I sent this article about India federalism, by Indian economist Advait Moharir, to my American friend living in Bangalore, and he wrote the reply that follows.
Oct 12, 2020
Well, this is interesting. It explains, in some terms, why in the second Modi regime (he was reelected about two years ago) the economy is so bad. The growth rate was predicted at 7%, but now India may be actually contracting.
The article makes the economy sound like a flat version of the caste system. The more money a state has, the more it can borrow. Smart entrepreneurs in any caste can increase their wealth, if they have any, to rise themselves not to a higher caste (you're born into one) but to a financial level where many of their problems are solved. They can borrow, while the lower states or castes cannot, falling into deeper debt. (Some subcastes have risen in the hierarchy.)
Some states may be well enough and are anti-central government enough to not want or have need to borrow from the top. Kerala and Tamil Nadu I presume are like that. Kerala has a mixed population, physically isolated from the north by mountains, as well as west from Tamil Nadu. Kerala is mostly lower caste Hindus, and Tamilians are very prideful of their heritage. West Bengal needs money certainly and may be in the low category now because it is at severe odds to the centre. UP is run by a Yogi, so it's in good with the centre--it is poor yet able to borrow. UP has the largest population in India. Kashmir, the only Muslim majority area, has had it's semi-autonomy stripped and its rebels jailed. It's not getting any money, I'm sure, but needs it now more than ever.
____
Others factors counteract the enclosed "federalism" article" and in some states help:
Modi knows nothing about fiscal policy. When he became Prime Minister, he had all paper money above Rs.500 (about $7.00) exchanged in banks, to stamp out black money. It had no effect: black money is held in foreign currency and illegally traded for rupees at far more than the normal rate.
The largest statue in the world, of the Marathi king and warrior Swaji, now stands in Mumbai bay. (Tamil Nadu plans to build a bigger statue for its hero.) That takes money.
Modi and his cohort Amit Shah are trying to reduce the minority Muslim population as much as possible to form a pure Hindubhoomi (nation). The Muslims who are of royal heritage have money. That money will be difficult to take away, but the centre wants that also.
The same for Bollywood. Maharastra, hosting Bollywood, also not run by Modi's BJP party is mostly liberal. True, Bollywood is releasing more mythological and historical films than in decades, but that's by a minority of filmmakers. The centre is pushing at Bollywood, partly through stories around the suicide of recent star Sushant Singh Rajput. The newspapers are full of them. Stars with no connection to the actual case are halled into court on "drug use." Pot is illegal here (thanks to the US) so pot makes headlines. This keeps the papers off Modi's financial failures. My boyfriend says Modi wants Bollywood's money.
Finally, you my also know that the pandemic, which started in the cities, has caused all daily wage earners to return to their northern villages. They have no work--construction workers, street-hawkers, tea vendors, vegetable vendors, rickshawallas, barbers, beggars--now spreading the virus in the poor northern countryside. The Chief Minister of Karnataka, where I am now, tried and failed to stop day workers from returning home because of much ongoing Bangalore construction, here in the IT-Seattle of India. Karnataka has the most corrupt state government in India.
I was about to write accidentally "streetwalkers' I instead of street-hawkers, and their livelihood is gone too. Brothels closed, at least in Kolkata, women are now reunited with their children, who live in government houses. Thus, I assume, few of the women are anxious to go back to work.
That's what comes to mind.
[signed]
P.S. A 'historical' note. The family that my friend Rekhs married into once owned an entire city block--four apartment houses, one at each corner, most or all occupied by family. But Indira Gandhi decreed that no one could own more than a certain amount of property. So they sold three of them. Rekhs says they have enough money for no one in the family to work for forty years. One of her daughters just finished film school, the other is prosperous in San Diego.
Rekhs herself writes English subtitles for South Indian films. Her mother was a proofreader for Macmillan.
This letter reminds of old times. You remember, I'm sure, that we met in a 'Geography of India' class.
Indeed, I did meet him in a Geography of India class, 36 years ago.