The Centre's Funding

The last session of the present Assam Assembly was unfortutely devoted largely to a condemtion of the changes being brought about to the Centre’s funding pattern for Assam. Interestingly enough, on the issue of the Centre’s funding pattern the ruling Congress and the Opposition parties were united in seeking to perpetuate a funding pattern for development projects that is very different from the funding of other more advanced States. The logic behind expecting the Special Category status for Assam and the other States of the North-east to continue for ever is rather flawed. The argument is that since Assam has been enjoying the Special Category status since 1969, this funding pattern should be continued for ever regardless of the long-term effects of such partial measures on the people of the State and their ability to compete with people from the rest of the country as equals. The present pattern of funding for Special Category States which is 90 per cent grant and 10 per cent loan (generally referred to as the 90:10 pattern) puts them in the category of States that approach the Centre with begging bowls. It is a funding pattern calculated to antagonize other States of India that have a less favourable funding pattern against the people of the Special Category States. Such a discrimitory dispensation also has the potential of stoking separatist aspirations among States that are not favoured as Special Category States. No one is disputing the fact that there are historical differences between the abilities of people from different parts of India to compete and ensure development on the basis of merit and competition. Backward States that needed time and skill development to compete and survive as equals had to be given some kind of a leg-up initially to come up to the level of other more advanced States of the Union. The backward States have had the benefit of the time required to come up to the level of other States, since the Special Category status in the matter of Central funding has been extended for over 46 years since 1969. If the Assam government and governments of other Special Category States failed to ensure the skill development required for competing with other States in almost half-a-century, the Centre can hardly be blamed for it. There is something about the liberal funding pattern for Special Category States that is comparable to the provision made in the Constitution for reservations for the SC and ST categories. These reservations were meant for a period of 10 years. Our lawmakers amended the Constitution and extended these reservations indefinitely to the detriment of what perpetual reservations have done to those sections of our society that were supposed to be the beneficiaries of such reservations. Unfortutely, our politicians lost no time in politicizing these reservations. What is happening now is that there is an attempt to keep up the flow of easy money that is assured by the 90:10 funding pattern. There is no dearth of politicians in the State who are perpetually moaning and groaning about the lack of funds for development of the State. Such politicians always strive to skirt around the reality of what is happening to taxes due to the State being collected at the check gates. The reality is that compared to say 1971, the quantum of consumer durables and essential commodities imported from the rest of India to Assam has increased several thousand times. The tax structure remaining more or less the same, the tax revenue has also increased several thousand times. But instead of accruing to the exchequer, the system of vouchers ebles tax revenue to be diverted to private coffers leaving only the crumbs for the exchequer. If the corruption in the handling of tax revenue can be stopped completely, the need to go to the Centre with the begging bowl at all times will cease. When this happens, people will begin to regain their self-respect and almost certainly work towards the kind of skill development that makes it possible to compete with the rest of the country and to sustain the newly acquired self-respect. One cannot hope that people will have self-confidence without self-respect, or that self-respect and self-confidence are possible in a political climate that seeks to perpetuate the charity of the Centre. The 90:10 funding pattern creates the kind of soil on which only two things grow: easy money and the rampant corruption that stems from it.