Unrest among the opposition states over the NDA government’s tactful formulation of policies that have been giving more power to the Center has been growing in recent times. Some state finance ministers have repeatedly pointed out the way in which the country’s federal structure is becoming increasingly centralized and the distribution of income is biased towards more populous states.
The book South vs North, India’s Great Controversy, written by Nilakantan RS, takes this debate forward by summarizing all the arguments that the opposition government, especially in Tamil Nadu, has against the Centre’s federalism. Anyone who wants to understand this debate and points of contention in the distribution of power between the constituents of the Indian Union will find this book very useful.
The author tries to find out with the help of data how Southern countries have scored much better than others in health, education and economic growth. He also makes some valid points about the inequality in revenue sharing between the center and the states and how prosperous states are being changed in the revenue sharing formula.
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While the book is quite insightful, a partisan slant permeates the narrative. Making the book about North vs South was unnecessary, as it ignites polarized emotions. In fact, much of the data presented by the author shows that states like Maharashtra, Gujarat, Haryana and Himachal Pradesh have performed reasonably well in many economic and social aspects despite not being located in South India. The book could well have been about Tamil Nadu’s performance alone.
Factors behind the dispute
That said, the analysis presented to understand the differences in performance between states is quite insightful.
The author points out that when the country gained independence, all states were in similar distress. But the improvement in human development measures has been significant in the South over the past 75 years, bringing it closer to other emerging economies. Many countries elsewhere in India have shown much less development, closer to sub-Saharan countries.
The author says that this development in the South could be caused by sub-nationalism, which in turn is related to linguistic identity. Some policies such as mid-day meal system, general distribution of basic food and general emphasis on education of people, especially women, have also helped to improve health and economic metrics.
“Still others have cited cultural and anthropological reasons and practices, such as cousin marriage – where a woman who marries into her extended family has slightly more autonomy than a woman who marries into a household outside her family network.” Economists also mention better access to the sea.
The author’s views on how the population gap is becoming a blessing as well as a bane for the South are also valid.
He writes that the population growth between 1971 and 2011 in Tamil Nadu was 75 percent, while it was 56 percent in Kerala. States like Rajasthan, Haryana, Bihar and Madhya Pradesh, on the other hand, saw an increase of 142 to 166 percent during the same period. The total fertility rate (TFR) is also much lower in Tamil Nadu and Kerala, but female literacy is much higher in these states. On the contrary, states like Uttar Pradesh, Rajasthan, Madhya Pradesh and Jharkhand have the highest female illiteracy rates and also higher TFR.
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While population control leads to better implementation of development policies and faster growth, it leads to a lower share of revenue from the Centre.
Problems in income distribution
The book shows with figures how the share of tax revenue of the southern states has decreased over the years since the decentralization formula is weighted in favor of more populous states. Declining population growth makes it difficult for the Southern states to get an adequate share of tax revenue.
The formula used by the Finance Commission to share revenue between states is skewed in favor of more populous states.
“The problem lies in what the Financial Committee has used in the calculations of demographic performance. It has taken the inverse of the TFR in 2011 and multiplied it by the population for 1971. In other words, a variable that was supposed to be directly about population control has been moved relative to absolute population numbers.”
This results in states such as Tamil Nadu, Kerala, Karnataka, Gujarat and Telangana receiving much less revenue transfer from the Centre, forcing them to raise their own taxes. On the other hand, states like Bihar received six times their own tax revenue as transfers from the Centre.
While the book espouses everything the current DMK government in Tamil Nadu has been saying, it does make some valid points about the problems with the Indian Union. Measures must be taken to rectify these issues soon.
Check it out Amazon.