Gaddam Rohin and Areeba Ahsanat Moazzam
This paper discusses how representational asymmetries and fiscal distribution relate in a federal system with reference to the case of India. It theorises malapportionment, which is the difference between the proportion of a state in the legislature and the proportion of the state in the population, as an institutional characteristic with possible distributive implications. The analysis uses a state-level panel dataset covering the period 2014-2024 to examine the hypothesis that overrepresentation has an impact on per capita central transfers and whether this effect is conditional on political alignment between state and central governments. The empirical results answer two questions. As for the impact of overrepresentation on fiscal transfers, the results of the baseline specifications are quite striking: states with a higher representation in Lok Sabha than their population share get much more in per capita transfers from the centre. This direct effect is reduced in size and becomes statistically insignificant when state and year fixed effects are added, suggesting that much of the variation is captured by the time-invariant state characteristics and common temporal shocks. Second, on the conditionality of this effect on political alignment: the interaction between malapportionment and political alignment is positive and statistically significant, indicating that representational advantages lead to measurable fiscal benefits when the state government is aligned with the Union government. These findings together indicate that institutional representation and partisan proximity are both important determinants of fiscal outcomes in Indian federalism.
