They are also keen to work in partnership with the Central government, to ensure policies are smoothly implemented.
Even when states compete to attract investments by aggressively pursuing their growth agenda, they expect greater devolution of powers from the Central government, especially in granting environment clearance and implementation of development schemes.
Further, the states want to work together with the Central government to get things done and keep the country on a stable and sustainable growth path.
This was the unanimous view that emerged at the panel discussion on “The New Role of the States: Catalysts for Growth”, at the Indian Economic Summit.
Said Oomen Chandy, chief minister of Kerala: “An understanding between the Centre and the states is a must. That will only strengthen the confidence of the people.”
Prithviraj Chavan, chief minister of Maharashtra, which includes the city of Mumbai, said that, in his view, states have no problems communicating their concerns and needs to the Central government – even if a different party is in power in Delhi than the one that governs a particular state.
“I don’t think there is any difference,” said Chavan, who is a member of the Indian National Congress, the party that leads the governing coalition at the federal level. “By and large, all states are treated equally.”
Yet, there are friction points. Environmental policies and infrastructure project approvals have proven to be difficult areas for states and the Central government to find a balance of power. “States really have to work hard to get environmental clearances,” explained Shivraj Singh Chouhan, chief minister of Madhya Pradesh.
“Projects certainly do get delayed. Many irrigation projects don’t get cleared. You need to give rights to the states. We have them, but they are quite few.” He insisted that a proper balance needs to be struck between development and environment protection. He observed that several projects were delayed due to decisions relating to the “go and no-go” policy.
Chandy complained that the Central government was quite adamant in clearing the Athirappilly hydro project in Kerala. “The project is quite crucial for the state, but despite repeated attempts by the Left Democratic Front government and the United Democratic Front government, the Central government has not yet granted clearance,” he noted.
As expected, the Lavasa hill city development project figured during the panel discussion. Maharashtra Chief Minister Chavan said, “It is a Central law that is being violated. Some penal action is required. There is a new awareness of the need to protect the environment. The environment laws were passed during Indira Gandhi’s regime but they have been violated galore.”
In Canada, provinces have a great deal of power over environmental policies and project approvals, remarked Christy Clark, Premier of British Columbia, which is on Canada’s west coast. She noted that British Columbia has instituted a carbon tax, the first such levy in North America. “Because we have carefully observed the rights of provinces, we have liberated provincial economies to do more for the country,” she reckoned.
Added Maharashtra Chief Minister Chavan: “Decentralisation is generally a good idea, but on environmental matters we have a very bad record. Somebody has to make sure that a country’s flora and fauna and natural resources are not completely destroyed. We need the guiding hand of the government.”
The panelists agreed that the states should also collaborate and exchange ideas with each other.
“State-to-state cooperation is very beneficial,” Chandy remarked. In fact, the chief ministers of both Maharashtra and Madhya Pradesh stated that they were open to innovation and the exchange of ideas among themselves.
The chief ministers welcomed a proposal from a participant that a think tank or non-partisan policy unit be established to help states develop policies and avoid repeating research, analysis and preparatory work.
Clark said that British Columbia routinely consults with other provincial governments and has copied policies that have worked in other provinces. All of Canada’s provincial premiers will visit India on a joint mission in 2012, she told participants.
A file photo of Prime Minister Manmohan Singh with UPA chairperson Sonia Gandhi.
Tariffs are determined primarily on cost-plus method and reviewed by the electricity regulatory commissions