'Union eating into states' resources’: Full text of Pinarayi speech at Delhi protest

The Kerala government, organised a protest in New Delhi’s Jantar Mantar against the Union government on Thursday, February 8, against the financial curbs imposed by the Union government on southern states and alleging that they are eroding democracy and federalism. 

Led by Kerala Chief Minister Pinarayi Vijayan, the event received support from across the political spectrum. Apart from leaders of the Communist Party of India (Marxist), the event had the presence of two Chief Ministers from Aam Aadmi Party (AAP) - Delhi CM Arvind Kejriwal and Punjab CM Bhagwant Singh Mann. 

Tamil Nadu Minister for Information and Technology Palanivel Thiagarajan, and former Chief Minister of Jammu and Kashmir Farooq Abdullah also attended the event to extend their solidarity. Communist Party of India (CPI) General Secretary D Raja, CPI(M) General Secretary Sitaram Yechury also shared the stage with Pinarayi Vijayan.

Stating that February 8 was a red letter day in the history of the Republic of India, Pinarayi Vijayan said the fight to ensure that India remains a sovereign secular democratic republic with federalism as its hallmark would be a long drawn one. 

Here’s the full text of Pinarayi Vijayan’s speech: 

Dear friends and comrades, greetings to you all.

Today, we are at a historical juncture of the Indian republic. A democracy that was envisaged as a 'Union of States' is slowly and steadily being crippled into an undemocratic 'Union over States'. We are seeing its manifestations around the country, especially in opposition ruled states.

We have all come together to register our strong protest against this and to preserve the federal structure of India. Today we are marking the beginning of a renewed fight that would herald a dawn of ensuring equitable treatment of the states. This fight would also strive to maintain a balance in the Centre - State relations. Thus, the 8th of February 2024, is going to be a red letter day in the history of the republic of India.

At the outset, let me extend a warm welcome and convey greetings to all those who have gathered here representing various State Governments and opposition political parties. The fight to ensure that India remains a sovereign secular democratic republic, with federalism as its hallmark, will be a long drawn one. Let this be an opportunity for all of us to reaffirm our commitment to this struggle.

Over the years, the Union has been making laws that encroach upon the states' powers and duties in several sectors, even on law and order, which are absolutely in the state list of the Constitution. Laws have been made by the Union in agriculture, education, power, cooperation and so on, crippling the states' rights. Even a Ministry for Cooperation has been formed. Multinational agreements are being entered into, on issues that affect the states, without seeking the states' opinion, let alone getting their consent. These are all telling examples of how the rights of States are being trampled upon and how India is being changed into an undemocratic 'Union over States'.

However, the body blow to India's federal structure is coming from the Union eating into the states' financial resources. It is being alleged that the same people who wax eloquent about cooperative federalism, have tried to undercut the resources to be allocated to the states by the Finance Commission. On top of that, we are seeing the Union's allocation for their own schemes coming down year after year, while the states are being forced to chip in more and more.

As it is, the states are having to shoulder the major burden of expenses in the country. According to RBI reports, the states are having to cover a substantial 65 percent of the country's total expenses, with the Union's contribution being only 35 per cent. But when it comes to revenue sharing, it goes in the reverse direction. The Union Government pockets about 65 percent and the states are left with only 35 percent. States have to meet 65 percent of the expenses with only 35 percent of the revenue. Even in the interim Budget that was presented a few days back, the States are being further squeezed as the loans given for capital expenditures have been reduced.

Despite the Union having a lower share than the states in many central schemes, they are keen to brand them. They even go to the extent of saying that funds will not be issued if there is no branding. Branding is essentially labelling. By doing so, the self worth of the beneficiaries of such schemes is being questioned. No responsible government that sees development and welfare as people's genuine rights can name and shame their own citizens.

Let's take the example of Kerala's LIFE Mission. So far 3,74,508 houses have been built under it. A total of Rs 17,104.87 crore has been spent for it. The Union's share in it is merely Rs. 2,081.69 crore, a paltry 12.17 percentage. 87.83 percent of it has been borne by the Government of Kerala and the LSGIs in Kerala. Even in this project, they are adamant that they should be named. If not, they say that they will withhold even their miniscule share. Just because the Union demands that their name board should be kept, let's not be under any illusion that this project is their benevolence.

Just imagine the pitiable scene of a poor man's house bearing the mark that it is somebody else's gift. To put such a mark amounts to an insult on the self esteem of the concerned family and would result in a shameful stigma that they will have to suffer even after generations. We would like to make it very clear that the State of Kerala will in no way allow it to happen.

We see a rapid rise in the Union's revenue earned through Cess and Surcharge. They need not be shared with the states as they do not come under the divisible pool. There has been a rise of 133 per cent in collection of major Cess and Surcharge levied by the Union Government on various products between 2017-18 and 2022-23. It went up from Rs. 2,18,553 crore to Rs. 5,10,549 crore during that five year period. Despite amassing all this revenue, not a single penny from it is shared with the States.

We all know what has happened with GST compensation. It was regularly being delayed and it was when many of us State Governments decided to approach the Honourable Supreme Court together that the Union Government disbursed arrears. The revenue neutral rate that was predicted when GST was being rolled out, is yet to be achieved. Yet, GST compensation has been done away with.

When GST was introduced, there were some calculations by the Ministry of Finance that envisaged that in order to be revenue neutral, the average GST rate must be at least 17 percent. Until we achieve that specific benchmark the Union Government is obliged to continue GST compensation. The current average rate is only 11.4 percent. States had to give up considerable financial rights so that GST could be introduced. Now, we should stand together to ensure that what is rightfully ours isn't denied.

The 'Union over States' mentality is being reflected in how the Governors across opposition ruled states are functioning. Constitutionally, Governors are to exercise their duties on the advice of the State Cabinets. However, we are seeing this phenomenon of Governors in opposition ruled states acting at the behest of the powers that appointed them, ie, the Union Government.

We are gathered here in Delhi, where the Union Government has intruded extensively into the powers of the state government. As you are aware this has become subject to severe criticism of the Supreme Court. We are all familiar with the case that was filed by the Delhi state government in the Honourable Supreme Court, and the verdict of the Constitution bench. However, within days of that landmark judgement in which the Honourable Chief Justice opined that 'a constitutionally entrenched and democratically elected government needs to have control over its administration', the Union Government introduced an Ordinance and subsequently passed a Bill in the Parliament. It proves to us that the Union Government will go forward with their authoritarian tendencies to any extent, to usurp the rights of the States.

We have seen gubernatorial excesses in Punjab, West Bengal, Odisha, Telangana, Tamil Nadu and so on. In many States including Kerala, we have seen Governors trying to over reach their Constitutional mandate by meddling with the autonomy of the Legislature. Assent to Bills passed by Legislative Assemblies have been indefinitely delayed. In this context, it is to be noted that the Supreme Court did warn the Governors that they were playing with fire. Yet Governors continue to play their political games. Multiple State Governments have had to approach the judiciary against such undemocratic high handedness.

Kerala's Governor does not have time to spend in Kerala. Mostly he is outside. If at all he comes to Kerala, he does not have time to read out the entire Governor's Address in the Assembly. But, he has time to sit on the road and create a scene.

In all opposition ruled states, there have been instances of Chancellors acting at the behest of their political masters in matters related to universities. Interests and Statutes of the States are being sidelined in this regard. Rather than consulting the State Governments, even on matters related to State funded Universities, Governors have made political interferences as Chancellors. In Kerala too, the same is happening. The Chancellor, by misusing his powers, is appointing Senate Members according to his own whims and fancies in an attempt to usurp the administration of Universities and thereby even destroying the academic autonomy of our Universities.

There are some who alleged that this protest in Delhi is politically motivated. In reality, it is that allegation which is politically motivated. This protest is against the denial of what is rightfully ours. Isn't it a fact that our borrowings have been limited and that our grants have been denied? How is it politically motivated to point it out?

It is not just Kerala that is protesting against the political discrimination against States. Karnataka has also come out in protest. They say that they suffered losses to the tune of Rs. 1,87,000 crore, a loss that is similar to that of Kerala's. The party that is in power in Karnataka is not the same as the party that is in power in Kerala. Aren't State Governments run by different political parties having to protest against the same issues, because it is true that they are facing discrimination? Is this politically motivated?

In yesterday's The Hindu Newspaper, there was an article written by two independent financial experts. They are not from Kerala. They are from Tamil Nadu. In their article about fiscal federalism, they are proving with the support of authentic data that the Union's revenue is spiking, while the states' share is plummeting. When they are describing the overall situation of the States in the country, is it politically motivated?

When federalism is destroyed it will cause losses to all the states. On top of that are the politically motivated actions against non BJP run States. Efforts are on by certain sections to depict the genuine demands of states as an issue of North - South divide. It is totally untrue, unfounded and baseless. Ours is a democratic protest against the undoing of federal structure and the sheer discrimination against the States irrespective of  North – South considerations. However, taking into account the interests of our people and our State, we cannot be quiet.

In our attempts to strengthen federalism and cooperative federalism, all these issues need to be addressed in such a way that India flourishes as a 'Union of States' instead of nose-diving into an autocratic 'Union over States'. I hope that today's gathering will go a long way in reaffirming our resolve to strengthen our states and thereby, our country. Let us hope that more States and opposition parties will join hands in this democratic struggle.

Let me conclude by thanking you all for your presence and by extending greetings to you all once again. Thank you.