T H E E C O N O M I C W E E K L Y M a y 6, 1961

An Analysis of Central Government Expenditure I S Gulati

IN a year when substantial addi­tions are proposed in taxation,

attention is bound to concentrate on the pros and eons of the various tax proposals. But taxes are only a means to an end, the end being the expenditure of the Government. The pure ly f iscal po l icy objectives apart, taxes are levied and addi­tions to them are proposed and just i f ied on the score that so much more of useful or necessary expen­d i ture has got to be incur red by the Government. It is, therefore, neces­sary that the expenditure proposed to be incurred should he carefully scrutinised by the legislators and the publ ic al ike. Of course, there are independent reasons for such a sc ru t iny ; that is to say, a scrutiny of Government expenditure is neces­sary even though the expenditure proposals are not accompanied by proposals for fresh taxat ion. Such a scrut iny should ensure that what­ever expenditure is incur red Is dis­t r ibu ted over various items in such a manner as to secure the maxi ­m u m social good in the sense that if various items of Government ex­penditure could be arranged in one order of social pr ior i t ies , first things should come first and not last; otherwise. Government expenditures are not being wisely spent. A l l this is meant to emphasise the impor­tance of exercising the utmost v ig i l in so far as the Governments ex­penditure proposals are concerned.

Let us now examine how the ex­penditures of the CentraI Govern­ment of Ind ia h a w been increasing over the past decade or so and how the increases that have taken place over this per iod been dis tr ibuted and whether this d i s t r ibu t ion con­forms to the broad s'benie of social p r ior i t i es . It is proposed to con­fine our present analysis to the Cen­t ra l Government's expenditure on revenue account.

Broad Classification

Table 1 analyses the expenditure on revenue account for the per iod 1950-51 to 1061-62 under six main heads ; Defence Services, A d m i ­nistrat ive Services, Social and Deve­lopmental Services. Debt Services, Miscellaneous, and Contr ibut ions to States. Our classification follows b road ly the pattern in t roduced as

f rom 1961-62. Uptil now, c i v i l ex­pendi ture was shown under the group head ' C i v i l Admin i s t r a t ion ' . This , as the Finance Minis ter r igh t ­ly pointed out in his Budget Speech, " is somewhat misleading ", because "the budget in, its present f o r m does not indicate separately the expendi­ture incurred by Government on its adminis trat ive activities and on so­cial and developmental act ivi t ies" .

To remedy this defect, it has been decided to split the group head ' C i v i l Admin i s t r a t i on ' in to two : Admin i s t r a t ive Services and Social and Developmental Services. T h i s d iv is ion has been adopted by us but for a minor change in that we have included expenditure on ' F o r e s t s ' and ' F a m i n e ' under 'Social and Developmental Services'. Certain changes have also been introduced

Source : Annexures I to V I I to the Explanatory Memorandum on the Budget of the Central (Government for 1961-62

Notes : ( i ) Includes grants (Rs 5 crores) to States for Administrative Services which were previously shown under respective administrative heads but are shown in the 1961-62 Budget under 'Contributions and Miscellane­ous Adjustments,

( i i ) Includes expenditure on 'Forests' and "Famine*. ( i i i ) Includes grants (Rs 92 crores) to Stales for Social and Developmental

Services which were previously shown under respective expenditure heads hut are shown in 1961-62 Budget under 'Contributions and Miscellaneous Adjustments'.

(iv) Includes appropriation for reduction and avoidance of debt which has stayed put at the annual figure of Rs 5 crores from 1950-51 to 1961-62 ( B E ) .

(v) Includes 'Civil Works' and 'Extraordinary Items'. (vi) Includes grants (Rs 65 crores) to States which were previously routed

through the head 'Miscellaneous* but are shown in the Budget for 1961-62 under 'Contributions and Miscellaneous Adjustments',

(vii) Covers only statutory grants to the States. (viii) Excludes grants to. States which though shown in the Budget under

'Contributions and Miscellaneous Adjustments' have for purposes of comparison with the earlier years, been shown under respective heads of expenditure.

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f r o m the new year by the Govern­ment regarding the type of expen­di ture to be shown under the group head 'Miscellaneous'. These changes are to the good, because from next year onwards, o n l y expenditure which is otherwise difficult to classi­fy w i l l be accommodated under this head. But in the table given by us, we fol low the old pattern in order to main ta in comparab i l i t y of the 1961-62 Budget Estimates w i t h the Actuals or Estimates of the previous years. Other minor departures made by us in d rawing up the table are expla ined in the footnotes .

It can be observed f rom the table that the overal l increase in the ex­penditure on revenue account be­tween 1950-51 and 1961-62 has been of the order of 200 per cent. Interestingly enough, the increase in the expenditure on Defence Servi­ces has been the lowest at 72.5 per cent, followed by Debt Services which registered an increase of 120 per cent and Miscellaneous under which the increase was 137 per cent. The increase w i t h respect to Adminis t ra t ive Services was 200 per cent, the same as fo r the Centre's Con t r ibu t ion to the States in the f o r m of statutory grants-in-aid of revenue.

Defence Expenditure

W h i l e in absolute terms the ex­penditure on Defence Services might look quite substantial ( i t stands at Rs 283 crores fo r 1961-62 B E), it is significant that the i n ­crease in Defence expendi ture has been the lowest - a fact wh ich has both a disquiet ing and an encourag­ing aspect. The fact that between 1957-58 and 1960-61 (B E) the outlay on defence went up by Rs 10 crores only al though it is d u r i n g this very period that we faced the most serious threat to our Nor the rn borders, makes one suspect that en-ouch is not being done to stren­gthen the country's defences. The increase in Defence expenditure in 1961-62 is expla ined largely in terms of the upward revision of the nay-scales of the Defence personnel. In fact, keeping in view the fact that prices have risen in the past 10 years by nearly 25 per cent, the real rise in Defence expenditure in the last decade has been much lower than 72.5 per cent. One must not overlook the encouraging aspect, however. The very fact that ex­pendi ture on Defence has not i n ­creased sharply should have enabled

the Government to spend so much more on Developmental Services. The outlay on the latter cou ld not have been stepped up at the current rate if the demands of Defence had not been held in check. The ques­t ion that arises again and again in one's m i n d is whether we are not over-economising on Defence; fo r , if our defences are not strong, a l l the gains on the social and develop­mental side may be wiped out in a day.

Debt Services

The increase in Debt Services by 200 per cent can be explained in terms of the increase in the interest-bearing obligations of the Central Government by about the same per­centage. It should be added that income-yie lding assets held against the outstanding debt of the Central Government comprise a much higher percentage in 1961-62 than they d i d in 1951-52. The percentage was 68 in 1951-52 and it is l ike ly to be 81 in 1961-62, which means that nearly 90 per cent of the loans con­tracted d u r i n g the last decade were util ised for the creation of income-y ie ld ing assets. Table 2 summa­rises the Debt posit ion of the Cen­tral . Government.

Social and Developmental Services

Now, we come to the expenditure on Social and Developmental Ser­vices which has recorded a pheno­menal increase of over 800 per cent in the per iod under review. The expenditure on these Services was a mere Rs 29 crores in 1950-51 wh ich was about one-sixth of the expendi­ture then incurred on Defence Ser­vices and it has now risen to the figure of Rs 269 crores which is very close to the Defence estimates of Rs 283 crores. The heads ac­count ing for the increase in order of magnitude are : Industries, Edu­cation, Scientific Department , A g r i ­culture, Publ ic Health and Medic ine . The increase under Industries and Education together accounts for 54 per cent of the total increase in ex­penditure on Social and Develop­mental Services. Table 3 gives details of expenditure on these Ser­vices for the per iod 1950-51 to

1960-61. The figures for 1961-62 are left out because, consequent on the change made in the recording of development grants to States which were previously shown under respective expenditure heads but are shown in 1961-62 Estimates under the head 'Cont r ibu t ions and Miscel­laneous Adjustments ' , they are not comparable w i th the figures for the earl ier years.

Assistance to States

The increase of 200 per cent shown w i t h respect to 'Cont r ibu t ions to States' does not really tell the whole story. This head accommo­dated only statutory grants-in-aid un t i l 1960-61. O n l y f r o m the year 1961-62 it has been decided to show all grants (s tatutory and non-statu­to ry ) under one head. Rut i f we take all Central grants in to account, the increase has been of the order of nearly 600 per cent — an order of increase which comes next on ly to that recorded for Social and Developmental Services. In fact, a large part of the increase on the latter is itself explained by the i n ­crease of the fo rmer , because the Centre's direct expenditure on these Services is relatively small .

Administrative Services

Fina l ly , we come to Admin i s t ra ­tive Services and the increase in ex­penditure on these Services. The increase of 200 per cent is by itself quite substantial but compared to increase on Social and Developmen­tal Services it is moderate. It is quite common and even fashionable to object to any increase in expen­d i tu re on Adminis t ra t ive Services. It is forgotten that a certain amount of increase in this expendi ture is necessary and even inevi table in a society where populat ion is expand­ing and the Government takes on itself an ever-increasing number of welfare and developmental fun­ctions. St i l l one migh t object to an increase of the above order on pure­ly Admin is t ra t ive Services.

The d i s t r i bu t ion of the expendi­ture on different adminis t ra t ive heads is given i n Table 4. I t w i l l be observed that, of the increase of Rs 40 crores in the Admin i s t ra t ive

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expenditure of the Centra l Govern­ment, the m a x i m u m increase took place on T r i b a l Areas. Part at least of the expenditure under this head is of social and developmental na­ture. As f rom 1961-62, no expen­di ture is shown under this head. Provis ion for T r i b a l Areas made under the respective heads to which expenditure relates and the A d ­minis t ra t ive heads (General A d ­min is t ra t ion and Police) account for Rs 9.9 crores on this account. Next to T r i b a l Areas is Police wh ich ac­counts for Rs 9.7 crores of the increase. If the increase in Police

expenditure in T r i b a l Areas were added to i t , the increase over the pe r iod under review should be around Rs 16 crores (i e, 40 per cent of the total increase). It is i n t e r e s t i n g t o note that Cen­t ra l expendi ture on Police has i n ­creased by over 300 per cent. How much of this increase can be ex­plained in terms of reinforcement of border patrols is a matter of guesswork. It is hoped that this large increase in Police expenditure is not accounted for by internal law and order s i tuat ion. It would be a sad commentary on the po l i t i ca l sta­

b i l i t y of the country i f we have to provide for larger increases on internal Police than on external de­fence. As regards General A d ­minis t ra t ion , the increase of Rs 8.1 crores works out to a percentage in ­crease of only 100 which perhaps was unavoidable.

The items coming next are Ex­ternal Affairs , the head w h i c h regis­tered an increase of Rs 6.7 crores and A u d i t , the head which account­ed for an increase of Rs 5 crores. It is very difficult to find faul t w i t h increases under these two heads on general grounds though one may

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st i l l be in a posi t ion to object to details especially of External A f ­fairs because it is common know­ledge that a l l is not too wel l w i t h our foreign service.

Summing Up

In conclusion, one may say that the broad pattern of increase in the revenue expenditure of the Central Government follows the current ac­cent on Social and Developmental Services, a l though it is felt that

more should, have been set apart for Defence Services bi l l not necessarily at the expense of the Social and Developmental expenditure. Possib­ly, the increase under adminis t ra t ive Services could have been more res­trained, say not beyond 100 per cent. This could have meant a saving of Rs 21 crores per year, a sum which is quite substantial re­membering once again that over the past four years the Defence expen­di ture rose by only Rs 10 crores.

World Tea Industry

W O R L D tea markets enjoyed remarkably stable conditions in

1960. Product ion remained very near the level of the two preceding years and w o r l d trade is l ikely to have expanded only sl ightly over that of 1959, U n l i k e the prices of a number of other agr icu l tu ra l com­modities, tea prices in I 9 6 0 were firm and somewhat above the level of 1959. The qual i ty of 1960 pro­duct ion was not outstanding, but prices were supported by strong domestic demand and, in the f i rs t half of the year, by the small decline in output. Consumption in produc­ing countries is becoming a market factor of increasing weight and has

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been instrumental in the past years in preventing stocks of more than w o r k i n g size from accumulating in Far Eastern countries. Unless the drought of 1960 has done more lasting damage to young plantings than can at present be ascertained, the outlook for the current year is for a moderate rise in product ion in a l l g rowing regions and for higher consumption in A f r i c a and Asia .

W o r l d output of tea — excluding M a i n l a n d China and the U S S R - is estimated in I 9 6 0 at around 760,000 tons, very l i t t l e different f r o m the product ion of the two previous years. The prolonged and

severe drought which occurred in Nor thern I n d i a n and Pakistani tea-g rowing areas in the first hal f of the year substantially affected, produc­t ion. The out turn in Nor thern India was probably reduced by ab­out 1.5,000 tons, or 6 per cent, f rom the level of two preceding years and. a l though there was a small i n ­crease in Southern I n d i a , total Ind ian product ion w i l l remain some­what below that of 1958 and 1959. Output in Pakistan declined probab­ly by more than 20 per cent, and a slight reduct ion is expected in tea product ion in Japan. These short­falls, amount ing to a total of some 15,000 to 20,000 tons, w i l l have been par t ly offset, however, by ' larger output in Ceylon and to a lesser extent, Indonesia and total Asian product ion is l i k e l y to remain only about 10,000 tons, or 1 per cent, below the two preceding years.

As for the Soviet bloc countries, a record harvest of green leaves, equivalent to 35,000 to 40.000 tons of made tea, is reported f r o m the U S S R. On the other hand, trade reports indicate that M a i n l a n d China's tea crop has suffered severe­ly f r o m adverse weather and may remain substantially below the 1959 figure of 151,000 tons.

tions are autonomous, author i ty can he said to be federal . It has been r i g h t l y observed that the health of a democracy depends on the extent to which autonomous and self-govern­ing organisation — te r r i to r ia l pro­fessional arid "funct ional" 8 — add the flesh to the bones of a constitu­t ional fabric and thus make for a wide diffusion of power in society and provide effective channels of par t ic ipa t ion in the decision-making process, channels that l ink up the people w i th the wider democratic framework".

There is, then, a fundamental affinity between the philosophical idea of federalism and democracy. The concept of a wide dispersal of power underlies both ideas. It does not, however, follow that constitu­t ional federalism is the best means to achieve dispersal of power. Con­stitutional federalism does not by itself guarantee diffusion of power within States and it may well be that the pol i t ia l leadership at the national level is more awake to the need for diffusion than leader­ship at the State level. More im­portant, territorial autonomy does not exhaust the idea of federalism even if the pr inc ip le is carried r ight down to the vi l lage. How far "local self-governing inst i tut ions" (of the te r r i to r ia l type) become t ru ly self-governing depends upon the strength and v i ta l i ty of voluntary associations and on the extent to which the habit of self-government and the spir i t of give-and-take can be inculcated in them. Even a Panchayat Raj that ignores this aspect of democracy would be a poor substitute for a uni ta ry and centralised pol i ty where these tradit ions have become opera­tive in the work ing of voluntary associations. And if a Panchayat Raj does not lead to democracy, consti tutional federalism is even less l ikely to. The distinetion -drawn here between the constitutional idea of federalism (the theme of Centre-State relations) and the philosophi­cal idea of federalism (the proper theme of democracy) is. therefore, crucial , for any theoretical formula­t ion on federalism, ft is stil l more crucial , of course, for an adequate understanding of the substantive pol i t i ca l structure as it obtains in anv country.

How far does such a conception of democracy and federalism accord wi th the ideas of "local autonomy" and "decentral isat ion" as the latter

are understood by the proponents o f const i tut ional federal ism? N o w , there is no doubt that democracy as understood here impl ies both local autonomy and decentralisations of power (the latter term is not very tasteful fo r a democrat : he wou ld prefer " d i f f u s i o n " ; de­centralisation, however, can be con-ceived as a process rather than a f o r m , a process which leads to d i f fus ion) . The question is : whose autonomy? A n d what type of decentralisation)?

Federalism and Democracy

In a federal structure of govern­ment, the Slates or provinces are autonomous; decentralisation of functions is also f rom the Centre to the States: the two ideas coincide. To what extent then does autonomy as envisaged in a federal constitu­t ion , namely provinc ia l autonomy, give rise to democratic procedures and practices? In other words, how far does the separate and indepen­dent exercise of authori ty by the Slate governments encourage and foster (1 ) ind iv idua l freedom and (2 ) popular par t ic ipa t ion?

The extent of ind iv idua l freedom depends on several factors, chief among them being the extent of cohesion achieved by the poli t ical communi ty , the nature of p lu r a l i t y that underlies such a uni ty , the ex­tent to which tradi t ions of tolerance and give-and-take have taken root through a process of persuasion, discussion and compromise and the extent of effective control of the common cit izenry over those in power.

Now, if we take the States in India as the operative pol i t ical com­munities (on the pr inc ip le of con­st i tut ional federalism), it is clear that f one of these condit ions is fu l f i l l ed . Factionalism wi th in the ru l ing parties in the States, sectional loyalties and personal r ivalr ies hamper uni ty even w i th in the State ( leaving apart the larger question of the uni ty of the country as a whole ) . The p lu ra l i ty that exists is also made up more of exclusive groupings rather than of "associations".10 each per forming an important funct ion for the individuals compris ing it and a l l together p rov id ing so many channels for the development of natural leadership among the peo­ple. Tradi t ions of tolerance are, of course, not w h o l l y absent. There te often a vigorous press and there is

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enough scope for discussion. W h a t is d i s turb ing is the excessive fo rmal i sm of. such discussion, the negligible i n ­f luence of publ ic op in ion on govern­ment pol icy w i t h attandant frustra­tions and the fact that many of the popu la r "freedoms" are available to the people because of, rather than in spite of, the exercise of the Cen­t ra l government's powers. In any case, the sp i r i t of compromise is less evident in the states except when electoral prospects are at stake; and very often the Congress H i g h Com­mand or a Central M i n i s t r y becomes the court of appeal where solutions acceptable to the factions are work-ed out.

The effectiveness of control w i e l d - ' ed by the people over those in power is not greater at the State level com­pared to the Centre. Control is largely exercised by a legit imised eli te wh ich is subtly uni ted by common ties of education, social status, po l i t i ca l acceptabili ty and economic resourcefulness. To the extent to which the elite is itself d iv ided among factions, there is scope for compromise and there­fore for indirect control .

It is then difficult to establish that greater provincia l autonomy would in any sense be more conducive to ind iv idua l freedom than the exis t ing system. On the contrary, it is possi­ble to argue that pressures exerted on the State governments by local polit icians have been main ly respon­sible for frustrat ing progressive policies. The lesser leaders in the States are, on the whole, undoubted­ly more opportunis t ic in the exer­cise of power. Besides, most of the l iberal and power-dispersihg policies are ini t ia ted by the Centre or adopt­ed by the States at its direct ion. It is not my intention here to judge between the Centre and the States, but to show that the democratic pro­cess cannot be understood w i t h i n the r i g id framework of constitu­t ional federalism.

Centralised Decentralisation

The same arguments app ly to the other c r i t e r ion of democracy noted above, namely the extent to which popular par t ic ipa t ion is allowed in the decision-making process. No proof is needed to show that on the whole such par t ic ipa t ion is as yet confined to the r ight to cast a vote. At the same t ime, there is in this country a powerful movement for increasing people's par t ic ipa t ion in

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runn ing the affairs of the State. Proposals for "democratic decentra­l isat ion," the expansion of the Com­muni ty Development Programme and the encouragement of voluntary agencies in ca r ry ing out educational and developmental act ivi ty are evi­dences of the trend. What is re­markable in each of these move­ments, however, is that the in i t ia t ive has largely come f rom the Congress H i g h Command, the Planning Com­mission and the Central Minis t r ies . Some States have, of course, avai l­ed of the oppor tuni ty more than others ( though passing a Pancha-yat Act is not necessarily a sign of greater awaken ing) . On the whole, however, both the insp i ra t ion for de­centralisation (as in the adoption of the Mehta Committee Report) and the argument for greater f lex ib i l i ty and room for local variations (as in the Communi ty Development A d m i ­nistrat ion) have come f rom New De lh i .

A l l this shows that there is no necessary relation between the auto­nomy of the States and democracy. In many countries, especially in the Uni ted States and Switzer land, local autonomy has added enormously to the v i ta l i ty of democracy. But it need not necessarily be the case. Even in the Uni ted States the pro­blem of c iv i l rights for the Negroes has brought out that it is the Federal Government, backed by the autho­r i t y of the Supreme Court , that has supported the cause of freedom. The question is far more -complicated in a country l ike India which differs f r o m the Uni ted States in so many respects: the t r ad i t ion of authori­tar ianism, the structure of the party system, the absence of the habit of voluntary effort and the persistence of ascriptive group behaviour. Un­der such condit ions, the realisation of the objectives of democracy de­pends not on the size of the govern­ed unit but on the qua l i ty of govern­ment. Centralisation is not neces­sari ly a function of Union-State re­lat ione; it may exist as much, and under the exis t ing Ind ian conditions perhaps more, in the power relations that ob­ta in within a State. Po l i t i ca l l i fe in the States is in fact h igh ly cen­t ra l i sed ; the relat ionship between a State capital and the districts is s t r ict ly a relat ionship of h ie ra rchy : bureaucracy and red tape are the bane of State adminis t ra t ions . Local self-governing units are considered

by State Governments as agencies that carry out functions delegated to them. The pattern is one of dele­gation rather than of decentralisa­t ion . At the party level, too, the dis­t r ic t , city and village units have l i t t l e say in the decision-making process; it is in the capital of the State that most of the consultations — as well as bickerings —wi th in the State party (usually taking the form of exchanges between the parlia­mentary and the organisational wings) are carr ied out. The auto­nomy of the State, then, is not syn­onymous wi th the autonomy of the uni ty of habitat ion or occupation (which constitutes the true idea of local autonomy or decentralisation), s t i l l less wi th the freedom of the ind iv idua l citizen (which constitutes true democracy) .

Formal Federalism Outstand

That slates the theoretical posi­t ion . Federalism is a doctr innaire attachment of Ind ian intellectuals and the v o t e d interest of local pol i ­ticians. It is also thoroughly out of dale to speak of "States' Rights" in a rapidlv shr inking and terror-stricken wor ld . When even nationa­lism as a pr inc ip le of pol i t ica l or­ganisation is. on the defensive, the "independent r ights" of province-sounds ludicrous. S imi lar ly to con-fuse federalism wi th devolution of power and dispersal of in i t ia t ive is to confound the V I I Schedule wi th Ram Rajya. It is to misunderstand the locus of power in a democracy: the ind iv idua l is replaced by the te r r i tory . It is also to misunder­stand the nature of centralisation so often alleged to be taking place in modern societies. Centralisation can be no less, in fact it can be more, severe in States than at the Centre. Democracy should not be confused w i th the parcell ing of pow­er into neat portions of terr i tories. Such te r r i to r ia l "sovereignties" de­feat tin1 purpose of democracy in two ways : (a) by creating vested interests in the terri tories it frus­trates that unity of the larger com­muni ty which is so essential for real f reedom: without true uni ty the urge to be free takes to parochial channels and divis ive tendencies: ( b ) at the same time, power given to these1 lesser feudatories leads to constant pol i t ica l instrusion in indi ­v idua l and group l i fe which is more c ramping for ind iv idua l freedom and more co r rup t ing to the tenor

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of public life than is the case when the exercise of authori ty is f rom a remote seat of power, "Immediate government' is just if ied only when it is true self-government and where the conditions for self government exist. Where dispersal of power takes the fo rm of division of autho­rity into parcels which become, the preserve of select groups- party, re­gional or caste- ,"immediate govern­ment" may become arbi t rary and suffocating.

The line taken here is not that the so-called "un i ta ry trendy in federal ism" have become inevitable under the impact of the overall de­velopmental effort." An examina­t ion of the actual t rend in India w i l l f o r m part of the examination of the substantive process below; it w i l l be shown that to characterise the trend as " u n i t a r y " is to suffer f rom the same formal ism as discussed above and to neglect the true nature of the change which consists in the emergence of a new structure alto­gether. Here we are concerned wi th the theoretical posit ion. What is being questioned is a position which confutes federalism and democracy w i t h te r r i tor ia l autonomy. The latter may or may not lead to genuine democracy. It cer tainly will not under conditions where such auto­nomy becomes the preserve of a few, where the lack of an adequate orga­nisation of public op in ion turns poli­t ic- into a happy hunt ing ground for a small group of professionals and where the larger publ ic is faced by a series of fait accompli coming from the constituted authorities. The public, under such conditions, has not one but so main masters who. while appearing to act as "coordi­nate au thor i t ies" ' ; work ing for the people's good, help to add to the general confusion, generate f r ic t ion horizontal ly as well as vertically and perpetuate as well as aggravate the oilier divisive tendencies of indige­nous o r ig in by br inging them into the poli t ical sphere.

No Argument for Centralisation

To repeat. I am not here arguing for centralisation. If anything. I argue against centralisation, the be­devi l l ing effect of modern technlogy and the consequent pol i t ic isal ion of ordinary l ife processes. What is stressed here, however, is that cen­tralisation should not be confused wi th the power of the Central Gov­ernment. There are more than one

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comes hut allows none to p reva i l . Be that as it may, the fact I wish to stress here is that at the present juncture in Indian poli t ics inter-party struggles can only become effective by influencing intra-party struggles which, it should not be forgotten, contributes substantially to keeping the democratic t r ad i t ion alive.

The other level is provided by the adminis t ra t ion. Here too the t rad i t ional divisions of constitu­t ional federalism are bypassed by and adminis t ra t ion manned, in its higher layers by personnel drawn from the same A l l - I n d i a Services (or f rom those who undergo uni­f o r m t ra in ing programmes) . They receive the same type of education., chant the same key-words, breathe the same air and feel bound by a chronic esprit de corps.

Together. then, the poli t ic ians united by common party bonds and other selective processes in society and bureaucrats tied together by affinities that are a result of various standardisation processes provide the human material that shapes the pol i t ica l process. The process cer­ta inly involves centralisation in the sense that a well-defined elite guides the destinies of the nat ion. But it is not centralisation as alleg­ed by the proponents of constitu­t ional federalism for the simple reason that such federalism has been conveniently shelved to re­main in the pages of the by-now-dusty Consti tution.

To what extent the new central i­sation that has emerged from the subtle in ter locking of the r u l i n g party's H i g h Command, the Plan­n ing Commission, the Minis t r ies and the Admin i s t r a t ion is frustrat­ing democracy in this country is a subject that falls beyond the scope, of this paper. What I have t r ied to show herein: ( i ) that the doct r i ­naire attachment of Indian intellec­tuals to constitutional federalism is a product of mistaken identities in point of theory, and ( i i ) that, in point of practice, it bears l i t t l e re­semblance to the substantive po l i t i ­cal process, as it actually obtains in this country .

No Vertical Diffusion of Power

The preva i l ing views on federa­lism are far too fo rmal . There is either the "traditional" defence of States' r ights or the " m o d e r n " plea for a strong Centre. Or there is

the more sophisticated defence of the status quo de jure which regards cooperation, and not competi t ion, as the dominant p r inc ip l e of fede­ral ism. The analysis in this paper is concerned. instead. w i t h the status quo de facto. It departs f rom each of the positions noted above, d isapproving them as for­mal exercises which do amuse but fa i l to enlighten. (Another formal approach is that of Professor K C Wheare in his Federal Government where he defines the I n d i a n consti­tut ion as 'quasi-federal '1 5) . The al­ternative interpreta t ion that is offered here is an attempt to get closer to reality and to examine the theoretical assumptions of constitu­tional federalism in that l igh t . The conclusion that emerges is that a horizontal d ivis ion of pol i t ical authori ty is no substitute for a ver­tical diffusa on of pol i t ica l power, that to plead for greater autonomy of the States is not necessarily to plead for greater democracy, that to plead for greater power for the Centre is also to mistake the sub­stantive nature of the pol i t ica l pro­cess in this country and, f inal ly, that the actual structure that has

"emerged is neither federal nor unit­ary ( i n terms of te r r i tor ia l ju r i s ­dict ions) but one which has as­sumed quite different forms. The pol i t ica l party on the one hand and the adminis t ra t ion on the other play dominant roles in this struc­ture. The nature of centralisation to which such a structure has given rise however, lies outside the scope of this paper,

Notes 1 See Lord Acton who also con-

reives federation as a means to limited government, Essays on Freedom and Power. Chapter 5.

2 For Balance discussion of the relation between liberty and demo­cracy, see 1, T Hobhouse, Ele­ments of Social Justice. The oppo­site viewpoint to that presented in this paper was very ably expressed in Sir Erskine May's classic work Democracy in Europe,

3 T H Green. Lectures on the Prin­ciples of Political Obligation.

4 K C Wheare, Federal Government. 5 Dicey, Law of the Constitution, 6 A Grammar of Politics, Chapter VII

entitled "Authority as Federal". 7 Laski op cit. 8 The idea of function was first fully

developed by Ramiro de Maeztu,

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Authority, Liberty and Function in the Light of the War. See also R H Tawney, Acquisitive Society ; G D H Cole, Self'Government in Industry,

9 The matter was fully discussed at the Rhodes Seminar on Democracy in the New States.

10 See J N Figgis, Churches in the Modern State, for an early formu­lation of the concept of association which was later applied by plura­list writers. See Hsiao, Political Pluralism. for a summary of their writings.

11 K Santhanam. op cit; K C Wheare, op cit.

12 The concept was developed and popularised in this country by the Planning Commission. See Draft Outline of the First Five-Year Plan.

13 For a statement of this view, sec the author's .laiprakash Narain's Thesis, Economic Weekly. April 9, 1960.

14 For an illuminating treatment of this subject, see an article by T N Sheth in the Sociological Bulletin of India, March 1960.

15 The argument against such a no­menclature is developed by Alex-androwiez. Constitutional Demo­cracy in India, Chapter 8.

1 0 M i l l i o n W a g o n s L o a d e d

INDIAN Railways have created a record in transportation of

goods by loading more than ten mi l l i on wagons d u r i n g 1960-61.

The total number of wagons load­ed at o r ig ina t ing and transhipment points f rom A p r i l 1960 to March 1961 . was nearly four lakhs more than what was done in the previous year. Despite the loss of traffic due to par t ia l strike in July and dislocation caused by f loods in sub­sequent months, the loading has been un i fo rmly higher on broad, metre and narrow gauges.

A significant feature of goods traffic handled bv the Railways dur­ing the per iod was a marked in-ereaK* in the loading of coal which constitutes nearly one-third of the ent i re volume of freight traffic.

Coal loading was of the order of 2,668,140 wagons against 2,433,707 wagons in 1959-60. l a n d i n g in coal thus registered an increase of 9.7 per cent as against .3.9 per cent in respect of a l l commodities handled.

May 6, 1961 T H E E C O N O M I C W E E K L Y

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