As states launch offensive against ED, cooperative federalism goes for a six

A song sung by multiple Opposition-ruled states over the past year is that Central agencies such as the Enforcement Directorate (ED), the Income Tax Department and even the Narcotics Control Bureau (NCB) have been systematically targeting their ministers and leaders, implicating them in cases under directions from the BJP-ruled Centre.

Now, with Maharashtra, West Bengal and Kerala attempting to reverse roles on the Centre — by filing cases against ED officers themselves — the already-strained relations between the states and Centre are bound to get worse.

Will this tussle affect each of their administrative functioning, leading to a further dilution of India’s federal structure, or are the states simply attempting to flex political will at a superficial level?

ED as BJP’s ‘ATM’

Last Tuesday, the Mumbai police began an investigation against four ED officials. Earlier this month, Shiv Sena leader and Rajya Sabha member Sanjay Raut, while calling the ED an “ATM” of the BJP, had said that a complaint had been lodged against four officials in connection with an “extortion racket”.

On the same day, the ED raided premises linked to Maharashtra Chief Minister Uddhav Thackeray’s brother-in-law Shridhav Madhav Patankar and froze assets worth ₹6.45 crore in an alleged money laundering case. All this while the Budget Session of the Assembly was on, marked by BJP legislators protesting outside the lower house and demanding the resignation of Maha Vikas Aghadi minister and NCP leader Nawab Malik, who was arrested by the ED in connection with an alleged money laundering case linked to gangster Dawood Ibrahim.

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On Friday, the ED attached properties worth ₹11.35 crore of three-time Shiv Sena MLA Pratap Sarnaik, in connection with a ₹5,600 crore fraud case at the National Spot Exchange Limited. Earlier this month, the IT department had also raided premises linked to three aides of Maharashtra ministers Aaditya Thackeray and Anil Parab.

With Malik currently in judicial custody, and his party colleague (and former home minister) Anil Deshmukh serving time in Arthur Road Prison, the Sena-NCP-Congress coalition in Maharashtra was hardly likely to take things lying down.

On March 23, the Economic Offences Wing and Mumbai Police probed BJP leader Kirit Somaiya’s son Neil in connection with an alleged land scam; Raut had earlier alleged that Neil had links with PMC Bank scam accused Rakesh Wadhawan. Earlier, in February, the police had summoned Somaiya after an FIR was lodged against him for allegedly violating COVID protocol last year when he visited state minister Chhagan Bhujabal’s benami property at Santacruz.

On Wednesday, a team from the Brihanmumbai Municipal Corporation inspected a 14-storey building in Santacruz (West), where BJP leader Mohit Khamnoj lives, to check for any unauthorised construction.

Other states on offensive

Maharashtra isn’t the only state retaliating against the ED.

Last Monday, Kolkata police issued fresh summons to three ED officials in connection with the leak of an alleged audiotape that was aired in the prelude to the West Bengal election last year. The summons came a day before Trinamool Congress MP (and Chief Minister Mamata Banerjee’s nephew) Abhishek Banerjee was scheduled to appear before the ED in Delhi, with regards to his role in an alleged money laundering case linked to the multi-crore Bengal coal scam that surfaced in 2020. Mamata has alleged that the ED’s actions are politically motivated.

Last March, the Kerala police had flexed its muscles against the ED when it lodged three FIRs against the department for allegedly trying to implicate Chief Minister Pinarayi Vijayan in a July 2020 gold smuggling case. The state government had also announced a judicial probe against the agency. However, the next month the Kerala High Court quashed two of the three FIRs.

Compulsions of political competition

Speaking to The Federal, political analyst Sandeep Shastri used the words “coordination, collaboration and competition” to describe the Centre-state tussles.

“By coordination and collaboration, I mean it in respect with the handling of the COVID crisis,” he said. “If you look at the second wave, the Prime Minister had started by saying that all decisions would be taken after only after consulting with chief ministers. But you also have what I like to call the compulsions of political competition, which we have seen in the West Bengal election as well as in Assam and Kerala,” he said.

“One of the facts of politics is the fact of competition. When you have a different government in power at the Centre and at the state…using different political platforms for competition is something that every political party will do. It is very difficult to avoid the temptation.”

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Shastri questioned whether such issues affected governance. “I often find that a lot of this competition and confrontation is more at the surface level,” he said. “It is more to get the media attention. If you talk to bureaucrats and administrators, they will say that it doesn’t really impact the functioning at the administrative level, where the Centre and state collaborate with each other.” 

Governor as the bridge

“Nobody is referring to the most important office of confrontation — that of the governor,” observed Shastri. “That office was supposed to be a bridge between the Centre and the state. I am not blaming one political party; every party, since Independence, has been misusing the governor’s office to suit their advantage. It is just that now you’re seeing it more brazenly and openly.”

Shastri said states’ retaliation against central agencies was both a manifestation of competition, as well as a cause for it. “I would like to make a separation between rhetoric and reality,” he said, adding that below the surface, it was work as usual. 

“I am convinced that this [tussle] doesn’t seriously impact at the governance and administration level. How else would you explain Opposition-ruled states being highly ranked by NITI Aayog and getting several prizes in terms of their governance?”