Co-branding vs. Federalism: How policy conflicts stall welfare initiatives

In India’s evolving federal structure, policy branding has emerged as a new battlefield. What should ideally be seamless governance has often turned into a tug-of-war between the Centre and states, affecting key welfare initiatives. From healthcare to housing, co-branding disputes have not just slowed down essential policy implementation but also exposed deeper fissures in federalism. These conflicts often lead to funding delays, governance inefficiencies, and service disruptions, impacting millions of citizens who depend on these policies for their basic needs.

Consider the renaming of NHM health centers as ‘Ayushman Arogya Mandir.’ Kerala rejected this directive, citing linguistic and cultural concerns, leading to the withholding of crucial healthcare funds. The same story repeats across sectors—whether it’s the housing scheme battle between PMAY and Kerala’s Life Mission, West Bengal’s branding of MGNREGA projects, Tamil Nadu’s PM Poshan resistance, or Punjab’s exit from PMFBY crop insurance. The above examples are only a few of the long list of policy lapses or pending issues that occurred due to co-branding. These aren’t just administrative disputes; they are policy roadblocks with real consequences for millions of Indians.

Healthcare and the 'Ayushman Arogya Mandir' Controversy

One of the most striking examples of this phenomenon is the renaming of National Health Mission (NHM) health centers as ‘Ayushman Arogya Mandir.’ The Kerala government rejected this directive, citing linguistic and cultural concerns, which led to a standoff with the Union government. The consequence was the withholding of Rs 636.88 crore worth of NHM funds, delaying crucial healthcare services, infrastructure expansion, maternal healthcare, and immunisation drives. This has had tangible consequences on the ground, with rural hospitals facing equipment shortages and state-run health programs struggling to operate effectively. The question that arises from this dispute is whether branding should take precedence over the actual delivery of services.

Housing delays due to PMAY branding dispute

The housing sector has also seen similar disputes. The Pradhan Mantri Awas Yojana (PMAY) is one of the most ambitious welfare schemes aimed at providing affordable housing, yet its implementation in Kerala was marred by branding conflicts. Kerala sought to integrate PMAY-funded projects with its own Life Mission housing program, but the Centre insisted on exclusive PMAY branding. This disagreement led to delays in approvals, which meant thousands of eligible families had to wait longer for their homes. Similar branding clashes in other states have also resulted in stalled housing projects, effectively making the government’s vision of ‘Housing for All’ a distant dream for many. The tussle over political credit has resulted in governance inefficiencies, where beneficiaries are left in limbo while governments argue over naming rights.

Prime Minister’s photograph and National Food Security Act fund freeze

Co-branding disputes have also surfaced in the implementation of the National Food Security Act (NFSA) in West Bengal, where the Union government withheld Rs 7,000 crore in funds because the state government refused to display the Prime Minister’s photograph and the NFSA logo at ration shops. This move affected the Public Distribution System (PDS), disrupting food supply chains and delaying subsidised food grains for millions of beneficiaries. Such conflicts raise an important question: should the branding of welfare programs take precedence over the urgent needs of citizens? The politicisation of relief measures creates unnecessary roadblocks, preventing efficient policy delivery. When the allocation of essential resources like food, healthcare, and employment is contingent on branding compliance, it erodes the foundational principles of cooperative federalism.

MGNREGA and the West Bengal Fund Freeze

The battle over branding has also extended to the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA). In West Bengal, the state government was accused of removing central branding from MGNREGA and Pradhan Mantri Gram Sadak Yojana (PMGSY) projects, which led to a complete freeze of funds by the Union government. The result was disastrous, as millions of MGNREGA workers went unpaid for months, severely impacting rural employment and livelihood security. This funding freeze underscored a larger issue: when a decentralized scheme is implemented at the state level, does the Centre deserve sole recognition? The inability to resolve this question has led to repeated disruptions, policy stagnation, and an erosion of cooperative federalism. The people who rely on these programs for their daily survival end up suffering the most as a consequence of bureaucratic and political disagreements.

Tamil Nadu’s resistance to PM Poshan

A similar controversy played out in Tamil Nadu when the state resisted renaming its long-established mid-day meal program to align with the centrally funded PM Poshan scheme. Tamil Nadu has had a pioneering mid-day meal program since the 1980s, introduced under the Puratchi Thalaivar MGR Nutritious Meal Programme. When the Centre mandated that states rename their school meal programs under the PM Poshan branding, Tamil Nadu refused, arguing that the change would dilute the legacy of its highly successful nutrition initiative. The dispute led to delays in fund disbursement, affecting meal distribution for 6.5 million children. The conflict here is clear: while uniformity in policy names may serve political and administrative interests at the national level, it should not come at the cost of long-standing state initiatives that have been successfully addressing local needs.

Agriculture and Punjab’s exit from PMFBY

Agriculture, too, has not been immune to these branding disputes. Punjab withdrew from the Pradhan Mantri Fasal Bima Yojana (PMFBY) over disagreements related to branding and implementation control. The state government decided to launch its own crop insurance scheme instead, but without central funding, farmers faced higher premiums and lower enrollments. This shift not only imposed a financial burden on farmers but also highlighted a major flaw in India’s policy framework: when centralised branding mandates push states into running independent but costlier alternatives, it ultimately hurts the people. Instead of fostering cooperative governance, such disputes force states into a position where they must either comply with branding mandates or bear the additional financial burden of launching their own programs.

The larger impact on federalism

These five case studies highlight the broader implications of branding disputes on federalism in India. Co-branding conflicts have resulted in states being financially dependent on the Union government yet facing conditional funding issues when they resist central branding. The West Bengal MGNREGA fund freeze is a prime example of how financial constraints force states into compliance, even when it contradicts regional priorities. At the same time, co-branding undermines state autonomy in policy-making, as seen in Tamil Nadu’s resistance to PM Poshan. This over-centralisation limits states’ ability to innovate and adapt welfare schemes to their unique socio-cultural and economic contexts.

Moreover, these conflicts stem from a tussle over political credit and visibility. Many centrally sponsored schemes aim for high political visibility, sometimes at the cost of efficiency. The branding dispute in Kerala over PMAY, which delayed housing projects, illustrates how governance takes a backseat when political ownership is prioritised over policy execution. Similarly, cultural and linguistic sensitivities are often ignored in the rush to impose uniform branding. Kerala’s rejection of the ‘Ayushman Arogya Mandir’ name due to religious connotations highlights how a one-size-fits-all approach does not work in a diverse country like India. Public acceptance is crucial for policy success, and forced branding often fails to achieve that goal.

Another major issue is policy stagnation due to branding conflicts. When governments remain deadlocked over branding issues, necessary policy implementations are delayed indefinitely. Punjab’s withdrawal from PMFBY is a classic example of how branding mandates can force states to abandon central programs, resulting in a loss for both governance and the citizens who depend on these schemes. These disputes raise serious questions about the structure of cooperative federalism in India and whether the Centre and states can function as true partners in governance.

Resolving co-branding conflicts

Resolving these disputes requires a more flexible branding policy that allows joint branding instead of enforcing exclusivity. A co-branded PMAY-Life Mission model, for instance, could have prevented the delays in Kerala. Similarly, introducing a transparent credit-sharing mechanism, where both the state and Centre receive visible recognition for their contributions, can reduce such conflicts. A mandatory consultation process for branding decisions could also prevent disputes like the NHM renaming controversy. Establishing an independent arbitration body to resolve conflicts arising from centrally sponsored schemes (CSS) branding could prevent unnecessary funding delays, as seen in Tamil Nadu’s PM Poshan case. Lastly, legislative protection for state branding autonomy, possibly through an amendment in Schedule VII of the Constitution, could provide a more structured approach to handling these disputes.

A test for India’s federal structure

Co-branding is more than just a symbolic issue; it is a litmus test for India’s federal structure. When branding conflicts delay essential policies, they hurt the very citizens they aim to serve. It is time for a balanced approach that respects both national unity and regional autonomy. The key to effective governance lies not in determining who gets credit, but in ensuring that policies are implemented smoothly and efficiently. The future of India’s federalism depends on cooperation rather than coercion and resolving branding disputes is a crucial step toward achieving that goal.

Yadul Krishna is a policy economist and is a fellow at Governance Innovation Labs. As the Parliamentary Secretary to a Rajya Sabha MP, he drafted "The Bhagat Singh National Urban Employment Guarantee Bill, 2022," introduced in Parliament.

Views expressed are the author’s own and don’t necessarily reflect those of Down To Earth