A Complex Issue with No Easy Answers
fiscal and political. Former RBI Governor D Subbarao believes that the Centre needs to address both aspects to find a lasting solution.
On the fiscal front, Subbarao acknowledges the practice of cross-subsidization, where richer states contribute more to the central tax pool than they receive back. He argues that this is necessary in a diverse country like India but questions whether the current level of cross-subsidization is sustainable.
He suggests a phased approach to delimitation, which is due in 2026, and proposes setting an end date for cross-subsidization. He emphasizes the need for a formula-based approach to ensure equitable distribution of resources and prosperity across the country.
The political dimension adds another layer of complexity. Delimitation based on population growth could potentially reduce the number of Lok Sabha seats in the South relative to the North. This, coupled with the potential reduction in fiscal transfers, could create a "double whammy" for the Southern states.
Subbarao emphasizes the need for enlightened political leadership at both the central and state levels to address this issue amicably. He believes that both the North and South need to grow stronger and achieve parity.
The Southern states have successfully controlled their population growth, while the Northern states continue to grapple with high population numbers. This demographic disparity further complicates the delimitation process.
Prime Minister Narendra Modi has hinted at considering regional balance alongside population for delimitation. He has criticized the Congress party's "jitni aabadi, utna haq" (more population, more rights) approach, arguing that it would disadvantage the South.
Finding a solution to the North-South divide requires careful consideration of both fiscal and political factors. A phased approach to delimitation, coupled with a clear end date for cross-subsidization and a formula-based approach to resource allocation, could be a starting point for addressing this complex issue. However, achieving a truly equitable and prosperous India requires strong political leadership and a commitment to collaborative solutions.