Expressing his concern on the highly centralized functioning of the Union government under Narendra Modi, the chairman of the 14th Finance Commission, Y.V Reddy said that the idea of a state-specific development model is missing. Reddy who was also the governor of the Reserve Bank of India (RBI) also pointed towards a worrying asymmetry between the responsibilities of States and the resources available to them.

Reddy was addressing during a webinar hosted by think tank Manthan on the topic of center-state relations. Reddy, began his career as an Andhra cadre civil servant and also served as secretary in that state, and is regarded as an expert on Centre-state issues. He also co-authored the book "Indian Fiscal Federalism". 

YV Reddy

"There is an impression gained that the Central government feels it can do a better job in regard to various activities even if they are in the State list. On fiscal federalism too, the Fifteenth Finance Commission recommendations were accepted but not fully implemented and its terms of references were controversial," said Reddy.

Reddy further went on to add that the Centre did not provide enough support to States at the start of the COVID-19 pandemic, instead resorted to "burden-sharing," and questioned the decision to abandon the existing immunization system, which saw the Centre provide free vaccines and States use their resources to deliver the shots.

Narendra Modi

"Too much centralization under the Modi government"

Reddy also added that under the United Progressive Alliance (UPA) government's ten years in office, multiple development models emerged among states as their governance competencies evolved and policies tailored to their specific needs were implemented.

 "Prime Minister Narendra Modi, however, has been able to project a national agenda, and the idea of different states having different models is not very much on the table now. And there are some tensions also," he said. Reddy also contested that the stressed relations between the central and state governments will be detrimental to the overall growth of India.