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For rich South India, the rest of the country is a tax burden

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India’s two halves have strongly disparate interests, demands and expectations. Healing those growing divisions will be the constant task of future leaders.

When Indian Prime Minister Narendra Modi visited the southern city of Chennai recently, he must’ve been startled by the welcome he received. Half the city, it seemed, had turned out to wave black flags at his motorcade, as well as banners that read “Go Back, Modi.” When the prime minister hopped into a helicopter, the crowds cleverly sent up black balloons in its wake.

QuickTake India’s Aspirations

The vitriol wasn’t entirely personal. Protesters in Chennai — capital of the prosperous state of Tamil Nadu — had singled out Modi as the most high-profile representative of a New Delhi establishment that many Tamils have begun to see as biased against them.

Marchers were angry about a very local issue — the federal government’s reluctance to implement a recent Supreme Court order dealing with water-sharing between Tamil Nadu and the neighboring state of Karnataka. But disenchantment in India’s south isn’t limited to a single issue or, indeed, a single state. The BJP is on the defensive in Karnataka as well, where the incumbent chief minister has sought to turn coming elections into a referendum on sub-national pride.

India — more diverse than Europe, more populous than Africa — has never been an entirely cohesive country. A rupee note has to find space for 17 languages; India’s Constitution specifically mentions 22 official languages and is written in a twenty-third, English. Originally, it was hoped that Hindi, the language of India’s northern hinterland, would replace English as the language linking India’s states. But, 50 years ago, that assumption led to riots and even secessionist movements in the south, particularly in Tamil Nadu, and so English has been kept on permanently. For years, the compromise seemed to hold; the Hindi-speaking hinterland and the non-Hindi coastal states muddled along together.

Recently, however, that uneasy, decades-old accord has broken down. Formerly, the long-ruling Congress party linked the two regions together by drawing voters from both. Modi’s BJP has since replaced the Congress as the dominant force in Indian politics, but very much remains much a party of the north and the west, with little or no presence in states like Tamil Nadu.

Even more disruptive is the fact that north and south have diverged economically and demographically. The richer south resents having to subsidize the rest of the country. Tamil Nadu gets back 30 rupees for every 100 it sends to New Delhi; the northern state of Bihar, by contrast, receives 219. The chief minister of Andhra Pradesh, who recently ended his alliance with Modi’s party, has accused the federal government of “diverting” the south’s money to the north.

Meanwhile, India’s interior has human development indicators equivalent to sub-Saharan Africa, while the southern states’ human development indices resemble those of upper-middle-income countries. In particular, women are more empowered in many coastal states. Consequently, they have fewer children. Female fertility in many southern states is below the replacement rate; up north, women might have three or four children on average.

Southerners have put these facts together and come to the uncomfortable conclusion that they could wind up becoming a permanent minority politically. Populations in areas that support the BJP will continue to grow in size, while those where the party has no followers are shrinking.

Part of the decades-old compact between south and north was the tacit agreement to ignore demographic changes. India takes a census every 10 years, but for all major distributional issues, including the division of taxes between federal and state governments, it was the population shares of the 1971 census that mattered.

Now the federal government has decided to abandon that decades-old compromise when it comes to tax-sharing. A non-partisan finance commission, appointed every five years, calculates the formula that decides which state gets how much money in India. While the commission itself isn’t directly answerable to the federal government, the latter does have the right to set the guidelines the commission must follow — terms of reference, they’re called. This year, the government told the commission to use the 2011 census instead of the 1971 one. Southern states worry that that will significantly reduce the share of revenue received by the very states that have worked hardest to empower women and control their populations and which are, not coincidentally, considerably richer.

In previous decades, this would have been quietly sorted out within the political establishment. But, today, neither the BJP — representing the hinterland — nor the regional parties that dominate the coasts have any interest in seeking a compromise. India’s two halves have strongly disparate interests, demands and expectations. Healing those growing divisions will be the constant task of future leaders.


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  1. Ideas like this are very dangerous for unity of India but Central govt should treat states in a fair manner.

    Biased, insensitive treatment of Central govt is the reason behind such ideas. There is a growing discontent among public that current BJP rulers only care for BJP ruled sub-section of India. Do we need bullet train of 1.1 lakh crore for Mumbai-Ahmedabad? Is it not making rich states more richer? If such large amount is spent on improving farmers lives through proper storage, warehousing, logistics and distribution channels, it can have positive impact on rural economy.

  2. This is not based on facts. The author must quote the source for his claim that south is receiving less compared to north. Its entirely untrue. States are given money proportionate to the taxes they collect for the most part.

  3. clearly a click bait article for which the writer cannot be blamed but yes the difference is there and i would congratulate the writer for bringing up this topic but the reason i call this a click bait article because it brings up a topic and then throws it into the gutter .there is a saying less information is always dangerous so mr sharma kindly give your fingers more workout and write more put the facts up or highlight links so the reader is well fed rather than just pinching the reader.
    i do not expect for a better article because sadly journalism has also stooped down to the level of gun toting,foul mouthed holier than thou ,prime time entertainment netas.
    pardon my english and my writing skills sadly u know better but wont work better

  4. India will protect it’s sovereignty at cost sacrificing democracy, Army may soon be coming to office.
    When Army will breach your office UN, Free Press, Leftists, Good Pakistani won’t save your ass.
    Freedom of Expression & Freedom of Press will shoved into your arses, better be prepared.

  5. मिहिर शर्मा जैसे बेवकूफ बीजेपी विरोधी से यही उम्मीद थी. किन्तु शेखर गुप्ता से यह उम्मीद नहीं थी. इसी आर्टिकल में दक्षिण की जगह हिंदू और उत्तर की जगह मुस्लिम लिख दो. देखो देश में कितना बखेड़ा खड़ा होता है.

  6. Armchair analysis at best. Far from reality and more hype than facts. Articles like these tend to belittle true journalism.

  7. Need to ignore all commie ideas because they are divisive. However, one cannot ignore that states producing large number of goods and generating high taxes need to spend on Infrastructure and security. Both are ignored by Center because much of the money is diverted to poor huge states, where contributions are lapped up by corrupt politicians. All that is necessary to be done is Southern states need to be given back a little larger portion than is given right now and end this discussion

  8. This article completely ignores the history behind the setting up of psu in south India. The industrialisation of parts of south India was achieved probably due to to freight equalisation. For further understanding please search for professor R Vaidyanathan’s video on this subject.

  9. A lot of workers from North (Bihar, Bengal, Orissa) are working in South while a lot of workers from Tamil Nadu have been in North for decades. Since when has the 2 been separate entities?
    I am a South Indian and so is my wife.
    I find this article disgusting and divisive.
    Mumbai collects 40 to 50% of India’s taxes and is the financial capital of India. The prosperity that this article talks about in South is just in some pockets. Mainly the IT sectors in Bangalore, Hyderabad and Chennai.
    While defense industries and many Scientific establishments were put up by the Center in South for logistic reasons, the finances to run these come from the Center which is in New Delhi. These institutions include the DRDO, IIT Chennai, IIM- Bangalore, Indian Inst of Science etc etc.
    We are Indians first and then only North or South Indians.
    Such articles should not be allowed to be published as it smacks of ignorance.

  10. This is a very childish analysis. I understand that the Southern States tend to lose on tax revenue distributions. However, this article underplays the importance of Government of India backed PSU’s and enterprises in the Southern States. Barring Karnataka the Southern states have an excellent railway network. Better than most Northern states. What happens if Indian railways pulls out of the South and forces these states to come up with their own Railway corporation? Their economy will collapse. Likewise, Bengaluru is blessed with several PSUs such as BEL, BHEL, ISRO, ADE/ADA, HAL, NAL, IISc in addition to huge Indian Army and Airforce bases. If GoI pulls out all of them what will be the unemployment rate in Bengaluru???

  11. At the bottom there is written
    – Bloomberg view at the same time it is also written “This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.” So have you lost your mind how is it possible both at the same time. Have you lost your professional ethics or you also want to become zee, republic, or etc media House even you are not sure who has put these views. First go and get some study. You can’t write anything on your own whims and fancies.

  12. This is an article best ignored and dubbed as anti national. Media should help unite the country, not divide.

  13. As they say ‘garbage in garbage out!’ Shekhar Gupta feeds on crap every day and spews it out every day. Whoever this Mihir Sharma is, he must be feeding from the same trough.

    I recommend severe beatings to the entire staff of The Print for publishing such divisive and hate-mongering messages.

  14. Feeling sorry about you.
    It clearly reflects maturity level of your mind which is certainly in nuance phase.
    You must not forget that north indians are also part of that so called tax payers from south and moreover south india is privileged with natural resources and north india with farming lands, so how can you easily concluded that rest of country is burden over south india.

  15. Anti national are there in south, Punjab and North East. Lots of funds are coming from foreign countries and there is no shortage of paid writers like him.

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