A Call for Balanced Growth and Representation
The North-South divide in India has been a long-standing issue, with concerns about both fiscal and political disparities. Former RBI Governor D Subbarao emphasizes the need to address this divide through a multi-pronged approach.
On the fiscal front, Subbarao highlights the practice of cross-subsidization, where richer states contribute more to the central tax pool than they receive back. While acknowledging the necessity of this practice in a diverse country like India, he raises the question of whether the current level of cross-subsidization is sustainable. He suggests setting an end date for this practice and implementing formula-based adjustments to ensure a more equitable distribution of resources.
The political dimension of the divide centers around the upcoming delimitation exercise in 2026, which will redraw parliamentary constituencies based on population changes. Southern states fear that this could lead to a loss of seats relative to the North, further exacerbating the existing imbalance. Subbarao advocates for a phased approach to delimitation, coupled with a clear end date for cross-subsidization.
He emphasizes the importance of finding a solution that benefits both the South and the North. This requires strong political leadership at both the central and state levels to ensure balanced growth and representation. He believes that a formula-based approach, addressing both fiscal and political aspects, can pave the way for a more united and prosperous India.
The concerns raised by southern states regarding population growth and its impact on delimitation are valid. However, Subbarao's call for a balanced approach that promotes growth in both regions while ensuring fair representation is crucial for the long-term well-being of the nation.