Amidst the ongoing debates surrounding Centre-state financial relations in India, Amartya Lahiri, a professor at the University of British Columbia, emphasized the underutilization of India's federal structure, advocating for enhanced competition among states as a solution to the persistent tussles.
"We don't take sufficient advantage of our (India's) federal structure; we have traditionally ended up relying too much on the Centre," Lahiri remarked during a session at the 4th Columbia India Summit held by Columbia University in New York.
The history of disputes between the Centre and states over economic policies in India dates back decades.
Recent years have witnessed a surge in both the frequency and intensity of such disagreements, with states like Karnataka and Kerala accusing the central government of neglecting their interests.
Lahiri highlighted the importance of fostering competition among states to encourage the adoption of best practices, stating, "Are we getting the states to compete with each other in terms of best practices, demonstrating the fact that you could lose business, if you are not."
Lahiri said in the current scenario, it seemed too easy for the states to complain that the Centre was "squeezing stuff", adding that while some of the concerns raised by them may be valid but some could be political posturing.
"This apprehension that some states are being discriminated against is a politically-vitiated narrative which, I am sorry to say, vested interests are happy to go about saying,” finance minister Nirmala Sitharaman had said on the tussles.
"It is important to take that option away because it is easy for misfunctioning states to hide behind the claim that the "Centre messed us up".
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