How would Narendra Modi actually woo potential allies in a post-election scenario? Presuming that the BJP will be the single largest party and will get an invite to form government, sources close to Modi reveal that his most potent ploy to appeal to regional parties would be to begin the process of financial reorganisation, giving greater fiscal power to the states.
This could potentially be a powerful card as numerous states continually complain about the overreach of the central government. Although it is not one of the aspects of his speeches that gets attention, Modi has consistently spoken of a genuine, greater federalism. A senior BJP leader says that would involve revisiting Centre-state relations and “reshaping the way the Centre does business with the states”.
In other words, scrap the Planning Commission, which anyway is not a constitutionally entitled body but created by an executive order passed in 1950 by India’s first prime minister Jawaharlal Nehru (he was also its first chairman). Columnist Swapan Dasgupta, seen as being close to Modi, says, “Left to himself, Modi is likely to undertake the whittling down of the Planning Commission. What Modi would like to do is put more money in the hands of the Finance Commission (an autonomous body appointed by the government) that sets a criterion for distribution of funds between Centre and states.”
Arvind Panagariya, professor of economics at Columbia University in the US, who is also believed to have influenced the economic thinking of Modi, also declared at a public function last week that the nation should think of doing away with structures like the Planning Commission.
If Modi were in a position to (and began) dismantling the Planning Commission, he would gain appeal with the states.
Were Modi to actually be in a position to begin this process, it would certainly appeal to the states. Just about two years ago, SP leader Mulayam Singh Yadav had asked for the sacking of Planning Commission deputy chairman Montek Singh Ahluwalia when the institution came up with new poverty guidelines. According to its website, the commission is mandated with “formulating plans for the most efficient and balanced utilisation of resources and determining priorities”. In other words, it’s the sort of institution that tells the states what to do—no surprises then why so many would be delighted to see it circumscribed. From Mamata in Bengal to Jayalalitha in Tamil Nadu, Naveen Patnaik in Orissa to Nitish Kumar in Bihar, all have in the last few years spoken again central writ in the states. There is a strong argument for greater economic federalism for the states, squeezed as they are by the Centre at the top and local bodies in the state unit.
However, there are two aspects to this that certain Modi advisors have been advocating. First, the BJP is traditionally a votary of a strong Centre and were Modi suddenly to become the catalyst for devolution of central powers, it would be quite radical. It would also be quite ironical, as Modi has centralised power in his own hands during his reign in Gujarat, cutting all other institutions to size, including wings of the Sangh parivar that have deep roots in the state.
The other significant point is that such a process could only begin were the BJP under Modi to get a 200-plus figure and then manage a minority government. A great deal of imagination and innovation would have to be applied to run a minority government, and greater federal power would certainly be a canny thing to advocate.