India’s federal administrative structure presents its unique set of challenges. Many public policy issues require tightly coordinated action by the central and state governments to realise their objectives. The complex nature of the issues adds to the necessity of such coordination.
Consider a few examples of public policy problems:
1. The continuously expanding expenditures on subsidy schemes like health insurance and tertiary education scholarships.
2. Increase the revenue base of urban and rural local bodies and achieve full devolution of powers as required under the 73rd and 74th amendments to the Constitution of India.
3. Reforms to the open-ended paddy procurement at the Minimum Support Price (MSP) which distorts incentives and results in the accumulation of rice stocks.
4. Address the problem of poor student learning outcomes in schools and acutely deficient employability skills.
5. Efforts to ensure the affordability of housing in the largest cities and expand the mortgage market.
6. Maintenance of the decentralised water supply schemes established under the Jal Jeevan Mission.
7. Introduce public-private partnerships (PPPs) in social sectors like health, education, skilling etc.
8. The problems facing power distribution companies in reducing distribution losses and dealing with the distortions caused by free power to farmers.
All these are complex problems with political economy implications that require the centre and states to work together. Besides, these problems bind with similar intensity across states and regions. Finally, they are also national challenges, and addressing them is essential for the country’s future.
Each has its respective solutions and their implementation strategies. But even with the best technical solutions and strategies, the political economy challenges detract from their effective pursuit. There’s a need for a bipartisan consensus.
Therefore, it’s essential to proactively and institutionally co-opt the state governments as partners in the journey. One way to co-opt state governments would be to constitute institutional forums which bring together the states and centre at political and executive levels and empower them with the mandate to deliberate and arrive at a consensus on important implementation challenges.
Such challenges may include overcoming the opposition of important stakeholders, mobilising additional resources by leveraging funds from different sources, adopting new approaches and practices (and shedding certain existing ones), compensating or mitigating those who suffer losses from their implementation, changing/revising associated laws and institutional structures, and so on.
There can be a forum of the respective Ministers of the state and central governments, supported by another forum of Secretaries to governments. To make discussions fruitful, it may be useful to restrict this forum to 6-8 members, with state governments rotating every two years. To ensure bipartisan support for the decisions emerging from the forum, it must strive to ensure equal or more representation from opposition-ruled states.
The union ministers concerned could chair the forum. It could be convened at least once a quarter. It could create sub-committees of ministers and/or secretaries and entrust them the responsibility to work out the details on specific issues, and have the forum debate and take decisions. The decisions of the forum must be consensual and not binding on the state and central governments. All this will help assuage apprehensions among states about the intent behind establishing them.
The force of moral suasion and collective support is often sufficient to tip the balance among fence-sitting states. Besides, even if there’s disagreement, the fact that such an inter-state forum discussed the problems in detail should provide sufficient impulse for interested states to push ahead with the implementation.
Also, the discussions in these forums could trigger debates and strengthen the hands of supporters of reforms, thereby creating the space for progress in at least some states. Given the nature of these issues, it’s unrealistic to expect all states to implement them together and uniformly. Instead, the discussions could unleash dynamics that bring together a few states to implement the reform. The others would follow suit gradually based on the results of those at the vanguard.
Further, the discussions would serve as a safety valve for all sides to express their opinions, be heard, and have decisions taken collectively. The chairpersons of each committee, representing the central government, could take extra care to steer its discussions away from becoming entrapped in political grandstanding.
In the initial stages, such forums can confine themselves to issues where there’s a policy consensus on the objectives but there are differences in their implementation or where implementation is fraught with practical problems. Accordingly, it must be made explicit that the forum’s discussions centre on the implementation challenges and stay away from high-level policy issues. Once the institutional confidence increases, the scope of these forums can be expanded. The forums can become departmental platforms to deliberate and make recommendations that could form the basis for new policies and schemes.
It can initially be experimented in a couple of departments and gradually expanded by incorporating changes based on emerging feedback.
There are good precedents that point to the value of such forums. The GST Council is an outstanding example where the central government has achieved consensus on a complex issue, also through exemplary statesmanship by successive union finance ministers.
Instead of creating new committees across departments, it could also be considered to have these as sub-committees to the Inter-State Council (ISC). The Council could decide on the issues to take up and also create sub-committees to deliberate and either decide or even recommend to the ISC.
The policy issues listed earlier are too complex to be easily amenable to even such well-intentioned institutional efforts. More importantly, the political differences and polarization are real, and it’s unrealistic to expect such neat institutional mechanisms to bridge those differences. It will therefore be a very messy journey. But this mechanism provides a good starting point to engage meaningfully on the problem with at least an intent of collective pursuit.
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