The 14th Finance Commission Report decisively shifts economic powers to the states, making them collectively much larger than the centre in terms of financial and political power. The Lutyens power elite cannot fatten itself on Delhi anymore

If the Lutyens power elite of Delhi has still not got the message, maybe they should read the summary of the Fourteenth Finance Commission's report released yesterday (24 February). The takeout from the commission is simple: economic power is shifting to the states at an accelerated pace under Narendra Modi.

The headline says it all: 42 percent of the centre's gross tax revenues will go to the states. Since all states additionally have their own resource-raising capabilities, this means from 2015-16 onwards they will have access to around 63 percent of the country's tax revenues. Over the next decade, this share will, if anything, increase dramatically.

The message for the allegedly liberal, allegedly left, allegedly secular elite of Lutyens Delhi is thus simple: the udders of the nanny state are about to run dry in the nation’s capital as money and patronage systems are cut back by the centre. They have to find other sources of power and pelf to suckle.

The Lutyens elite were the children of Nehruvian Socialism, under which the centre positioned itself as a feudal mai-baap sarkar, with the states playing supplicants. This elite – which includes everybody from Left historians to the people who man government committees to large sections of the mainstream media, the ‘intellectuals’ who fatten themselves on state largesse and myriad NGOs claiming high purpose and narrow anti-development agendas – was always nurtured by the Nehru-Gandhi dynasty. Ten years of UPA saw the Lutyens elite achieving the pinnacle of power, with Sonia Gandhi herself being their patron saint at the National Advisory Council.

The occasional coming to power of non-Congress governments – in 1977, 1989, 1996, and 1998 - did little to disrupt the power base of this parasitical elite, which has made a living out of championing the cause of the poor on the seminar and committee room circuits. The Lutyens elite fought imaginary battles on human rights, corruption, and communalism sitting in Delhi, when these evils really reside more at the state level, where political power is concentrated.

This elite actually had little connect with the poor or the real India, but claimed to represent it. When non-Congress governments came to power, this elite survived simply by co-opting the VP Singhs, Deve Gowdas and Atal Behari Vajpayee’s into their networks by designating them as “honorary good guys” – and the latter did little to disabuse them of their notions.

Crucial to their power was the centre’s huge budgets and control of economic resources which they could redirect according to their fancies. Now, this itself is under attack. First, the Planning Commission, another of their haunts, was disbanded; now there is the Finance Commission’s transfer of resources to contend with. They will have no role to play in distributing the cake anymore.

No one exemplifies the fading power of the Lutyens elite better than Amartya Sen, who is miffed for being denied an extension as boss of Nalanda University – a centre-funded extravaganza. Sen played victim and cried on every available left-liberal shoulder – once again proving that the Lutyens elite finds it hard to accept that its halcyon days are over.

The message of power-shift has been coming loud and clear for over two years now, when the distant rumble of the Modi bandwagon began to be heard. But the Lutyens elite told themselves: dilli door ast. Closer to the Lok Sabha elections, when opinion polls indicated a sharp swing away from the Congress and UPA, they prayed for a fractured verdict. Then they prayed that Arvind Kejriwal would thwart Modi. That too didn’t happen. When Modi came to Delhi with a full majority, they tried three months of fawning on him to get him to embrace them, but he failed to do so.

Like jilted lovers, they went into ecstasies over the BJP’s humiliating defeat at Kejriwal’s hands in the Delhi assembly elections earlier this month.

However, the Lutyens elite is unlikely to find succour even in Kejriwal. He may be their darling of the moment, but fundamentally even Kejriwal believes in decentralisation of power. And this means economic power will reside not with the centre, but the states.

This shift is bad news for the Lutyens elite because the centre’s own ambit of operation will gradually reduce to areas like foreign policy, foreign investment, defence, macroeconomic policy, monetary management, etc. There is still enough economic power with the centre, but with every passing year, the power of patronage in Delhi will diminish.

The Lutyens elite used every opportunity it got under the UPA to destroy federalism by legislating laws that only states could implement: on the right to education, health, food security, land, everything. As long as laws were made by the centre and the bulk of the money came from there, they were going to rule the roost. Now, that is not going to happen.

The notice hanging on their bungalow doors of the Lutyens elite is simple: pack up from Delhi and move to the state capitals. The money has moved.