Karnataka Chief Minister Siddaramaiah has said the southern states pay more taxes to the Centre without getting enough returns. A developed South India has been subsidising the north, the Congress leader said in a Facebook post on Friday.
Siddaramaiah also proposed a mechanism like the Goods and Services Tax Council, where states have more say in making trade policy. He cited an example of how policy on trade of pepper with Vietnam affected lives of farmers in key producing states.
His Facebook post on Friday was a Kannada translation of a post he wrote in English on March 14.
The chief minister wrote that South India, with stable population growth, was not getting enough because population was a prominent criterion for the devolution of central taxes.
The post was a response to the criticism of Karnataka for wanting to adopt a separate flag for itself. He said the demand for a separate flag was not inconsistent with the idea of building a strong India.
Here’s the full text of his Facebook post:
Some time in July last year, TV studios in Delhi were outraged at Karnataka government’s move to set up a committee to examine if the state could have its own flag. The anchors were worried about the unity of India and lectured Karnataka government on nationalism. This year, the committee gave its report recommending adoption of a flag for Karnataka. Our government has accepted the committee’s report and is requesting the central government to include the Karnataka flag in the schedule of the Emblems and Names (Prevention of Misuse) Act, 1950.
This episode begs the question: Is the desire of the people of Karnataka to have a flag for their state, to give primacy to Kannada language and to have greater say in the running of their own lives inconsistent with the objective of building a strong nation?
In 1947, India was a young nation and we needed to be cautious of any divisive or secessionist tendencies. India therefore became a union of states with a strong centre. When [first Home Minister] Sardar Patel went about integrating the princely states into the Union, a strong centre did make sense. Today, 70 years down the line, we have done admirably well as a nation. The Constitution of India has stood the test of time. We have also learnt useful lessons from turmoils in Tamil Nadu over Hindi language imposition and demands of autonomy from certain states like Punjab and Assam.
From a union of states, we are evolving into a federation of states. Therefore, I don’t think the demands for greater federal autonomy and recognition of regional identity are inconsistent with our nation.
Karnataka prides in Kannada identity. The oldest written document (in stone) in Kannada found at Halmidi, Hassan district, dates back to 2nd century AD. The oldest Kannada kingdom under the Kadamabas of Banvasi ruled the state during the 4th century AD. We have been using a red and yellow flag since decades. Yet, Karnataka, as our poet Laureate Kuvempu said, is the daughter of Bharata, the Indian nation (Jaya Bharatha Jananiya Tanujathe). The nervousness of anchors in Delhi studios about our assertion of identity is therefore misplaced.
Having established our place firmly in the union, let me raise certain issues of federalism that affect us on a day-to-day basis. Relatively well-developed states like Karnataka, Kerala, Tamil Nadu, Andhra Pradesh and Maharashtra contribute more to central taxes than what they get in return from the centre. What we get from the centre comes in the form of state’s share in devolution of central taxes and grants under centrally sponsored schemes. The grants under centrally sponsored schemes come with strings attached. Schemes are designed keeping the entire country in mind and we are forced to implement them and provide our share. We need a system where states receive larger portion of the taxes collected from our states and the share of centrally sponsored schemes must go down. The central schemes, if at all needed, need to be flexible so that we can tailor them to our needs.
Historically, the South has been subsidising the north. Six states south of the Vindhyas contribute more taxes and get less. For example, for every one rupee of tax contributed by Uttar Pradesh that state receives Rs 1.79. For every one rupee of tax contributed by Karnataka, the state receives Rs 0.47. While I recognise the need for correcting regional imbalances, where is the reward for development? The states of the South have nearly reached replacement levels of population growth. Yet, population is a prominent criteria for devolution of central taxes. For how long can we keep incentivising population growth?
The economic policy that affects India’s commerce with the rest of the world affects the states, and yet the states do not have a say in making of the country’s economic policy. For example, the South Asia Free Trade Agreement has encouraged import of cheap pepper from Vietnam through Sri Lanka, seriously affecting the lives of pepper farmers of Kerala and Karnataka. The central government’s trade policy has been encouraging agricultural imports and discouraging agricultural exports. This is affecting the profitability of our farmers who have a marketable surplus.
In a nutshell, agrarian distress caused by central policies cannot be remedied by states alone. On the lines of the GST [Goods and Services Tax] Council, we need a standing mechanism for discussing trade policy and agrarian issues so that we have a better say in making policies that affect our farmers. The NITI Ayog has effectively dismantled the erstwhile National Development Council. No effective consultative mechanism has come in its place. Even the NDC was a talk shop. We urgently need a mechanism where the states get a greater say in making of the nation’s policies.
Karnataka is bigger than many nations in Europe. Most of the Indian states are. For India to grow stronger her states need to grow and prosper. We are today in a position to set the states free to grow as per their capacity and their genius, without being nervous about any imagined threat from assertion of their identity. The states need greater autonomy to run their economic polices, borrow internationally as long as they convince the lenders of their creditworthiness, build the infrastructure of their choice without depending too much for licenses from the centre, and design programs of their choice.
Whether we now like it or not, the states of India were organised on linguistic basis. Many of the languages and cultures of the states pre-date the Indian identity. Yet, we Indians are bound by a common history, common civilisation, and a common destiny. My identity as a proud Kannadiga is not inconsistent with my identity as a proud Indian. So, in Karnataka when we speak about primacy to Kannada, argue against imposition of Hindi language, or call for adoption of a state flag, we are confident we are contributing to building of a strong India; for, a confident Indian nation is confident about the individuality of all her daughters.
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