Center-State Relations

Center and State relation is one of the pillars of Indian democracy, Where on One side, states have been given enough powers to facilitate their economic, Social and Political development, on the other side, the centre has been provided with enough powers to restrict any state from taking any action against the interest of the nation.

Center-state relation in India can be devided into 1. Legislative relations, 2. Administrative relations, 3. Financial relations

Center-State relations news/updates

• Political and administrative elements in maintaining Healthy Federalism

  Synopsis: The recent Centre-West Bengal controversy over Political and administrative elements has brought attention towards the health of the federal structure in India.

  Background:

  • The recent issue is that the former Chief Secretary of Bengal reached late in the meeting called by Prime Minister to review cyclone relief work.
  • Though both political and administrative state functionaries were requested to attend the meeting, the chief secretary along with West Bengal Chief Minister left the meeting abruptly.
  • Consequently, the centre has sent showcase notices and a charge sheet for the chief secretary’s failure in fully and properly participating in the meeting.
  • These events raised concerns regarding the norms of civil service conduct, political and administrative arrogance and revengeful behaviour.

  Why the Centre’s action on the Former chief secretary of Bengal is unwarranted?

  To understand this issue, a few important political and administrative elements should be kept in mind.

  • Firstly, India is a ‘union of states ‘.
    • The State governments are not subordinate agencies of the central government.
    • As per the Constitution, the Centre’s decisions have primacy over those of the State governments.
    • But the primacy does not extend to the holding of meetings.
  • Secondly, most relief and rehabilitation work during natural calamity or disaster is done at the local level under the State governments.
    • Also, the Disaster Management Act, 2005 operates mainly at the State, district and local levels.
    • However, the States have given space to the Centre for disaster management for getting financial, technical and logistical support.
  • Thirdly, civil servants are required to balance between loyalty toward states and loyalty toward center.
    • IAS officers are ultimately subject to the control of the respective State governments when they are in the employment of their States.
    • Otherwise, IAS officers will face trust deficit, if they show preference or loyalty to the central government just because they are appointed by the Center.
  • Fourthly, the center has violated the norms required for “deputation”.
    • As a measure of punishment, the former chief secretary for his conduct was initially called to the Centre on ‘deputation’ on the day he was to retire.
    • This was done without the concurrence of the state government. But the concurrence of the state is required before an officer of its cadre is deputed to the Centre.
  • Fourthly, absurd interpretation of the provision of Disaster Management act, 2005.
    • Actions against the former Chief secretary is taken under Section 51(b) of the Disaster Management Act for failing to comply with the Centre’s direction.
    • However, this section is meant to deal with cases of defiance of the lawful orders or action of the competent authorities under the Act for handling disaster management.
  • Lastly, the All-India service officer or any officer has to act under the direction of his official superior.
    • For an IAS officer, the State government is the official superior.
    • If this is not followed, there will be chaos and indiscipline in administration.

  The conduct of the former chief secretary and the reaction of the Central government must be seen in an overall context. Also, in these kinds of circumstances, one needs to use the wisdom of our tall political leaders to maintain proper Political and administrative elements for a healthy federal polity.

  Source: The Hindu

• Issues with recent draft rules notified by the Lakshadweep administration

  Synopsis: The recent changes brought in Lakshadweep Administration in the name of public purpose is against the public interest and ethos of the island.

  Contents

  • 1 Background:
  • 2 What is unique about Lakshadweep?
  • 3 What are the two competing visions for the island’s future?
  • 4 Major concerns associated with the new changes in Lakshadweep administration

  Background:

  • Recently, the administrator of Lakshadweep brought changes to the following acts to promote infrastructural development to boost tourism.
    • Development Authority Regulation,
    • Prevention of Anti-Social Activities Regulation,
    • Lakshadweep Panchayat Regulation and
    • Lakshadweep Animal Preservation Regulation
  • However, the proposed changes ignore the significance of cultural ecology, cultural geography and strategic location of Lakshadweep.
  • These changes are also against the 2019 Kerala HC judgement which had recognised the special status given to the inhabitants for protecting their ethnic culture and traditions.
  • Now, the draft rules are challenged before the High Court of Kerala.

  What is unique about Lakshadweep?

  • It is an egalitarian coconut tree owning society.
  • It has little economic inequality along with high literacy and high unemployment.
  • The Muslim community is designated as Scheduled Tribes.
  • Coconut trees are the main agricultural crop and fisheries is the main economic activity.
  • Fisheries employ the majority of the working population.
  • Since solar electricity requires a large land area, electricity is generated through diesel generators.

  What are the two competing visions for the island’s future?

  • NITI Aayog’s vision 2019: It identified water villas and land-based tourism projects as the development issue faced by the islands.
    • It also suggested zoning-based land acquisition and focused on sustainable development.
    • However, it ignores the fragile environment and culture.
  • Integrated Island Management Plan 2016: It was prepared under the guidance of the Supreme Court and the National Centre for Sustainable Coastal Management.
    • It had rejected ‘home stays’ in view of the strict social customs and strong resistance of the vast majority.
    • It also suggested that development programmes should be implemented in consultation with the elected local self-government bodies
    • It also recommended adherence to scientifically determined plans.

  Major concerns associated with the new changes in Lakshadweep administration

  • Firstly, these changes are arbitrary, authoritarian and will destroy the way of life.
  • Secondly, vague criteria of ‘public purpose’ for acquiring private land will increase conflict.
    • Dev Sharan vs State of Uttar Pradesh, 2011: SC observed that “Any attempt by the State to acquire land by promoting a public purpose to benefit a particular group of people or to serve any particular interest at the cost of the interest of a large section of people especially of the common people defeats the very concept of public purpose.
  • Thirdly, Since, the existing water balance is under stress, it is difficult to adopt tourism.
    • All the inhabited islands already have a scarcity of drinking water supply. Hence, the conventional method of sewage treatment is not feasible because of the coral sandy strata and high-water table.
  • Fourthly, arbitrary changes will affect the relationship between the state and society, resulting in trust deficit and misgovernance.
    • For instance, the powers of the panchayats have been withdrawn on grounds of corruption, two-child policy for election candidates, banning beef and allowing liquor only for tourists.
    • Also, the new draft legislation has brought preventive detention for ‘anti-social activities’ whereas the island has no case of murder or smuggling by local people.
  • The Lakshadweep Administration has said the changes are in line with Maldives development road. However, it has adopted a very different strategy without the active participation of the public.

  How the Maldives development strategy is different from the Lakshadweep administration?

  • Firstly, tourism in the Maldives is centred on water villas in uninhabited islands, ensuring that very few coconut trees are cut.
  • Secondly, only limited homestays are allowed.
  • Thirdly, Maldives has a ‘one island, one resort’ policy which has kept very little pressure on reefs low.
  • Fourthly, since the rich and healthy reefs are essential for economic returns, its business model is about giving coral reefs economic significance.

  Source: The Hindu

• Growing Centralisation of Power Erodes Federal Structure

  Synopsis: The tendency to centralise power by the Union government is increasing. It will alter the basic structure of Federalism in India.

  Background

  • Recently, a NITI Aayog Member, asserted that it was the lack of centralisation that has led to poor management of the ongoing COVID-19 vaccination drive.
  • The claim reinforces the practice of the growing centralisation of power practiced by the current union government.
  • In this article we will discuss the challenges posed due to Centralisation of Power in the Economic, Political and Social sphere.

  How the central government is affecting Political federalism?

  There is a growing incursion of the Union government into sectors where State governments have primary responsibility. For instance,

  1. One, there has been increasing centralisation in resource allocations and welfare interventions. For instance, GST.
     • This has negatively impacted the finances of State governments, especially after the implementation of Goods and Services Tax (GST).
  2. Two, the Centre has been encroaching into domains under State government control through centrally sponsored schemes in sectors such as education and health.
     • For example, NEET exam, meddling with the appointments of vice-chancellors in universities funded and run by State governments etc.,
     • It subverts the affirmative action policies developed at the regional level in response to local political demands.
  3. Three, the Centre is increasingly ignoring elected representatives of State governments. It is holding direct meetings with State secretaries and district collectors on issues that are primarily under State control.
     • It subverts the Constitutional arrangement of Power-sharing between Centre and State.

  How the central government is encroaching into Economic federalism?

  • Nepotism and crony capitalism. It is evidently visible that big businessmen are getting benefits from the government.
  • Apathy towards small businesses. The centre had strongly supported the Indian big business from global competition by sidelining the Regional Comprehensive Economic Partnership (RCEP). In contrast, the government has eroded the power of small businesses through GST and the call for a single national market.
  • Restricting the political funding for regional parties. Regional parties rely on region-specific rent-thick sectors for political funding, such as mining and real estate. The ruling party has curtailed this by levelling corruption allegations and the use of central agencies against businesses supporting the regional parties. This weakens the ability of regional parties to compete with the ruling party electorally.

  How the central government is encroaching into the social fabric of states?

  • Besides the legal-constitutional aspects of federalism, it is diversity in the cultural foundation of regions that sustains Indian federalism.
  • However, the center is trying to homogenize Indian culture. Markers of regional identities and regional socio-cultural practices are now interpreted as a pan-Indian Hindu tradition.
  • For instance, Tamil, which has been a symbol of an anti-Vedic tradition, is now seen as a segment of that Hindu past. While Tamil Muslims and Christians becoming outsiders.

  A federal coalition that looks beyond the legal-constitutional aspects of federalism is needed to preserve the idea of a plural India.

   

  Source: The Hindu

• New Lakshadweep Regulations: Issues and Rationale – Explained, pointwise

  Contents

  • 1 Introduction
  • 2 Lakshadweep Regulations formulated by the Administrator
  • 3 About the Lakshadweep Island
  • 4 Constitutional Provisions related to Lakshadweep:
  • 5 Arguments in favour of new Lakshadweep Regulations
  • 6 Arguments against the new Lakshadweep Regulations
  • 7 Suggestions
  • 8 Conclusion

  Introduction

  New Lakshadweep regulations proposed by its new administrator are attracting opposition from local leaders. The smallest union territory of India (Lakshadweep) is undergoing severe changes for the last few days. The new administrator has introduced 4 new regulations that would alter the culture, livelihood, ecology, and development level of the island. 

  The draft regulations include the Lakshadweep Animal Preservation Regulation, 2021; the Prevention of Anti-Social Activities Regulation (PASA); the Lakshadweep Panchayat Regulation, 2021 and Lakshadweep Development Authority Regulation 2021. They have attracted criticism from civil society as they place economic development over environmental sustainability. Furthermore, they jeopardize the pristine culture of the indigenous inhabitants.

  The Home Ministry is currently scrutinising the draft legislation and would become law after their approval by the President.

  Lakshadweep Regulations formulated by the Administrator

  1. The Lakshadweep Development Authority Regulation, 2021: It calls for the creation of a Lakshadweep Development Authority (LDA).
     • It will plan the development of any area identified as having a “bad layout or obsolete development”.
     • The act defines development as the carrying out of the building, engineering, mining, quarrying, or other operations in, on, over, or under the land. It also includes making any material change in any building or land or in the use of any building or land.
     • The authority could acquire any land required for a public purpose.
     • It stipulates that islanders must pay a processing fee for zone changes.
     • It establishes penalties such as imprisonment for obstructing the development work or workers.
  2. The Prevention of Anti-Social Activities Regulation (PASA): It provides for the administrator to order the detention of a person for a period of up to one year. 
     • It can be ordered if the offender’s actions adversely affect the maintenance of public order.
     • Such actions include when a person is a bootlegger, drug offender, immoral traffic offender, property grabber, etc. All these actions deemed to adversely affect the maintenance of public order.
  3. The Animal Preservation Regulation, 2021: It bans the slaughter of cows, calves, bulls, or bullocks. The slaughter of animals, other than cows or bulls, for religious purposes, will require a certificate from the authorities. 
  4. The Lakshadweep Panchayat Regulations, 2021: It disqualifies people with more than two children from becoming gram panchayat members. 
     • However, the law will not disqualify anyone having more than two children if they have been elected before the regulation has been notified.
     • The regulation also provides for the reservation of 50 percent seats in gram panchayats for women. 

  About the Lakshadweep Island

  • It is a group of 36 coral islands in the Arabian Sea totaling 32 square kilometers.
  • The name Lakshadweep in Malayalam and Sanskrit means ‘a hundred thousand islands’.
  • It is a uni-district Union Territory (UT) and comprises 12 atolls, three reefs, five submerged banks, and ten inhabited islands.
  • The natural landscapes, the sandy beaches, the abundance of flora and fauna, and the absence of a rushed lifestyle enhance the mystique of Lakshadweep.
  • Muslims constitute more than 93% of the population and the majority of them belong to the Shafi School of the Sunni sect.
  • Malayalam is spoken in all the islands except Minicoy where people speak Mahl. The society in all islands is matriarchal.
  • The entire indigenous population has been classified as Scheduled Tribes because of their economic and social backwardness. 

  Constitutional Provisions related to Lakshadweep:

  • Article 239: It states that every UT shall be administered by the President acting through an administrator appointed by him.
    • Since December 2020, Mr. Praful Patel is acting as administrator of Lakshadweep.
  • Article 240: Under this, the President has the power to make regulations for the peace, progress, and good government of the Union territories. This includes Lakshadweep, Andaman, and the Nicobar Islands, Puducherry, Dadra and Nagar Haveli, and Daman and Diu.
    • Any regulation made by him/her may repeal or amend any Act made by Parliament which is for the time being applicable to the Union territory.
  • Article 241: Parliament may by law constitute a High Court for a UT or declare any other court to be a high court for such UT.
    • The High court of Kerala functions as the High Court of Lakshadweep as well.
  • Article 243L: It states that the provision of Part 9 (Panchayats) will apply to UTs. However, the application would be subject to exceptions and modifications made by the President through a public notification.
    • Lakshadweep consists of 10 Village panchayats whose members are directly elected.
  • Article 243ZB:  It states that the provision of Part 9A (Municipalities) will apply to UTs. However, an application would be subject to exceptions and modifications made by the President through a public notification

  Arguments in favour of new Lakshadweep Regulations

  • Firstly, the government has brought new rules for augmenting the development potential of the island. They will ease the procedural and regulatory requirements for land acquisition thereby enabling faster development of infrastructure.
  • Secondly, the new provisions would boost the tourism potential of the island. The government intends to develop Lakshadweep into “a renowned international tourist destination” like the Maldives.
  • Thirdly, the government believes that new rules will help in realizing the objectives of the Holistic Development of Islands Program.
    • The program focuses on the creation of jobs for the islanders through tourism promotion as well as the export of seafood and coconut-based products made in the Islands.
    • The Island Development Agency(IDA) was constituted in 2017 under the aegis of the Home Ministry to look into the holistic development of islands.
  • Fourthly, regulations like the Prevention of Anti-Social Activities Regulation (PASA) are essential for augmenting the security situation in the UT. Several states, including Kerala, Karnataka, Tamil Nadu, and Uttar Pradesh have similar regulations. 
  • Fifthly, the Panchayat regulations will pave the way for the upliftment and empowerment of women. The reservation would generate more women representatives who would create gender-sensitive policies.

  Arguments against the new Lakshadweep Regulations

  • Firstly, they seem to fulfill the interest of commercial developers rather than the indigenous islanders. The developmental plan can be used to vacate land which may later be sold to outsiders.
  • Secondly, the powers bestowed on Land development authorities are very wide. It can prepare comprehensive development plans for any area and relocate people regardless of their will.
    • Further, the new rules put the onus on the owner to develop his holding as per the development plan or bear a heavy penalty in case of non-compliance. This may increase forcible eviction and relocation of masses.
  • Thirdly, the new rules may hamper the cultural milieu of the region. They allow for the intrusion of outsiders in the region which may destroy the way of life practiced by indigenous people for generations.
    • Further, the cow slaughter ban and allowance of alcohol consumption go against the cultural practice of the 96% Muslim population of the region. 
  • Fourthly, the ease in approvals may hamper the pristine ecological environment of the region. The tourism infrastructure will adversely impact the fragile coastal ecosystem of the region.
  • Fifthly, it is difficult to understand the rationale behind PASA as UT possesses one of the lowest crime rates in the country. According to NCRB data, only 121 cases of crime registered on the islands in 2017, 86 in 2018, 186 in 2019, and 89 in 2020. 
    • It may be misused to curtail free speech and the right to protest of the masses.
  • Sixthly, the two children cap for panchayat elections seems unjust in a UT with a very low fertility rate. According to the National Health and Family Survey-5 (2019-20), the total fertility rate is 1.4 (which is far behind the national average of 2.2).
  • Seventhly, the UT has developed quite well over the years and doesn’t require such radical reforms.
    • The island has a robust infrastructure to support rainwater harvesting and solar power generation.
    • All islands have been connected by helicopter service since 1986, and high-speed passenger boats were purchased in the 1990s to improve connectivity.
    • The literacy rate of UT is over 90% and the poverty line in terms of GDP is only slightly higher than the World Bank’s poverty threshold.
    • It also has a desalination wind-powered plant gifted by the Danish government.

  Suggestions

  • The new laws should be discussed with the concerned stakeholders including the local fisherman and civil society. Their grievances should be heard and rectified for ensuring greater acceptability.
  • The focus should be placed on addressing the real problems of the Island. This includes:
    • Focusing on addressing the rising income disparities in the region
    • Restricting Indiscriminate trawling as it endangers the coral landscape. The Maldives had already banned trawling activities after witnessing excessive exploitation. 
    • Restraining from relaxing the quarantine norms as the UT is witnessing a Covid -19 surge
  • The President must refrain from giving assent to the new laws and should send them back for due reconsideration.
  • The issue also provides the Parliament an opportunity to draft a reasonable law that can prevent a single individual (the nominated administrator) from undermining people’s will.
  • A blind copy of the Maldives model should be avoided. For instance, the expensive Water bungalows are hazardous to the corals. Also, they would collapse in Lakshadweep’s turbulent monsoon. 

  Conclusion

  There is a need to redesign new laws to reflect a people-centric approach. The current situation warrants due consultation with the concerned stakeholders so as to fix the lacunas and strive towards attaining sustainable development.

• How “Legislative Councils” are Set-up in States?

  Contents

  • 1
  • 2 What is the News?
  • 3 History of legislative councils in India:
  • 4 About Legislative Council:
  • 5 Election of Legislative Council:
  • 6 Tenure:
  • 7 Powers of Legislative Council:

  What is the News?

  The West Bengal government has decided to set up a Legislative Council (Vidhan Parishad).

  Note: West Bengal had a Legislative Council in existence till 1969 after which it was abolished.

  History of legislative councils in India:

  • Legislatures with two Houses (bicameral) have a long history in India.
  • The Montagu-Chelmsford reforms led to the formation of the Council of State at the national level in 1919.
  • Then the Government of India Act of 1935 set up bicameral legislatures in Indian provinces. It was under this law that a Legislative Council first started functioning in Bengal in 1937.

  About Legislative Council:

  • India has a bicameral system i.e two Houses of Parliament namely Lok Sabha and Rajya Sabha.
  • Similarly, at the state level, the equivalent of the Lok Sabha is the Vidhan Sabha or Legislative Assembly.
  • Further, the states can also have a Legislative Council in addition to the Legislative Assembly under Article 169 of the Constitution.
  • Article 169 of the Constitution allows Parliament to create or abolish the council in a state with the following conditions.
    • If the legislative assembly of that state passes a resolution for the purpose by
      • a special majority of the total membership of the assembly and
      • a majority of not less than two-thirds of the members of the assembly present and voting.
  • Currently, six states — Bihar, Uttar Pradesh, Maharashtra, Andhra Pradesh, Telangana, and Karnataka — have a Legislative Council.

  Members: Article 171 states that a legislative council cannot have more than 1/3rd of the total number of members in the legislative assembly. Also, it cannot have fewer than 40 members.

  Election of Legislative Council:

  • 1/3rd of members are elected by the members of the Assembly.
  • 1/3rd by electorates consisting of members of municipalities, district boards, and other local authorities in the state.
  • 1/12th by an electorate consisting of teachers.
  • 1/12th by registered graduates.
  • The remaining members are nominated by the Governor from among those who have distinguished themselves in literature, science, art, the cooperative movement, and social service.

  Tenure:

  • Legislative Council is a permanent House like the Rajya Sabha. Hence, its dissolvement is not possible.
  • The tenure of a Member of the Legislative Council(MLC) is six years, with one-third of the members retiring every two years.

  Powers of Legislative Council:

  • Unlike Rajya Sabha which has substantial powers to shape non-financial legislation, Legislative Councils lack the constitutional mandate to do so.
  • Legislative Assemblies also have the power to override suggestions/ amendments made to legislation by the Council.
  • While Rajya Sabha MPs can vote in the election of the President and Vice-President, members of Legislative Councils can’t.
  • Further, MLCs also can’t vote in the elections of Rajya Sabha members.

  Source: Indian Express

• What is the Process to Create New District in India?

  What is the News? Punjab Chief Minister has declared Malerkotla as the 23rd district of the Punjab State. Let’s have look at the process to create new district in India.

  What is the process to create a new district in India?

  • The power to create new districts or alter or abolish existing districts rests with the State governments. This can either be done through an executive order or by passing a law in the State Assembly.
  • Many States prefer the executive route by simply issuing a notification in the official gazette.

  What is the role of Central government to play here?

  • Firstly, the Centre has no role to play in the alteration of districts or creation of new ones. States are free to decide.
  • Secondly, the Home Ministry comes into the picture when a State wants to change the name of a district or a railway station.
  • Thirdly, the departments such as the Ministry of Earth Sciences, Intelligence Bureau, Department of Posts, Geographical Survey of India Sciences, and the Railway Ministry, provides their clearance to the proposal of state government.
  • Fourthly, after examination of their replies, state government receives a no-objection certificate.

  What is the rationale behind creating a new district in India?

  • States argue that smaller districts lead to better administration and governance.
  • For example, in 2016, the Assam government issued a notification to upgrade the Majuli sub-division to the Majuli district for “administrative expediency”.

  What has been the trend?

  • According to the 2011 Census, there were 593 districts in the country. The Census results show that between 2001-2011, as many as 46 districts were created by States.
  • The 2021 Census is yet to happen. However, Know India, a website run by the Government of India, says currently there are 718 districts in the country.
    • The surge in a number of districts is mostly due to the bifurcation of Andhra Pradesh into A.P. and Telangana in 2014. Telangana at present has 33 districts and A.P. has 13 districts.

  Source: The Hindu

  What is “One District One Product Scheme”?

• [ Yojana Summary] Federalism during the Pandemic – Explained, Pointwise

  Contents

  • 1 Introduction
  • 2 Federalism in India
  • 3 Federalism during Initial phase of Covid-19 Pandemic
  • 4 Federalism at present
  • 5 Challenges to federalism during the pandemic
  • 6 Initiatives taken to strengthen Federalism during the pandemic
  • 7 Conclusion

  Introduction

  The second wave of Covid-19 is creating havoc in the country. The country is facing challenges in overcoming the medical Oxygen crisis, lockdown associated losses to the economy, etc. All this necessitated coordination between the center and the states. While states are struggling with a lack of financial resources, the center is finding itself helpless in tackling the pandemic all over the country on its own. This situation highlights the need for functioning federalism in the country, where both the center and the states take responsibility for their respective domains.

  But the government has to remember that both extreme political centralisation or chaotic political decentralisation can lead to the weakening of Indian federalism. Controlling these extremes is a challenge, as federalism must accept the need for national unity on the one hand, and regional autonomy on the other. The forms of Federalism during the pandemic changed a lot in India.

  Federalism in India

  The Indian Constitution has structurally made the Union government more powerful than the states, called “centralised federalism”.

  During the Constituent Assembly debates, Jawaharlal Nehru highlighted the need for a strong center. Further, the members of the Assembly also demanded a stronger Union government. They were of the opinion that a strong center is necessary for India’s survival and political stability. Especially when considering India’s vast diversity based on religion, language, caste, and ethnicity.

  But our final Constitution did not completely favour centralization. India’s Constitution provides for the separation of powers between the center and the state through union and state subjects. Further, the Finance Commission recommended the division of revenue between the center and the States.

  This is why the Australian Constitutional expert K.C. Wheare called the Indian constitution “quasi-federal”. He stated, “Indian Union as a unitary state with subsidiary federal features rather than a federal state with subsidiary unitary features.”

  Federalism during Initial phase of Covid-19 Pandemic

  The initial stages of the Covid-19 response highlighted the unitary tilt in the Indian federal structure. For example,

  • Implementing a national lockdown using the powers under Disaster Management Act.
  • The Ministry of Home Affairs also issued extensive guidelines to states for controlling the pandemic.
  • Although the State have independent powers under the Epidemic Diseases Act, 1897, State governments followed the Centre’s orders.
  • State governments also requested the central government to continue its administration of the national lockdown.
  • In doing so, states ceded considerable decision-making power to the central government

  Federalism at present

  If the initial phase of Covid-19 management resulted in high centralisation, then the later phase seen high decentralisation. For example,

  • The Union government provided adequate autonomy to the states to strengthen their healthcare facilities. For example, the New Vaccination policy vest 50 percent of the purchasing of vaccines to the State governments.
  • Imposition of localised lockdowns: The central government permitted the State government to impose local lockdowns to control the spread of the pandemic. For example, Lockdowns by Delhi and Tamil Nadu government.
  • Implement social security measures to mitigate the impact of the pandemic. Many state governments have introduced local health policies, welfare measures for vulnerable sections, etc.

  Challenges to federalism during the pandemic

  1. More centralisation:  At present the Autonomy of the state is limited. The Centre using its power to push much-needed reforms in the State list also. For example, The enactment of farm laws and various policies of centre in subjects like Health, etc. The centre mentions that it will consider the welfare of the entire country and its citizens. That too with a long-term holistic view. Such a view is limited for States according to the Centre’s argument.
  2. Loss of Fiscal revenue for States: The national lockdown resulted in shutting down almost all economic activity, the State Governments faced a drastic reduction in revenue. Even before the lockdown, many states in India already breached their mandated fiscal deficit limits. The lockdown has further increased their financial dependence on the centre.
  3. The centre’s indulgence in Agriculture: Agriculture is a state matter in India. But, the enactment of the Three Agricultural legislation reformed the long-standing agricultural marketing system. Some states such as Punjab and Haryana opposed these reforms. Further, they view these legislations as a violation of federalism.
  4. The power of the Centre to approve the FDI inflows: Even many states are negotiating with foreign investors, they do not have the power to bring FDI into their state. In India, the approval for FDIs is centralised. The Department for Promotion of Industry and Internal Trade(DPIIT)  being the nodal Ministry for FDI approvals. So, the state governments depend on the centre for approval/rejection/modification of their Foreign inflows.
  5. The power of the Centre to accept Foreign aid: The states have no power to receive foreign aid to tackle the disaster they face. For instance, During the Kerala Floods, the center turned down the foreign aid despite the Kerala government’s request for approval of aid.

  Initiatives taken to strengthen Federalism during the pandemic

  • The concept of Fiscal Federalism: As the national lockdown impacted the State’s revenue the centre implemented many measures to strengthen “Fiscal Federalism.” Such as
    • Enhancement of Borrowing Limit of States: Union Government permitted the State Governments to borrow within the Net Borrowing Ceiling of 3% of their GSDP in a financial year.
    • Ways and Means Advances: The Reserve Bank of India (RBI) provides Ways and Means Advances (WMA) to the States. This is to help them tide over temporary mismatches in the cash flow of their receipts and payments. During the pandemic, the RBI increased the WMA limit of States. This gave immediate liquidity to States to borrow short-term funds from RBI at a lower rate of interest. It provided them greater comfort to undertake Covid-19 containment and mitigation efforts.
    • Financial Assistance to States: The central government announced the Scheme of Financial Assistance to States for Capital Expenditure in October 2020. The Scheme contains total funding of Rs. 12,000 crore. Of that part of the allocation was set aside for States.
    • Maintaining Tax Devolution to States: The 15th Finance Commission recommended 41% tax devolution. The centre accepted the devolution. Despite
      the pandemic, the Centre empowered the States fiscally well-equipped to fight the pandemic.
  • More active collaboration with states in policymaking: While drafting new legislation or trying to amend any existing legislation the Central Government consults all State Governments. Today, the draft legislations are shared online on websites for larger outreach and stakeholder consultations.
    • For example, the drafting of the Model Tenancy Act has involved all State Governments and stakeholders
  • States ability to perform foreign economic policy: The Centre encouraging states to negotiate loans / FDI directly with overseas banks/institutions. Such initiatives have helped some states in their economic development and reduced their financial dependence on the Centre. So at present, the State not only relies on the Centre’s grants in aid. But still, the approval for FDIs is centralised.
    • At present, the States also start overseas facilities to attract FDI directly. For example, Gujarat Government in 2014 set up international desks independently in the USA, China, Japan for facilitating “INVEST IN VIBRANT GUJARAT”.

  Conclusion

  India’s response to the Covid-19 pandemic has shifted the balance of its federal structure. The most important moment for federalism during the pandemic is the role of state governments on the ground level in managing the Covid-19 crisis. The Centre also provided more power and autonomy to states to tackle the pandemic. But the Centre and States have to ensure the right balance between extreme political centralisation or chaotic political decentralisation. As the right balance will protect the States from threatening the national unity and providing adequate autonomy to states.

  Source: Yojana May, 2021

• West Bengal Housing Industry Regulation Act (WB HIRA) is Unconstitutional: SC

  Synopsis: The court struck down the West Bengal Housing Industry Regulation Act (WB HIRA), 2017 as unconstitutional. The court also clarified that the legislations by the Parliament and the state government are on the concurrent list.

  Introduction:

  The central government enacted the Real Estate (Regulation and Development) Act to regulate the Real Estate sector in India. West Bengal government also enacted a parallel Act known as the West Bengal Housing Industry Regulation Act (WB HIRA), 2017. Recently the Supreme Court held the West Bengal legislation Unconstitutional.

  Background of both legislations:

  Contracts and the transfer of property falls under the Concurrent List of the Seventh Schedule.

  • In 1993 the West Bengal government enacted the West Bengal Housing Industry Regulation Act on the above two subjects.
  • But, to bring transparency and safety in the market for consumers of residential and commercial projects, the Central government enacted RERA in 2016. With the enactment of RERA, the 1993 Act was repealed.
  • In the same year, West Bengal notified the draft Real Estate (Regulation and Development) Rules, 2016.
  • Instead of finalizing the rules the state government went ahead and enacted West Bengal Housing Industry Regulation Act (WBHIRA) in 2017.
  • Forum for Peoples Collective Efforts filed a case against the State of West Bengal regarding the WB HIRA

  Recent Supreme Court Judgement on West Bengal Housing Industry Regulation Act:

  The Supreme Court held in Forum for Peoples Collective Efforts v. State of West Bengal case held that the WB HIRA was unconstitutional. Further, the court also mentioned the following things.

  • Both the statutes refer to the same subjects (contracts and the transfer of property) in the concurrent list.
  • Article 254 (2) allows for a conflicting State law on a concurrent list subject to prevail over a central law if it receives the assent of the President. But the WB HIRA neither reserved for the consideration of the President nor the Presidential assent was obtained.
  • The court also held that if any areas have been left out in the central legislation, the state legislatures can provide cognate(related) legislation. Such State legislation can incidentally deal with the provisions of Central legislation. But, The HIRA encroaches upon the authority of the Parliament.
  • But in the case of clause-by-clause comparison between the two laws, the court observed that 95 to 98%, the WB HIRA is a complete copy-paste of the RERA. This is an attempt to establish a parallel regime by the State government.
  • Furthermore, the court also observed that in a few critical aspects, WB HIRA is in direct conflict with RERA.
  • The court also observed that there was a “doctrine of repugnancy” between WB-HIRA and RERA. (Repugnancy –  inconsistency or contradiction between two or more parts of a legal instrument.) Such as,
    1. WB HIRA has failed to incorporate valuable institutional safeguards
    2. The WB HIRA does not have provisions intended to protect the interest of homebuyers
    3. The court observed these repugnancies of the state legislature as against the public interest.
  • The court also elaborated on the tests of repugnancy. The three tests of Repugnancy as stated by the court are
    1. Where the provision of State legislation is directly in conflict with a law enacted by Parliament. In such cases, compliance with one is impossible along with obedience to the other.
    2. The second test of repugnancy is based on the intent of Parliament to occupy the whole field(contracts and the transfer of property) covered by the legislation.
    3.  The subject of the legislation enacted by the State is identical to Parliament, then does the State law enacted prior or later to the central law.
  • Since the State law is completely repugnant to the Central law, it was constitutionally impermissible

  Conclusion:

  The court based on the above explanations struck down the West Bengal Housing Industry Regulation Act (WB HIRA), 2017, as unconstitutional. Further, the court also held that striking down the present law will not result in the revival of the 1993 WB HIRA. This is because the 1993 Act was repealed after the enactment of RERA.

  The Court also clarified that the striking down of WBHIRA will not affect the sanctions permissions granted prior to the delivery of the judgement.

  Source: The Times of India

• The Government of National Capital Territory of Delhi (Amendment) Act, 2021

  Introduced: Lok Sabha (15th Mar 2021)

  Passed: Lok Sabha passed GNCTD Bill (22nd Mar 2021)

  Passed: Rajya Sabha passed GNCTD Bill (24th Mar 2021)

  Present Status: Assent granted. Converted to an Act

  About GNCTD Amendment Act 2021

  Objectives:

  • Define the responsibilities of the elected government and the Lt. Governor (LG)
  • Create a harmonious relationship between the Legislature and the Executive
  • To ensure better governance in the NCT of Delhi. Further, it aims to improve the implementation of schemes and programmes meant for the common people of Delhi.

  Key provisions of the Act:

  • “Government” to mean “Lieutenant Governor (LG)”: The expression ‘Government’ referred to in any law to be made by the Legislative Assembly shall mean the Lieutenant Governor(LG).
  • Widening of Discretionary Powers of LG: The Act gives discretionary powers to the LG. This power is extended to LG even in matters where the Legislative Assembly of Delhi is empowered to make laws.
  • Proceedings of Delhi Assembly: The Act curbs the Delhi Assembly’s power to conduct its proceedings as per the rules of procedure made by it. It provides that the Rules made by the Delhi Legislative Assembly must be consistent with the Rules of Procedure and Conduct of Business of the Lok Sabha.
  • Opinion of LG: The Act provides that if the LG specifies then the opinion of the LG must be obtained before taking any executive decisions of the Delhi Government.
  • Administrative Activities: The Legislative Assembly cannot make rules to consider matters of the day-to-day administration. Further, the Assembly cannot conduct any probe into administrative decisions. All such rules made before the enactment of this Act will be void.
  • Reserve Bills: The L-G also has to reserve bills that cover any of the matters outside the purview of the Legislative Assembly for the consideration of the President.

  Source: PIB

   

• The NCT of Delhi Act, 2021 Enhances Cooperative Federalism

  Synopsis: The accusation made on the Government regarding the passage of the Government of the NCT  of Delhi Act 2021  is groundless.

  Background of the NCT of Delhi Bill

  • Last week, both Houses of Parliament voted in favor of the amendments to the Government of the National Capital Territory (NCT) of Delhi Act.
  • Many criticized the passage of the bill that the government is undermining the federal structure of the country. Some have equated the passage of the bill as the death of democracy and Federalism.
  • But the government mentioned the Bill as a necessary change vital for the following things,
    • Ensuring clear-cut roles and responsibilities.
    • To remove ambiguities in the governance of the NCT of Delhi
    • To facilitate a clear chain of command among stakeholders

   Why the accusation against the NCT of Delhi Bill is groundless?

  The Evolution of The GNCT of Delhi bill has to be examined carefully to understand the issues against the accusations of the GNCT bill.

  • First, the aim of the amendments was to clear the ambiguities in the roles of various stakeholders. Since various court judgments have observed the ambiguities and lack of clarity. The government through the recent amendment brought consistency in the definition of the term “Government”.
    1. The amendment clearly stated that the term ‘government’ refers to the Lieutenant Governor. By doing this, the government has only formalised the definition of a term that the Delhi Assembly itself had already accepted.
    2. For example, in 2015 the Legislative Assembly of Delhi passed the Delhi Netaji Subhas University of Technology Bill. It was sent for the President’s assent.
    3. However, it was returned to the Delhi assembly as it had defined the term “Government” as the “Government of the National Capital Territory of Delhi.
    4. Later, the Delhi assembly sent a modified version of the Bill for the President’s assent. This time the definition of “government” was described as “Lieutenant Governor of NCT Delhi appointed by the President.”
  • Second, the government has proved itself as a torch-bearer of Federalism. For example, the government provided equal opportunities for States in the following events. Such as,
    • 1. The creation of NITI Aayog,
      2. During the establishment of the Goods and Services Tax Council,
      3. The acceptance of the Fifteenth Finance Commission’s recommendations for greater devolution.
  • Third, the amendments will ensure that there is no encroachment in legislative matters in the union’s jurisdiction. NCT Delhi has no legislative competence in matters pertaining to the police, public order, and land. However, the current proposals for providing statehood to Delhi Legislative Assembly involve one major risk. That is the encroachment of the Delhi assembly on these subjects.
  • Fourth, Delhi is of unique importance to India. It hosts the Parliament, the seat of the Union Government, Supreme court, Foreign embassies, and other institutions of national importance. In such instances, ensuring the opinion of the Lieutenant Governor can only ensure the smooth functioning of the government.

  So, the NCT of Delhi (Amendment) Bill balances the proper functioning of the Delhi Assembly and the cooperative federalism in India.

  Source: The Hindu

• NCT of Delhi (Amendment) Bill, 2021 is against the Principle of Federalism

  Synopsis: The Lok Sabha has passed the Government of NCT of Delhi (Amendment) Bill, 2021. The Bill is against the constitutional morality and hence, it needs to be declared unconstitutional.

  Background

  • Article 239AA of the Constitution of India granted Special Status to Delhi in 1991 through the 69th constitutional amendment (CAA).
  • The 69th CAA provided Delhi with a Legislative Assembly and a Council of Ministers (CoM). The CoM was made responsible to the legislative Assembly and empowered to deal with matters of concern to the common man.
  • The recently introduced Government of NCT of Delhi (Amendment) Bill, 2021 is against Article 239AA.

  What are the changes made in the National Capital Territory of Delhi (Amendment) Bill, 2021?

  • The Bill says, the expression “Government” referred to in any law to be made by the Legislative Assembly in Delhi shall mean the “Lieutenant Governor”.

  READ MORE ABOUT THE GNCT OF DELHI BILL, 2021

  What are the related rulings on this issue by the court?

  • First, the Govt. of NCT of Delhi v. Union of India (2018) case: The court stated that the Council of Ministers should keep the LG (Lieutenant Governor) informed of its decisions. The rationale of this decision was to resolve the difference of opinion between the LG and the Delhi government by referring it to the President.
  • • • Further, the court said the LG should be guided by the concept of constitutional morality. And the exercise of power to refer to the President should be an exception.
  • Second, in Samsher Singh v. State of Punjab (1974) the court warned against giving excessive powers to an individual like the Lieutenant Governor. The reasons stated by the court are,
    • • One, elections will not have any meaningful value.
      • Two, the voice of the Citizens will go unrecognized. Because elected representatives chosen by the citizens are not given appropriate power to perform their functions
      • Three, it is against the concepts of pragmatic federalism and collaborative federalism.

  Read more – NCT of Delhi Bill Critically Explained 

  What are the issues in the recent amendments?

  • Firstly, the Lieutenant Governor has been made synonymous with the Government. The government that is a collective voice of millions of citizens is replaced by one individual.
  • Secondly, the bill provides the LG with enormous powers to refer all matters to the President.
  • Thirdly, it provides for a mandate to take the opinion of the lieutenant governor before taking executive actions.
  • Lastly, the above two provisions are against the Supreme Court ruling in Govt. of NCT of Delhi v. Union of India (2018) case and doctrine of Pith and substance.
    • The doctrine of Pith and Substance states that within their respective spheres the state and the union legislatures are made supreme. They should not encroach upon the sphere demarcated for the other.

  The bill Is violative of the principles of participative democracy, cooperative federalism, collective responsibility to the House and, constitutional morality, and needs to be aborted

  Source: The Hindu

• NCT of Delhi (Amendment) Bill is against the spirit of Federalism.

  Synopsis: The Government of NCT of Delhi (Amendment) Bill, 2021 gives more powers to the Lieutenant governor(LG). Further, It is against the principle of representative democracy.

  Evolution of The Government of NCT of Delhi (Amendment) act 1991

  1. India follows Parliamentary democracy with a cabinet form of government. This is a basic structure of the Indian Constitution.
  2. When the Constitution came into force, there were four kinds of States. (Parts A, B, C and D States)
  3. The states under C and D were directly administered by centrally appointed Chief Commissioners and Lieutenant Governors. They don’t have any elected Assemblies. Delhi came under Part C.
  4. But in 1951, a Legislative Assembly was created with an elected Chief Minister for Delhi.
  5. However, issues of jurisdictions and functional autonomy between the Chief Minister and chief commissioner of Delhi was always present. This led to the resignation of the 1^st chief minister in 1955.
  6. In 1956, following the States Reorganisation Act, only two categories(States and Union Territories) remained in the Indian Union.
  7. Delhi became a Union Territory. Also, the Legislative Assembly of Delhi was abolished. Then, Delhi was administered by an Administrator appointed by the President.
  8. In 1966, the Delhi Administration Act 1966 provided a limited representative Government in Delhi. But there were repeated political demands that demanded a full statehood to Delhi.
  9. To resolve this, the Balakrishnan Committee was set up in 1987. Consequently, the committee made the following recommendations
     • • Delhi should continue to be a Union Territory.
       • But there must be a Legislative Assembly and Council of Ministers responsible with appropriate powers to ensure stability.
  10. Based on this report, the Constitution (69th) Amendment Act and the Government of National Capital Territory of Delhi (GNCT) Act, 1991 were passed.
  11. This act provided Delhi with a Legislative Assembly, a Council of Ministers and an elected Chief Minister.

  Why Delhi is kept under the control of the Union Government?

  1. First, our Constitutional makers feared that Delhi will acquire a predominant position compared to other States if Delhi had statehood. So they included Delhi under Part C.
  2. Second, Delhi is the National capital. So Parliament decided to keep Delhi under Union Government on the basis of national interest.
  3. Third, to avoid federal disputes and provide for smooth administration in Delhi. For example, If full statehood is provided to Delhi, then two different political parties at the centre and Delhi will result in higher conflicts than the present ones.

  Salient provisions of NCT of Delhi (Amendment) Bill:

  The NCT of Delhi (Amendment) Bill has few significant provisions. They are,

  1. The bill reduces the power of representative government. It provides enormous powers to the Lieutenant governor (directly appointed by the centre).
  2. It makes the opinion of the Lieutenant Governor mandatory for taking any executive action.

  Challenges with the NCT of Delhi (Amendment) Bill:

  1. The Bill is against federalism (basic structure of the constitution). It gives more powers to the centre.
  2. The bill is against the provisions of representative democracy. It limits the power of the people. On the other hand, it gives more powers to the directly appointed administrators.
  3. The Bill aims to hand over the accountability of Delhi to an unelected, centrally appointed government functionary.
  4. The bill also violated the directions given by the Supreme Court. The SC provided a balanced approach. It mentions the LG has to ‘aid and advice’ the matters on which the Delhi Assembly has powers under the State and Concurrent Lists.

  The government must reconsider the NCT of Delhi (Amendment) Bill as per the advice of the Supreme Court.

  Source: The Hindu

• GNCT of Delhi Amendment Bill 2021 and Supreme Court’s Verdict

  Synopsis: GNCT of Delhi Amendment Bill 2021 appears to go against the idea of representative government.

  Introduction 

  The Centre’s Bill is trying to amend the law that relates to the governance of the National Capital Territory of Delhi. The bill claims that its aim is to implement the Supreme Court judgments on Delhi’s governance structure. However, the proposed changes are the very opposite of what the Court has said.

  What was the Supreme Court’s 2018 verdict on the matter?

  • The Constitution Bench verdict in 2018 stated that the LG (Lieutenant Governor) has not been trusted with any independent decision-making power. 
  • The LG either has to act on the aid and advice of council ministers. Or, he has to implement the decision of the President on the matters referred to him.
  • The ‘aid and advice’ clause applies to the matters on which the Delhi Assembly has powers under the State and Concurrent Lists. This comes with an exception of public order, police, and land.
  • Wherever there are differences between the L-G and the elected government, the L-G should refer the question to the President.
  • Further, different judgments have clarified that the power to refer “any matter” to the President does not mean “every matter”.
  • This bill completely undermines the Court’s efforts. The judgment strengthened the elected government in relation to Lieutenant Governor. 

  Read more – NCT Amendment Bill

  What are the issues with the NCT amendment bill? 

  The Court wanted to clarify that the power to refer any matter to the President did not mean that every matter should be referred. 

  1. Firstly, the Bill states all references to the government in the bills and orders would mean the LG. It is irrational to declare LG as the government, in the UT with an elected House.
     • As per the guiding principle, an elected government should not be undermined by the unelected administrator.
  2. Secondly, the provision to Article 239AA empowers L-G to refer the matter to the President, in case of difference of opinion. However, this does not mean that the administrator should come up with a different opinion on every government decision.
     • However, the bill provides the L-G with an opportunity to refer every matter to the President.
  3. Third, instead of Parliament identifying the matters on which the L-G’s opinion should be required, the Bill proposes that the L-G himself would specify such matters.

  This bill amounts to a rollback of representative government. The Union Territory concept is one of the many ways in which India regulates relations between the Centre and its units. It should not be used to undermine the basis of electoral democracy.  

  Source: click here

• Validity of “State’s resolution against Central laws”

  What is the News?

  The Supreme Court has found no harm in State Legislative Assemblies passing resolutions against Central laws. It was seen in the cases of the Citizenship Amendment Act or the new farm laws.

  What was the case?

  • Several State Assemblies passed resolutions against the Citizenship Amendment Act and the farm laws. A petition was filed in the Supreme Court challenging the legislative competencies of states passing resolutions against Central laws. And, this is especially when such laws fall under the Union List of the Seventh Schedule.
  • The petitioner argued that the States cannot make laws on the subjects in the Union List. So the State Assemblies should not give an opinion on the merits or limitations of the central law.

  Supreme Court observations on State’s resolutions against Central laws

  • The Supreme Court has said that states passing resolutions against the Central laws were not disobeying any law. And so, this was only a matter of expressing States opinions.
  • Moreover, the states also have the right to express their opinions. The resolutions do not mean that they are asking people to disobey the law.

  About Seventh Schedule:

  • The seventh Schedule under Article 246 of the constitution deals with the division of powers between the union and the states. It contains three lists-
    • Union List: It contains the subjects on which Parliament may make laws
    • State List: It contains the subjects on which state legislatures may make laws.
    • Concurrent List: It contains subjects in which both Parliament and state legislatures have jurisdiction. However, the Constitution provides federal supremacy to Parliament on concurrent list items in case of a conflict. (Unless the State law gets the assent of the President, the Central law will prevail if there is a conflict between the Central law and the State law.)

  Source: The Hindu

   

• The Government of NCT of Delhi (Amendment) Bill 2021- Explained, Pointwise

  Contents

  • 1 Introduction
  • 2 Key Provisions related to Delhi
  • 3 Salient features of the NCT of Delhi (Amendment) Bill 2021
  • 4 Background of LG and Delhi Government Relationship
  • 5 Impact of Supreme Court Verdict on NCT of Delhi 
  • 6 Need for new NCT of Delhi (Amendment) Bill
  • 7 Implications of NCT of Delhi (Amendment) Bill
  • 8 Suggestions

  Introduction

  The Government of National Capital Territory of Delhi (Amendment) Bill, 2021 or the NCT of Delhi (Amendment) Bill 2021 got introduced in Lok Sabha. It amends certain provisions related to the distribution of powers and responsibilities among the L-G (Lieutenant Governor) and the Delhi legislative assembly. The issue of power tussle between the L-G and the elected government of Delhi has come into the limelight again. It is because of the introduction of this bill.

  Key Provisions related to Delhi

  1. Delhi’s current status as a Union Territory with a Legislative Assembly is an outcome of the 69th Amendment Act. The act introduced Articles 239AA and 239BB in the Constitution.
     • They have created the Union Territory of Delhi with a legislative assembly.
     • Further, the administrator appointed under article 239 gets designated as the Lieutenant Governor. There shall be a council of ministers to aid and advise LG.
     • Lastly, provisions of public order, police and land are not under the jurisdiction of the Delhi government. The Centre will maintain these provisions.
  2. Article 239AA(4) mandates that in case of a difference of opinion between the L-G and the Council of Ministers, the L-G has to refer the issue to the President.
     • Until the decision is pending before the President, the L-G can use his discretion to take immediate action if urgency requires him/her to take an action.
  3. The GNCTD Act 1991 got passed to supplement the constitutional provisions relating to the Assembly and the Council of Ministers in the national capital. The act outlines few important provisions such as: 
     • the powers of the Assembly
     • the discretionary powers enjoyed by the L-G 
     • duties of the Chief Minister with respect to the need to furnish information to the L-G.

  Salient features of the NCT of Delhi (Amendment) Bill 2021

  The NCT of Delhi (Amendment) Bill mainly aims to amend four clauses of the Government of National Capital Territory of Delhi Act, 1991 (GNCTD Act 1991). They are, 

  1. Section 21 – This section deals with the restrictions on laws passed by the Legislative Assembly concerning certain matters.
     • The Bill provides that the term “government” referred to in any law made by the Legislative Assembly will imply Lieutenant Governor (L-G).
  2. Section 24 – This section deals with assent to Bills passed by the Legislative Assembly. The L-G will reserve the bills for the consideration of the President in a few matters. It includes bills that diminish the powers of the High Court of Delhi, the President directed the L-G to reserve a bill, etc.
     • The NCT of Delhi (Amendment) Bill requires the L-G to reserve bills for the President that incidentally cover any of the matters outside the purview of the powers of the Legislative Assembly.
  3. Section 33- It mentions that the Legislative Assembly will make rules to regulate the procedure and conduct of business in the Assembly.
     • The 2021 NCT bill states that such rules must be consistent with the Rules of Procedure and Conduct of Business in the Lok Sabha.
  4. Section 44 – It deals with the conduct of business. Accordingly, all executive decisions taken by the elected government should be under the L-G’s name. 
     • The 2021 bill empowers the L-G to specify his suggestions on certain matters. His opinions has to be taken before making any executive action on decisions of the Minister/ Council of Ministers.  

  Background of LG and Delhi Government Relationship

  1. Frequent tussles have been witnessed between the Delhi government and the L-G of Delhi since 2015. 
  2. The primary reason behind it was the lack of clarity over Article 239AA. The proviso of Article 239AA(4) seems to give primacy to the L-G. Using this, the LG was able to undermine the will of the elected government.
  3. A case also filed on the court about the L-G’s power of discretion. In the

     Government of NCT of Delhi v. Union of India case 2018, the Supreme Court defined the limits of L-G’s discretionary powers. The important points of that judgement were,

     • L-G is bound by the aid and advice of the council of ministers except in subjects of land, public order and police.
     • Executive decisions do not need the concurrence of the Lieutenant General. Further, the court also held that the L-G has no powers to overrule the decisions of the elected government.
     • The difference of opinion has to be referred to the president under Article 239AA(4) provision.
       • The Lieutenant Governor cannot act mechanically and refer every decision to the president.
       • Only genuine cases of public interest can be referred to the President.
       • Before referring a bill to the President, the L-G has to consider the principles of collaborative federalism, the concept of constitutional governance, objectivity, etc.
     • Executive power rests with the council of ministers of NCT, Delhi. The union government has no overruling powers with respect to the executive powers.

  Impact of Supreme Court Verdict on NCT of Delhi 

  • It established a situation of calm between the Delhi Government and the L-G.
  • The Delhi government stopped sending files on executive matters to the L-G before the implementation of decisions. This resulted in swifter decisions like: 
    1. Free bus rides to women, 
    2. Doorstep delivery of rations to the city’s residents, 
    3. Free electricity to households that are using less than 200 units of power 
    4. Mechanization of sewage cleaning operations
    5. Moreover, during the COVID-19 pandemic, the government restricted Delhi’s medical resources to its residents alone

  Need for new NCT of Delhi (Amendment) Bill

  The Centre introduced the bill in Lok Sabha by mentioning the needs of the bill which includes: 

  1. The Bill seeks to give effect to the 2018 judgement and implementing the verdict.
  2. The new Bill is also intended to promote cooperative federalism between the centre and the state.
  3. The Bill would address the ambiguities in the interpretation of legislative provisions.

  Implications of NCT of Delhi (Amendment) Bill

  1. Equating the L-G with the government simply undermines the legitimacy of the elected government thereby disrespecting representative democracy.
  2. Further, The bill goes against the spirit of the 2018 verdict. The provisions such as getting the compulsory opinion from the L-G are against the verdict.
  3. The NCT of Delhi (Amendment) Bill restricts the Delhi government from inquiring into executive matters. The Delhi assembly at present is examining multiple issues ranging from riots to the environment. This disregards the ideal of democracy conceived for the NCT of Delhi by Article 239AA of the Constitution.
  4. The NCT of Delhi (Amendment) Bill if passed would be a huge setback for Delhi’s quest for full statehood. As the L-G gets precedence to the Delhi government.
  5. The bill empowers L-G to specify certain matters on which his opinion must be taken. This can curtail the autonomy that any elected government legitimately requires for governance.
  6. Providing excess powers to L-G can also distort the federal equilibrium. The centre can use this bill as a precedent to curtail the powers of other states in the future.

  Suggestions

  1. The new bill should be reconsidered in the light of Justice D Y Chandrachud’s note in the 2018 verdict: “In a democratic form of government, the real power must subsist in the elected arms of the state”.
  2. A cautious discussion and deliberation should take place between the Centre and Delhi government on the ambiguous provision of the bill. This will help in the eradication of unconstitutional and undemocratic provisions.
  3. Apart from that, the government at the centre and state must cooperate to make sure that L-G can discharge its constitutional function. At the same time, they need to avoid L-G doesn’t become a hindrance to development.

  Conclusion:

  The government must reconsider the NCT of Delhi (Amendment) Bill as per the advice of the Supreme Court. The revamped provisions should enable L-G to act as a facilitator for upholding the law of the land and constitutional provisions.

• MHA introduced “NCT of Delhi (Amendment) Bill 2021”

  What is the News?

  The Ministry of Home Affairs has introduced the Government of National Capital Territory of Delhi (Amendment) Bill,2021 in the Lok Sabha. The Bill aims to change some important provisions concerning the National Capital.

  About NCT of Delhi (Amendment) Bill 2021:

  • It seeks to amend the Government of National Capital Territory of Delhi Act,1991.
  • The main objective is to give overarching powers to the Lieutenant Governor (LG) in the functioning of Delhi.

  Key amendments of the proposed NCT of Delhi (Amendment) Bill 2021

  • The ‘Government’ from now on will mean ‘Lieutenant Governor’: The Bill provides that the term “government” referred to any law made by the Legislative Assembly will imply Lieutenant Governor (LG).
  • LG’s opinion for executive actions: The Bill mentions that on certain matters, as specified by the LG, the government have to obtain LG’s opinion before taking any executive actions.
  • Reservation of bills to President: The NCT of Delhi (Amendment) Bill requires the LG to reserve all those Bills for the President that incidentally cover any of the matters outside the purview of the powers of the Legislative Assembly.
  • It limits the administrative powers of the Delhi Assembly: The bill provides that the rules made by the Delhi Assembly for regulating its procedure and conduct of business shall not be inconsistent with the Rules of Procedure and Conduct of Business in Lok Sabha.

  About Delhi as a Union Territory:

  • Delhi is a Union Territory with a legislature. It came into existence in 1991 under Article 239AA of the Constitution. This provision was inserted by the Sixty-ninth Amendment Act,1991.
  • As per the existing Act, the Delhi Legislative Assembly makes laws in all matters except public order, police, and land.

  Supreme Court Judgement on Delhi Government vs Powers of LG: In 2018, the Government of NCT of Delhi vs. Union of India (2018) case the supreme court provided a guideline. This guideline aimed at reducing the power tussle between the government of Delhi and the Lieutenant Governor. They are, 

  • Lieutenant Governor (LG) of Delhi is bound by the “aid and advice” of the elected Delhi government except for issues of public order, police and land.
  • Delhi Government needs to inform the LG of its well-deliberated decisions. The government need not obtain his “concurrence” in every day-to-day issue of governance.

  Source: The Hindu

• SC orders Info. on Rule Curve for “Mullaperiyar Dam”

  Contents

  • 1 What is the News?
  • 2 What is Rule Curve?
  • 3 About Mullaperiyar Dam:
  • 4 Why Controversy over Mullaperiyar dam then?

  What is the News?

  The Supreme Court orders the Tamil Nadu Chief Secretary to give information on the ‘rule curve’ for the Mullaperiyar dam. It also directed the Supervisory Committee to issue directions or take steps to address the three core safety issues.

  What is Rule Curve?

  The ‘rule curve’ in a dam decides the fluctuating storage levels in a reservoir. The gate opening schedule of a dam is based on the ‘rule curve’. It is part of the “core safety” mechanism in a dam. Rules curves are used to guarantee the safety of the reservoir as well as water security.

  About Mullaperiyar Dam:

  • The Mullaperiyar dam is located on the confluence of the Mullayar and Periyar rivers in Kerala’s Idukki district. The dam is located on the Cardamom Hills of the Western Ghats.
  • Operated by: The dam is located in Kerala but is operated and maintained by the neighbouring state of Tamil Nadu.
  • Why Tamil Nadu operates the dam? The dam is operated by Tamil Nadu following an 1886 lease agreement for 999 years. It was signed between the Maharaja of Travancore and the Secretary of State for India during British Rule.
  • Lease Agreement Renewed: In the 1970s, the lease agreement was renewed by Tamil Nadu and Kerala. It gave the former, rights to the water from the dam, besides the authority to develop hydropower projects at the site. In return, Kerala receives rent from Tamil Nadu.

  Why Controversy over Mullaperiyar dam then?

  • In 1979, problems erupted over the safety of the Mullaperiyar dam. It was claimed that a minor earthquake had resulted in the cracks in the dam.
  • Consequently, the Central Water Commission decided that water level in the dam be brought down from the full reservoir level of 152 ft to 136 ft. It will enable Tamil Nadu to carry out dam strengthening works.
  • By the 1990s, Tamil Nadu started demanding restoration of the water level in the Mullaperiyar dam as it completed the task assigned to it. When no consensus was reached through negotiations, the Supreme Court was approached.
  • In 2014 as per directions of the Supreme Court, the Ministry of Jal Shakti constituted a three-member Supervisory Committee.
  • The committee has been asked to address the three core safety issues
    • Monitoring and performance of the instrumentation of the dam,
    • Finalising the ‘rule curve’ and
    • Fixing the gate operating schedule — and submit a compliance report in four weeks.

  Source: The Hindu

• National Capital Territory of Delhi Laws Second (Amendment) Bill, 2020

  Introduced: Rajya Sabha (8th Feb 2021)

  Passed: Rajya Sabha (9th Feb 2021)

  Passed: Lok Sabha (10th March 2021)

  Present status: Received assent on 12th Mar 2021 and converted to Act.

  ---

  About National Capital Territory of Delhi Laws Second (Amendment) Bill, 2020:

  Ministry: Housing and Urban Poverty Alleviation

  • The bill amends the National Capital Territory of Delhi Laws (Special Provisions) Second Act,2011. The 2011 Act was valid till 31st December 2020. The Bill seeks to extend this deadline till the end of December 2023.
  • The bill seeks to regularise unauthorized colonies based on 2 qualifications
    1. that existed in the National Capital Territory of Delhi as of June 1,2014 and
    2. that had seen development up to 50% as of January 1,2015.
  • It also provides protection to certain forms of unauthorized developments in Delhi from punitive action where adequate measures are yet to be taken.

  What was the need for this bill?

  • There are 1,700 unauthorized colonies in Delhi. Due to unauthorization, these colonies are not receiving proper amenities. This Bill provides ownership rights to those living in these colonies.
  • The bill would also facilitate access to institutional credit and also improve the basic amenities.

  Source: The Hindu

• Nagaland to revive barbed cages for criminals

  What is the News?

  Some villages in Nagaland are trying to revive a traditional form of punishment. It involves punishing the criminals by putting them into barbed cages.

  About the Nagaland traditional form of punishment:

  • Villages in Nagaland practice a traditional form of punishment that punishes social offenders or violators of Naga customary laws. They put offenders into a triangular barbed cage that irritates the skin.
  • The cage is made of the logs of Masang-fung. It is a local tree that people avoid because of the irritation it causes.
  • These cages are referred to in Nagaland as khujli Ghar and in Nagamese as pidgin lingua franca.
  • The cage is usually placed at a central spot in the village, usually in full public view. Hence, the punishment is more of humiliation or loss of face within the community or clan than of spending at least a day inside the barbed cages without any space to move.

  Article 371A – Nagaland

  • Article 371A of the Constitution states that no act of Parliament would apply to the state of Nagaland on the following matters
    • Religious or social practices of Nagas
    • Naga customary law and procedure
    • Administration of civil or criminal justice involving decisions according to Naga customary law and
    • Ownership and transfer of land and its resources.
  • Exception: The Legislative Assembly of Nagaland must pass a resolution for an act to be applicable to the state.
  • Special Responsibilities: The Governor of Nagaland has special responsibility for law and order in the state. But this responsibility will extend as long as internal disturbances caused by the hostile Nagas continue. In the discharge of this responsibility, the Governor, after consulting the Council of Ministers should exercise his individual judgment and his decision is final.

  Source: The Hindu

   

  Use of Criminal conspiracy Law in India – Explained, Pointwise

• President’s rule in Puducherry: Issue in constitutional and legal provisions for Union Territories

  Synopsis: President’s Rule is imposed in Puducherry after all parties failed to make government. Legal and constitutional provisions related to UTs contributes to the destabilization of government there.

  Background

  • President rule is imposed recently in Puducherry after Narayanasamy government lost majority support in the assembly.
  • This incident is not new. It is very common especially when Union Territories with assemblies and central government are ruled by different parties.
  • Present constitutional and legal provisions for Union territories facilitate this destabilisation.

  How present constitution set up makes it easier to destabilise Union Territories

  Constitution of India under article 239A provides for legislature and Council of Ministers in Union territories. The intent behind this move was to fulfil the democratic aspirations of the people of these UTs. In other words, the rule of President under article 239 through administrator is not in line with democratic needs.

  However, certain provisions are working as hurdles in achieving the real intent behind these provisions.

  1. Firstly, Article 239A provides that a local Legislatures or Council of Ministers (CoM) or both can be created for Union territory. It means there can be a Council of Ministers without a legislature or with it or vice versa.
     • In our constitutional scheme, either CoM or legislatures can work alone. The legislature is a law-making body and CoM proposes these laws.
  2. Secondly, provisions provide that legislature to be a partly elected and partly nominated body. Center through a simple amendment can create a legislature with more than 50% nominated members.
     1. In the case of Puducherry, the centre can nominate 3 members to 33 members Puducherry Assembly. Thus, the centre nominated 3 members of its party to the assembly. This move was challenged in SC. However, SC ruled that the centre is not required to consult the State government for nomination and nominated members have the same right to vote regular members.
     2. Rajya Sabha also has nominated members, but, under clause (3) of Article 80, some qualifications are mentioned for such nominations. It ensures enrichment of quality of debates.
     3. However, it is not the case with Puducherry assembly. No qualifications are mentioned for nominations.
  3. Third, Lieutenant Governor in the UTs restricts the autonomy granted to UTs. Center can interfere in every decision of the Council of Ministers through LG and President.
     1. Article 239 AA(4) and section of UTs act vests the power in the administrator. He or she can express disagreement with any policy matter and refer the matter to the President. Then, he or she can take all actions he or she deems fit in the matter.
     2. In Puducherry too, conflicts between the Lt. Governor and the Chief Minister were perennial.

  Thus, past experience proves that the UTs with legislatures have ultimate control vested in the central administrator. It is not workable.

• Centre’s decision over Finance Commission’s recommendations

  Synopsis: The 15th Finance Commission has submitted its recommendations for 2021-26 to the centre. Amongst which maximum have been accepted by the centre while others are put on a hold by it. 

  Background:

  • The commission headed by N.K Singh was required to give recommendations for the period 2020-21 to 2024-25. 
  • Although due to COVID 19, it was required to submit an interim report for a year 2020-21 and later give a road map for 2021-22 to 2025-2026.
  • Further, the recommendations were to be given keeping in mind the multiple challenges. This included dissolution of the planning Commission, introduction of GST and above all the fiscal and revenue stress induced by the pandemic.
  • The commission gave the recommendations based on a judicious interpretation of the unusual terms of reference given to it. This has ensured that recommendations are based on the principle of equity.

  Recommendations accepted by the Centre:

  • 41% of the Centre’s taxes would be distributed amongst the states.
  • Revenue deficit grants amounting to 2.95 lakh crore would be given to 17 states in 5 years.
  • Grants towards urban and local bodies would be conditional upon: 
    • Setting up of a State finance commission
    • Online publication of Local bodies accounts
    • Sanitation and Water services provided by local bodies (60% weightage)
  • Setting up of a non-lapsable defence modernisation fund for augmenting capital expenditure on defence beyond the normal budgetary allocations.

  Recommendations put on hold:

  • Taking out 1.53 lakh crore rupees from the consolidated fund of India to partly finance defence modernization fund.
  • Sectors specific and other grants to states amounting to 1.8 lakh crore rupees.

  Way Forward:

  • The Centre must take proactive steps to win the confidence of states, especially in the current stressful times. 
  • The instances of introducing more cess and surcharges should be reduced as these are not shared with states, like the recent agricultural infrastructure development cess 
  • The Centre needs to take states along with it to drive the country on a sustainable fiscal path and ensure equitable growth throughout the country.

   Read Also:-

  Issues in 15th Finance Commission Recommendation

• An Analysis of 15th Finance commission’s recommendations

  Synopsis: The 15^th Finance Commission recommendations are slightly different from the other Finance commissions. It has introduced many revolutionary changes that can shape India’s future.

  What are the major challenges faced by 15^th Finance commission?

  The 15^th Finance commission (FC) had many challenging tasks while preparing its report for the year 2021-26. The most important among them are,

  1. One, the issue of using 2011 population census data. The southern states were against it.
  2. Two, the issue of creating a non-lapsable defence fund.
  3. Three, using certain parameters for calculating performance incentives to states.
  4. Fourth, the 15^th FC required to prepare the fiscal roadmap for the Union and state amid a shortfall in the GST collection and the Pandemic.

  How the 15^th FC report addressed these challenges?

  1. First, the 15^th FC recommended vertical devolution at 41 per cent to states against 14^th FC recommendation of 42%. The 15^th FC adjusted 1 per cent for the erstwhile state of Jammu and Kashmir.
  2. Second, for horizontal distribution, it introduced efficiency criteria for tax and fiscal efforts of states. This is expected to harmonise the principles of revenue needs and performance.
  3. Third, the 15^th FC assigned 12.5 per cent weight to demographic performance. By that, it incentivized the states for the progress made by southern states in replacement rate of population growth.

  What was the recommendation by 15^th FC for distributing grant in aids to the states?

  • The grant allocation will be based on the below five categories. 1. Revenue deficit grants, 2. Grants for local governments, 3. Grants for disaster management, 4. Sector-specific grants and 5. State-specific grants.
  • The centre in its Action Taken Report accepted all the grants except sector-specific grants (Rs 1,29,987 crore) and state-specific grants (Rs 49,599 crore).
  • The Commission also tasked to examine, whether revenue deficit grants should be provided at all to the states. Some states argued that providing revenue deficit grants will disincentives tax efforts and prudence in expenditure.
  • However, the FC recommended revenue deficit grants of Rs 2,94,514 crore for (2021-26). It will help fiscally stressed states by COVID, such as Kerala, Punjab, West Bengal.

  What were the Changes brought by 15^th FC regarding grants to local governments?

  • First, the 15^th FC has prescribed the following conditions to local bodies to get access to the grants.
    • Constitution of State Finance Commissions
    • Timely auditing and online availability of accounts for rural local bodies
    • Notifying consistent growth rate for property tax revenue for urban local bodies.
  • Second, it has also recommended for tying the grants to the local bodies to drinking water, sanitation, solid-waste management and faecal sludge management. This is in line with the national programmes such as Swachch Bharat Mission and Jal Jeevan Mission.
  • Third, for the first time, the FC recommends Rs 8,000 crore to states for incubation of eight new cities. It also provides for urban grants to million-plus cities for improving air quality, to meet the benchmark of solid waste management and sanitation.
  • Fourth, the landmark recommendation of the 15^th FC is the health grant of Rs 70,051 crore through local bodies. It will help to address the gaps in primary health infrastructure.

  15^th FC recommendations for strengthening Disaster risk management

  • The FC recommends setting up the state and national level Disaster Risk Mitigation Fund (SDRMF). It is in line with the provisions of the Disaster Management Act.
  • Also, for the first time, it introduced a 10-25 per cent graded cost-sharing by the states for the NDRF and NDMF. Though, this is not accepted by the states.

  15^th FC recommendations to strengthen Defence sector

  • It recommends for setting up of a dedicated non-lapsable fund and the Modernisation Fund for Defence and Internal Security (MFDIS) for 2021-2026.
  • The fund will bridge the gap between projected budgetary requirements and budget allocation for defence and internal security. It will also provide greater predictability to critical defence related to capital expenditure.
  • It has recommended the following four specific sources from where the funds for defence can be sourced.
    1. Transfers from the Consolidated Fund of India.
    2. Disinvestment proceeds of DPSEs.
    3. Proceeds from the monetisation of surplus defence land.
    4. Proceeds of receipts from defence land, which is likely to be transferred to state governments.
  • Furthermore, It recommends an allocation of Rs 1,000 crore per annum for the welfare of families of the defence and CAPF personnel who sacrifice their lives in frontline duties.

• Issues in 15th Finance Commission Recommendation

  Synopsis: The recent 15^th FC report recommendations criticised on the basis of two grounds. One, the recommendations will impact co-operative federalism. Two, the recommendations are not aligned with the changing federal structure in India.

  Background

  • Recently, the 15^th Finance commission (FC) report tabled in the parliament. It’s following key recommendations accepted by the government.
    1. The Commission has recommended a total devolution of Rs 8,55,176 crore to the states, which is 41% of the divisible pool of taxes.
    2. It also recommended for revenue deficit grants of Rs 1.18 lakh crore to the states.
    3. Furthermore, It recommended a non-lapsable defence fund. The grants component of the states has been reduced by 1 per cent (from 42% to 41%). It will be used to set up special funds for defence.
  • The FC’s recommendation for the vertical devolution at 41% is pragmatic. However, some of its recommendations will have an implication on the co-operative federalism.

  What are the issues in the 15^th FC recommendations?

  • First, the 1% cut in the devolution is for special funding on defence. It means states are paying Rs 7,000 crore for defence and internal security. But, Defence and National Security are the centre’s responsibility as per the 7th Schedule of the Constitution. This use of funds from states to finance the Centre’s expenditure is against the spirit of cooperative federalism.
  • Second, the issues in the horizontal distribution of funds. Successive finance commissions have used the criteria of need, equity for devolving 92.5 per cent of funds to a state. Whereas 15^th FC has reduced this to 75%. And the remaining 25% will be based on efficiency and performance. This is the lowest weightage for equity, making the 15th FC transfers the least progressive.
  • Third, 15^th FC recommendations do not depict the changed fiscal conditions. For example, after GST, the tax collection method has changed from a production-based tax system to a consumption-based tax system.
    • This structural change has a significant impact on the interstate distribution of tax.  It is not taken into account by the 15^th FC report.
  • Fourth, the approach for distributing revenue deficit grants is not changed. The 15^th FC could have recommended a minimum-guaranteed revenue of 14 per cent to every state.
    • This unchanged policy approach has resulted in an increase of statutory and non-statutory grants to almost 55 per cent of the total transfers. Whereas the aggregate transfers have dropped to 45 per cent. This makes the devolution process more discretionary.

• Govt. agrees to maintain States’ share in the divisible pool of taxes

  Why in News?

  Recently the Government released the Fifteenth Finance Commission (15th FC) recommendations along with the action taken report in the Parliament.

  Major recommendations of 15th  FC:

  Tax Devolution to States:

  • The 14th FC commission recommended that states 42% share in the divisible tax pool of the centre.
  • But the interim report of 15th FC reduced that to 41% from the year 2020-21 to 2024-25. This is because of the conversion of Kashmir, Jammu and Ladakh into Union Territories.
  • Demographic Performance: The Commission recommended 12.5% weightage for demographic performance in its tax-transfer calculations. It has done so to reduce the fears of southern States about losing some share in tax transfers. The southern states fear due to the reliance on the 2011 Census data instead of the 1971 census. They consider the reliance on 2011 census will penalise the States that perform better in population control.

  Revenue Deficit Grants:

  • The commission recommended additional revenue deficit grants of ₹2.94 lakh crore for 17 States over the next five years.
    • Revenue Deficit Grants is a mechanism for the Centre to compensate for revenue loss incurred by states.

  Recommendations In-Principle Approved by Government:

   Borrowing by States:

  • The commission allowed a normal ceiling of net borrowing for the States at 4% of Gross State Domestic Product (GSDP) for the year 2021-2022. A portion of this ceiling will be spent on incremental capital expenditure.
  • An additional borrowing ceiling of 0.5% of GSDP will also be provided based on meeting specified reforms in the power sector.

  Modernisation Fund for Defence and Internal Security

  • Purpose::It will be a dedicated non-lapsable fund to bridge the gap between projected budgetary requirements and allocation for defence and internal security.
  • Purpose: The proceeds from the fund will be used for:
    • Capital investment for modernisation of defence services.
    • Capital investment for central armed police forces and modernisation of state police forces.
    • The small component as a welfare fund for soldiers and paramilitary personnel.
  • Duration: The total indicative size of the fund has been proposed at Rs 2.38 lakh crore for the 2021-26 period.
  • Funding: The fund will receive partial funding from the Consolidated Fund of India partially using receipts from the disinvestment of defence public sector enterprises and land monetisation.
  • Nodal Ministry: The Ministry of Defence will have exclusive rights over the use of the funds money.The government can also operate the fund through a high-powered committee.

  Other Key Recommendations of the commission:

  • Fiscal Deficit:
    • Centre: The fiscal deficit should be 6% in 2021-22, 5.5% in 2022-23, 5% in 2023-24, 4.5% in 2024-25 and 4% in 2025-26.
    • States: The commission has said that states are expected to reach a fiscal deficit of 3% of GSDP by 2023-24 and maintain that level till 2025-26.
  • The health spending by states should be increased to 8% of their budget by 2022.
  • Annual grants worth Rs 1,200 crore be awarded between FY23 and FY26 for incentivising states to enhance educational outcomes.
  • Disaster mitigation funds should be set up at both national and state levels, in line with provisions of the Disaster Management Act.

  Source: The Hindu

• 15th Finance commission: Reforming financial governance of India’s municipalities

  Source: Indian Express

  Gs2: Issues and Challenges Pertaining to the Federal Structure, Devolution of Powers and Finances up to Local Levels and Challenges Therein.

  Synopsis:  The reforms suggested by the 15^th Finance commissions (interim report) can improve the financial governance of India’s municipalities.

  Background:

  • The 15^th Finance Commission submitted an interim report for FY 2020-21.
  • Now, the final report for FY 2021-22 to FY 2025-26 is expected to be tabled along with the forthcoming Budget 2021-22.
  • The Interim report for 2020-21 talks about raising the standards of financial governance of India’s municipalities in four specific ways.
  • Implementation of the suggested 4 changes can be a watershed moment in the financial governance reforms of India’s municipalities.

  What are the four changes suggested by the 15^th Finance commission?

  The 15^th Finance commission in its interim report has suggested the following changes to bring reforms to the financial governance of India’s municipalities.

  1. First, increasing the overall financial disbursement for municipalities (including panchayats) from the existing 30 per cent to 40 percent, in phases. This will result in increased financial resource for the municipalities over the five years.
  2. Second,  it has set two very important conditions for all municipalities, for receiving grants. First, Publication of audited annual accounts. Second, notification of floor rates for property tax. It will result in financial accountability and increased revenue of Municipalities.
     • • Moreover, an Additional borrowing limit has been set for states (Rs 50,000 crore). It is linked to reforms in property taxes and user charges for water and sanitation.
  3. Third, 100 percent outcome-based funding to 50 million-plus urban agglomerations (excluding Union Territories). Conditions emphasize specifically air quality, water supply, and sanitation.
     • • Note: India has 4,500 municipalities out of which approx. 250 municipalities are urban agglomerations with 53 million-plus population. It contains 44 per cent of the total urban population.
       • Whereas, the remaining 4,250-plus municipalities comprise 56 per cent of the total urban population.
  4. Fourth, it has recommended a common digital platform for municipal accounts. This will give a consolidated view of municipal finances and sectoral outlays at the state level.

  What are the suggestions?

  Constitutional bodies like the finance commission can only prepare the grounds of reforms. The ultimate responsibility for municipal finance reforms remains with the state governments.  Thus, State governments need to enact municipal legislation towards following 5 Objectives:

  1. Fiscal decentralisation by strengthening state finance commissions.
  2. Revenue optimisation to enhance their own revenues.
  3. Fiscal responsibility and budget management to accelerate municipal borrowings.
  4. Strengthening institutional capacities by an adequately skilled workforce.
  5. Facilitate transparency and citizen participation for democratic accountability.

  • Also, State governments need to shift from the present discretionary grants practice to predictable fiscal transfers to municipalities.

• Reasons for frictions between Puducherry CM and LG

  Synopsis: Tussle between the Puducherry CM and LG Kiran Bedi is one of the examples of increasing frictions between constitutional functionaries. In today’s article we are listing the causes of frictions between them.  

  Background 

  • Recently, Puducherry Chief Minister (CM) V. Narayanasamy staged a three-day protest against Lieutenant Governor (LG) Kiran Bedi. 
  • The CM accused LG of “functioning in an autocratic manner” and adopting an “obstructionist attitude” in ensuring the progress and welfare of people and asked the Centre for the recall of the Lt Governor.  
  • Whereas, LG defended herself by stating that the Lt Governor’s secretariat is ensuring just, fair and accessible administration, within the legal limits.  

  What are the causes of friction between Puducherry LG and CM? 

  Both have been in friction over issues such as; 

  • The appointment of the State Election Commissioner, an office critical to holding elections to local bodies in the Union Territory.  
  • The implementation of direct benefit transfer in the public distribution system using cash, instead of free rice, being given to beneficiaries.  

  How experts are seeing this issue? 

  • First, the Assembly elections are likely in April or May. The protest of CM leading the protest against the Lt Governor was seen as an act of political mobilisation. 

  • Second, experts opine that LG should also take into account the legitimate requirements of an elected government and try to accommodate Mr. Narayanaswamy’s views on important matters such as the free rice scheme.  

  • Even the Centre itself did not see any benefit in the DBT mode when it decided to give additional food grains (rice or wheat) free of during the COVID-19 pandemic. 

  Now the responsibility lies with the Centre to step in and restore the breakdown of communication between the Lt Governor and the Chief Minister in the interest of smooth administration.

   

   

• Federal Water Governance Ecosystem

  Context- Importance of Centre-States coordination to deal with the emerging challenges of inter-state water governance.

  How the two bills on water can attend the longstanding issue of inter-state externalities

  1. The Interstate River Water Disputes Amendment Bill 2019– The bill seeks to improve the inter-state water disputes resolution by setting up a permanent tribunal supported by a deliberative mechanism, the dispute resolution committee.
  2. The Dam Safety Bill, 2019– The bills provides for the surveillance, inspection, operation, and maintenance of specified dams, with the help of a comprehensive federal institutional framework comprising committees and authorities for dam safety at national and state levels.

  • It also provides for an institutional mechanism to ensure the safety of such dams.

  However, these two bills were passed by Lok Sabha and are pending in Rajya Sabha.

  What is the importance of Jal Jeevan Mission JJM?

  • The chief objective of the Mission is to provide piped water supply (Har Ghar Jal) to all rural and urban households by 2024.
  • The Jal Jeevan Mission will converge with other Central and State Government Schemes to achieve its objectives of sustainable water supply management across the country.
  • The central assistance through JJM is an opportunity to open a dialogue with the States to address federal water governance gap.

  Why a coordinated response from the Centre and states is vital?

  1. Systematic federal response– Emerging concerns of long-term national water security and sustainability, the risks of climate change, and the growing environmental challenges, including river pollution needs systematic federal response where the Centre and the states need to work in a partnership mode.
  2. For implementation of current national projects– Centre-States coordination is also crucial for pursuing the national projects. For example Ganga river rejuvenation or inland navigation or inter-basin transfers.
  3. Critical for Jal Jeevan Mission’s success.
  4. To pursue development and sustainability goals–

  What is the way forward?

  1. Absence of authoritative water data- Data systems related to water in the country are limited in their coverage, robustness and efficiency. The sector suffers from the following key data problems-
  2. Limited coverage,
  3. Unreliable data
  4. Limited co-ordination and sharing.

  Therefore, the Centre can work with the states in building a credible institutional architecture for gathering data and producing knowledge about water resources.

  2. Jal Jeevan Mission presents an opportunity to get states on board for a dialogue towards stronger Centre-states coordination and federal water governance ecosystem.
     

     ---

  Federal Structure of Indian Polity

• Future of the federal framework

  Context- The role of the Finance Commission as a neutral arbiter in the Centre-state relation in achieving the delicate balance.

  What are the key highlights of the latest report?

  The Fifteenth Finance Commission led by Chairman N. K. Singh submitted its report for the period 2021-2026 to President of India.

  Title of the report – ‘Finance Commission in COVID Time’s and the scales are used to represent the balance between the States and the Union.

  Significance of report-

  1. The report will determine how India’s fiscal architecture is reshaped.
  2. And how Centre-state relations are reset as the country attempts to recover from the COVID-19 shock

  What are the key points in the report that can impact states revenue share?

  1. The 15th Finance Commission, in its interim report had said, ‘There is merit in ensuring funds for defence and internal security and this will receive appropriate consideration in our final report.’

  • This had led to speculation that states will have to contribute to such a fund, in turn leading to a drop in their share of central government’s taxes.

  2. Southern Indian states complaining their efforts to control population would go against them. This is because the terms of reference of the 15th Finance Commission included using the 2011 census to suggest devolution of taxes to states.

  • The 15th FC has considered the 2011 population along with forest cover, tax effort, area of the state, and “demographic performance” to arrive at the states’ share in the divisible pool.

  What are the States issues?

  Recommendation of 14^th Finance commission– The commission had recommended for an increase in the share of the States in total tax revenues from 32% to 42%. However, states’ share never touched 42 per cent of tax collections due to-

  • Dominance of Centre– The Centre is trying to claw back the fiscal space ceded to the states and assert its dominance over the country’s fiscal architecture. Central government spending has risen on items that lie in the state and concurrent lists.
  • Shrinking of divisible pool– Centre has reduced the pool of funds to be shared with the States by shifting from taxes to cesses and surcharges, revenue from which is not shared with the states.

  Way forward-

  • Finance Commission has to play an important role in achieving the delicate balance in the conflicting domain of finance by addressing the concerns of both the players.
  • The Centre can reduce States’ fears by tabling the report without delay, and address any apprehensions it may give rise to.

  Federal Water Governance Ecosystem

• 15th Finance commission report

  Context – The 15th Finance commission led by Chairman N K Singh, submitted its Report to the President of India.

  What are the key highlights of the latest report?

  The 15th Finance commission led by Chairman N. K. Singh submitted its report for the period 2021-2026 to President of India. As per the Terms of Reference (ToR), the Commission was mandated to give its recommendations for five years, i.e., 2021-2026.

  • Title of the report – ‘Finance Commission in COVID Times’and the scales are used to represent the balance between the States and the Union.
  • The report is divided into four volumes.
  • The Report is devoted to the Union Government and contains key departments in greater depth, with the medium-term challenges and the roadmap ahead.
  • After the report is tabled in the Parliament, it will be available in the public domain.

  Which issues are addressed in the report?

  1. The Commission submitted its report on vertical and horizontal tax devolution, local government grants, disaster management grant, incentives for States in many areas such as power sector, adoption of DBT, solid waste management etc.
  2. The Commission also submitted its report on whether a separate mechanism for funding of defence and internal security ought to be set up and if so how such a mechanism could be operationalized.

  What are the key points in the report that can impact states revenue share?

  1. The Commission has addressed all its unique terms of reference such as considering a new non-lapsable fund for financing national security and defence spending, and offering performance incentives for States that deliver on reforms.
  2. The Fifteenth Finance Commission has considered the 2011 population along with forest cover, tax effort, area of the state, and “demographic performance” to arrive at the states’ share in the divisible pool of taxes.

  States issues-

  • Cutbacks in devolution – Centre has systematically cut the share of States in taxes raised by the Union government.
  • Shrinking of divisible pool- Centre has reduced the pool of funds to be shared with the States by shifting from taxes to cesses and surcharges.

  Way forward-

  The Centre can reduce States’ fears further by tabling the report soon so that any anxieties can be debated and laid to rest, and States can also plan upcoming Budgets with less uncertainty.

• GST Compensation Cess

  What is Cess?

  • • A cess is an earmarked tax that is collected for a specific purpose and ought to be spent only for that.
    • Cess may initially go to the CFI but has to be used for the purpose for which it was collected.
    • Cess collections are supposed to be transferred to specified Reserve Funds that Parliament has approved for each of these levies.
    • Every cess is collected after Parliament has authorised its creation through an enabling legislation that specifies the purpose for which the funds are being raised.
    • Article 270 of the Constitution allows cess to be excluded from the purview of the divisible pool of taxes that the Union government must share with the States.

  What is GST Compensation Cess?

  • The Goods and Services Tax in India is a comprehensive, multi-stage, destination-based value-added indirect tax. It has replaced many central and state indirect taxes in India such as the excise duty, VAT, services tax, etc.
    GST compensation: As per the GST (Compensation to States) Act, 2017, states are guaranteed compensation for revenue loss on account of implementation of GST for a transition period of five years (2017-2022).
  • The compensation is calculated based on the difference between the current states’ GST revenue and the protected revenue after estimating an annualised 14% growth rate from the base year of 2015-16.
  • Any shortfall has to be compensated from the receipts of Compensation Cess imposed on selected commodities that attract a GST of 28 per cent.
  • At present, the cess levied on sin and luxury goods such as tobacco and automobiles flow into the compensation fund.
  • But the issue was created when during Pandemic govt. denied paying compensation cess due to low revenue collection.

• Can a state challenge/reject central laws? On issue of farm bills and CAA

  Recently Punjab has denied implementing the Central Farm Laws in the state and has moved amendments to the legislations.

  Previously, on the Issue of CAA (Citizenship Amendment Act), several state governments like Kerala denied the implementation of the same in their states.

  Thus, the question arises, are states empowered to reject the central laws in their states? if yes, then under what circumstances?

  Powers of the central government

  Article 256 of the constitution of India provides for the obligation of States and the Union.

  • The executive power of every State shall be so exercised as to ensure compliance with the laws made by 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.
  • Thus, under article 256 of the constitution, states are in obligation to Implement the laws framed by the central government.
  • Article 257 (1) of the constitution of India provides that state governments shall not exercise their executive powers in a manner that will “impede or prejudice” the exercise of the executive powers of the Union.
  • If a state is not implementing the act, Article 355 of the Constitution can be invoked to issue warning to the concerned state which states that the government of every State is carried on in accordance with the provisions of this Constitution.”
  • If the state ignores the warning under Article 355 as well, the Centre can impose President’s rule under Article 356.

  Rights available to the state government

  • If any central law is Infringing upon the rights or powers of a state, then a state can move to the Supreme Court.
  • Article 131 confers exclusive jurisdiction on the Supreme Court in disputes involving States, or the Centre on the one hand and one or more States on the other.
  • Unlike individuals, State governments cannot complain of fundamental rights being violated thus cannot move to SC or High Courts under Article 32 or Article 226 of the Constitution.

  Previous cases

  • In 2011, in the State of Madhya Pradesh v. Union of India and Another, the court said that the Central laws can be challenged in the State High Courts and Supreme Court under Article 32 and held that the constitutional validity of a central law cannot be normally challenged under Article 131.
  • In the State of Jharkhand vs. State of Bihar and (2014), the Supreme Court upheld Article 131 as an appropriate tool to test the constitutionality of central law. The court ruled that the condition for invoking the court’s jurisdiction under Article 131 was that the dispute should involve a question on the existence or extent of a legal right and not a political one.

  Thus, presently, the States can move the Supreme Court under Article 131 if any legal right derived from any statue or the Constitution of India is infringed. Further states cannot question the legality of central law on a political or ideological basis.