Model Answer
0 min readIntroduction
The post-liberalization era in India, marked by the LPG (Liberalization, Privatization, Globalization) reforms initiated in 1991, witnessed a paradoxical trend – the rise of ‘New Localism’. This refers to the assertion of regional identities, demands for greater autonomy, and increased focus on local governance. While globalization aimed to integrate India with the world economy, it simultaneously triggered anxieties about cultural homogenization and economic marginalization, leading to a resurgence of local concerns. This phenomenon has significantly altered the dynamics of Centre-State and State-Local relations, creating both opportunities and challenges for cooperative federalism and effective governance.
Understanding New Localism
‘New Localism’ isn’t merely a revival of regionalism. It’s a complex phenomenon characterized by:
- Increased political mobilization at the regional and local levels: Driven by factors like caste, language, and local grievances.
- Demand for greater devolution of powers and resources: States and local bodies seeking more autonomy in decision-making.
- Rise of regional political parties: Parties focusing on specific regional identities and interests gaining prominence.
- Focus on local economic development: Emphasis on utilizing local resources and promoting local industries.
LPG Reforms and the Rise of New Localism
The LPG reforms, while boosting economic growth, inadvertently contributed to New Localism in several ways:
- Uneven Distribution of Benefits: The benefits of liberalization weren’t evenly distributed, leading to regional disparities and a sense of marginalization in some areas.
- Reduced State Intervention: The rollback of state intervention in the economy created a vacuum that local actors sought to fill.
- Increased Competition: Globalization increased competition, prompting local industries to seek protection and support from regional governments.
- Information Revolution: Increased access to information through media and the internet facilitated the mobilization of local communities and the articulation of their demands.
Impact on Centre-State Relations
New Localism has significantly impacted Centre-State relations, manifesting in several ways:
- Increased Fiscal Federalism Debates: States have increasingly demanded a greater share of central taxes and more flexibility in utilizing funds. The 14th and 15th Finance Commissions (2015 & 2020 respectively) witnessed intense negotiations on the criteria for devolution.
- Competition among States: States compete to attract investment and promote economic growth, sometimes leading to ‘race to the bottom’ in terms of labor laws and environmental regulations.
- Political Assertiveness: Regional parties have played a crucial role in national politics, often holding the balance of power and influencing policy decisions.
- Areas of Conflict: Disputes over issues like river water sharing, border disputes, and central government projects continue to strain Centre-State relations.
The introduction of Goods and Services Tax (GST) in 2017, while intended to streamline the indirect tax system, initially faced resistance from some states fearing loss of fiscal autonomy.
Impact on State-Local Relations
New Localism has also reshaped State-Local relations, primarily through:
- Strengthening of Local Governance: The 73rd and 74th Constitutional Amendment Acts (1992) aimed to strengthen local bodies (Panchayats and Municipalities) by providing constitutional recognition and ensuring regular elections.
- Demand for Greater Decentralization: Local bodies have demanded greater devolution of funds, functions, and functionaries from the state governments.
- Rise of Local Movements: Local communities have become more active in demanding accountability from state governments and advocating for their rights.
- Challenges to State Authority: In some cases, local movements have challenged the authority of state governments, particularly on issues related to land acquisition and environmental protection.
However, the implementation of the 73rd and 74th Amendments has been uneven, with many states reluctant to fully devolve powers to local bodies due to concerns about losing control.
| Aspect | Centre-State Relations | State-Local Relations |
|---|---|---|
| Key Driver | Fiscal disparities, political competition | 73rd & 74th Amendments, demand for decentralization |
| Manifestation | Increased fiscal demands, political assertiveness | Strengthening of local bodies, local movements |
| Challenges | Conflicts over resources, policy disagreements | Uneven implementation of decentralization, resistance from states |
Conclusion
New Localism, born out of the complexities of the LPG era, has fundamentally altered the landscape of Indian federalism. While it has fostered greater political participation and accountability, it has also created new challenges for Centre-State and State-Local relations. A balanced approach that recognizes the legitimate aspirations of regional and local communities while maintaining national unity and economic integration is crucial. Strengthening cooperative federalism, ensuring equitable distribution of resources, and empowering local bodies are essential steps towards harnessing the positive aspects of New Localism and mitigating its potential risks.
Answer Length
This is a comprehensive model answer for learning purposes and may exceed the word limit. In the exam, always adhere to the prescribed word count.