Delhi Funded Political Systems Selling Corruption As Cohesion, Says FinMin Drabu
20 May 2015
: Shocking his audience, J&K's finance minister Dr Haseeb Drabu on Wednesday said Delhi has funded political systems that resorted to corruption and packaged it as a way forward. He insisted the central government is more centric than federal and federalism is more coercive than cooperative. 'There were political systems funded by the centre who sold corruption as cohesion,' Drabu said in one of his interventions as the author of India's current fiscal's Economic Survey Dr Arvind Subramanian was speaking on devolutions and resources at a function in the University of Kashmir. Dr Subramanian is Government of India's Chief Economic Adviser. In another intervention, Dr Drabu said the evolution of economic management systems is creating a situation that the finance ministers of the states are becoming the twelfth members in the cricket team. 'Positive impact of the 14th finance commission award is being offset by various measures including, for instance, the new GST regime which will limit the scope of any intervention by the states because GST will uniform tariff structure,' Dr Drabu said. 'J&K is the only state that has the authority to legislate on all taxes and this flexibility will go with the new GST regime.' Drabu said J&K is unlikely to implement GST regime because it compromises it position. This is despite GST is better and efficient system. To the chagrin of Dr Arvind, Drabu disputed his statement of cooperative federalism being in vogue. 'Indian federal system is very centralized as for as economy is concerned though it is somewhat decentralized as politics is concerned,' Drabu said. 'It is less than cooperative.' Drabu said while radical restructuring of economic policy that paved way for abolishing of planning commission has been a key intervention so far, there is no follow up. 'States are in chaos about whether they should have a plan or not,' Drabu said. 'Fourteenth Finance Commission has changed fiscal federal system in India (but) there is no corresponding follow up about how this will work.' Insisting that India's open economy set up is internally fragmented despite the gung-ho over it. 'Orissa prevents mining saying half of the investment must be spent in the state, Goa puts barriers in export of it, Drabu said, 'It (the state protectionism) has reached the level of such an absurdity that a refinery in Mathura gets charged by UP government for refining the oil.' Drabu questioned the wisdom of all the NMDC rentals being collected on India's eastern side goes to Delhi as dividends. 'Why revenue sharing only, why not resource sharing and we can start with water,' Drabu asked. 'Federalism should not be seen from a top down approach but from bottoms up perspective as well. If we see down, it is coercive federalism and not cooperative federalism.' Appreciating the changed economic survey, Drabu, however, said this document has a top down approach and offers a federal view. It, he said, must be a combination of economic situation of the states and must take care of the inter-state issues as well. He offered the background of the survey from the Sino-Indian conflict and insisted historically it remained a cut and paste document with change in only para numbers. He disputed the impact that public investment is being projected to have created. Drabu said the survey could be made 'little more relevant' to the states because 'all the wisdom does not lie with the central government'. He said India's 30 states are at different levels of development and have different policy perspective. 'That wisdom must be reflected in the economic survey.' Throwing his weight behind state's right to be treated fairly, Drabu said while coalition politics in India has changed a lot, they need to be better engaged in economic policy making. 'It might be worthwhile what we could learn from states and engage with them,' Drabu said, 'some states have done exceptionally better on certain fronts.' He said there are 'lot many lessons' that centre must learn from the states.