Modi's power and the widening north-south divide

Political parties in southern Indian states have come together to oppose a plan on redrawing parliamentary constituencies, fearing it would give the populous northern states more electoral power.

Could this create a new headache for Prime Minister Narendra Modi's government? That's the focus of our analysis this week.

Also, pressure builds on India from the U.S. to cut tariffs, with top officials from Washington saying India's "special relationship" with the United States could be at stake. And, a project on indoor heat covers shantytown roofs with a reflective coating, to help keep residents cool in the hottest months. Scroll down for more on those stories.

"Unity in diversity" is a time-honoured catch phrase in India to describe how the world's most populous country, with 1.4 billion people, has held together despite its scores of languages, varied cultural traditions, and deep religious divide between majority Hindus and minority Muslims.

A new threat to that unity cropped up last week: Three dozen political parties in the state of Tamil Nadu, a prosperous manufacturing hub in the south, buried their differences to jointly oppose plans by Prime Minister Narendra Modi's government to redraw parliamentary constituencies.

Those plans would reallocate seats based on new population data, potentially giving more power to populous northern states that are Modi strongholds. And that has rekindled fears among the southern states of domination by the north.

Rising tensions could, analysts warn, trigger protests like those of past years, or provoke power struggles between the states and New Delhi that might disrupt infrastructure projects, police investigations, and other government functions shared by the two sides.

Tamil Nadu and other states in the south have over recent decades curbed their population growth while focusing on education and healthcare, leading to improvements in social and economic indicators.

They say the reallocation plan would end up punishing them for good policies and governance, while rewarding northern states where population growth has continued largely unchecked.

India's constitution mandates that a redrawing of parliamentary constituencies must commence by 2026, and analysts say this will be necessary to ensure fair representation in legislatures and to keep pace with demographic change.

Amit Shah, the federal home minister, has tried to reassure the southern states that their representation in parliament will not be diluted but has offered no details, leaving them sceptical.

At the same time, Modi's Bharatiya Janata Party (BJP) has accused leaders in the south - where opposition parties hold power - of playing politics and inflaming the north-south divide. Politicians in the south, for their part, fear a power grab by the BJP and say their grievances transcend politics.

To be sure, this is not the first tussle between the southern states and the federal government since the Hindu nationalist BJP swept to power in 2014. It has pushed policies that critics say try to stifle diversity or dilute the power of the states.

There have been face-offs over federal fund distribution, infrastructure project approvals, disaster relief and language policies. The southern states accuse the Modi government of seeking to impose the widely spoken Hindi language of north India on the south, where the Tamil, Telugu, Kannada and Malayalam languages predominate.

A similar north-south dispute erupted in 2018 when a federal finance panel decided to use 2011 census data to distribute federal tax revenues to the states, instead of the earlier benchmark of the 1971 census.

Leaders of southern states that had lowered their population growth since 1971 protested, fearing a lower share of revenues. The finance panel relented and agreed to new criteria that took population policies into account.

Analysts say something similar needs to be attempted this time as well, although Tamil Nadu wants the entire redrawing exercise to be put off for three decades, until 2056.

The Modi government could go beyond Shah's assurances and hold a meeting of all political parties to build a consensus, the Hindustan Times newspaper wrote in an editorial.

"A conversation reaffirming faith in the federal pact could help rebuild trust" between the federal government, the states and the opposition parties, it said.

Are the southern states and the Modi government on a collision course that could undermine governance and political stability? Write to me with your views at yp.rajesh@thomsonreuters.com.

"India has some of the highest tariffs in the world, and that will require a rethinking of the relationship, the special relationship, between India and the United States," U.S. Commerce Secretary Howard Lutnick told India Today television on Friday.

India needs to buy more U.S. military hardware and lower its tariffs on other U.S. products for the two countries to be able to sign a "grand" bilateral deal, he said.

Trump, speaking in Washington, said India had agreed to cut tariffs "way down" but no details have been announced.

A rise in the rupee's volatility, coupled with a decline in the cost of protecting against currency weakness, has prompted firms to increase longer-tenor hedges to shield their balance sheets, Reuters journalists Nimesh Vora and Jaspreet Kalra report.

The rupee will weaken more against the U.S. dollar over the coming year than previously thought, a Reuters poll of FX analysts found, due to escalating fears of a U.S.-led global trade war and a slowing Indian economy.

 Hundreds of roofs in the informal settlements of western India's  Gujarat state have been painted in a reflective white coating over the last two months, to help keep the occupants cooler as the hottest time of year approaches.

The effort, which involves 400 households in Ahmedabad, is part of a worldwide scientific trial to study how indoor heat affects people's health and economic outcomes in developing countries, and how "cool roofs" might help.

This newsletter was edited by Edmund Klamann, Deputy Head, Asia Desk in Singapore.

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