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ShareThere is nothing particularly novel about Gujarat chief minister Narendra Modi's demand that he would rather withhold the state's contribution to the central tax pool because it gets so little in return.
Friction between the states and the Centre is fairly common -- and not unnatural -- in a federal set up and while there are often genuine grievances, often there is a political calculation behind the stance.
There have been many before Modi who made the same point with greater clarity and force. West Bengal's Jyoti Basu and Asok Mitra argued that the Centre cannot be an arbitrary dispenser of tax revenues.
Andhra Pradesh's NT Rama Rao and Tamil Nadu's Karunanidhi made it an issue of federalism, where the states should be less dependent on the Centre for undertaking public projects.
They accused the Centre under Congress rule of discriminating against states ruled by opposition parties. Bihar's leaders had argued for a long time that given the state's mineral wealth -- this was before Jharkhand was carved out -- it could be self-sufficient.
But there is also the general, if not stated feeling that the richer states are subsidising poorer ones and this cannot go on in the same fashion.
It can of course be argued that the economic vibrancy of Gujarat has less to do with political management and more to do with the entrepreneurial talents of the people who beat an unfriendly system.
But this is precisely the point that Modi wants to harp on; his Gujarati asmita is built on the notion that the acumen of Gujaratis in and outside the state will see the state through -- it does not need central largesse.
It is a political message rather than an economic one and its timing -- in the run up to the elections within the next few months -- must be kept in mind.
He has his job cut out of delivering maximum possible number of seats from Gujarat for his party -- a bit of sabre-rattling never goes waste.
The question of sharing tax revenues between the Centre and states has cropped up time and again. Successive finance commissions have addressed this very issue and they had come up with various formulas over the share of revenues
between the Centre and the states.
It is true that not all of them have been ideal or even satisfactory solutions. But that is an inherent part of a quasi-federal system like that of India.
Modi must surely know that, as much as he knows that no Indian state can exist totally on its own, without the contribution -- in terms of markets, talent or access -- of the others.
This kind of bravado might play well with his constituency, but has limited appeal beyond that.
