The last month or so has seen politicians across parties from southern India coalescing around subnationalism. One after the other, they have made compelling arguments against the way in which India’s current federal structure erodes states’ rights and punishes south India for its progress. They have buttressed their economic arguments against the central government using data, which is a pleasant deviation for a polity that can often come across as innumerate.

Pawan Kalyan and MK Stalin started this latest avalanche by pointing to how unfair the allocation ratio of the 15th Finance Commission is likely to be for southern India, given Census 2011 will be used as the baseline. Chief minister of Andhra Pradesh, Chandrababu Naidu, spoke in the state assembly and criticised the central government for taxing the south to spend in the north.

Siddaramiah, Karnataka’s chief minister, wrote what is likely the most cogent summation of the case for subnationalism: the current policies incentivise population growth in north India while delegitimising his Kannada identity.

MK Stalin, sensing momentum, said the DMK would support a demand for ‘Dravida Nadu’ if such a request came about from all other southern states. Dravida Nadu is an old and enduring demand of the Dravidian movement. At various time periods, it has meant various things. Sometimes it has meant greater devolution of powers to the states, at others it’s meant full sovereignty and complete secession.

The ambiguous nature and long history of the demand makes it a potent but empty vessel into which people can project their own ideas.

To understand the landscape that these voices are coming from, one needs to look at how the finances of the states intersect. For example, Tamil Nadu’s GSDP is 15.9 lakh crore. Uttar Pradesh’s is 14.8 lakh crore. That is, if these were two states were independent entities, Tamil Nadu’s economic output would be higher than that of Uttar Pradesh’s despite the latter being three times more populous than the former.

However, the total budget expenditure of Tamil Nadu for 2018-19 is 1.1 lakh crores while that of Uttar Pradesh is 1.5 lakh crores. In other words, Uttar Pradesh has a budget outlay that’s 36% higher than Tamil Nadu despite having an economy that’s 7% smaller. And this is true of other southern and western states like Kerala, Karnataka, Gujarat and Maharashtra – all of which have smaller budgets than what their economies would otherwise warrant.



Another important aspect, which makes chief ministers like Siddaramiah speak out, is, the share of states’ own revenue in the total budget expenditure. Karnataka for instance has the highest ratio in this regard.

The state meets 72% of its expenses from state’s own taxes; this is over and above the central taxes that citizens of the state pay which typically form a much larger portion of an individual’s tax burden. Conversely, Karnataka also receives the least in terms of central transfers as a ratio to its total expenditure. Bihar, meanwhile, meets 77% of its expenditure through revenue from central transfers.

In fact Narendra Modi – as chief minister of Gujarat in 2013 – told Y.V. Reddy, chairman of the 14th Finance Commission, that states’ allocation ratios should be decided based on their contribution to GDP. It’s anybody’s guess what Modi’s position, as an MP from Uttar Pradesh, is in 2018.

In federal unions, the idea of richer regions subsidising poorer ones is common.

New York and California, in the US, subsidise states in Appalachia and the deep South for example. The Flemish speaking parts of Belgium subsidise the French and German speaking parts. Or, even more infamously, Catalans do that for rest of Spain.

The one important difference between these unions elsewhere in the word and that of India is: correlation between demography and economic growth works in the reverse direction in India. In US, the state with the lowest growth rate in population is also among its poorest: West Virginia. The states with the biggest and fastest growing economies are also among those whose population growth is highest. And that’s because economy drives the population growth via migration in the USA. In India, unlike other federal unions, citizens having no access to education drive population growth with high rates of fertility in states that are already poor.

The southern states, which are complaining about getting the short shrift in terms of finances, are really making a point about being rendered unequal partners in an India that’s tilting towards the North’s demographic might.

Consider the ratio of population that’s under 15 years of age in conjunction with the fertility rate of each state.

Let’s do a quick back of the envelope calculation: in 2011 Census, Uttar Pradesh (UP) had a population of ~203 million. According to NFHS-4 data, about 42.3% of UP’s population is under 15 years of age.

That is, there were 85 million children under 15 years of age in UP in 2011. In 2011 UP’s TFR was 3.4. And in 2016 it was 3.1. Let’s assume a mean TFR of 2.5 over the period 2011 to 2031. Sex ratio for UP is 912/1000. Therefore, of these 85 million children, it’s likely that 39 million are girls. If they have a TFR of 2.5, that results in 97.5 million children. In other words, the children who’re under 15 years of age in Census 2011 will likely have 97.5 million children of their own in the next decade and a half.

Tamil Nadu’s children under 15 years of age from 2011 Census, making only 26% of its population, meanwhile, would have had 14 million children if we calculate the same way. That’s roughly equal to the number of people who are likely to naturally die in those years; or the state has achieved a relative equilibrium in population.

Take into account this is over and above the population growth divergence in the last 40 years in which Kerala and Tamil Nadu had the lowest rates of population growth among all states. The additional children that Uttar Pradesh’s children of today are likely to have in the next two decades roughly equals the total population of Tamil Nadu and Kerala combined.

It is in this context of demographic divergence that one needs to situate the sub-nationalism of Siddaramaiah and M.K. Stalin.

If the tax collection ratios are skewed this way or that, they can be corrected with policy tweaks. That’d not be an issue that warrants a ‘Dravida Nadu’ demand from serious politicians. Every other large federal union faces and resolves such problems.

The problem is that, in India’s case, the levers of political power are irreversibly skewing towards the demographic might of north India. That makes the south fear economic and cultural hegemony; and it’s not an irrational fear.

The reason this is problematic isn’t merely because of where we are currently and how the future looks from this vantage point. It’s because the impending skew is a slap on the face of democratic progress that the southern states made in the past 70 years.

Uttar Pradesh, or United Provinces before Independence, was one of the better-administered provinces in British India. Its status as a laggard state is a recent one.

By the same token, Kerala was a caste-ridden backward society in the late 19th century. It was constantly under threat of being annexed and merged with Madras Presidency because of its backwardness. It is the state’s local politics and a sense of subnationalism, as Prerna Singh argues in her book How Solidarity Works for Welfare: Subnationalism and Social Development in India, that moved Kerala forward to become India’s most advanced state in terms of social development.

And conversely, Singh suggests, the absence of such subnationalism in Uttar Pradesh’s case is what resulted in government programs being seen as zero-sum games between caste and religious groups. The former results in greater social expenditure while the latter in the exact opposite.

What the skew of political power to states in north India will result in is: punish and nullify the miraculous improvements achieved by progressive political movements like Aikya Kerala movement while rewarding the politics of nationalism sans a strong regional identity. That is neither democratic nor is it good policy.

And this is why it is natural that many in the south want to re-examine the structure of India’s federal union.