The Left Democratic Front (LDF) government is headed for a major confrontation with the Centre over a horde of issues, triggered primarily by the latter’s refusal to allow cooperative institutions to handle exchange of demonetised currency notes and the Prime Minister’s refusal to meet an all-party delegation to highlight the problems the State is facing on account of this.
It was only a matter of time for relations to get soured, considering the fact that political combinations with diametrically opposite ideologies are in power at the Centre and in the State. As soon as he assumed power, Chief Minister Pinarayi Vijayan had made moves to lay the foundations for Centre-State relations, emphasising on cordiality and a distinct tilt towards securing a fair deal for the State.
There were several hiccups such as the cut in foodgrains allocation for the State to be distributed through ration shops as a penalty for the delay in implementing the Food Security Act.
End of cordiality
The refusal to hear an all-party delegation signalled the end of cordiality, with senior leaders of the UDF and the LDF suspecting that the Centre’s refusal to give leeway to cooperative institutions to handle demonetised notes was reflective of the BJP’s political designs.
The CPI (M) and the BJP-RSS combine are already in a violent mode in Kannur, but the demonetisation has revealed another strategy of the BJP under an assertive leadership of Narendra Modi and Amit Shah to loosen the grip of the LDF and the UDF in the cooperative movement. The State government has now partially fallen in line with the RBI norms for cooperative banks, but there is no relaxation yet to help these institutions tide over the crisis they are facing.
The strain in ties is now seen in the Kerala’s stance on compensation for the loss of tax revenue because of economic stagnation triggered by demonetisation. Kerala, along with Tamil Nadu and Bihar, on administrative control over goods and services below Rs. 1.5 crores turnover threshold, ensured there would be no consensus in the GST council meeting.
With the BJP in an politically assertive mood, senior political leaders believe that could be several grey areas in the Centre-State relations that would come up, especially during Budget time early next year.
