Editorial Analysis 15 June

Polity

Reimagining Indian federalism

Source: The Hindu

Context

• Coalition Government in 2024: The ruling party did not secure a majority, resulting in a coalition government with regional parties, affecting federal governance dynamics.
• Centralization of Power: Efforts to centralize authority since 2014 have undermined state autonomy, necessitating a revival of India's federal structure.

Details

Key Points

• Coercive Centralism:
  • Recent governance practices have shown tendencies towards centralized decision-making, often bypassing state governments.
  • For instance, during the pandemic, nationwide decisions like lockdowns were implemented without adequate consultation with state governments, impacting their autonomy and local responses.
• Fiscal Imbalances:
  • The introduction of various levies and cesses has altered the fiscal balance between the Union and states.
  • This includes funds like PM CARES, which diverted contributions away from state relief funds during crises, impacting state-led disaster management efforts adversely.
• Demographic Representation:
  • The impending lapse of constitutional provisions like the 91st Amendment, which recalibrated parliamentary representation based on census data, poses challenges.
  • Failure to renew such provisions could skew political representation towards certain demographics, potentially disenfranchising regions that have made strides in socio-economic indicators.
• Judicial and Administrative Oversight:
  • Instances of using central agencies to scrutinize and control political opponents from regional parties illustrate concerns over judicial and administrative overreach.
  • For instance, the use of agencies like the CBI and ED for political purposes undermines the federal principle of impartial governance.
• Revival of Federal Forums:
  • There is a critical need to strengthen institutions like the Inter-State Council.
  • Originally intended for cooperative decision-making and conflict resolution between states, its current efficacy has waned.
  • Revamping such institutions could foster greater consensus-building and policy coordination among states.
• Cultural and Linguistic Diversity:
  • Attempts to impose cultural and linguistic uniformity, such as language policies, have sparked dissent.
  • For example, efforts to promote a single language across diverse linguistic regions have faced resistance, reflecting challenges in reconciling unity with diversity within the federal framework.
• Economic Disparities:
  • Ensuring equitable resource distribution is crucial. Policies that disproportionately benefit certain states while neglecting others could exacerbate economic disparities.
  • For instance, the distribution of central funds and grants should align with developmental needs and regional priorities to uphold the principles of cooperative federalism.

Sources:

The Hindu

Economy

FOOD FACTOR

Source: The Hindu

Context

• As of May 2024, India's headline retail inflation slightly decreased to a 12-month low of 4.75%. However, persistent food price inflation, driven primarily by vegetables and pulses, continues to pose challenges, especially impacting urban consumers more than rural counterparts.
• The relentless rise in food prices, particularly of essential items like vegetables and cereals, not only affects the inflationary trend but also burdens household budgets across the country. This situation necessitates effective policy measures to mitigate inflationary pressures, considering its disproportionate impact on lower-income groups.

Details

Key Points

• Food Price Inflation:
  • Food inflation, measured by the Consumer Food Price Index, remained high at 8.69% in May 2024.
  • Vegetables, including tomatoes, onions, and potatoes, registered significant price hikes, with potatoes notably increasing by 15.1% month-on-month.
  • This underscores the acute challenges in managing food inflation through policy interventions.
• Vegetable Price Dynamics:
  • Vegetable inflation continued to surge above 27% for six consecutive months, with a month-on-month acceleration to a six-month high of 3.22% in May 2024.
  • Such trends indicate sustained pressure on consumer budgets, exacerbated by escalating wholesale costs, thereby highlighting the urgency for effective price stabilization measures.
• Cereal and Pulses Inflation:
  • Cereals and cereal products, the largest food category, recorded a five-month high inflation of 8.69%.
  • Prices of rice, wheat, and wheat flour (atta) saw notable increases, reflecting persistent inflationary pressures across staple foods crucial for household consumption.
• Pulses Inflation:
  • Pulses inflation rebounded to 17.1% in May 2024, with prices of gram dal, tur, urad, and moong significantly higher compared to the previous year.
  • The acceleration in pulse prices to a six-month high of 1.53% month-on-month underscores challenges in stabilizing essential protein sources amidst fluctuating supply and demand dynamics.
• Monsoon and Agricultural Outlook:
  • Despite an 'above normal' monsoon forecast, concerns over a 12% rainfall deficit since June 1, 2024, persist.
  • This weather anomaly could potentially impact agricultural output, compounding inflationary pressures in the food sector if not managed effectively through appropriate policy responses.
• Impact on Poorer Sections:
  • Food inflation disproportionately affects lower-income groups, threatening their purchasing power and standard of living.
  • Policymakers are urged to maintain vigilance and adopt targeted measures to protect vulnerable segments of society from the adverse effects of rising food prices.
• Policy Imperatives:
  • Effective policy interventions are crucial to mitigate food inflation, stabilize prices, and ensure food security.
  • Measures may include enhancing agricultural productivity, improving supply chain efficiencies, and implementing targeted subsidies or price controls to alleviate the burden on consumers, especially the economically disadvantaged.

Sources:

The Hindu