Context
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The Indian Constitution may face an unprecedented crisis in 2026 when there will be a dramatic change in the composition of the Lok Sabha. Since 1976, seats in the Lok Sabha have reflected the 1971 census and have not taken into account changes in the population.
The primary reason for this has been unequal population growth among States. India’s most highly developed and prosperous States have been successful at family planning, while the poorer States continue to expand. The freeze was thus a chance to ensure that India’s most successful States are not punished politically for their success.
Post 2026, when this compact ends, there will be a seismic shift in national power towards India’s poorest and most populated States, which is sure to generate much resentment among the States that will lose political and economic power and influence. This calls for a realignment in the balance between the democratic principle and the federal principle in the Indian Constitution.
The essence of the Union
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As Article 1 of the Indian Constitution says, India is a Union of States. The choice of words is deliberate: it is the several States that, together, make up the Indian Union.
Admittedly, unlike in other federations, there is no separate State citizenship or State Constitutions. However, one need only study the history that led up to the linguistic reorganisation of States in 1956, and to subsequent movements for Statehood afterwards, to understand that States are distinct associative communities, within the federal structure of the Indian Union. Indeed, in a polity as plural as ours – linguistically, culturally, and ethnically – it could not be any other way.
Big versus small States
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Having established, thus, that States are important, self-contained units within the Indian constitutional scheme, we must turn to an inherent contradiction between the principles of democracy and federalism, when federal units are unequal in size, population and economics.
This is easy to comprehend. In a democratic set up, all citizens are equal and are thus entitled to equal representation in governance. But this would imply that bigger States are likely to dominate the national conversation over smaller States. Small States fear that they would get a smaller share of the pie economically, a much reduced say in national issues, and be irrelevant in the political governance of the country.
In order to assuage this legitimate fear, federal democracies have incorporated into their governing structures various kinds of compromises to ensure a balance between democratic principles and federal ones.
For example, when the Americans adopted their Constitution, they protected smaller States in four ways.
- First, national powers over the States were limited.
- Second, each State regardless of size had two seats in the Senate, giving smaller States an outsized role in national governance.
- Third, Presidents are elected by electoral votes, which means they must win States rather than the total national population.
- Fourth, and deplorably, the slave-owning States which did not confer citizenship on slaves were allowed to count the slaves for purposes of representation, with each slave being counted as three-fifths of a person.
This essential structure remains the bedrock of the American Constitution today, though the Americans have rid themselves of slavery (fortunately) and have dramatically increased the scope of federal intervention. This federal structure has led to the severing of causational links between the national vote and presidential elections. Presidents George W. Bush and Donald Trump won without winning the popular vote.
The current movement to remove the power of a minority to filibuster legislation is based on democratic principles seeking to mitigate the pathology of excessive federalism: indeed, the American structures of government go so far in the other direction, that they have been accused of essentially facilitating and entrenching minority rule through the Senate, which favours rural, sparsely populated States that are also predominantly white.
The Indian structure
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Other federations (Switzerland and Belgium come to mind) have adopted other — less extreme — forms of reconciliation. However, India’s quasi-federal structure has always been sui generis.
Our founders knew that India’s diversity made federalism inevitable, but, fearing fissiparous tendencies among States that had never been a single political unit, they also created a strong centre.
While history has been chequered, the fears for Indian national unity simply on the basis of giving States greater powers have proven to be unfounded — and if at all, it has been the other way.
The 1956 reorganisation of States on linguistic lines was a popular recognition of federal principles and yet did not result in separatist tendencies. Since then, new States within the Union have been created in response to the demands of people for greater autonomy.
In India, any clash between federal principles and democracy will inevitably also have linguistic, religious and cultural implications and may result in new forms of sub-regional chauvinism. Thus, there is an urgent need to reimagine our national compact — another freeze will only kick this thorny issue down the road and will continue to perpetuate an increasingly undemocratic set up.
Fine-tune these elements
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We have the components of such a new balance that need to be fine-tuned to Indian realities. First, the powers of States vis-à-vis the Centre contained in the Lists and in the provisions dealing with altering boundaries of States must be increased to assuage the fear of smaller States that they will be dominated by bigger ones.
There is no reason to believe that empowering our States would cause national disintegration. On the contrary, more localised decision-making is bound to increase national prosperity. Indeed, this was the entire goal of the creation of Panchayat governance through the 73rd and 74th Amendments to the Constitution, whose promise remains — unfortunately — unrealised.
Second, the role and composition of the Rajya Sabha, our House of States, must be expanded. This would allow smaller States a kind of brake over national majoritarian politics that adversely impact them.
Third, constitutional change and the change in financial redistribution between the States must require the consent of all or nearly all States (the fate of the Goods and Services Tax, or GST, serves as a salutary warning in this regard). Constitutional provisions dealing with language and religion must also be inviolate. If India is a joint venture between majority and minority shareholders, the minority must be protected by a comprehensive list of “consensus items” that require unanimity — or at least, a super-majority — and not simple majority.
Fourth, serious thought must be given to breaking up the biggest States into smaller units that will not by themselves dominate the national conversation.
Competing claims
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The unity of India is, of course, the fundamental premise underlying this discussion; but this unity does not depend on an overbearing Centre for its survival. National bonds of affection and patriotism will not be severed by devolution of powers though they will be at least severely strained when one part of the country is empowered over another.
Lampedusa’s Il Gattopardo contains the memorable quote, Everything must change for everything to remain the same. This includes the question of how we are to balance the competing claims of democracy and federalism, in the years to come.
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Steve Ovett, the famous British middle-distance athlete, won the 800-metres gold medal at the Moscow Olympics of 1980. Just a few days later, he was about to win a 5,000-metres race at London’s Crystal Palace. Known for his burst of acceleration on the home stretch, he had supreme confidence in his ability to out-sprint rivals. With the final 100 metres remaining,
[wptelegram-join-channel link=”https://t.me/s/upsctree” text=”Join @upsctree on Telegram”]Ovett waved to the crowd and raised a hand in triumph. But he had celebrated a bit too early. At the finishing line, Ireland’s John Treacy edged past Ovett. For those few moments, Ovett had lost his sense of reality and ignored the possibility of a negative event.
This analogy works well for the India story and our policy failures , including during the ongoing covid pandemic. While we have never been as well prepared or had significant successes in terms of growth stability as Ovett did in his illustrious running career, we tend to celebrate too early. Indeed, we have done so many times before.
It is as if we’re convinced that India is destined for greater heights, come what may, and so we never run through the finish line. Do we and our policymakers suffer from a collective optimism bias, which, as the Nobel Prize winner Daniel Kahneman once wrote, “may well be the most significant of the cognitive biases”? The optimism bias arises from mistaken beliefs which form expectations that are better than the reality. It makes us underestimate chances of a negative outcome and ignore warnings repeatedly.
The Indian economy had a dream run for five years from 2003-04 to 2007-08, with an average annual growth rate of around 9%. Many believed that India was on its way to clocking consistent double-digit growth and comparisons with China were rife. It was conveniently overlooked that this output expansion had come mainly came from a few sectors: automobiles, telecom and business services.
Indians were made to believe that we could sprint without high-quality education, healthcare, infrastructure or banking sectors, which form the backbone of any stable economy. The plan was to build them as we went along, but then in the euphoria of short-term success, it got lost.
India’s exports of goods grew from $20 billion in 1990-91 to over $310 billion in 2019-20. Looking at these absolute figures it would seem as if India has arrived on the world stage. However, India’s share of global trade has moved up only marginally. Even now, the country accounts for less than 2% of the world’s goods exports.
More importantly, hidden behind this performance was the role played by one sector that should have never made it to India’s list of exports—refined petroleum. The share of refined petroleum exports in India’s goods exports increased from 1.4% in 1996-97 to over 18% in 2011-12.
An import-intensive sector with low labour intensity, exports of refined petroleum zoomed because of the then policy regime of a retail price ceiling on petroleum products in the domestic market. While we have done well in the export of services, our share is still less than 4% of world exports.
India seemed to emerge from the 2008 global financial crisis relatively unscathed. But, a temporary demand push had played a role in the revival—the incomes of many households, both rural and urban, had shot up. Fiscal stimulus to the rural economy and implementation of the Sixth Pay Commission scales had led to the salaries of around 20% of organized-sector employees jumping up. We celebrated, but once again, neither did we resolve the crisis brewing elsewhere in India’s banking sector, nor did we improve our capacity for healthcare or quality education.
Employment saw little economy-wide growth in our boom years. Manufacturing jobs, if anything, shrank. But we continued to celebrate. Youth flocked to low-productivity service-sector jobs, such as those in hotels and restaurants, security and other services. The dependence on such jobs on one hand and high-skilled services on the other was bound to make Indian society more unequal.
And then, there is agriculture, an elephant in the room. If and when farm-sector reforms get implemented, celebrations would once again be premature. The vast majority of India’s farmers have small plots of land, and though these farms are at least as productive as larger ones, net absolute incomes from small plots can only be meagre.
A further rise in farm productivity and consequent increase in supply, if not matched by a demand rise, especially with access to export markets, would result in downward pressure on market prices for farm produce and a further decline in the net incomes of small farmers.
We should learn from what John Treacy did right. He didn’t give up, and pushed for the finish line like it was his only chance at winning. Treacy had years of long-distance practice. The same goes for our economy. A long grind is required to build up its base before we can win and celebrate. And Ovett did not blame anyone for his loss. We play the blame game. Everyone else, right from China and the US to ‘greedy corporates’, seems to be responsible for our failures.
We have lowered absolute poverty levels and had technology-based successes like Aadhaar and digital access to public services. But there are no short cuts to good quality and adequate healthcare and education services. We must remain optimistic but stay firmly away from the optimism bias.
In the end, it is not about how we start, but how we finish. The disastrous second wave of covid and our inability to manage it is a ghastly reminder of this fact.