Minister of Himachal Pradesh has written a separate letter on this issue to the Centre.
Tripura Chief Minister Manik Sarkar, in a letter to Mr. Modi says: “After analysing the 14th FC’s recommendations and the union Budget for 2015-16, it appears to me that virtually the status of special category states of NER is going to be discontinued. This will be nothing but a big blow to the interest of the NE states who have been suffering from the backwardness and utter under-development due to apathetic and neglecting attitude of the earlier Union Governments causing lot of social and political problems in this region. I am being forced to say that this dangerous and disastrous move cannot be accepted at this stage.”
Coming to the issue of institutionalized bribing of the electorate by political parties especially ruling alliances, the Constitution is silent on this issue. So is thus the Statute.
The Supreme Court has shed light on this issue in its verdict on freebies such as colour televisions, gold, laptops and green homes offered by two leading rival parties in their manifestos and honoured after coming to power.
In its judgement delivered on the subject in July 2013, the Apex Court noted: “the law is obvious that the promises in the election manifesto cannot be construed as ‘corrupt practice’ under Section 123 of RP (Representation of People) Act, the reality cannot be ruled out that distribution of freebies of any kind, undoubtedly, influences all people. It shakes the root of free and fair elections to a large degree. The Election Commission through its counsel also conveyed the same feeling both in the affidavit and in the argument that the promise of such freebies at government cost disturbs the level playing field and vitiates the electoral process and thereby expressed willingness to implement any directions or decision of this Court in this regard.”
While directing the Election Commission frame guidelines on incorporating freebies in the election manifestos, the Supreme Court concluded: “We also record the need for a separate legislation to be passed by the legislature in this regard for governing the political parties in our democratic society.”
The conspiracy of silence across the political horizon on this issue shows the deep rot in Indian democracy. Can Mr. Modi dare to moot enactment of law on prevention of institutionalized corruption of the electorate in a ultra fast-track mode?
published by taxindiaonline.com on 8th September 2015