Why Mamata is opposed to Centre’s UDAY scheme

Even after a huge amount of pressure being applied to West Bengal by the Union government, West Bengal Chief Minister Mamata Banerjee has firmly stood up for the interests of her state and in defence of federalism and state rights by still refusing to join the UDAY scheme that is being strongly pushed by Piyush Goyal, Union Minister of State with Independent Charge for Power, Coal, New and Renewable Energy and Mines. 

And this issue assumed greater significance in the light of the series of steps that have been taken by the present BJP-led Union government to encroach into state rights by anti-federal policies and the initiatives by Mamata Banerjee to create a federal front to lead the political charge against such incursions.

UDAY is a Union government idea called Ujwal Discom Assurance Yojana. The main issue of interest is that it is a scheme by which, on paper, it’s a financial restructuring package for debt-ridden power distribution companies, most of which belong to state governments. While it sets out a series of measures for restructuring debt, the problem lies in the fact that it takes away independence of state government power companies and hence of the state governments themselves by preferential treatment to those states which agree to this scheme. And the states that don’t agree to join the UDAY scheme, the Union government is forcing them through other pressure tactics, that is basically nothing short of bullying. Let us look at some of these aspects.

When the scheme was launched by Piyush Goyal in November 2015, it was stated very clearly that joining by states is optional. This optional bit is not some great magnanimity by the Union government by a requirement of constitution since electricity is not (yet) in the Union list but in the concurrent list. Ever since the constitution was promulgated, electricity is a concurrent subject at Entry 38 in List III of the seventh Schedule of the Constitution of India. However, the proposals of the UDAY scheme clearly show that it plans to discriminate against states that don’t join the UDAY scheme. 

States accepting UDAY and performing as per operational milestones will be given additional / priority funding through Deendayal Upadhyaya Gram Jyoti Yojana (DDUGJY),Integrated Power Development Scheme (IPDS), Power Sector Development Fund (PSDF) or other such schemes of Ministry of Power and Ministry of New and Renewable Energy. Additionally, such States (that join the UDAY scheme) shall also be supported with additional coal at notified prices and, in case of availability through higher capacity utilization, low cost power from NTPC and other Central Public Sector Undertakings (CPSUs). Finally, states not meeting operational milestones (and hence, also the states that don’t join the UDAY scheme) will be liable to forfeit their claim on IPDS and DDUGJY grants.

Let us analyse what this means. It means, the Union government will adopt a carrot and stick policy for disbursing funds. Money if you join and agree to go by our rules. No funds if you don’t. Given that all Union government resources from states, the Union wielding its revenue power to discriminate between states due to its whims and schemes means that it discriminates between states and that it discriminates between independent political choices made by the people of the states in electing people who might not agree to UDAY.  

If this is not a direct blow to the concept of federalism where the Union government and State government are fundamentally equal and sovereign, differing just in distribution of tasks, what is? And Mamata Banerjee, by standing upto UDAY has championed federalism at a time when it is under threat from every scheme announced by the Union government. The UDAY scheme is no exception. From HRD ministry’s RUSA scheme to various schemes of other Union ministries, funds and resources are being made available to those who agree to the Union government’s policies. For those who don’t but are still as much stakeholders in the Union of India, there is the stick. This is a grave threat to the idea of representative federal democracy which should have no place for punishing people for their political choices.

But the threat contained in the UDAY scheme is even more dangerous. For states joining UDAY, the scheme provides for “additional coal at notified prices and, in case of availability through higher capacity utilization, low cost power from NTPC and other Central Public Sector Undertakings”. So, we can envisage this scenario. West Bengal doesn’t join UDAY. Coal from the coal fields of West Bengal will be preferentially given to other UDAY-compliant states and not the very land and the people from whose natural homeland that coal is being extracted. It is a matter of shame that centralization has driven the Indian Union to this end where the states themselves are being removed from the resources of their own land. It is a matter of rights and a matter of dignity and also a matter of independent economic and fiscal policy.

Concomitant with such Union government schemes comes the elaborate ways by which decision making about economic policies, rates, and various other things are being taken away from state legislatures and hence from direct control of the people to unelected bodies of “experts” who are not unaccountable to the people. 

This is an old -trick to serve the interests of the rich and the powerful, especially those groups, whose interests are harmed by democratic decision-making.  In short, those whose interests are opposed to the interests of the people. By decision making increasingly technocratic and taking them out of the influence of the people, it makes it more open to abuse by those with links to power and those who can buy power and influence by money. This specifically includes big corporates and those in the good books of the Union government.  Such moves undermine federalism and democracy. It’s a shame.