A Long History in India
Disputes between the central government and individual states over economic policies have been a recurring theme in India's history. In recent years, however, these conflicts have become more frequent and intense, with states like Karnataka and Kerala accusing the Centre of unfair treatment.
Amartya Lahiri, a professor at the University of British Columbia, believes that India is not fully utilizing the potential of its federal structure. He argues that the country has traditionally relied too heavily on the central government, leading to these conflicts.
Lahiri suggests that a more robust approach to fiscal federalism could be a solution. He believes that states should be encouraged to compete with each other in terms of best practices, demonstrating that they can lose business if they are not efficient.
However, Lahiri acknowledges that some states may use the Centre as a scapegoat for their own shortcomings. He believes that while some concerns raised by states may be valid, others could be politically motivated.
Finance Minister Nirmala Sitharaman has also addressed these conflicts, stating that the apprehension of some states being discriminated against is a politically-driven narrative. She believes that vested interests are happy to perpetuate this narrative.
Lahiri urges the Centre to consider his proposed policy as a solution. He argues that it is important to remove the option for poorly performing states to blame the Centre for their own failures.