P. Raman 
We had earlier explained how the Modi-Shah regime had borrowed extensively from other spin dictators’ toolkit, but in matters of central projects and financial allocation, its role model has been the Bretton Woods institutions like the World Bank and the International Monetary Fund.
The IMF imposes rigorous conditions for its special loans, as it did in June 1991 when India faced a serious foreign exchange crisis. India was forced to implement the economic reforms package that included the progressive dismantling of PSUs and massive privatisation. Finally, on these conditions, it was extended a special loan of Rs 3,275 core.
Since Narendra Modi became Prime Minister, the Centre has been imposing similar transactional but political conditions on state governments for the release of routine central allocations, special funds, the GST share that forms a substantial part of states’ revenue, and flood and drought relief packages. There are allegations of arm-twisting and political favouritism in the negotiations for special loans, exemptions and outstanding dues.
‘PM’ pre-fixed to the names of welfare schemes
To begin with, the Modi government pre-fixed ‘PM’ to the names of welfare schemes, such as PM Awas Yojana, PM TB Mukt Bharat Abhiyan and PM USHA. There are about a dozen of these.
The Centre insists that state governments display flexes with huge pictures of the Prime Minister and install his selfie points in every ration shop as a condition for central allocation of food grain. In Telangana, which has refused to accept the conditions, Union finance minister Nirmala Sitharaman yelled at a district collector for not putting up the Prime Minister’s portrait at ration shops.
Jan Aushadhi outlets must also prominently display Modi portraits, with officials periodically checking to ensure this condition is fulfilled.
Opposition chief ministers have objected to this misuse of public funds for the personal publicity of the Prime Minister. For instance, PM SHRI is a scheme to upgrade government schools with a 60 per cent contribution from the Centre and 40 per cent from the state.
Most opposition-ruled states have similar schemes of their own, but were arm-twisted into accepting the central scheme. Each state had to sign a memorandum of understanding before the Centre released funds.
Centralisation of power has a wide compass. Besides financial intimidation, under this regime the governors are acting as storm-troopers of the Union home ministry in Opposition-ruled states. As a result of meddling by the Raj Bhavan, six universities in Tamil Nadu are functioning without vice-chancellors.
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Several states have gone to the Supreme Court to complain that the governors have turned political activists and are trying to run a parallel administration.
Now, the UGC is being used to rob the residual powers that states had in higher education. Its newly issued draft guidelines on the appointment of vice-chancellors of state universities are an outright transgression on the states’ domain. State universities have been established under an act of the Assembly, and the UGC is overriding that to prescribe rules for appointing VCs and fixing their service conditions. The UGC is being used as an instrument for saffronisation of higher education and thus to establish a foothold among academia.
Modi had once accused the Centre of discriminating against opposition states
Ten years ago, Narendra Modi came to power at the Centre offering simplistic solutions to complex problems. He promised less government and more governance. However, as Prime Minister, Modi has dispensed with the ideas that he himself had proposed as chief minister.
When he was Gujarat chief minister, Modi had charged the Manmohan Singh government with ignoring his suggestion to set up solar panels in the deserts of Gujarat and Rajasthan. Now, as Prime Minister, he has failed to implement his own suggestion.
Chief minister Modi had accused the Centre of discriminating against opposition-ruled states in allocating central funds. He had suggested to the 14th Finance Commission that it change the existing formula and allocate more funds to states with higher growth and fiscal discipline. After becoming Prime Minister, he has dumped his own recommendation.
As chief minister, Modi had challenged Manmohan Singh to stop central aid to his state in exchange for not collecting taxes from Gujarat. He had even dared the Centre to slap sedition charges against him for asking it not to collect taxes from Gujarat, which gave Rs 40,000 crore as revenue but got back only 2.5 per cent of the devolved funds.
Under Modi as Prime Minister, many states are worse off than they were before.
According to answers given in Parliament, under the 15th Finance Commission, Karnataka’s share of taxes collected by the Centre fell from 4.71 per cent to 3.64 per cent and Kerala’s from 2.5 per cent to 1.94 per cent. Telangana’s share is 2.1 per cent. Overall, the share of the five southern states decreased from 18.62 per cent to 15.8 per cent under Modi.
For every rupee it paid in GST and direct taxes, Tamil Nadu received only 26 paise, Kerala 62 paise, Karnataka 19 paise, Andhra Pradesh 50 paise and Telangana 40 paise. This is a substantial decline as compared to the devolution under the previous government.
By contrast, Uttar Pradesh received Rs 2.02 for every rupee it paid the Centre, and Madhya Pradesh and Rajasthan Rs 1.70 and Rs 1.14, respectively.
Chief Ministers have been forced to protest on the streets
Funds squeeze, an outright denial or withholding of loans and schemes, gubernatorial meddling and frequent adverse comments by central ministers has become all too common. Opposition governments see these as part of a deliberate design to starve them of funds and make it difficult for them to administer the state. State after state has been seeking the Supreme Court’s intervention against the Centre’s highhandedness.
Punjab went to court to seek its dues from the Centre, Karnataka did so to seek the release of flood relief funds, as did Tamil Nadu. Kerala is another state that approached the apex court for funds, and West Bengal went to the Supreme Court against the governor withholding bills passed by the Assembly.
Frequent judicial interventions are a sure sign of executive excesses. As are the frequent protests. Given that presiding officers in Parliament routinely block debates and motions sought by the Opposition, the only other option left is to hold dharnas and rallies.
Kerala, Telangana, Tamil Nadu, Karnataka and Punjab joined hands last September to demand an increase of the share of taxes from 41 per cent to 50 per cent, saying that states with better performance were being punished for their hard work. These states had earlier held a dharna in February. The same month, DMK MPs had attended Parliament wearing black and sat on a dharna at the Gandhi statue. The Karnataka chief minister, who protested with his ministers at Jantar Mantar, said his state had lost over Rs 45,000 crore in four years because of the Centre’s faulty tax devolution formula. All the INDIA parties together held a protest on Parliament premises alleging discrimination against the Opposition-ruled states in the Union budget.
Chief ministers have been forced to protest on the streets because Modi treats states like municipalities, Tamil Nadu’s M.K. Stalin said, contrasting this with past Prime Ministers who respected the rights of states.