Dynamics
of Centre-state relations in India
Introduction –
A
sacrosanct federal system which India
has evolved over a period of time starting from the late 18th
Century is different from the accepted
notion of federation. The evolved Indian federalism is very unique in character
and the Union - State relationship has also become extremely complex over the
years.
A
federal set up is considered to be an optimal form of Government as it combines
the strength of a unitary as well as decentralized form of Government. The
essence of federalism lies in proper division of powers and functions among
various levels of Government to ensure adequate financial resources to each
level of Government to enable them to perform their exclusive functions. In a
federation, both developed and underdeveloped federating units find it
advantageous to remain within the federation due to various reasons like
unified marketing facility, security and financial cooperation. In India
federalism has evolved from a highly centralized system under the British
regime -Lord Mayo financial resolution of 1871 to a three tier from of
federation.
The
Govt of India Act 1919 has been a real mark in the history of evolution of
fiscal federalism in India whereas the Govt of India Act 1935 established a
vertical/right demarcation of subjects
falling under Centre, State and both. On attaining independence from British
rule in 1947, the federal status of India underwent a fundamental change with
clear division of financial powers and expenditure responsibility between
central and state governments and it is
well described in the 7th schedule of the Constitution of India.
The
Indian National Congress after
independence in 1947 for another 20 years(Mr JL Nehru Period) led to a strong
central Government and it had developed the
concept of a patriarch controlling Indian federation. It was nothing but just
like the branches of the central government because almost all states were
ruled by the Congress Party.
However
over the last 60 years many changes have been incorporated in the Indian
federation through different constitutional amendments- changes in criteria for
devolution of resources of resources to fulfill the objectives of fiscal
federalism viz reducing fiscal imbalances and ensuring provision for equal
level of public services like education and health etc across all states at
similar rate of taxes.
The
most important aspect of fiscal federalism is the division of resources and
functions between different level of government. The existence of fiscal
imbalance is inherent in most of the federations since the division of resources goes in favour of the central
government to achieve the objectives of
stabilization and distribution. Similar is the case of Indian Federation
where there is a mismatch of resources and expenditure responsibilities at
different layers of the government. Even after 70 years of independence the
imbalances are there in the system. The Transfers from Centre to States take
place through 3 channels -UFC, PC and Central Ministries, of which transfers
from FC are predominant. Gross devolution and transfers (GDT) comprises of
state’s share in central tax SCT, grants in aid and gross loan from centre.
Thus gross transfers from centre to states have been increasing in the last
decades except a little dip in 2011-12.
Issues between Centre and States:
With the inception of economic reforms started from 1991 , the responsibility
of states has increased to meet the demand of public services. The level of
discipline in states in managing their fiscal balance needs improvement. FRBMA
(Fiscal Responsibility and Budget Management Act) directs the states to
bring discipline in the management of
public finances has added pressure, particularly in improving productive assets
of the poorer states.
To
improve the position of financial imbalances between states and the centre is
the crux of the centre state relations.
Under
the circumstances, let us make an overview of dynamism as under:
“Though
the country and the people may be divided into different states for convenience
of administration, the country is one integral whole, its people a single
people living under a single imperium derived from a single source.” - Dr. B.R Ambedkar
It
is clear that the Indian system of
governance through the constitution is a federal system. the union and the States
drive their power from the constitution which has divided –
Legislative Relation (245-255)
Executive Relation (256-263) and
Financial Relation (264-290)
Art.
245 Extent of laws made by Parliament and by the legislatures of states – (1)
Subject to the provisions of this constitutions, Parliament may make laws for
the whole or any part of the territory of India, and the legislature of a state
may make laws for the whole or any part of the state.
(2)
No law made by parliament shall be deemed to be invalid on the ground that it
would have extra-territorial operation.
Territorial distribution
– Legislative powers in a federal or quasi-federal constitution, are divided
between the centre and the state. the division is in respect of both the
territory and topics of legislation. Article 245 defines the ambit or
territorial limits of the legislative power vested in parliament and the
legislatures of the states; article 246 defines the respective jurisdictions of
the union and the state legislatures as regards subjects or topics of
legislation. The prevalent view is that not only the territorial jurisdiction
but also the substantive law-making power of parliament and state legislatures
emanate from article 245 and that those powers are “subject to the provisions
of this constitution” as stated in the opening words of that of that article.
According to this view judicial review of legislation is justified in the
opening words of article 245.
Territorial nexus: -
under article 245 of the constitution of India the legislature of state can
make law for the state or any part thereof. it would be overstepping the limits
of its legislative field when it purports to affect men and property outside
the state. in other words, the state legislature has no legislative competence
to make law which have extra-territorial operation. the supreme court-over a
period of three decades-has evolved a principle called “doctrine of territorial
nexus” to find out whether the provisions of a particular state law have extra
territorial operation. The doctrine is well established and there is no dispute
as to its principle. If there is a territorial nexus between the person,
property subject matter of the act and the state seeking to comply with the
provisions of the act then the statute cannot be considered as having extra
territorial operation.
Sufficiency
of nexus can be determined looking at two mandatory elements i.e., (1) the
connection must be real not illusionary, (2) the liability sought to be imposed
must be pertinent to that connection. In the case state of Bombay Vs R.M.D. Chamarbaughwala AIR 1957 SC held that
‘a newspaper which is in wide circulation in a state is not exempt edfrom tax
on a prize competition it runs in that state, under an act enact for this
purpose by the legislature merely for the reason that it is based in some other
state.
Delegated Legislation –
Underlying
the concept of Delegated legislation is the basic principle that the
legislature delegates because it can not directly exert its will in every detail.
All it can in practice do is to lay down the outline. This means that the
intention of legislature, as indicate in outline (that is the enabling act),
must be the prime guide to the meaning of the delegate legislation and the
extent of the power to make it. the true extent of the power governs the legal
meaning of the delegate legislation. The delegate is not intended to travel
wider than the object of legislature.
The
delegate’s function is to serve and promote that object while at all times
remaining true to it. that is the rule of primary intention. power delegated by
an enactment does not enable the authority by regulations to extent the scope
of journal operation of the enactment but is strictly ancillary. The aforesaid
principle will apply with greater rigour where rules have been framed in
exercise of power conferred by a constitution provision .no rules can be framed
which have the effect of either enlarging or restricting the content and
amplitude of the relevant constitutional provisions. Similarly, the rules
should be interpreted consistent with the aforesaid principle.
Subject-matter of laws made by
Parliament and by the Legislatures of States –246. (1)
Notwithstanding anything in clauses (2) and (3), Parliament has exclusive power
to make laws with respect to any of the matters enumerated in List I in the
Seventh Schedule (in this Constitution referred to as the “Union List”).
(2) Notwithstanding anything in clause (3),
Parliament, and, subject to clause (1), the Legislature of any State 1*** also,
have power to make laws with respect to any of the matters enumerated in List
III in the Seventh Schedule (in this Constitution referred to as the
“Concurrent List”).
(3) Subject to clauses (1) and (2), the
Legislature of any State has exclusive power to make laws for such State or any
part thereof with respect to any of the matters enumerated in List II in the
Seventh Schedule (in this Constitution referred to as the “State List”).
(4) Parliament has power to make laws with
respect to any matter for any part of the territory of India not included 2[in
a State] notwithstanding that such matter is a matter enumerated in the State
List.
Distribution of law making power :– The
constitution in making the distribution of legislative power between the Union
And The States , follows the government of India act 1935.it enumerates various
items of legislation in three lists :
·Union
list
·State
list
·Concurrent
list
Principle of interpretation – in
ascertaining the respective jurisdiction of parliament and the state
legislature set out in Art 246 ,the following principle of interpretation are
applied:
2.
Retrospectivity
3.
Predominance of union power
4.
Avoidance of conflict (Harmonious
construction)
5.
Pith and substance
7. Colorable
legislation
Plenary power of legislature
It
is an absolute power to enact laws (even if it is contrary to any understanding
or guarantee is given by the state), subject only to its legislative competence
and other constitutional limitations. No limitation can be read on the ground
of legislative practice or legitimate expectations.
The
principle to interpret the entries (in lists) so as to make the legislative
power of parliament and state legislatures ‘plenary’ is that the entries should
not be read in a narrow or restricted sense. Each general word in an entry
should be construed to include all ancillary or subsidiary matters which can
fairly and reasonably be said to comprehend it.
The
following points are important to understand the nature of plenary power: -
(1)
The power to make a law includes the power to give effect to it prospectively
(i.e. for future acts – law to take effect from a future date) as well as
retrospectively (i.e. for past acts – law to take effect from a backdate).
(2)
The meaning of a validation act is to remove the causes of ineffectiveness or
invalidity of actions or proceedings which are validated by a legislative
measure. A validating law is upheld first by finding out whether legislature
possesses competence over die subject matter/and, whether by validation the
legislature has removed the defects which the courts have found in the previous
law.
(3)
where an impugned act (i.e. an act whose validity is questioned) passed by a
state legislature is invalid on the ground that state legislature did not have
legislative competence to deal with the topic covered by it, then even
parliament cannot validate such act, because such validation would give the
state legislature power over subjects outside its jurisdiction.
(4)
When the legislature cures the said infirmity and passes a validating law, it
can make the said provisions of earlier law effective from the date when it was
passed. The retrospective application of law thereby removing the basis of
earlier judicial decision (i.e. a decision based on earlier law) is not an
encroachment on the judicial power. However, the legislature cannot by bare
declaration, without anything more, reverse or override a judicial decision.
Retrospectivity -
The
legislative power can be exercise both prospectively and retrospectively. where
a legislature can make a valid law, it may provide not only for the prospective
operation of that law, but it can also provide for its retrospective operation (Rai
Ramkrishna Vs state of Bihar 1963SC)
In
J. K. jute mills Vs state of UP AIR 1961SC -The power to make law includes the
power make law prospectively or retrospectively.
Predominance of the Union Power -
In
spite of a clear demarcation in the law-making power of Parliament and State Legislatures, Parliament
was assigned a predominant position in the general Legislative field. If a
matter happened to be included in the Union list and the State List, and if
there was ever a conflict between them the Union List prevailed? Similarly, if
there was an overlapping between the Union and concurrent lists, the Union list
was paramount, and the concurrent list had priority over the State List. Clause
(4) of Article 246 of the Indian Constitution further provided that, Parliament
has power to make laws with respect to any
matter
for any such part of the territory of India as had not been
included
in a State, notwithstanding that such matter was a matter
enumerated
in the State List.
Avoidance of Conflict -
When
there is a conflict between two or more statues or two or more parts of a
statute then the rule of harmonious construction needs to be adopted. The rule
follows a very simple premise that every statute has a purpose and intent as
per law and should be read as a whole. The interpretation consistent of all the
provisions of the statute should be adopted. In the case in which it shall be
impossible to harmonize both the provisions, the court’s decision regarding the
provision shall prevail.
The
rule of harmonious construction is the thumb rule to interpretation of any
statute. An interpretation which makes the enactment a consistent whole, should
be the aim of the Courts and a construction which avoids inconsistency or
repugnancy between the various sections or parts of the statute should be
adopted. The Courts should avoid “a head on clash”, in the words of the Apex
Court, between the different parts of an enactment and conflict between the
various provisions should be sought to be harmonized. The normal presumption
should be consistency and it should not be assumed that what is given with one
hand by the legislature is sought to be taken away by the other. The rule of
harmonious construction has been tersely explained by the Supreme Court thus,
“When there are, in an enactment two provisions which cannot be reconciled with
each other, they should be so interpreted, that if possible, effect should be
given to both”. A construction which makes one portion of the enactment a dead
letter should be avoided since harmonization is not equivalent to destruction.
Harmonious
Construction should be applied to statutory rules and courts should avoid
absurd or unintended results. It should be resorted to making the provision meaningful
in the context. It should be in consonance with the intention of Rule makers.
Rule of Harmonious construction is applicable to subordinate legislature also.
Pith and Substance –
Lets
understand the true spirit of the doctrine-
Pith
means "true nature" or "essence" and substance means the
essential nature underlying a phenomenon.
Thus,
the doctrine of pith and substance relates to finding out the true nature of a
statute.
·
This doctrine is widely used when deciding
whether a state is within its rights to create a statute that involves a
subject mentioned in Union List of the Constitution.
·
The basic idea behind this principle is
that an act or a provision created by the State is valid if the true nature of
the act or the provision is about a subject that falls in the State list.
State
of Maharashtra Vs F N Balsara AIR 1951 illustrates this
principle very nicely. In this case, the State of Maharashtra passed Bombay
Prohibition Act that prohibited the sale and storage of liquor.
This
affected the business of the appellant who used to import liquor. He
challenged the act on the ground that import and export are the subjects
that belong in Union list and state is incapable of making any laws regarding
it. SC rejected this argument and held that the true nature of the act
is prohibition of alcohol in the state and this subject belongs to the State
list. The court looks at the true character and nature of the act having
regard to the purpose, scope, objective, and the effects of its provisions.
Therefore,
the fact that the act superficially touches on import of alcohol does not make
it invalid.
Within
their respective spheres, the Union and the state Legislatures are made supreme
and they should not encroach into the sphere reserve to the other. If a law
passed by one encroaches upon the field assigned to the court will apply the
doctrine of pith and substance to determine whether the legislature concerned
was competent to make it. If the ‘pith and substance’ of law, i.e., the true
object of the legislation of a statute, relates to a matter with the competence
of legislature which enacted it, it should be held to be intra vires even
though it might incidentally trench on matter not within the competence of
legislature.
The
doctrine of pith and substance is applied when the legislative competent of a
legislature with regard to a particular enactment is challenged with reference
to the entries in different legislative list, because a law dealing with a
subject in one list within the competence of legislature concerned is also
touching on a subject in other list not within the competence of that
legislature. In such a case, what has to be ascertained is the pith and
substance of enactment -the true character and nature of the legislation. if, on
examination of the statute, it is found that the legislation is in substance on
a matter assigned to the legislature enacting that statute, then it must be
held valid in its entirety even though it may incidentally trench upon matter
beyond its competent, that i.e., on matters included in the list within
competence of the other legislature. Legislative matters in different list are
bound to overlap and therefore incidental encroachments shall take place.
Ancillary legislation-
It
is well settled that the power to legislate on a topic of legislation carries
with it the power to legislate on an ancillary matter which can be said to be
reasonably included in the power given. Thus, the power to legislate with
respect to collection of rent includes the power to legislate with respect to
remission of rent. the power to legislate with respect to land includes the
power to legislate with mortgages of land as a subsidiary subject. Likewise,
legislation relating to tax on agriculture also bestows competence to enact a
law relating to a tax on agriculture income.
Colourable legislation –
In India ‘the doctrine of
colorable legislation’ signifies only a limitation of the law making power of
the legislature. It comes into picture while the legislature purporting to act
within its power but in reality it has transgressed those powers. So the
doctrine becomes applicable whenever a legislation seeks to do in an indirect
manner what it cannot do directly. If the impugned legislation falls within the
competence of legislature, the question of doing something indirectly which
cannot be done directly does not arise.
In India legislative
powers of Parliament and State Legislatures are conferred by Art. 246 and
distributed by Lists I, II and III in the seventh schedule of the Constitution.
Parliament has exclusive power to make laws with respect to any of the matters
in List II. Parliament and State Legislatures have both powers to make
laws with respect matters in List III which is also known as concurrent list.
Residuary power of legislation is vested in Parliament by virtue of Art. 248
and entry 97 in list I. the power of State Legislatures to make laws is subject
to the power of Parliament to make laws with respect to matters in List I and
III. While examining the legislative competence of Parliament to make a law all
that is required to be seen is whether the subject matter falls in List II
which Parliament cannot enter for in view of the residuary power vesting in
Parliament other matters are not outside the legislative competence of Parliament. Legislative
competency is an issue that relates to how legislative power must be shared
between the center and states. It focuses only on the relation between the
two.
The question whether the
Legislature has kept itself within the jurisdiction assigned to it or has
encroached upon a forbidden field is determined by finding out the true nature
and character or pith and substance of the legislation . The main
point is that the legislature having restrictive power can not step over the
field of competency. It is termed as the “fraud on the constitution"
The Supreme Court in the
case of K.C gajapti vs state of Orissa while explaining the doctrine held that
“if the constitution of a state distributes the legislative spheres marked out
by specific legislative entries or if there are limitations on the legislative
authority in the shape of fundamental rights, questions do arise as to whether
the legislature in a particular case in respect to the subject matter of the
statute or in the method of enacting it, transgressed the limits of the
constitutional power or not. Such transgression may be patent , manifest and
direct, but may also be distinguished, covered and indirect and it is the
latter class of cases that the expression ‘colourable legislation’ has been
applied in certain judicial pronouncements."
The Supreme court of
India in different judicial pronouncements has laid down the certain tests in
order to determine the true nature of the legislation impeached as colourable
:-
1. The court must look to
the substance of the impugned law, as distinguished from its form or the label
which the legislature has given it.
For the purpose of
determining the substance of an enactment, the court will examine two things :-
a) effect of the legislature and the b) object and the purpose of the act.
2. The doctrine of
colourable legislation has nothing to do with the motive of the legislation, it
is in the essence a question of vires or power of the legislature to enact the
law in question.
The doctrine does not
involve any question of bonafides or malafides intention on the part of the
legislature. If the legislature is competent enough to enact a particular law,
then whatever motive which impelled it to act are irrelevant . On the
other hand, it was observed by the Apex court that “ the motive of the
legislature in passing a statute is beyond the scrutiny of the courts" so
the court has no power to scrutinize the policy which led to an enactment of a
law falling within the ambit of the legislature concerned.
There is hardly any
instance where a law has been declared by the court as invalid on the ground of
competency of the legislature. The only instance is in the case where a state
law dealing with the abolition of landlord system, provided for payment of
compensation on the basis of income accruing to the landlord by way of rent.
Arrears of rent due to the landlord prior to the date of acquisition were to
vest in the state and half of these arrears were to be given to the landlord as
compensation. The provision was held to be a piece of colourable legislation
and hence void on the basis of the following grounds:-
That it was not within
the competence of Bihar state legislature to enact the impugned act.
That the acquisitions of
the estates not being for public purpose, the act was unconstitutional
That the legislative
power in various sections of the act has been abducted in favour of the
executive and such abdication of power was unconstitutional.
That the act was a fraud
on the constitution and that certain parts of the act were unenforceable on
account of vagueness and indefiniteness.
There is always a
presumption that the legislature that the legislature doesnot exceed its
jurisdiction( ut res magis, valet quam parret) and the burden of establishing
that an act is not within the competence of the legislature or that it has
transgressed other constitutional mandates as is always on the person who
challenges its vires.
So the ultimate analysis
is that colorable legislation indicates that while making the law the
legislature transgressed the limits of its power. But the question may be
raised that whether or not parliament can do something indirectly, which it can
not do directly, may depend upon why it cannot do directly. There are so many
examples in law as well as life where something can be done indirectly,
although not directly. So the true principle of colourable legislation is “ it
is not permissible to do indirectly, what is prohibited directly."
LEGISLATIVE
ACCOUNTABILITY IN INDIA-
In India, legislature
mends the laws whenever they transgressed their limits. Actually in colloquial
language we can safely say, the Indian legislature make it a habit to do
rewind, fast forward, pause; everything they wish whenever they found any
inconvenience. They just bring the majority in the house and pass laws whatever
they need. They never give due regard to the public aspirations which actually
is the source of their power. For that reason we need legislative
accountability. To understand legislative accountability first we have to know
what is accountability? Generally, it indicates the process of holding persons
or institutions responsible for the performance as objectively as possible.
Accountability is the mechanism by which the concern authority is explicable
for account of his conduct. The accountability is better if extracted by the
authority from himself or rather say by his inner consciousness and not by
legal means . It requires responsibility. Responsibility refers the
authority to act, the power to control and the freedom to decide.
Over the past half
century India has been a complex experiment in institutionalizing democratic
accountability through parliamentary institution. Parliament is the agency
through which the govt is accountable . In Indian constitution there is no
direct contemplation of legislative accountability. But in India where a
parliamentary democracy prevail, the legislature has a vital role to make
administration accountable. The members of the parliament and legislative
assemblies in different states are elected by the people of India so the
parliament is accountable to the people. The indication of legislative
accountability can only be traced through the provision of Comptroller and
Auditor General of India as enumerated in article 148 and 149 of the Indian
constitution.
The framers of the Indian
constitution being inspired by the then freedom movement and emotions with it
would have an opinion that the ministers would always think for the people so
to make legislature accountable to some extent the above mentioned provisions
are made. Under article 148 the comptroller and auditor general of India is the
most important officer of the Govt. of India who by exercising his power and
discharging duties make the legislature accountable to some
extent. Under the Article 149 the duties and powers of the comptroller
and general of India is to enhance accountability of the executive to the
parliament and the state legislatures, by carrying out audits in public sector
and providing accounting services in the states in accordance with the
constitution of India and laws as well as best international
practices. To maintain the accountability being a high independent
statutory authority the comptroller and auditor general has a double role to
perform. Firstly, to function as an agency on behalf of the legislature to ensure
that the executive complies with the various laws passed by the legislature in
letter and spirit and secondly on behalf of the executive to ensure compliance
by subordinate authorities with the rules and orders issued by it.
The comptroller and auditor
general of India generally empowered to perform certain duties among which he
has a duty to take account of accounts of the union and of the states. On the
basis of which he prepares a report regarding the expenditures and money spent
by the union and the state. Under article 149, it is the responsibility of the
CAG to audit all expenditures and receipts of the Govt.of India, the state
Govt. and Union territories. It has played a vital role to maintain the balance
in the govt. finances. The system mechanism should be user friendly so that the
public can acquainted with the financial management of the Govt.
The primary duty of the
legislature is to make laws. The primary accountability is accountability for
law made means what law should be made by the Legislature? As Article 246 of
the Constitution speak about the Distribution of Legislative powers between
Centre and State, and power to make laws. Thus, it is important for the
legislature to take account of the fact that what laws should be framed and how
it should legislate. Whether on the areas identified in the Constitution under
Schedule VII, which means Legislature can make legislations on only 97+66+47 =
210 areas/fields or according to the need of the people, need of the country.
The answer to this question is simple that Legislature is accountable to frame
legislations according to the need of the hour and entries identified under
Schedule VII. So it is necessary for the legislature to take account of the
fact that what laws should be framed and how it should be legislate. But
unfortunately, there is no specific provision in this regard.
Under
the constitution of India, [1] exclusive jurisdiction for the Union and the
State has been conferred regarding subject matters of legislation. This has
been provided by Article 246, [2] which has demarcated the legislative
jurisdiction of the parliament and the state assemblies by outlining the
different subjects under List I for the Union, List II for the State, and List
III for both, as given in the seventh schedule to the Indian Constitution. As a
consequence, conflicts of jurisdiction arise due to the fact there exist
separate lists for the Union and the State to legislate upon. It often happens
that strict constitutional boundaries are transgressed in legislation, inviting
judicial review of the said bill/act.
The
enactment of legislation is a function of the legislative power. In order to
decide whether particular legislation is unconstitutional for breaching the
constitutional limitations of distribution of powers, the Court examines the
enactment with some strictness. The legislature can only make laws within its
legislative competence. The legislative competence may be limited by specific
List entries or be restricted by other constitutional limitations and
prohibitions. It cannot over-step the area of its legislative capability. A
simple rule is followed in this regard, which is to find out if the legislating
body had the power to legislate directly. If not, then the legislature cannot
legislate indirectly. What it cannot do directly, it cannot attempt to do
indirectly. Therefore, the substance of the legislation must be articulated for
the purpose of determining whether what it enacted, it could really do.
The
question of colourable legislation was fully discussed by the Supreme Court in
K.C. Gajapati Narayan Deo v. Orissa, a decision which has been treated as
settling the law on the subject. This ruling was confirmed in the Supreme Court
decision of Sonapur Tea Co. v. Deputy Commissioner.
Judicial Accountability is also required to be seen from the angle of limited government which is near the Centre State relations to completely understand as to why LIMITED GOVERNMENT is important in Indian Parliamentary System of the Government.
EXECUTIVE RELATION
–
Administrative Relations
Article
256 to 263 deals with the administrative relations between the centre and the
states. Article 256 states that
"the executive power of every State shall be so exercised as to ensure
compliance with the laws made by the parliament and any existing laws which
apply in that State, and the executive power of the Union shall extend to the
giving of such directions to a State as may appear to the Government of India
to be necessary for that purpose".
Cooperation Between the Centre and
the States:
The
constitution lays down various provisions to secure cooperation and
coordination between the centre and the
states. These include:
(i)
Article 261 states that "Full faith and credit shall be given throughout
the territory of India to public acts, records and judicial proceedings of the
Union and of every State".
(ii)
According to Article 262, the parliament may by law provide for the
adjudication of any dispute or complaint with respect to the use, distribution
or control of the waters of, or in, any inter-State river or river valley.
(iii)
Article 263 empowers the President to establish an inter-State Council to
inquire into and advise upon disputes between states, to investigate and
discuss subjects in which some or all of the States, or the Union and one or
more of the States, have a common interest.
Financial Relations -
The
Constitution deals with the centre-state financial relations in Article 268-293
of Part XII.
Allocation
of taxing powers
The
Constitution has provided the union government and the state governments with
the independent sources of revenue. It allocates the powers to centre and the
states in the following way:
(i)
The parliament has exclusive power to levy taxes on the subjects mentioned in
the Union List.
(ii)
The state legislatures has exclusive power to levy taxes on the subjects
mentioned in the
State
List
(iii)
Both the parliament and the state legislature are empowered to levy taxes on
the subjects mentioned in the Concurrent List.
(iv)
The parliament has exclusive power to levy taxes on the matters related to the
residuary subjects.
However,
in case of tax revenue distribution,
article
268 states that duties are levied by the Union but are collected and
appropriated by the States;
Service
tax levied by Union and collected and appropriated by the Union and the States
(Article 268-A);
Taxes
levied and collected by the Union but assigned to the States (Article 269);
Taxes
levied and collected by the Union but distributed between the Union and the
States (Article 270).
Surcharge
on certain duties and taxes for purposes of the Union (Article 271)
Under
Article 275, the parliament is authorized to provide grants-in-aid to any state
as parliament may determine to be in need of assistance, and different sums may
be fixed for different States.
Under
Article 282, the union or a state may make any grants for any public purpose,
notwithstanding that the purpose is not one with respect to which Parliament or
the Legislature of the State, as the case may be, may make laws.
Sarkaria commission Report-
With a view to reviewing the working of the
existing arrangements between the Union and the States in the changed
socio-economic scenario, the Government constituted a Commission vide Ministry
of Home Affairs Notification No. IV/11017/1/83-CSR dated June 9, 1983 under the
Chairmanship of Justice R.S. Sarkaria
with Shri B. Sivaraman and Dr. S.R. Sen as its members. The terms of reference
of the Commission as enunciated in this notification were as under :-
“The Commission will examine and review the
working of the existing arrangements between the Union and States in regard to
powers, functions and responsibilities in all spheres and recommend such
changes or other measures as may be appropriate”. "In examining and
reviewing the working of the existing arrangements between the Union and the
States and making recommendations as to the changes and measures needed, the
commission will keep in view the social and economic developments that have
taken place over the years and have due regard to the scheme and framework of
the Constitution which the founding fathers have so sedulously designed to
protect the independence and ensure the unity and integrity of the country
which is of paramount importance for promoting the welfare of the people."
1.Residuary
powers of legislation in regard to taxation matters should continue to remain
exclusively in the competence of Parliament, while the residuary field other
than that of taxation, should be placed in the Concurrent List. The
Constitution may be suitably amended to give effect to this recommendation.
2.The
enforcement of Union laws particularly those relating to the Concurrent sphere,
is secured through the machinery of the States. Coordination of policy and
action in all areas of concurrent or overlapping jurisdiction through a process
of mutual consultation and cooperation is, therefore, a pre-requisite of smooth
and harmonious working of the dual system. To secure uniformity on the basic
issues of national policy with respect to the subject of a proposed
legislation, consultation may be carried out with the State Governments
individually, and collectively at the forum of the proposed Inter-Governmental
Council.
It is not necessary to make the proposed
consultation a constitutional obligation. This will make the process needlessly
rigid. The advantage of a convention or rule of practice is that it preserves
the flexibility of the system and enables it to meet the challenge of an
extreme urgency or on unforeseen contingency. This convention as to
consultation with the State Governments, individually, as well as collectively,
should be strictly adhered to except in rare and exceptional cases of extreme
urgency or emergency.
3.The
best way of working Union-State relations in the sphere of education would be
that the norms and standards of performance are determined by the Union and
professional bodies such as the UGC set up under Central Enactments but the
actual implementation is left to the States. By the same token a system of
monitoring would have to be established by the Union. The basis pre-requisites
of successful working of such professional bodies are –
(i) that their
composition, functioning and mode of operation should be so professional and
objective that their opinion, advice or directive commands implicit confidence
and
(ii) this objective
cannot be achieved without close concert, collaboration and cooperation between
the Union and the States.
4.
There is a potential for misuse by the two levels of government of the powers
available by virtue of Entry 45 of List III. However, the mere fact that this
power is capable of being misused, is no ground for amending the constitution.
There is a case for providing appropriate safeguards against the misuse of this
power, in the commissions of Inquiry Act, itself. such safeguards can be :-
(i) that no Commission
of inquiry against an incumbent or former Minister of a State Government on
charges of abuse of power or misconduct shall be appointed by the Union
Government unless both Houses of Parliament, by resolution passed by the
majority of members present and voting require the Union Government to appoint
such a Commission or, the Minister or Ministers concerned request in writing
for the appointment of such a Commission; and
(ii) No Commission of
inquiry shall be appointed to inquire into the conduct of a Minister (incumbent
or former) of a State Government with respect to a matter of public importance
touching his conduct while in office, unless the proposal is first placed
before the Inter-Governmental Council (recommended to be established under
Article 263) and has been cleared by it. (iii)
Appropriate safeguard on the lines indicated above, be provided in the
Commissions of Inquiry Act, 1952, itself, against the possible misuse of this
power, while appointing a commission to inquire into the conduct of a Minister
or ministers of a State Government.
5.Ordinarily,
the Union should occupy only that much field of a Concurrent subject on
which uniformity of policy and action is essential in the larger interest of
the nation, leaving the rest and details for State action within the broad
frame-work of the policy laid down in the Union Law. Further, whenever, the
Union proposes to undertake legislation with respect to a matter in the Concurrent
List, there should be prior consultation not only with the State Governments,
individually, but also, collectively, with the Inter-Governmental Council which
as we have recommended, should be established under Article 263. A resume of
the views of the State Governments and the comments of the Inter-Governmental
Council should accompany the Bill when it is introduced in parliament into the
conduct of a Minister or ministers of a State Government.
6.Cases
may arise, particularly in the modern context where States may feel aggrieved
on account of taxes imposed by the Union on the trade or business in terms of
clause (2) of Article 289. The scheme of the Constitution envisages remedial
action under clause (3). Where one or more State Governments feel aggrieved on
account of any action of the Union Government covered by clause (2) of Article
289, adequate consultation should be held with the State Governments or the
National Economic and Development Council proposed by us and action taken to
afford relief in terms of clause (3) of Article 289.
7.Before
a law is passed by Parliament by virtue of clause (3) of article 286 read with
Entries 92A and 92B of List I, the State Governments and the National Economic
and Development Council should be consulted and the resume of their comments
should be placed before Parliament along with the Bill.
8.
Articles 256, 257 and 365 are wholesome provisions, designed to secure
coordination between the Union and the States for effective implementation of
Union laws and the national policies indicated therein. Nonetheless, a
direction under Articles 256 and 257 and the application of the sanction under
Article 365 in the event of its non-compliance, is a measure of last resort.
Before issue of directions to a State or application of sanction under Article
365, utmost caution should be exercised and all possibilities explored for
settling points of conflict by all other available means.
9.
Federalism is more a functional arrangement for cooperative action, than a
static institutional concept. Article 258 provides a tool, by the liberal use
of which, cooperative federalism can be substantially realised in the working
of the system. A more extensive and generous use of this tool should be made,
than has hither-to been done, for progressive decentralisation of powers to the
Governments of the States and/or their officers and authorities.
Punchhi Commission-
The major recommendations may be
enumerated as follows:
There
should be an amendment in Articles 355 and 356 to enable the Centre to bring
specific trouble-torn areas under its rule for a limited period.
1. The
commission has proposed “localising emergency provisions” under Articles 355
and 356, contending that localised areas — either a district or parts of a
district — be brought under Governor’s rule instead of the whole state. Such an
emergency provision should however not be of duration of more than three
months.
2. The
commission however supports their right to give sanction for the prosecution of
ministers against the advice of the state government.
3. To make an amendment in the communal violence
Bill to allow deployment of Central forces without the state’s consent for a
short period. It has proposed that state consent should not become a hurdle in
deployment of central forces in a communal conflagration. However, such
deployment should only be for a week and post-facto consent should be taken
from the state.
4. Among the significant suggestions made by the
Commission is, laying down of clear guidelines for the appointment of chief
ministers. Upholding the view that a pre-poll alliance should be treated as one
political party, it lays down the order of precedence that ought to be followed
by the governor in case of a hung house:
a)
Call the group with the largest prepoll
alliance commanding the largest number;
b)
the
single largest party with support of others;
c)
the
post-electoral coalition with all parties joining the government; and last
d)
the post electoral alliance with some
parties joining the government and remaining including Independents supporting
from outside.
5. The
panel also feels that governors should have the right to sanction prosecution
of a minister against the advice of the council of ministers. However, it wants
the convention of making them chancellors of universities done away with.
6. As for qualifications for a governor, the
Punchhi commission suggests that the nominee not have participated in active
politics at even local level for at least a couple of years before his
appointment. It also agrees with the Sarkaria recommendation that a governor be
an eminent person and not belongs to the state where he is to be posted.
7.
The commission also criticizes
arbitrary dismissal of governors, saying, “the practice of treating governors
as political football must stop”. There should be critical changes in the role
of the governor — including fixed five-year tenure as well as their removal
only through impeachment by the state Assembly. It has also recommended that
the state chief minister have a say in the appointment of governor.
DECENTRALISATION ISSUE:Following
73rd and 74th Amendments to the constitution India has
become a three tier multilevel federalism. Alongwith Central and State
Governments India has 2,50 Lah of local governments comprising over 3.05 million elected representatives which makes
India the largest democracy and federal country.
REGIONAL DISPARITY:There
is wide variance in the provisions of basic services like education, medical
and other infrastructure facilities leading to discrepancies is major socio
economic indicators like literacy rate, infant mortality rate, poverty ratio,
and the life expectancy. To bring about a balance in Regional Disparity is also
a big question for federal system to rightly operate the best system –
federalism in Union or union in federalism.
Role of Financial Commissions: With the
increasing inequality and requirement for fiscal discipline and macro economic
stability the scope of 13th UFC was much more wider than the earlier
ones. Accordingly the devolution of tax collected and devolved as happened in
13th and 14th UFC have played a very significant role in
bringing about balance between states and the Centre. Notwithstanding any thing
contained above there is increasing need to improve the things to eliminate the
disparity in physical devolution and understanding thereon.
CONCLUSION –
The
federation and the Union are two types of the configurations as far as the
Union of unit states in any country is concerned:
USSR
was one type in which it was Union which got fragmented in 90s and India is a federation with flexibility
but no opportunity to any state to alienate. Therefore , here it is important to realise to keep federation
intact, hence the centre and state
relations must be balanced though centre must always remain strong to uphold
and prop the needbased requirements including financial support, of all states.
In
India, the Constitution of India, being federal in structure, contains
righteous arrangements for devolution/division of all powers between the Centre and the states.
At the same time there is no division of
judicial power as the constitution has established an integrated judicial
system to enforce both the central laws as well as state laws. Though the Centre
and the states are supreme in their respective fields, the maximum harmony and
coordination between them is essential for the effective operation of the
federal system. Hence, the constitution contains elaborate provision to
regulate the various dimensions of the relations between the Centre and the
states. This is evident from its past history as well as from present
secessionist tendencies. The framers rightly tried their best to bring about a
compromise between the demands of a strong center and the aspirations of the
states for more powers. Notwithstanding any thing above, the imbalance between
states and the centre should be eliminated to the maximum to keep relations
normal and healthy. At periodical intervals there should be review of relations
to keep pace with .
The
healthy Centre State relations means following the rule of law laid down in the
preamble of the constitution and leading
towards building India a welfare state.
Reference –
·
Constitutional law of India, Dr Subhash C.
Kashyap
·
V.N Shukla’s Constitution of India by Mahindra
P. Singh
·
J.N Panday. constitutional law of India
·
H.M Servia Constitution of India.
·
Wikipedia
·
T.K Tope -constitutional law of India
p.621
·
Josh Jagran article (in danik jagran
newspaper)
·
Sarkaria commission report
·
Punchhi commission report
·
And legal magazines
·
The Hindu
·
M Laxmikanth (Indian polity)
By Neeraj Sharma, Asstt Professor
Global College of Law Ghaziabad .
