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:
1. Plenary power of legislature
2. Retrospectivity
3. Predominance of union power
4. Avoidance of conflict (Harmonious construction)
5. Pith and substance
6. Ancillary legislation
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 .
