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Indian Journal of Federal Studies
1/2004

Federal Division of Responsibilities in India

 - Mahendra Prasad Singh

[ There would appear to be a good case for the "constitutionalization" of intergovernmental forums with a reasonable degree of parliamentary and legislative control from the two levels of governments. With declining investment by the state in the economy and the emerging profile of a federal regulatory state in place of the bureaucratic state, a new partnership between the state, the civil society, and the market needs to be forged. What is required is: (a) constitutional entrenchment of the NDC, like the ISC, as the major line organizations of intergovernmental 'executive federalism' (b) Streamlining of the two staff agencies of executive federalism, namely, the Finance Commission and the Planning Commission.. (c) Implementation of the entire spectrum of party system reforms recommended by the Venkatachaliah Commission Report (d) Setting up of a constitutional commission on the taxation system as recommended by the Sarkaria Commission. ]

The Constitutional Design

The transfer of power from British to Indian hands was legal, (which entailed structural and procedural continuities) as well as 'revolutionary', in the sense that it came at the culmination of a multi-stranded nationalist movement in which extra-legal methods of agitation were used. The wider context also included a World War and the partition of the country on a dubious 'two-nation theory'. Reading the Seventh Schedule of the Constitution that outlines the Union, State, and Concurrent Lists of exclusive or shared jurisdictions of the Federal and State governments one hears the echoes of all these tumults of the time at home and abroad. As one goes through these lists, initial entries in all three are continuously seized of, in fact obsessed with, war and defense, public order, crime and punishment, and preventive detention ad nauseam. After forty-three years of experiment in constitutional politics in India the situation does not seem to have improved, only worsened.

There can be no greater evidence of the spirit of accommodation and reconciliation and commitment to constitutionalism and rule of law on the part of the Indian political elites in 1946-49/50 than the Constitution that they framed and adopted despite the insanity at home and abroad that raged all around them. India's continuing commitment to this constitution is an index of a new national culture in the making. Coming back to federal division of powers in the Constitution, the three legislative lists in the Seventh Schedule are to be read with Parts XI and XII of the basic law, dealing with legislative/executive relations and financial relations between the Union and State governments. Normally, the exclusive legislative jurisdiction of State legislatures is coterminous with their territories and legislative subjects and tax bases specified in the State List. The exclusive legislative jurisdiction of the Parliament is coextensive with the territory of India and legislative subjects and taxes enumerated in the Union List. The Parliament also has the exclusive power to legislate on residuary matters not listed in the Concurrent List or the State List (Articles 245, 246, and 248). Going strictly by the written text of the Constitution, one gets the impression that it has a wider notion of legislative power(s) than either the executive or the judicial powers. The latter two categories executive and judicial powers are coextensive with the legislative power(s) (barring the residue of executive prerogative, if any) and subject to judicial review (parts V and VI read with parts of the Constitution dealing with Fundamental Rights, Directive Principles of State Policy, and the federal arrangements). The federal division of powers between the Parliament and State legislatures reflect the principle of subsidiarity whereby the two orders of legislatures have been granted the subject and taxes that they can best handle. This first premise is subject to the principle of concurrency such that subjects like inter-state trade and commerce, civil and criminal law and procedure, business contracts, preventive detention, forests, administration of justice and organization of lower courts, companies/trusts and monopolies, labour relations and Trade Unions, economic/social/family planning, social security and social insurance, food, drugs, price control, rationing, factories, electricity, newspapers/books/printing presses, etc. are under the shared jurisdiction of the Union and States. The Union List and State List, originally with 97 and 66 items respectively, were larger than the Concurrent List, which included 47 subjects. Over the last half a century, the State List has become constricted, as the Concurrent List has gained some new items through constitutional amendments and the Union has functionally entered into exclusive jurisdiction of States, using its spending power via discretionary grants (as distinguished from mandatory constitutional grants) and centrally-sponsored schemes administered by the States. Formulation and monitoring of these schemes is done by ad hoc secretarial or ministerial conferences from the two orders of governments chaired by the concerned Union secretary or minister. Prime Ministers Morarji Desai and Indira Gandhi often visited State capitals to review their progress with central teams.

The constitutional demarcation of Union-State jurisdictions in the Seventh Schedule, as already mentioned above, has been affected by constitutional amendments over the years. Between 1950 to 2001 a total of 27 changes were brought about by amendments: nine in the Union List, eleven in the State List, and seven in the Concurrent List. (See the text of the Seventh Schedule in Bakshi, 2001:363-373).

Union List: Four out of nine of the changes in the Union List have resulted in the enlargement of extractive, cultural, and coercive powers of the Union vis--vis States. The sixth Amendment (1956) added a new tax to this list i.e. taxes on sale and purchase of goods (other than newspapers) of the scope of inter-state trade and commerce (entry 92A). the seventh Amendment (1956) empowered the Parliament to declare a historical and cultural heritage of national importance and brought a similar power of a State legislature subject to it. The forty-second Amendment (1976) inserted an additional entry 2A into this list which empowered the Union to deploy armed forces or paramilitary forces of the Union in a state in aid of civil power.

State List: Barring the omissions of items from this list by amendments, the three substitutions or insertions only mirrored the corresponding changes in the Union List. The seventh Amendment (1956) clarified that industries under state's jurisdiction were exclusive of those that were declared to be under Union jurisdiction in national interest from considerations of defense and public interest.

Concurrent List: This list has had no omissions through amendments, only five supplemental additions. The third Amendment (1954) omitted the previous entry 33 by a new one i.e. trade and commerce whose control and regulation is warranted in public interest and welfare. The seventh Amendment (1956) substituted the previous item of entry 42 by a new one i.e. "Acquisition and requisitioning property" in the Concurrent List. The forty-second Amendment (1976) added three new items to this list i.e. administration of justice in a state and formation of lower courts (entry 11A), forests (entry 17A), education (entry 25), and population control and family planning (entry 20A). This list has seen five supplemental additions and three substitutions. The items in the Concurrent List are shared between the two orders of legislatures, but with parliamentary acts prevailing over laws made by regional legislatures in cases of conflict.

To sum up the effects of amendments, from the onset of the constitution in 1949-50 to the turn of the century, the changes have enlarged the scope of the Union and Concurrent jurisdictions and reduced the exclusive jurisdiction of States. In all, 27 changes were made in or before 1982, 13 in the Nehru era, 14 during the Indira Gandhi regimes. So the first three decades of one-party dominance under the Indian National Congress were a period of irreversible centralization in the constitutional design of division of powers irreversible because the succeeding regimes have not undone the expanded powers of the Union. The post-1989 aggregate legislatures of the Union and States have not taken any new steps in the direction of greater centralization, though.

Functional Interdependence or overdependency?

Excepting constitutional "emergencies" and legislations warranted in "national/public" interest (determinable jointly by the Union executive and Parliament), the constitutional scheme of Union-State relations normally expects a functional interdependence between the two orders of governments. Article 263 of the Constitution contemplates an Inter-State council (ISC) for harmonization of interstate and Union-State relations and policy coordination. The composition and rules of business of this council are left wide-open by the Constitution.

The Constitution itself did not set up the ISC. Article 263 only made an enabling provision for establishing it by the Union government if "it appears to the President that the public interests would be served by the establishment of a Council". The ISC was not set up until 1990 at all, and after that date it has not really come into its own (Saez, 2002). It has either been inert, ineffective, or bypassed by such extra-constitutional intergovernmental forums such as the National Development Council (NDC) set up by the Nehru government in 1952 for intergovernmental approval of five-year plans (Saxena, 2002), or several National Councils in some policy areas (like local self-government, health, and population) (Singh, 2002a). Parliamentary enactments have also set up Zonal Councils under the States' Reorganization Act, 1956, and some interstate tribunals under the Inter-State River Water Disputes Act, 1956. Prima facie, these enabling constitutional or legal openings have left Article 263 in splendid isolation. Instead of the Constitutional formality of this provision, the Union governments have generally preferred to set up apex forums by less formal cabinet resolutions, for they allow the Union government a greater leeway. Besides, parliamentary creations have also been largely defunct (e.g. Zonal Councils, excepting the Northeastern Council) or overly conflict-ridden (especially Satluj and Kaveri tribunals and judicial commissions). Supreme Court have had to step in frequently to prevent the Kaveri from being on fire.

Maybe the Union government finds the informality and flexibility of non-formal intergovernmental forums more convenient as well as productive, with the groundwork done by provisional secretarial and ministerial conferences of intergovernmental scope and by the Planning Commission officials. The Planning Commission, through their constant interaction with and intermediation between the two orders of governments know the minds of the Union and State governments and are able to persuade the executive heads in New Delhi and State capitals with techno-economic reason. A former Couple of former senior oficers of the Government of India, who had been participant observers in some ISC and NDC meetings, have remarked that meetings of these bodies have been technically constrained by the given texts of the Constitution (in relation to Article 356) and five-year plans the two items that have haunted their agendas. Mostly the first ministers and their delegations come with prepared speeches to be read out and there is little interactive session, if any. In contrast, the ad hoc ministerial and official conferences are more open-ended and negotiative on the day-to-day problems of policy and administration they are convened to deliberate on. Despite repeated discussion and consensus in the ISC and its subcommittees on reforming the provisions regarding President's rule in a State for about a decade no follow-up amendment has resulted! The Srinagar meeting of the ISC (monsoon 2003) first ever held outside New Delhi has again reached a consensus to entrench the new regulatory case law laid down by the Supreme Court in S.R.Bommai & others v. Union of India (1994) in the Constitution by amendment. This landmark judgement made President's rule in a State for the first time subject to judicial review and ordered that while dismissing a State government in a "constitutional emergency" the Union executive must not simultaneously dissolve the State Assembly until the presidential proclamation has been approved by the Parliament.

Despite considerable federalization since the 1990s, the high-handedness of the Union leaves the States down and dry. For example, Punjab and Tamil Nadu have had to move the Supreme Court to oppose the unilateral signing of the World Trade Organization (WTO) treaty in 1995 which adversely affects exclusive jurisdictions of States, e.g. agriculture. The matter in still pending in the court. Similarly, the Parliament, alone or in collusion with richer non-Hindi States, has recently (2002) partitioned some Hindi-speaking States like Bihar, Uttar Pradesh and Madhya Pradesh in a cavalier way. The same category of States have also been robbed of increased parliamentary strength that they would have gained by delimitation of constituencies after each decennial census by freezing the process in 2002 until 2026. The Hindi-speaking States that dominated the politics of the country in the era of Congress dominance have lost weight in the current phase of multiparty federal coalition governments.

All the formal or informal intergovernmental forums shun majority rule and work with consensus as determined by the Prime Minister/Union minister or Union secretary. Agenda is set by the Union in consultation with States.

In the domain of fiscal federalism, the constitutionally mandated transfers from the Union to States on the advice of the Finance Commission (appointed every five years by the President of India under Article 280 of the Constitution) have enjoyed greater legitimacy than the discretionary grants-in-aid by the Union on or without the advice of the Planning Commission (an extra-constitutional creature of the Union executive). However, going by a walkout from the NDC by the Telugu Desham chief minister of Andhra Pradesh around the mid 1980s and the sharp reaction of the richer states to the Eleventh Finance Commission Report, shows the need for political understanding and persuasion within the larger framework of Indian nationalism and comparative federal theory and practice. For is not India a multicultural federal nation? And, is not federal theory and practice an exercise not only in political governance but also an essay in removal of regional economic disparities in a federation? (Watts, 1999; Lazar and McIntosh, 1999). Hence there would appear to be a good case for the "constitutionalization" of intergovernmental forums with a reasonable degree of parliamentary and legislative control from the two levels of governments. The current state of affairs are pathetic and apathetic. In the long run, political constitutionalism will carry us much farther than excessive "judicial activism" of politics that promptly lulls into sleep the moral sense of responsibility in the political class such that they feel they can afford to leave the mess created by them to be cleared by the judiciary, or they can get away with anything that escapes judicial censor. Toothless moralization are already bursting at the seems in too many areas to allow Indians to have a good night's sleep education, multicultural amity, sharing of interstate river waters, elections, breakdown of law and order, suicides by farmers, violence in family, seething simmers of social movements, road rage, militarization of civil society, and mounting political, administrative, and economic corruption, and criminalization of politics. Cross-border terrorists find India an easy target more for these reasons than anything else other than unemployment. Constitutionalism of parliamentary-federal politics with the rule of law and economic development are our most effective weapon of national reconstruction.

Reforms

The years since the 1990s have seen some paradigm shifts in polity and the economy. India today is much more federal than ever, spurred by a new level of politicization in the society, party system transformation from Congress dominance to multiparty regionalized political configurations in the States and the Union (including minority and/or coalitional governance in New Delhi), new patterns of protest politics and social movements, revival of civil society institutions (including Non-Governmental Organizations), and growing judicial activism. Moreover, state failures in the public political economy and the relative success of private organization of agricultural production (excluding subsistence peasant family farming) prompted, rather compelled, the government of India to introduce the neo-liberal economic/market reforms and open up to globalization.

These transformations and their dynamic functionalism require reforms and regeneration in the state, civil society, and the economy. With declining investment by the state in the economy and the emerging profile of a federal regulatory state in place of the bureaucratic state (Singh, 2002b & 2003), a new partnership between the state, the civil society, and the market must be forged. The first precondition for this task is for the state to put its own house in order. Not much have been happening on this front. Since the early 1980s the Commission on Centre-State Relations (chaired by Justice R.S. Sarkaria), the Law Commissions, and the National Commission for Review of the Working of the Constitution (chaired by Justice M.N. Venkeatchaliah) have made a series of well-thought-out recommendations for reforming our parliamentary, federal, and representational-electoral systems. None of their significant recommendations requiring constitutional amendments and legislations have been implemented. At the minimum following must be done to implement their major recommendations to reorganize the government to face the challenges of the 21st century: (a) constitutional entrenchment of the NDC, like the ISC, as the major line organizations of intergovernmental 'executive federalism' (so called because these two apex bodies bring together executive heads of two orders of governments on a common forum for intergovernmental negotiations and policy harmonization). (b) Streamlining of the two staff agencies of executive federalism, namely, the Finance Commission and the Planning Commission. The former serves as an autonomous advisory body under the constitution at five yearly intervals, and the latter as a permanent secretariat of the NDC without a constitutional status. Both should be given a permanent constitutional life. (c) The entire spectrum of party system reforms recommended by the Venkatachaliah Commission Report should be implemented. These recommendations intend to bring political parties under a comprehensive law. The objective is to promote democratic and federal construction of parties with transparent and publicly accounted and audited funding. (d) Setting up of a constitutional commission on the taxation system as recommended by the Sarkaria Commission. This is necessary to deal with the constant refrain of State governments that their revenue resources are not commensurate with the heavy responsibilities the Constitution has placed on their shoulders, especially in the new context of neo-liberal economic reforms and adverse effects of globalization on weaker sections of population and backward States and regions. Neither the Union nor the States can adopt an ostrich-approach to this problem. Something more than the piecemeal approach to the problem by the Raja Chelliah and Vijay Kelkar Committees on tax reforms seems to be called for.

References

Bakshi, P.M. The Constitution of India With Selective Comments (Delhi: Universal Law Publishing Co. 2001).

Government of India. Commission on Centre-State Relations, Report (Chair Justice R.S.Sarkaria) (Nasik: Government of India Press, 1987-88), 2 Vols.

Government of India: Report of the National Commission to Review the Working of the Constitution (Delhi: Universal Law Publishing Co., 2003), Vol. 1. Vol. 2 containing scholarly 'consultation papers' not yet published. Available on internet http://lawmin.nic.in/ncrwc

Lazar, Harvey and Tom McIntosh. Canada: The State of the Federation 1998/99: How Canadians Connect (Institute of Intergovernmental Relations, McGill-Queen's University Press, 1999).

Saez, Lawrence. Federalism Without a Centre: The Impact of Political and Economic Reforms on India's Federal System (New Delhi: Sage Publications, 2002).

Singh, M.P. "Impact of Global and Regional Integration on India's Parliamentary Federal System", in Harvey Lazar (ed.), Seminar Proceedings on this theme in comparative federal context about to be released by McGill-Queen's University Press, Canada, 2004a.

Singh, M.P. Observations in Roundtable on Mechanism of Intergovernmental Relations, New Delhi (22April 2002), cosponsored by Forum of Federations, Ottawa (New Delhi: Institute of Social Sciences): 11-12. 2002a.

Singh, M.P. "Study of Political Institutions in India: A Research Note", Contemporary India, Vol. 1, No. 3, July-September 2002b: 41-50.

Singh, M.P. & Douglas V. Verney. " India's Contribution to the Theory and Practice of Federalism", Publeus: The Journal of Federalism, forthcoming, 2004.

Watts, Ronald L. Comparing Federal Systems (Montreal & Kingston: McGill-Queen's University Press, 1999, 2nd ed.).

 

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