BS Yeddyurappa, former chief minister of Karnataka [ Images ], is eager to return to his former post, which he was forced to vacate after the state lokayukta held him responsible for corrupt practices relating to allocation of plots to his family members. Karnataka saw a scam in illegal iron ore mining under his rule. Despite this being the case, Yeddyurappa not only continues to command the support of a sizeable number of Bharatiya Janata Party [ Images ] legislators from Karnataka, but is also able to threaten the BJP high command in Delhi [ Images ] with revolt if he is not reinstated.
What enables a politician like Yeddyurappa to defy the party's central leadership with impunity? Earlier, too, we have seen a whole host of Congress leaders like Mamata Banerjee [ Images ], Sharad Pawar [ Images ], etc walk out of the Congress party to set up their own regional outfits.
Yeddyurappa is not the exception but part of an overall fissiparous trend where power is shifting from the Central leadership of political parties to the states. This is obvious when you consider how various states have been able to hold up implementation of central legislation in areas like the GST, FDI in retail, NCTC, etc. Indeed, the Trinamool Congress [ Images ] and the Dravida Munnetra Kazhagam [ Images ] have even been able to scuttle or modify foreign policy initiatives of the Centre with neighbouring countries.
The trend has been brushed aside as either the inevitable result of a weak coalition government at the Centre or an affirmation of India's [ Images ] federalism. Were it so, there would be no cause for undue worry. However, Yeddyurappa's easy defiance of the BJP high command, despite being in the dock on corruption charges, points to much deeper forces at work in shaping our polity than mere regionalism or federalism. It is time to dig deeper into the phenomenon.
India may have been a cultural unity for thousands of years but it was never a political one. Instead, it was a political patchwork of small regional satrapies of varying hues and quality living together in uneasy coexistence. Prior to British rule in India, we had no experience of a strong central government, common currency, central army funded by nationwide taxes, and a national market for goods, services and finance. If culture and religion transcended the fragmented political principalities, it was despite them, not because of them.
The mutual wars and jealousies kept India divided with disastrous consequences for the region as a whole. Therefore, it is well to bear in mind that the nationwide political union that our generation of Indians takes for granted, is a very recent phenomenon in our long history. There is no natural constituency to protect and preserve Delhi's power over the Union above and beyond the Union government itself.
Back in the days of our dalliance with socialism and the dogma of central planning, every little economic and political initiative came out of the womb of a faceless central bureaucracy. In many areas untouched by reforms, it is still so. What gave the Union its power over the states was our system of taxes wherein about 70 per cent of the taxes are collected directly by the Union and then devolved to the states by a formula devised by a Finance Commission every five years.
This enables the Union to maintain an army, pay for a large central police force and to dictate the developmental programmes that states adopt. Reforms have not changed the formal system by which the Union exerts influence on the states. However, parallel to the formal structure, was a less formal way of political control over regional leaders followed by mainstream political parties.
The Congress party has an organisational structure that closely mirrors the formal state structure with a central leadership led by its president, aided and assisted by a working committee that looks suspiciously like the Union Cabinet and has many common members. At the state level, the party is similarly constituted statewise right up to the district level.
A group of states are "looked after" by general secretaries at the centre, who report to the president. These general secretaries are often former chief ministers from different states. In theory, the party high command exercises tight control on who is the chief minister, who gets into his/her cabinet and the clutch of policies the state follows. The BJP closely mirrors the Congress party structure functionally but with a different nomenclature.
In many ways the formal, legal structure for the Union's control over the states cannot work without the political party structure through which the chief minister and his/her cabinet colleagues are appointed. In fact, in normal times it is the political structure that overrides the formal Union. And Yeddyurappa's defiance of the BJP high command, or the walking out of Congress by Mamata Banerjee to form her own TMC, like many others before her, must be understood more as part of the changing political dynamic following reforms.
Political parties are hungry cash machines with very little income. Money drives everything in a political party, from publicity expenses, staff salaries, and office bills to the fortunes needed to fight elections. Not surprisingly, he who pays the piper calls the tune. While all politicians and parties prefer to obscure this evident fact, we need to examine its influence on the polity in some detail. Needless to say, all political parties are guilty on this score. We should not miss the woods for the partisan trees. Absent a viable legal source of funding, all political parties raise monies through rent extraction from businesses using government controls, favours and assets. Public donations are a fiction.
Prior to reforms, under the licence and permit raj, businesses needed a licence or government favour to expand, import a raw material, or to manipulate markets through changes in excise duties, import duties, or even raid a rival for tax evasion. Rent extraction under such a scheme was easy. Corruption was pervasive, leaving nothing untouched. Rents were key to profits. Trading favours with businesses raised funds.
Since most of the favours were in the power of central government to give or withhold, fund collection was centralised. Money flowed to the party high command from where it was distributed to regional leaders when required. Under this system, revolt against the central leadership of a political party, though not unknown, was rare. To revolt or defy meant certain banishment into arid wilderness without money.
With dismantling of the licence and permit raj, a whole system for corruption and rent extraction vanished. New sources had to be devised. Lacking other devices, these have been found in sale of government-held assets like spectrum, mines or land. The shenanigans in this area are in the press daily.
But what should concern us are two things. First, in mining as in land, the control of assets is squarely with the state government or the chief minister. So rent extraction now happens at the state or the regional level rather than the central level as before. Second, if the political party that is in power at the state but not the Centre has a defiant chief minister on its hands, it has no coercive power to put down the revolt. That is the BJP's predicament regarding Yeddyurappa.
In both the BJP and Congress, the centre depends on the states to raise funding. If the loss of control by the central leaders on Congress party apparatus is not so stark, the reason owes more to brand equity of the Gandhi name as a vote-getter within the Congress. Over time even that will attenuate.
Devolution of formal powers, as envisaged in the Constitution, should be carefully distinguished from the breakdown in political control of regional leaders within political parties. The two are different and distinct issues. We need more formal power delegated to states, cities and municipalities, not less. We need some 500 new cities which are self-managed to cope with urbanisation.
But along with that we need strong national level political parties. Necessary reforms for these are urgent and obvious. Firstly, we must mandate open, transparent, independently conducted, intra-party organisational elections through the Election Commission. That will ensure a measure of inner-party democracy that parties sorely lack in order to reconcile internal differences. Secondly, we need to grasp the nettle of political funding. That cannot be delayed any longer.
We are but one step away from mafia rule in some states because corruption has ceased to be an issue that turns off voters. Note that the Union government is no more than a mute bystander in the Karnataka imbroglio despite its implications for the country's governance. Given our long and disastrous history of regional satrapies, to allow central institutions to weaken further would be playing with fire.
This is one unintended consequence of reforms that we need to address urgently.