Towards Greater Federalization PDF

# Chapter 7: Towards Greater Federalization ## Introduction - Federalism and parliamentarism are two axial principles of Government of India. - They contradict each other due to: - Parliamentarism is based on legislative supremacy. - Federalism is based on decentralization of political pow...

# Chapter 7: Towards Greater Federalization ## Introduction - Federalism and parliamentarism are two axial principles of Government of India. - They contradict each other due to: - Parliamentarism is based on legislative supremacy. - Federalism is based on decentralization of political power. - These two principles are combined for: - vast size and considerable regional diversity of India - Partition lessons in 1947 - Indian Constitution has strong parliamentary centre. - Parliamentary supremacy and federal decentralization were reconciled by: - Giving Union Government overriding powers - Creating a federal Supreme Court with hierarchy of courts - Creating Inter-State Council for coordinating Union-State relations. - Indian federalism is not static and continues to evolve. - During Congress dominance era of parliamentary system - Towards federalization under a multi-party system with coalition Governments since 1989 ## Historical Background - During British rule of nearly 200 years: - Conflicts among regional kingdoms were contained by a strong colonial authority. - Federal system was considered necessary around the time of transfer of power in 1947. - British Raj had already attempted a federal experiment under the Government of India Act, 1935. - Early part of British Rule: - Administrative centralization was carried out. - Latter part of British Rule: - Devolution of powers to provinces was started. - 1935 experiment was abortive at federal level due to the reluctance of princely states to join the proposed Union. - Only provincial aspect of 1935 act was implemented. - Central Government worked under 1919 act - British Raj was a unitary system. - Centre preceded the units in cases of British Indian Provinces. - There were notionally independent princely states under the paramountcy of British Crown. - Princely states were given the right to self-determination after independence. - Remain independent - Join one of the two new states of India and Pakistan - Institutions established at the Centre influenced institutions established in the States. ## The Federal Design - Indian Constitution is described as 'quasi-federal'2 and centralized. - Federal design provided for: - Single Citizenship - Extensive Union and Concurrent Lists - Parliament to reorganize State boundaries. - Common integrated hierarchy of courts - Unique cadres of All-India Services - Federally appointed Planning Commission - Early predominance of Indian National Congress both at the Union and state levels. - Indian political system has moved towards greater federalization especially since the 1990s . - Douglas Verney highlights that the Indian party system moving towards a regionalized multi-partisan configuration has encouraged the transition of the Indian political system from 'quasi-federation' to 'quasi-confederacy'. - Government of India today cannot be imagined without recognition of the federal principle. - Understanding the federal system in India requires sensitivity to its unique historical and sociological contexts. - This should not be diluted by comparative perspective. - This requires consideration of equivalences and contrasts among major federal systems of the world. ## Asymmetries in the Federal Structure - Federalism in India is considered to be 'asymmetrical federalism'. - Federal design in India is based on historical and cultural factors which create a desire for special or distinct constitutional recognition. - Four types of asymmetries: - Universal asymmetry - States in India are represented in the Rajya Sabha not on the footing of formal equality. - Based on population, such as Uttar Pradesh has 31 seats whereas states of North-East such as Meghalaya, Mizoram, Manipur and Pondicherry have only one seat each. - Specific asymmetries - Administration of tribal areas, - Intra-state regional disparities - Law and order situation - Number of seats in legislative assemblies: - Maharashtra, Gujarat, Assam, Manipur, Andhra Pradesh, Sikkim, Arunachal Pradesh and Goa. (Articles 371, 371B, 371C, 371D, 371E, 371F, 371H and 3711) - Article 371 provides that the Governor of Maharashtra or Gujarat would have a "special responsibility" for the establishment of separate development boards for certain backward regions of these states. - Special kind of federating units that are called the Union Territories (UTs). - Seven UTs - Reasons for creation: - Were either too small to be states - Too difficult to merge with a neighbouring state - Due to cultural differences, - Inter-state disputes, - Specific needs of the National Capital Territory, - Far-flung isolated location. - They were administered by a centrally appointed administrator. - They have no legislature but are represented in the Parliament. - Parliament can extend jurisdiction of a neighbouring state or create a separate High Court. (Article 241[1] and [4]). - Two new types of UTs were created, - Pondicherry (Fourteenth Amendment Act, 1962) - Delhi (Sixty Ninth Amendment Act, 1991) - Common feature is unicameral legislatures whose members are directly elected. - The Pondicherry legislature is partly elected and nominated. - Both have a council of ministers responsible to the legislature: - Head of state is a Lieutenant Governor appointed by the Union. - Governments are headed by Chief Ministers accountable to their respective legislatures - Delhi is appointed by the President. - Delhi enjoys only concurrent jurisdiction. - Delhi represented by one seat each in the Lok Sabha and the Rajya Sabha. - Delhi has seven Lok Sabha and three Rajya Sabha seats. - The States of Jammu and Kashmir, Nagaland and Mizoram (Article 370, 371A and 371G) . - Jammu and Kashmir: - Article 370 provides for the legislative powers of the Parliament of India to "correspond to matters specified in the Instrument of Accession" of the State to the Indian Union, and any other matter "with the concurrence of the Government of the State." - Jammu and Kashmir was freed from the paramountcy of the British Crown under the Independence of India Act of 1947. - The state was given the option to stay independent or to join India or Pakistan. - The Dogra Hindu Maharaja Hari Singh decided to stay independent. - The state was attacked by Pakistan. - Maharaja decided to exercise the first option, but under a veiled aggression from Pakistan decided to seek military assistance from India. - Indian troops deployed after the Instrument of Accession was signed. - Special status was given to Jammu and Kashmir in the Indian Constitution due to these circumstances. - The state has been increasingly integrated with the Indian federation with its own Constitution framed in 1956 by a constituent assembly. - No Act of the Parliament applies to the state unless and until endorsed by the state legislature. - Nagaland and Mizoram: - Articles 371 A and G require the consent of the legislature of these states for any parliamentary statute relating to religious and social practices of Nagas and Mizos, Naga and Mizo customary law and procedures, administration of civil and criminal justice affecting Naga and Mizo customary law and ownership and transfer of land resources of these states. - Nagaland has "special responsibility" with respect to law and order in Naga Hills Tuensang area. ## Union-State Relations ### Legislative Relations - Constitutional demarcation of jurisdictions - Union and State Governments is carried out in three lists: - Union List - State List - Concurrent List. - Based on: - Subsidiarity - Concurrency. - Subsidiarity: - Whichever level of Government can handle a subject more effectively is granted that subject. - Concurrency - Subjects in the twilight zone are allocated to both orders of Governments - Laws made by the Parliament prevail over those made by State legislatures in cases of conflict. - Original Constitution had: - 97 items in the Union List - 66 in the State List - 47 in the Concurrent List. - Since 1950: - State List has lost some items to the Concurrent/Union list. - Total 27 changes have been brought about by constitutional amendments. - 9 in the Union List - 11 in the State List - 7 in the Concurrent List.. ### Administrative Relations - Executive powers of the Union and State Governments are coterminus with their legislative jurisdictions. - Constitution envisages ‘cooperative federalism’. - Article 256 stipulates that "the executive power of the State shall be so exercised as to ensure compliance with the laws made by Parliament." - Article 256 states that "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”. - Power to enter into any international treaties or conventions is a power of the Union executive. - Article 253 requires a parliamentary legislation for giving effect to these agreements. - This provision acquires a controversial dimension due to globalization. - For example, Union signed the WTO treaty in 1995 which entailed obligations for the federating states. ## Fiscal Federalism - Union had initiated Centrally Sponsored Schemes (CSS) with the consent of State Governments in all major policy areas, even in matters under exclusive jurisdictions of state governments. - Some state Governments have been complaining about fiscal domination of the Centre over states and demanding redistribution of powers and revenue resources between the two. - Sarkaria Commission or the NCRWC hasn't recommended any substantial review in this arrangement. - Sarkaria panel recommended setting up of another commission to study and report on the taxation system. - Taxation system has been tinkered with in an ad hoc manner. - Fiscal federalism is a complex and technical domain. - Indian constitution has gone into some details of sharing of revenue between the Union and states. - Constitutionally mandated autonomous Finance Commission. - Appoints a commission every five years. - This commission is appointed by the Union Government to study the problem and recommend the principles for transferring revenue from Union to the states. - Discretionary grants-in-aid are made on the advice of the Planning Commission. - The Planning Commission has been set up by a cabinet resolution. - It is less autonomous than the Finance Commission. - State Governments have preferred for federal transfers to states being based on the advice of the Finance Commission. - The Sarkaria Commission recommended that the Finance Commission be made a permanent body. - Planning Commission should be given a constitutional status. - Paradigm shift in economic policies and Union-State relations on count of growing federalization. - Economic liberalization has augmented the autonomy of the private sector and state governments. - This has accentuated the tendency towards political as well as economic regionalism . - Decentralized planning is in place. - Public investment has considerably gone down. - This has opened up opportunities for economically more developed States to chart out their own strategies of development in collaboration with the private sector. - Backward states are at disadvantage due to lack of their own resources and declining public investment on part of the federal government. - Twelfth Finance Commission Report submitted in 2005 has recommended increase in shares of states in the total divisible pool of federal resources. - Slight gain for states may canceled out due to neolibera economic policies. - Finance Commission is to perform its role, asking it to suggest a plan by which the (State) Governments, collectively and severally, may bring about a restructuring of the public finances, restoring budgetary balance, achieving macro-economic stability and debt reduction along with equitable growth. - There were fears that this is a violation of the principles of federalism, an attempt by the Centre to straitjacket the States in the liberal reform mode with all its harsh implications. - UPA has come to power in 2004 which relies on a sizeable parliamentary support of Communist parties, some change of orientations has come about. ## Disputes and Interactions - Intergovernmental relations in India are facilitated due to: - Unusually detailed provisions in the constitution - Especially in matters of fiscal federalism to harmonize Union-State relations - Legacy of established administrative procedure for centre-state relations. - Constitution has taken special care to meticulously provide for allocation, collection and sharing of tax revenue between the Union and states. - Article 280 mandates periodic review of this arrangement by an autonomous Finance Commission, largely composed of experts. - Union and states engage in detailed negotiations by ministers or officials. - Besides constitutionally mandated federal transfers, there are discretionary Union transfers of funds to states. - A non-statutory Planning Commission has been set up since 1950 for advising the Centre in these matters. - Planning Commission is a creation of the Union Cabinet, although largely a body of experts. - Sarkaria Commission recommended that the Finance Commission be made a permanent constitutional body. - Planning Commission be given a constitutional status. - K.N. Kabra recommends the State Governments should have some say in the appointment of the members of the Planning Commission. - Development planning was initiated by the Nehru Government. - A National Development Council (NDC) was set up in 1952. - Consists of: - Prime Minister - Key union ministries - Chief Ministers of all states - Executive heads of union territories. - Chaired by the Prime Minister and decides by consensus as determined by chair. - Serves as a think tank for Union and State Governments for advising on the transition of the economy. - The Union Government has set up informal intergovernmental forums in almost all major sectors of policy. - Central Advisory Board for Education (CABE) was chaired by the Union HRD Minister. - Comprises state education ministers, ministers, union and state education secretaries and leading educationists. - This arrangement was discontinued by the BJP-led National Democratic Alliance Government. - Alliance Government revived this defunct body when they came to power in May 2004. - Other agencies in the field of education have been set up for harmonizing intergovernmental policies such as the All India Council of Technical Education (AICTE). - Established in 1948 as an advisory body to assist the Central Government. - AICTE was made a statutory one under an Act of Parliament in 1988. - New development in last two decades is the emergence of 'self-financing institutions' in the private sector. - Some have been started as commercial ventures charging hefty capitation fees. - The AICTE has advised Union and state governments to regulate these institutions in common public interest. - Matters have been taken to the Supreme Court. - National councils and advisory boards exist in almost all policy areas such as health, urban development, local self-government, population, industries, agriculture, etc. - The Inter-State Council (ISC) was left unused until 1990. - It was partly because there were functional substitutes and partly because Union Government thought that existing forums would be more flexible than a formal constitutional forum of ISC. - The Janata Dal-led National Front promised to activate federal provisions of the Constitution by appointing the ISC. - The V.P. Singh Government appointed the ISC in 1990 and its composition overlapped with the NDC. - The activation of ISC couldn't materialize as : - Existing coalition governments were unusually large. - Many state governments found direct regional representation in the federal Cabinet. - ISC was only needed for those state governments who were not represented. - NDC continued to be the forum for approval of economic plans. - The Sarkaria Report advised keeping them separate. - The NDC continued to retain some importance as an apex forum for economic policy making. - The ISC was marginalized as an ‘apex’ political body. ## Regional Pressures - The federalizing process has been long in the making. - Indira Gandhi in 1983 appointed a Constitutional Commission on Centre-State Relations chaired by Justice R.S. Sarkaria. - Commission submitted a report that has become most frequently invoked document in federal discourse. - This report recommended the constitutional entrenchment of: - National Development Council (NDC). - Planning Commission. - It proposed the setting up of the Inter-State Council (ISC). - NDC and ISC are the highest intergovernmental bodies for representing the executive heads of the Central and State Governments to deliberate and make policy on issues of common concern. - The Sarkaria Commission recommended that the Finance Commission be made a permanent body—which hasn't been done yet. - Finance Commission Reports have generally enjoyed legitimacy between the two levels of the government. - Rajiv Gandhi adopted a more contextually specific accommodative approach to regional demands and movements. - Centre reached regional accords with ethnic movements and parties in : - Punjab - Assam in 1985 - Mizoram in 1986 - Tripura in 1988. - The Punjab Accord with the Akali Dal sought to resolve territorial and inter-state river water disputes. - Assam Accord was signed in August 1985 between the Home Secretary R.D. Pradhan and the Assam agitation leaders. ## Local Government: The Third Tier of the Federal Structure? - The third tier of the federal structure is the local self-governing institutions in urban and rural areas. - Local Government is under the jurisdiction of state governments. - They don't have direct structural link with the Union Government. - Any link between the top and bottom levels of the government are informal. - 73rd and 74th constitutional amendments in 1992–93 for rural and urban areas. - They created a model local government legislation and distribution of responsibilities which the state legislatures are prompted to adopt and enact. ## Administration - There are three broad categories of administration in India: - Union - State - All-India Services - The Union and State Governments have their own respective administrative personnel. - Central services - State services. - All-India Services are recruited by an autonomous constitutional Commission. - Union Public Service Commission. - Trained in central academies and in the field in state governments to which they are permanently allocated. - They may temporarily serve the Union Government on deputation. - Senior most administrative positions in the State and Union Governments are held by these officers. - They work under the disciplinary jurisdiction of whichever level of government they are serving. - In the event of a disciplinary measure of suspension and dismissal, a reference to the Union Home Ministry is necessary. ## Federal Politics in the Era of Coalition Governments - Structure of the Constitution, the working of the legislative and executive government in the Indian federation is significantly influenced by the nature of the electoral system, party system and judicial behaviour. - Duverger-Riker hypothesis that plurality electoral system gives rise to two party-systems. - This hypothesis is valid only for countries that are endowed with a relatively homogeneous political culture such as the United Kingdom, Australia and the United States. - Canada and India are counter examples. - They historically developed a phase of one-party dominant systems at the national level. - They have turned into multi-party systems with increasing politicization and assertion of regional and ethnic identities. - The party system is perhaps the most important intervening variable that significantly influences the working of a federal political system. - India began as a one-party dominant system. - This lasted from 1989 until it became a multi-party system. - It was associated with one-party Congress dominance. - This was reflected in the working of all organs of the government. - India has a nominal head of the state. - Nehru-Patel duumvirate formed the cabinet. - After Patel's death, Nehru became the prime minister. - Indira Gandhi regime centralized the political system more than before. - Congress dominance increased as well as the central hegemony over Congress-ruled state governments, and opposition-ruled state governments became more accentuated. - Article 356 was frequently resorted to topple opposition governments in states. - The J.P. Movement challenged the Union Government. - This resulted in the imposition of internal emergency. - 1977 elections routed the Emergency regime and voted the newly formed centrist Janata Party to power in New Delhi and major North-Indian states. - The Janata interlude lasted nearly two and a half years and was followed by the restoration of Congress Party led by Indira Gandhi in 1980. - Rajiv Gandhi succeeded his mother in 1984. - Government under Rajiv was marked by centralization though somewhat lesser than in the 1970s. - State governments were controlled by non-Congress parties. - Rajiv Gandhi signed a series of peace accords with major regional parties in Punjab, Assam, Mizoram and Tripura. - He built bridges of understanding with the National Conference leader Farooq Abdullah of Jammu and Kashmir. - Multi-party system began in 1989 general elections, and it has continued ever since. - Coalition and minority Governments became the rule. - Prime Ministerial system has dissolved into a Cabinet system that has gone beyond recognition in comparison to the classical Westminster system. - Cabinets today are fragmented into segments. - The prime minister remains as the head of the system. - The Presidential role has acquired some more elbow room but has not amounted to an independent role. - The phase of coalition and minority governments has increased the autonomy of Parliament and state Governments. - The Rajya Sabha's role as a federal Second Chamber. - Rajya Sabha emerged as a federal Second Chamber as it reflects a different party configuration. - The Rajya Sabha has more oppositional majority than Lok Sabha. - The governmental majority in the Lok Sabah must now make inter-house legislative understandings with the Rajya Sabah to facilitate passage of legislation and constitutional amendments. - Deadlock between the two Houses of Parliament is resolved only at a joint session. - The Lok Sabha is likely to emerge successful in joint sessions. - The joint session is not a regular feature of the parliamentary process. - The Rajya Sabah's representative character is reflected in the fact that among the elected Rajya Sabah members between 1952-2002, 59 per cent of the incumbents before their election to the house were active in state politics. - Judicial behavior affects working of legislative and executive governance in the Indian federation. - The Supreme Court has been protective of the federal structure. - Three ways courts have protected the federal structure: - Hargovind Pant v. Raghukul Tilak & others (1979), the Supreme Court gave an essentially federal interpretation of the role of the Governor. The Governor's "is an independent constitutional office which is not subject to the control of the Government of India". - S.R. Bommai & others v. Union of India & others (1994), the Supreme Court reversed its earlier decisions. The Court maintained that determination under Article 356 was a "political thicket" best left in the hands of the Union executive. The Court now maintained that satisfaction of the President in the matter was "subjective" but "not entirely absolute" – it must be exercised on some palpable material or evidence in the public domain. - The Court made the power of the Union executive subject to judicial review. - This considerably reduced the threat to the autonomy of State Governments from arbitrary exercise of the executive power of the Union. - Keshavananda Bharti v. Union of India (1973) and Minerva Mills v. Union of India (1980) established the doctrine of the unamendability of the 'basic structure' of the Constitution, which includes federalism. - - The current trend of greater federalization of the political system is likely to continue. - 2004 Lok Sabha elections produced a hung Parliament. - NDA loses power to the UPA. - Coalition politics is now coming of age. - NDA's stability may be attributed to the neo-liberal economic reforms stepped up in 1991, bringing autonomous and semi-judicial regulatory agencies. - Agencies have existed in limited numbers . ## References **1.** M.P. Singh, "From Hegemony to Multi-Level Federalism? India's Parliamentary-Federal System", *The Indian Journal of Social Science*, Vol. 5, No. 3, July-September 1992, Rekha Saxena, “Reframing Continuity” (Conversation with Douglas Verney), *The Pioneer,* New Delhi, 5 April 2001. **2.** K.C. Wheare, *Federal Government*, Oxford University Press, New York, 1964, Fourth edition. **3.** M.P. Singh, "From Hegemony to Multi-Level Federatism? India's Parliamentary Federal System," *Indian Journal of Social Science*, Vol. 5, No. 3, July-September, 1992, and M.P. Singh and Rekha Saxena, *India at the Polls: Parliamentary Elections in the Federal Phase*, Orient Longman, Delhi, 2003. **4.** Douglas Verney, 'From Quasi-Federation to Quasi-Confederacy? The Transformation of India's Party System,” *Publius*, Vol. 33, No. 4, Fall 2003, p. 171. Also see Lawrence Saez, *Federations Without a Centre: The Impact of Political And Economic Reform on India's Federal System*, Sage, New Delhi, 2002. **5.** Wheare, op. cit., pp. 26-28. **6.** Ajay Kumar Singh, "Federalism and State Formation: An Appraisal of Indian Practice" in B.D. Dua and M.P. Singh (Eds.), *Indian Federalism in the New Millennium*, Manohar, New Delhi, 2003. See also A.S. Narang, *Ethnic Identities and Federalism*, Indian Institute of Advanced Studies, Shimla, 1995. **7.** Rekha Saxena, "Indian Model of Federalism", *The Federal Idea*, Centre for Policy Alternatives and the Forum of Federations with the support of the Canadian International Development Agency and Foreign Affairs Canada, Browns Beach Hotel, Negombo April 3-5, 2005, pp. 35-38. See also Balveer Arora, “Adapting Federalism to India: Multi-Level and Asymmetrical Innovations” in Balveer Arora and Douglas V. Verney (Eds.), *Multiple Identities in a Single State: Indian Federalism in Comparative Persepective*, Konark, New Delhi, 1995. **8.** M.P. Singh, “Federal Division of Responsibilities in India", *Indian Journal of Federal Studies*, Vol. 1, January 2004, pp. 109–11. See also Akhtar Majeed (Ed.) *Federalism Within the Union: Distribution of Responsibilities in the Indian System*, Manak, New Delhi, 2004. **9.** Commission on Centre-State Relations Report, Part I, Government of India Press, Nasik, 1988, Chapter 5. Chair : Justice R.S. Sarkaria. **10.** See Rekha Saxena, "Supranational Intergovernmental Relations and Role of Judiciary" in B.D. Dua, M.P. Singh and Rekha Saxena (Eds.). *Judiciary and Politics: The Changing Landscape*, Manohar, New Delhi, 2007. On the treaty-making power of the Union Government, the latest and best reading material is Rekha Saxena, “Treaty-Making Power: A Case for “Federalization” and “Parliamentarization”, Economic and Political Weekly, Vol. XLII, No. 1, January 6, 2007. **11.** S.R. Bommai & others v. Union of India, Supreme Court Cases, Judgements Today, 1994. **12.** V. Sridhar, "Short-Changing the States", *Frontline*, 8 April 2005, pp. 34-35. For more details on fiscal federalism, see M. Govinda Rao and Nirvikar Singh, *Political Economy of Federalism in India*, Oxford University Press, New Delhi, 2005. **13.** K.N. Kabra, "Federating the Planning Commission”, *The Hindu*, 2 July 1996. **14.** Rekha Saxena, *Situating Federalism: Mechanisms of Intergovernmental Relations in Canada and India*, Manohar, New Delhi, 2006. Much of this section draws on this first book-length work on intergovernmental relations in India. **15.** UPA, *Common Minimum Programme of the United Progressive Alliance*, 27 May, New Delhi, 2004, p. 14. **16.** Commission on Centre-State Relations, *The Report*, pts. I and II, Vol. I. Government of India Press, Nasik, 1987–88. **17.** The texts of these accords are compiled in P.S. Datta, *Ethnic Peace Accords in India*, Vikas, Delhi, 1995. In a related development, substate regional movements led to the creation of three new States in 2000: Chhattisgarh, Jharkhand and Uttarakhand. **18.** For the political situation in Punjab preceding this accord, see Robin Jeffrey, *What's Happening to India? Punjab, Ethnic Conflict, Mrs. Gandhi's Death and the Test for Federalism*, Holmes & Meir, New York, 1986, Chapters 2 and 3. **19.** *Asian News Digest*, No. 1, 8-14 July 2000, pp. 435-36. **20.** *Ibid.*, pp. 450-51. **21.** George Mathew, *Panchayati Raj: From Legislation to Movement*, Concept Publishing Company, New Delhi, 1994 and "From Culture to Constitution" in Manoj Rai, et al. (Eds.), *The State of Panchayats: A Participatory Perspective*, Sanskriti, New Delhi, 2001. **22.** *Ibid.* **23.** Bernard Grofman and Arendt Leijphart (Eds.), *Electoral Laws and their Political Consequences*, Agathon Press, New York, 1986. **24.** Hargovind Pant v. Raghukul Tilak, All India Reporter, (AIR) 1979, Supreme Court. **25.** Keshavananda Bharati v. State of Kerala, AIR, 1973, Supreme Court. **26.** Minerva Mills Ltd. v. Union of India, AIR, 1980, Supreme Court. **27.** M.P. Singh, "The Impact of Global and Regional Integration on Indian Parliamentary Federal System". B.D. Dua and M.P. Singh (Ed.), *Indian Federalism in the New Millennium*, Manohar, New Delhi, 2003, pp. 379-435. ==End of OCR for page 26==