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Daily-current-affairs / 05 Oct 2023

The Impact of Population on Political Representation and Fiscal Transfers in India : Daily News Analysis


Date : 06/10/2023

Relevance: GS Paper 2- Polity - Political Representation

Keywords: First-Past-the-Post' electoral system, Delimitation, Finance Commission, "One Person, One Vote" System


In the complex landscape of Indian federal democracy, the relative population size of states holds profound political and economic significance. The southern states, characterized by strong linguistic identities and regional renaissances, have made substantial strides in various aspects of development. In contrast, the northern states face challenges related to population growth.

Delimitation and Political Representation

  • Article 81 of the Indian Constitution mandates that Lok Sabha constituencies should have equal populations. The number of Lok Sabha constituencies was determined based on the 1971 Census, and this allocation remained unchanged until the 84th Amendment Act in 2001, which extended it until the first Census after 2026.
  • During the period from 1971 to 2011, the northern states, including Bihar, Chhattisgarh, Gujarat, Jharkhand, Madhya Pradesh, Rajasthan, Uttarakhand, and Uttar Pradesh, witnessed a population increase from 44% to 48.2%. Conversely, the five southern states – Andhra Pradesh, Karnataka, Kerala, Tamil Nadu, and Telangana – experienced a decrease from 24.9% to 21.1%. This discrepancy, if upheld in the delimitation process, would result in the southern states losing 23 parliamentary seats, while the northern states would gain 37. This alteration would elevate the political representation of the northern states by 6.81% and diminish that of the southern states by 4.24%.

Challenges in the "One Person, One Vote" System

  • The challenge of ensuring fair political representation for sub-central units with smaller populations is a common issue in federal systems. For example, Canada has addressed this by consistently increasing the representation of less populous provinces in its national Parliament. The effort to equalize constituency sizes based on population aligns with the principle of "One Person, One Vote."
  • In a 'First-Past-the-Post' electoral system, coupled with multi-party competition, it's important to recognize that only one candidate can emerge victorious, securing all the representation for that constituency. Frequently, winners are elected with less than one-third of the total votes cast. When we calculate the proportion of votes garnered by the winner in a constituency, it may be as low as one-fifth of registered voters or even one-sixth of the entire population of that constituency. Effective candidate strategies can lead to victory in this system.
  • To provide perspective, using 2019 election data, we observe that a Member of Parliament from the northern states of Bihar, Chhattisgarh, Gujarat, Jharkhand, Madhya Pradesh, Rajasthan, Uttarakhand, and Uttar Pradesh represents approximately 18 lakh registered voters, while a Member of Parliament from the five southern states represents 16 lakh registered voters. However, in both cases, it only takes 12 lakh votes to secure a seat in Parliament.
  • This highlights that the true essence of 'one person, one vote' may not be fully realized in this system. Therefore, the strict alignment of constituency sizes with population may not be deemed essential.

Population Control and Social Change

  • When family planning and population control are the stated policies of the national and regional governments in India, States that have implemented these policies and effectively controlled their population should not be penalized through reduced political representation in subsequent periods.
  • Population control in the southern states is not merely a result of family planning programs but also the outcome of profound social change driven by visionary leaders. Penalizing these states with reduced political representation would disincentivize other regions from adopting population control and social change as public policy. Maintaining the seat distribution freeze from 1971 until population stabilization occurs in all states seems to be a fair solution.

Role of Population in Fiscal Transfers

  • Every five years, the Union government establishes a Finance Commission to make recommendations, including the allocation of tax revenue among states. Each Finance Commission devises a formula for distributing the Union government's tax revenue among states, giving significant weight to two key indicators: population and per capita income.
  • The population of a state serves as a proxy for the demand for public expenditure, making it a crucial variable in the distribution formula. Initially, the first Finance Commission determined a state's share primarily based on its population size. Subsequent Finance Commissions, however, progressively reduced the emphasis on population while introducing additional variables into the formula.
  • In the case of the Eighth Finance Commission (1984-89), the Union government directed the use of the 1971 population data instead of the 1981 figures. This practice persisted until the Thirteenth Finance Commission (2010-15). For the Fourteenth Finance Commission, the Union government modified the terms of reference, allowing consideration of demographic changes since 1971, whenever population data were utilized. Consequently, this marked the first departure from the established practice of rewarding states with controlled population growth, shifting the focus to more populous states.
  • The Fifteenth Finance Commission's terms of reference openly stipulated the use of the 2011 population data in the distribution formula. Consequently, the southern states lost their previous advantage of receiving financial rewards for population control efforts. As a result, the southern states have already experienced reduced financial transfers from the Union government as a consequence of their success in controlling population growth.
  • Another crucial element consistently considered in the distribution formula is a state's per capita income. Per capita income serves as an indicator of a state's capacity to generate its own revenue. States with higher per capita incomes tend to receive a smaller portion of the Union tax revenue. Conversely, states with lower per capita incomes may have larger populations relative to their Gross State Domestic Product (GSDP), leading to a higher share of Union tax revenue.
  • It is noteworthy that, typically, per capita income carries significant weight in the distribution formula, often favoring the northern states. As a result, the combined share of the five southern states in Union government tax revenue declined from 21.1% between 2000-05 to 15.8% up to 2021-26. In contrast, the combined share of Bihar, Chhattisgarh, Gujarat, Jharkhand, Madhya Pradesh, Rajasthan, Uttarakhand, and Uttar Pradesh increased from 51.5% to 53.2% over the same period.


Using current population data for delimitation and in the distribution formula for tax revenue allocation seems to be a form of retribution for the southern states' population control efforts and an accolade for the higher population growth rate in the northern states. Finding a balance that incentivizes population control while ensuring fair representation and fiscal transfers is a challenge that needs thoughtful consideration in the Indian federal system.

Probable Questions for UPSC Mains Exam-

  • Question 1: What is the primary challenge associated with ensuring fair political representation in a 'First-Past-the-Post' electoral system? (10 Marks,150 Words)
  • Question 2: How has the use of population data in the distribution formula for tax revenue allocation evolved over the years, and what impact has this had on the financial transfers to states, particularly in the case of the  southern states? (15 Marks,250 Words)

Source - The Hindu