Skewed Distribution: If It's A Crime, Vijayan, Siddaramaiah And Stalin Are Guilty Of It Too

The last couple of days have seen chief ministers of two states — Siddaramaiah of Karnataka and Pinarayi Vijayan of Kerala come to Delhi to protest against the Centre for its alleged discrimination in distribution of funds.

Tamil Nadu Chief Minister M K Stalin too has lent his support to the protests.

It was only a few days ago that Congress leader D K Suresh, who is the brother of Karnataka Deputy Chief Minister D K Shivakumar, had said that the south may be "compelled to seek the creation of a separate nation".

The protests and Suresh's remarks about needing a separate country are however bad ideas because if they look inwards — within their own states, the rulers of the states will find themselves accused of the same 'crime' they are accusing the Centre of.

In all these states, there are many districts and regions that lag behind others and are dependent on money from elsewhere in the state for their development needs. And no politician in any of these states, including the chief ministers, would say that they can't use the tax money from one part of the state for the development of other regions.

Take the case of Tamil Nadu, for instance.

A prosperous district like Coimbatore or region like Kongu Nadu in Tamil Nadu has its own share of grievances. People of the region feel that they do not get their due in terms of infrastructure or development projects and most of it goes to Chennai, like the preference for Chennai when it comes to IT investments and the long delay in Coimbatore airport expansion.

There are enough examples from each of these states. Part of the money generated in Chennai and Coimbatore is being used in other districts of Tamil Nadu like Cuddalore and Ramanathapuram, which lag behind. Likewise, money from Bengaluru is being spent in North Karnataka and that from Kochi is used in Wayanad.

Moreover, certain states are more agricultural than industrial. Agriculture-heavy states or regions will naturally have a lower gross state domestic product (GSDP) but supporting them is crucial for the country's food security and development.

Even within states, such disparities exist among various districts. Parts of Karnataka will never be as urban as Bengaluru, and might not generate the same amount of tax revenue as the capital. This holds true for all states of the country.

In Tamil Nadu, for example, the districts in the Cauvery delta, which have agriculture as the main economic activity, have lower gross district domestic product (GDDP), but can the state or the country do without them?

This interdependence must be recognised at the national level too.

The central government cannot be faulted for spending more on backward states or regions. Backward districts of even these states, such as the ones classified by the NITI Aayog as 'aspirational districts' do get special focus and attention from the Centre.

The critique also forgets that the very reason for spending more money on backward regions is to help them catch up with the rest. If the central government stops spending more on them, they will take longer to catch up.

It is the Centre's responsibility to take care of all of its territory just like the state is supposed to take care of all its regions. The Prime Minister explained this succinctly in his now Internet-viral speech in Rajya Sabha yesterday (7 February).

And it is not as if money is going down the drain. A look at how the performance of Uttar Pradesh, one of the backward states clubbed under the BIMARU acronym, has improved over the years would illustrate the point.

The GSDP of the state has grown from Rs 12.47 lakh crore in 2016-17 to Rs 20.48 lakh crore in 2022-23. The state's Finance Minister, Suresh Khanna, in his budget address (2023-2024) had said that Uttar Pradesh’s GSDP grew 16.8 per cent in 2021-2022, which was higher than India's growth rate.

Recently, it became the second largest contributor to the nation's GDP in terms of percentage (9.2 per cent), by going slightly ahead of Tamil Nadu (9.1 per cent). It is also looking at becoming a $1 trillion economy in the next few years.

The state recorded the largest decline (5.94 crore) in the numbers of those suffering from multidimensional poverty in the last nine years as per a discussion paper of the NITI Aayog released in January 2024.

Another important criticism levelled by these states against the Centre is regarding how the Finance Commission decides on the share of taxes to be given to each state.

While it is true that 'population' (on the basis of which these states have contended that they are being discriminated) is a criteria, it must also be remembered that the same commission also has 'demographic performance' (in which these states are better performers) as one of the parameters.

Therefore, a perfect balance is not possible. There will always be some more grants for the backward states for them to catch up with the more developed parts of the country.

These states should consider this to be a form of 'positive discrimination' similar to reservations and at the same time reduce regional imbalances within their own territories.