Amaresh Bagchi: Towards quasi-confederacy?

is the title of an article in the Publius, the well-known journal of federalism, in its latest issue.

The author is Douglas Verney, a political scientist and a fellow of the Centre for Advanced Study of India at the University of Pennsylvania.

Carrying a subtitle "Transformation of India's Party System," the article argues that with the emergence of multi-party coalition governments at the Centre made up of, among others, parties based only in one state, India's federal system, which so long was viewed by many as a quasi-federation, at best is fast acquiring the character of a confederation.

While at first glance it may look attractive to those who resent the centralised federalism that operated in India in the first three decades of independence and would like the states to have more voice in the running of the country, this development, the paper argues, is not very conducive to stability, which the country critically needs for both its integrity and growth. The author proposes some radical reforms of the party system as a remedy.

In a confederation, the states are sovereign, each having veto power over central goverment actions: a quasi-confederacy is one in which the central government can act on its own in matters like taxation but cannot carry out reforms without the assent of the members of Parliament acting as delegates of the states where they are elected.

The US had an experience of confederacy for a brief period formed by 13 states in the wake of the War of Independence. The experience was not too happy.

In fact, recoiling from its failures, the founding fathers of federalism in the US, James Madison and his associates, went in for a "compound republic" based on the principles that they thought were appropriate to make a country comprising multiple political entities to retain their identity and autonomy, stable and strong, both politically and economically.

Though not adopting the US model in its entirety and going in for a Westminster-type parliamentary democracy India's founding fathers did have the US model in mind when they drew up a constitution on the federalist pattern, with a strong Centre.

This constitutional arrangement had worked well for the first three decades in that the country held together despite separatist pulls and pressures and made some notable progress on the economic front too (though many felt that over-centralisation took its toll by retarding growth).

What had helped in this, more than anything else, was the rule by a single party, which did not have to rely on the support of any other party except for a brief while.

There has been a tremendous transformation of the political scene in the last 20 years with a proliferation of parties, which could not have been anticipated by the Constitution makers, and has brought about a qualitative change in the political system.

From a total of 36 in 1980 the number of political parties had increased to 209 in 1996 and stood at 169 in 1999. Of these only seven were recognised as national parties and the rest were "state" (40) and "registered" (though not recognised) parties.

The position does not seem to have undergone any significant change since then. Of late, with a large number of parties contesting the elections and none securing an absolute majority, the national parties have had to depend on coalitions that include numerous parties, some with a representation of no more than one in the Lok Sabha (LS).

In the 2004 elections, sensing that absolute majority might not be attainable on their own, the Congress, the party in opposition which so long had spurned coalitions, tied up with a number of other parties in alliance, and after the elections, falling short of a majority in forming the government, sought support from parties that were not in the alliance and not aligned with it ideologically, either.

In 1999 too, the BJP was obliged to rely on a coalition of 20-odd parties to acquire power.

A dominant role in these coalitions is being played by "state" parties, that is parties having a base in no more than one state. This may signify a strengthening of India's federalism and India becoming more federal.

The dependence of the ruling national parties on coalition partners also may act as a check on their monolithic or fundamentalist proclivities.

However, as Verney cautions, the growth of state parties must be viewed with concern. As he puts it, "state party growth could transform India not into a genuine federation but into a quasi-confederacy in which the state governments and their members of Parliament call the shots".

The Coasian theory of bargaining is sometimes invoked in support of confederate systems. It is salutary to remember, however, that bargaining does not work when the number of bargaining jurisdictions is more than two and the bargain is one of many.

The failure of confederacy in the US has already been cited. A recent example is the collapse of the East African federation because of lack of agreement over surplus sharing.

Besides, state parties joining (or supporting) the coalition can undermine the institutions of federal fiscal relations. The clout that a state party can exercise when in alignment with the Centre was seen during the NDA regime and is again in evidence with the UPA government announcing hefty special packages for states that are politically close to it.

State domination of coalitions can paralyse the Centre from acting even when the situation demands, as happened in Gujarat in 2002. One can cite many more instances where the Centre cannot act even when there is a prima facie case (such as enforcing Supreme court orders in river waters disputes).

Ruling out, rightly, the presidential system as an alternative, Verney goes on to argue, the party system must be reformed if India's federalism is not to turn into a quasi-confederacy.

In a nutshell, the reform he proposes is to replace the present party system with one that allows only two main categories of parties to contest national elections, viz. national parties and "alliance" or "federal" parties, i.e. smaller parties with inter-state spread.

To qualify as national, a party must meet three criteria: it should contest at least half the seats in the LS, win at least 5 per cent of the votes cast, and 5 per cent of the total number of LS seats. Ideally, only national parties should be allowed to contest in LS elections.

But in view of the vastness of the country, another category, viz. alliance or federal parties have to be allowed in the fray to take account of alliances of parties that have an appeal beyond a particular state, even if not nationwide.

To be recognised as "federal", a party or alliance must win seats in at least three states and to retain the status, and secure 5 per cent of the seats or of the votes cast in at least three states. Such a requirement is common in Germany and Russia.

Getting the existing parties to accept such reforms may not be easy. Also, it may not remove the hurdles that a coalition regime may face in pushing its agenda if it draws support from parties""even when they are "national" or "federal"""that have fundamental differences in major policy matters, as is happening now with the Left parties stalling reforms that others in the coalition would want.

But the problem calls for serious attention and remedies must be found if tiny parties are not to be allowed to use their position in the coalition to hold a country to ransom and India's federalism is not to degenerate into a quasi-confederacy.

(The author is Emeritus Professor, National Institute of Public Finance and Policy)