Towards competitive federalism

NITI Aayog has announced a plan of ranking states on social indices on the basis of their performance in social sectors. Initially, the sectors included are health, water, and education – the three most crucial areas that determine the level of social development of an area or people.

This is in accordance with the Government’s commitment to social sector already manifested in including health and education among the nine pillars set to transform India.

While water is a basic necessity, health and education are mutually dependant sectors – one helping the development of the other. Indices are being finalised to measure the achievements of States on parameters pertaining to these sectors.

The purpose seems to be to link the disbursal of Central funds with State’s performance on these indices. The question whether the better performers should be rewarded with more funds or low rank holders should be helped with more aid is likely to emerge in view of varied causes accounting for a State’s achievements and failures comprising both human, administrative, and environmental factors.

The utility of social indicators to assess the quality of life, monitor the social system and to identify required changes and guide policy interventions is recognised by scholars as well as administrators.

It led almost to an academic movement in the 1970s and resulted in improvements in methods of measurement and reporting in course of time. Social indices are created to reflect the conditions of life at grassroots – a responsible task in planning.

It is clarified that ranking of States will not be done on the basis of the current position of the States, but on the basis of their performance in one year after the introduction of the scheme.

It is good news for those at the bottom and an incentive to intensify their efforts. The erstwhile BIMARU States (Bihar, Madhya Pradesh, Rajasthan, and Uttar Pradesh) can improve their rank provided they register a good record in the year ahead.

It is also reported that ranking will be done by a third party like the World Bank (WB) obviously to maintain neutrality. One can hope that this will eliminate petty party politics and fight over ranking between States.

Two equally significant effects on the nation’s march towards progress and development may result from this exercise – one to drive all States to focus on the three most important social sectors mentioned, and the other to promote a healthy competition among States to improve their performance.

The former is necessary as social development and economic progress are two sides of the same coin. These are inseparables. The latter will promote competitive federalism, which is complementary to cooperative federalism by which Indian federalism is generally described in textbooks.

The NDA Government has all along been stressing the significance of cooperative federalism for integrated growth of the nation. For faster progress and to ensure that no one lags behind, there is need to consciously infuse a spirit of competition between States which is presently attempted.

Competitive federalism is already at work in economic policies since liberalisation. States vie with one another to hold investors’ meet; Chief Ministers go abroad to promote trade relations; State governments enter into agreements with foreign countries for social-economic projects.

Regional meetings are also held to promote common economic interests. In these endeavours, some are going fast and some lag behind – a situation that ranking may help to change.

Mint Asia and the Institute of Competitiveness has released The State Competitiveness Report which measures and ranks 28 major States on parameters that are vital for Indian economy.

The report categorises States on economic basis. Similar ranking on social indices is now launched by the Government with a view to bridging social disparities between States without which economic progress will halt.

There may be several genuine problems in making comparisons between States. Even in the case of Scheduled Castes and Tribes considered on the whole to have low indices, their disadvantage varies substantially depending on the State where they live.

Data from the Socio-Economic Survey conducted by the Census and the UNICEF’s Rapid Survey on Children, for instance, have found that SC and ST children in Tamil Nadu and Kerala are less likely to be underweight than OBC and forward caste children in Jharkhand, Odhisha or Bihar. National averages hide State-level disparities.

Such inequities are common in the level of education also in terms of literacy, number of schools and colleges, years of schooling, rate of drop-outs, teacher-pupil ratio, basic facilities in institutions etc.

Ranking of States will doubtless introduce a semblance of competitive federalism over the established notion of cooperative federalism of India. Bill Gates is reported to have remarked that the positive competition between States in India is one of the most positive dynamics that the country has.

Competitive federalism, a concept associated with the writings of Albert Briton (1990s), applies market-type competition to government arena.

In this, the Centre competes with the States/provinces and vice-versa and the States compete with one another while all of them are contributing to a nation’s development.

The competition is widening day by day due to increasing awareness of people and institutions and the need to win races and be equipped to face fresh challenges.

To succeed in competitions in trade, investments, and commerce, level playing is required that is, a certain amount of parity in social development meaning health and education. It will help all-round and inclusive development of the nation.

Fierce competition between States is considered a healthy atmosphere for realising our aim of “Make in India”. At the same time, NITI Aayog is set to provide for constitution of Regional Councils to promote cooperation between States for joint progress.

Without the present stress on ranking, State-wise presentation of data is a known practice. It is adopted by the Census, the National Sample Survey Organisation, the Planning Commission, the National Rural Health Mission, the National Crime Research Bureau, and all Government departments.

The Social Progress Index published on the basis of writings of Amartya Sen et al., measures the extent to which countries provide for social and environmental needs of their citizens by 54 indicators in three areas.

These include Basic Human Needs covering nutrition and basic medical care, water and sanitation, shelter, and personal safety; Foundations of Well-being indicated by access to basic knowledge, information and communication, health and wellness, and environmental quality; and Opportunity measured by personal rights, personal freedom and choice, tolerance and exclusion, and access to advanced education.

The index defines social progress as the capacity of a society to meet the basic human needs of its citizens, establish building blocks that allow citizens and communities to enhance and sustain the quality of their lives and create the conditions for all individuals to reach their full potential.

Competitive federalism is supported by the Centre’s fiscal policy of transferring funds to State governments and giving them freedom to fix their priorities in spending within national objectives.

In the context of this freedom of States to make their plans, ranking on social indices in a way becomes necessary to promote the responsibility and accountability of the governments at the Centre and the States.

Dr S Saraswathi
Source: INFA