[Assam] Constitutional Autonomy: Caution.

[Chan Mahanta]

Thanks again Santanu for pointing out some extremely important 
points.  For thi ose of us unfamiliar with the details of how things 
work in India, it is very educational.

All the more reason therefore, that this Autonomy thang  will be 
little more than "Kona haanhok potaan dhaan", UNLESS Assam has 
complete economic independence.






At 10:43 AM -0500 3/22/09, Roy, Santanu wrote:
>This is a note of caution. Addressed to those who have voiced their 
>demand for Assam's  political "autonomy" in terms of  certain 
>changes in the Indian constitution - in particular, transfer of 
>items from the federal or central domain to the state list & other 
>safeguards.
>
>I suggest that this may not lead to a whole lot of difference in the 
>balance of economic and political power between the centre and the 
>state. And therefore, the effective autonomy that will be exercised 
>by the state may well continue to be very limited.
>
>Over the last six decades, there has been rapid increase in the 
>actual power exercised by Delhi over the states (particularly ones 
>that are economically backward) and the division of actual power 
>today is far more lopsided than what would appear to someone reading 
>the Indian constitution.
>
>There are several reasons behind this.
>
>First, a very large share of total public sector expenditure in 
>India is actually financed through internal debt (short and long 
>term government borrowing, treasury bills etc), external borrowing 
>(sovereign debt), deficit financing  (accommodated by a Reserve Bank 
>of India that is wholly subservient to the Finance Ministry in 
>Delhi) - that simply cannot be devolved to a state without much 
>greater wholesale reform (establishing an autonomous RBI independent 
>of central government's control, allowing states to borrow directly 
>coordinated by an independent economic body etc).
>
>Second, the central government's tax revenue sources  (income tax, 
>excise and customs) are much more elastic i.e., respond very rapidly 
>to economic expansion than the state tax revenue sources.
>
>Third, given the high degree of regional inequality in India, the 
>process of transfer of resources from the fast growing to the poorer 
>regions is, by definition, subject to the discretion of Delhi (or 
>its appointed officials such as the Finance Commissions).
>
>Due to the above three factors, the financial dependency of Assam's 
>state government on the central government will continue to be very 
>high unless, of course, the state is allowed to print its own money, 
>have its own central bank and levy & collect all income tax, excise 
>etc and tax international trade flows (this would be impossible even 
>for flows related to Assam).
>
>Fourth, the process of economic planning in India has generated a 
>gargantuan monster in Delhi (that is extra-constitutional); it 
>controls all development expenditures and projects. (There is of 
>course no economic planning in this free market era; simply 
>bureaucratic or executive control remains.) If you do not grovel and 
>satisfy these faceless safari suit white shirts, you cannot 
>undertake any major development project. And because of the above 
>three factors, it is difficult to undertake such projects 
>independently at the state level.
>
>Fifth, as we have seen continuously in the case of Kashmir, even 
>having your own constitution does not in any way hinder the central 
>government from changing legitimately elected state governments 
>whenever it suits them (Mrs Gandhi, for example, was adept at this 
>and more or less created the present violent instability there) by 
>involing concerns about internal security. So, unless one takes away 
>all emergency powers of the centre (which I can bet they will never 
>agree to as they see it as the essence of Indian sovereignty) - the 
>power to intervene to preserve the integrity of India, internal 
>security and prevent mass disturbance - the power to rush armed 
>forces after that, there may not be much left to the autonomy.
>
>Sixth, even if one takes away all of the emergency powers of the 
>centre under the constitution, a very high degree of national 
>control over the state comes through the national political groups 
>including political parties (but also other political 
>organizations). The reason why state political actors may (mostly, 
>if not always) play to the tune of their national higher-ups is 
>partly because of personal ambition (state political power is only a 
>stepping stone to a potential national profile - a giant lottery to 
>be won and aspired for)  and partly because of the financial clout 
>of the national versions and the need for money to win elections 
>(even an MLA might spend crores today). Note that even the regional 
>parties are part of the pan-Indian political game thanks to the era 
>of coalitions. 
>
>This is perhaps too pessimistic. But I cannot escape the feeling 
>that the Indian economy and the Indian state as it is constituted 
>today, leaves insufficient room for real decentralization of 
>economic and political power. Perhaps, the pessimism is unfounded. 
>Once the devolution of power begins - albeit, in a limited fashion, 
>it will act as a catalyst for other changes and eventually lead to 
>true decentralization. But that would require others to act. Assam 
>alone cannot do it.
>
>And yes, we cannot be worse off.
>
>Santanu.
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