Centre State Local Relations

Devolution of Powers and Finances up to Local Levels and Challenges therein

Financial Autonomy of ULBs/ RLBs

                The lower levels of government suffer from lack of devolution of funds and of self-generating revenue. Municipal bodies in urban areas face multiple challenges that necessitate capital: water supply, sanitation, power supply, solid waste management.

Why a problem of Finance?

  1. Lack of devolution of funds: Devolution of adequate funds is the prerogative of the state government and is included among the voluntary provisions to be implemented by states in setting up local government institutions
  2. Lack of taxation powers: Most states have not provided avenues for municipalities to acquire revenue on their own through levying taxes and they continue to be dependent on state governments for grants
    1. Economic Survey: 4% of revenue of panchayats are raised from direct tax avenues
  3. Corruption and Mismanagement: Most municipalities are crippled by corruption and financial mismanagement that hinders productive spending on infrastructure and resources
  4. Taxation Powers not used: The Economic Survey points to a ‘low equilibrium trap’ wherein local bodies have been reluctant to use taxation powers vested in them to maintain the low level of accountability on local body institution.
    1. Inadequate delivery of serviceà Low Direct TaxesàWeak accountabilityàInadequate delivery
  5. Tied Funds—> No Functional Autonomy

Way Forward

  1. Ensure Financial Accountability: Municipalities expenditure needs to be placed under professional scrutiny and debt management should be made a priority to plug leaking funds
  2. Sustainable Revenue Sources: Collection from property tax, sustained regular income from provision of services like water supply would usher in self-reliance when it comes to finances. GIS mapping and installation of ultra sound water meters can help in achieving both of these targets
  3. Municipal Bonds: They can be vital instruments to attract corporates and entrepreneurs to invest in urban planning and infrastructure development. It also reduces the burden on state governments and relieves ULBs of their financial dependence on state governments

Local Self-Governments

            Local self-governments were provided with constitutional status through the 73rd and 74th amendment with the objective of deepening democratic decentralization in the country. LSGs transform citizens being passive participants in election process to active decision makers at ground level thus heralding participative democracy.

Why LSG?

Citizen participation: LSGs enable citizens to be direct participants in decision making at the grass-root level. This inculcates political consciousness within citizens making them an active part of democracy

Eg: The institution of Gram Sabha that is inclusive of all voters in a village is an embodiment of direct democracy where voices are directly heard and heeded to

Decentralization: LSGs are the lowest rung in the governance ladder that enables decentralized demand-driven service delivery to citizens. The citizens at the grass-root level are more aware of the needs of the society as compared to higher ladder governance institutions 

Eg: A village panchayat that needs healthcare service delivery will channelize its funds and functionaries in accordance with that priority in mind.

Women Empowerment: By reservation of one-third of LSG seats, women are politically empowered being active decision-makers at the grass-root level. This can drive them towards better social status and economic empowerment. Similarly, SCs, STs and other backward classes are emancipated due to reservation of seats in panchayats

Functions of a LSG

Planning and Implementation: The LSGs are vested with the authority for planning and implementation for socio-economic development and welfare of its population. The state government and LSGs cooperate to achieve the laid out objectives.

Beneficiary Identification: The LSGs are identifiers of deserving beneficiaries for state entitlements and assistance. They are better aware of grass root level demography and hence better placed to make decisions with regard to beneficiary identification

Eg: LSGs decide the beneficiaries of MGNREGA

Service Delivery: LSGs are responsible for service delivery of basic amenities to households- drinking water, electricity etc. In some states like Chhattisgarh, they are even managing the PDS to ensure fair and equal access to all beneficiaries.

Safeguards for Tribal Population: The LSG institutions in Schedule V and VI areas are responsible for expending natural resources – minerals, land, forests, minor water bodies. The Gram Sabha has to be consulted in matters of land acquisition, rehabilitation of displaced population and mineral mining.

Eg: Dongria Kond tribe of Niyamagiri hills rejected Vedanta’s request for Bauxite mining

Infrastructure: LSGs play a pivotal role in infrastructural development in coordination with the state government on matters of road connectivity, telecom and electrification.

Issues at the Local Body Level

  • Lack of 3Fs: The state governments have not devolved enough funds, functions and functionaries hindering democratic decentralization to the third tier of the government. Many states have not included voluntary provisions of the amendment that included devolution of resources and functions.
  • Lack of Financial Autonomy:
    • Limited Taxation Powersà No self-reliance
    • Limited use of existing taxation powersà Low revenue generation
    • Low devolution of funds from state and centre-à Infrastructural backwardness
    • Tied Fundsà Affects functional autonomy and priority based works of PRIs

The Economic Survey of 2017-18 states that the direct tax collection of panchayats is at a meagre 4% of its revenue base illustrative of the heavy dependence on state and central devolution

  • Recentralization: The decentralization of governance has been partly negated by para-statal authorities and recentralization schemes that abridge the authority and status devolved to lower levels of government
    • MPLADS and GCDA
  • Patriarchal Challenge: The provision for reservation of seats for women have been greatly compromised by the ‘Sarpanch pati’ system that puts husbands as active decision-makers in place of their passive spouse representative.
  • Casteism: Panchayats have been formed along the lines of caste that have perpetuated caste divisions in villages and has assumed quasi-judicial functions that impose harsh punishments on lower caste sections on the basis of customary laws and practices.
    • Khap Panchayats in parts of U.P and Bihar
  • Corruption or Maladministration: Panchayats as political institutions have not been free of corruption and other antithetical activities that hinder development, progress and welfare for all
  • Bureaucratic Culture: The introduction of the 3rd tier of governance has changed the role of a district collectorà The bureaucracy in practice is yet to be fully adapted to the change
  • Ignorance of peri-Urban Areas: Regions at the periphery of cities that are transition zones for rural-urban areas suffer from lack of administrationà water and sanitation problems as per the 2nd ARC report
  • Lack of Human Resource Development: The panchayats suffer from the presence of a lack of adequate knowledge and expertise for governance at the local level.

Way Forward

  • Greater Devolution of 3Fs: Panchayats and ULBs need to be adequately equipped with funds, functions and functionaries from state governments. Performance grants can be provided as per the 14th finance commission’s recommendations to incentivize planning and implementation of socio-economic developmental projects
  • Financial Autonomy:
    • Provide LSGs with more taxation powers
    • Devolve adequate finances to local bodies
    • Flexibility of Funds: The ARC recommends untied resources to be devolved so that sufficient fiscal space exists for the local governments to spend on priorities of the panchayat
    • ULBs can mobilize private capital through various debt instruments like Green and Blue bonds
  • Functional Autonomy: The Principle of Subsidiarity as recommended by the ARC shall be followed with regard to matters of devolution of powers and functions. All functions that can be performed at the lowest level need to be vested with the local bodies.
  • Avoiding Recentralization: ARCs recommend that recentralization schemes and para-statal authorities can be limited and their jurisdictions reversed so that they do not absolve the authority given to grass root level political institutions
  • Monitoring to tackle Socio-cultural challenges: Caste and patriarchal challenges have to be overcome through better monitoring at grass root levels to ensure that they function as institutions of democratic governance alone and not on tradition or socio-cultural lines
  • Anti-corruption body: ARC has recommended that a local body ombudsman can be constituted to limit malafide transgressions of panchayat members. Lokayutas can be made mandatory to supervise the prosecution of corruption related cases.
  • Reforming Bureaucratic Culture: The rigidity of the bureaucratic system can only be overcome when proper awareness of the system is created among civil servants. They need to adapt to the 3rd tier of governance and ensure coordination and cooperation to effectuate grass-root level development and welfare
  • Education as Qualification: Bringing in education as qualification for panchayat membership can enhance the quality of human resource.
    • Recently, the Haryana assembly passed a legislation bringing in educational qualifications for candidates

Requirement of Education

            Few states like Haryana had instituted a law whereby individuals contesting elections to panchayat samite, zila parishad or for sarpanch were mandated educational qualifications

Issue at Hand

  • Antithetical to Spirit of Constitution: The requirement of education is an impediment to a full realisation of grass-root democracy and people participation that is the hallmark of the 73rd and 74th amendment of the constitution
  • Political Inequality: Even referenced in the preamble, political equality is an ideal that is at odds with prescribing education as a qualification for electoral posts calling into question the practice of Right to Equality guaranteed under Article 14 of the Indian Constitution
  • Doubtful Correlation: There are several examples of uneducated individuals as good administrators and vice versa. Thus, the correlation between education and governance is not clearly visible

Why is it Required?

  • Better Governance: Supreme Court has opined that education is indispensable for an office holder in determining what is right, wrong, good or bad. Thus, education can help in decision making at grass root level governance on planning and implementation of developmental projects
  • Empowered Officials: Supreme Court also opined that educated and literate individuals are less susceptible to manipulation and misinformation giving the state an empowered workforce

Issues Pertaining to Federal Structure

The Curious Case of Delhi: Institution of the Governor

69th Amendment of the Constitution

An elected Government + Legislature: It gave the UT of Delhi its own democratically elected government and legislature. Sub-section 4 of Article 239AA mandates that the council of ministers shall aid and advise the LG (Lieutenant Governor) in the exercise of his functions except in matters of his discretion

Power Sharing: As per Article 239AA, the elected legislature can legislate on all matters in the State and Concurrent list except public order, police, services and land. These three items are reserved for the centre through the institution of Lieutenant Governor.

The SC in the recent Government of NCT of Delhi vs Union of India case stated that the LG is bound by the aid and advice of the council of ministers in all other matters. He cannot act as an independent administrator in all matters except those reserved.

Conflict Resolution: A proviso to Article 239AA subsection 4 mandates that in case of a difference of opinion between the LG and Council of Ministers, the former shall refer the matter to the president. It stated that any matter cannot be every matter that is put for the president. Only matters involving extraordinary importance may be done so.

Provision for Dismissal of Elected Government: Article 239AB provides President with the opportunity to dismiss the council of ministers in case governance is not carried on in accordance with provisions under Article239AA

Issues of 239AA

No authority for Elected Government: The sweeping powers provided to the LG under Article 239AA is averse to the federal nature of administration curtailing authority provided to the elected representatives. It opens the door for arbitrary use of the vested power and conflicts between the Union government and the elected government of Delhi.

No control over Bureaucracy: The elected government in Delhi cannot even control the postings, promotion and transfer of bureaucrats of the Delhi government. This symbolises the lack of coordination in the governance machinery

Lack of Accountability: The exceptions of public order, police and land create dual power centres in the Delhi Polity hindering accountability of the elected government of the UT. It hinders the meaningful realisation of the mandate of the people

Poor Dispute Resolution Mechanism: Any dispute between the LG and the Delhi Government is resolved with the president as the mediator. This provision is biased in favour of the Union government as the President acts on the aid and advice of the council of ministers.

Court Verdicts

The 2016 Delhi High Court verdict granted autonomy to the LG opining he is not bound by the aid and advice of council of ministers and is free to take a unilateral decision regarding matters in the National Capital

The Supreme Court in November 2017 has observed that the Article gives primacy to the LG. However, the LG cannot cause inordinate delay to schemes and proposals put forward by the council of ministers. Any conflict in opinion shall be referred to the president and resolved immediately.

The court once again in the Government of NCT vs Union of India case stated that the LG is bound by the aid and advice of the elected state government in all matters except the reserved ones. This can enable the elected UT government to take back services and management of the bureaucracy which were earlier subsumed by the LG.

Way Forward

Limit Authority of LG: The subjects under the control of assembly and council of ministers shall be left exclusively to them with LG not attaining his discretionary power regarding these subjects. LG may exercise his discretionary power only in those subjects reserved for him under Article 239AA.

Harmonious administration: The court reaffirms the need for harmony and mutual respect in the functioning of the UT government and the LG to uphold constitutional values. The offices need to be used productively to realise the will of the people and bring welfare leaving aside political ambitions.

More Autonomy to Delhi Government: A democratically elected government needs to be vested with more freedom and autonomy to realise the mandate the people has given them.

Reform Dispute Resolution Process: The current dispute resolution process whereby matter is referred to by the president lacks credibility and invariably favours the centre. The dispute resolution process needs to be institutionalized as done in several capitals around the world            

Conclusion

                The offices of LG and state government must uphold constitutionalism and embrace the collaborative federal structure that is laid down in the finding document. The large metropolis that Delhi has evolved into needs its own elected government with clear authority and jurisdiction to function.

Statehood for Delhi?

Introduction

 Major capitals of the world viz. Tokyo and Berlin have not been given much autonomy by the Union Governments let alone statehoods. Delhi as India’s National Capital Territory houses critical infrastructure – parliament, Rashtrapathi Bhavan, Defence and Foreign missions. The extend of autonomy that can be granted without affecting national interest needs to be observed.

Yes

  • Federal Autonomy: Showering Delhi with statehood would provide the democratically elected government of the new state independent powers in subjects enumerated in state list. This decentralized model augurs well for good governance and realisation of the mandate of the people
  • Ensuring Accountability: The full realisation of the people’s mandate for the Delhi government is hindered due to its lack of authority in multiple spheres- police, land, services and public order. Once accorded statehood, there would be greater accountability on the incumbent government for all such matters
  • Functional Clarity: The jurisdictions of the state government would be clearly spelt out if statehood is granted. This enables better coordination and rationalization of functions of Union and State governments
    • The current scenario where the Delhi government has little control over bureaucrats does not augur well for the governance machinery
    • Loss of Delhi governments control over Anti-Corruption Bureau and Department of Services
  • Delhi as a Large Metropolis: Delhi is to rapidly evolve by 2035 as the largest metropolis in the world. The rising aspirations of such a large urban community cannot be met without a democratically elected state government.
  • Past Precedents: Union Territories of Goa, Manipur and Himachal have been granted statehood.

No

  • Delhi as National Capital: As national capital, Delhi is the host for foreign missions and high level political meetings. In the best of national interest, it is best the Union government retains a substantial degree of control over it
  • Burden on State Government: Statehood would deprive Delhi of many of the advantages like the managing of the policing that is taken up by the Union Government
  • National capital belongs to people of India and not of the city alone

Suggestions

  • More autonomy: The Centre government can take the middle path by offering more autonomy to Delhi in matters of police, land, public order and services but not according statehood. This would improve governance in the NCR without affecting India’s national interest
  • Collaborative Federalism: Inbuilt overlapping jurisdictions in the constitution have to be managed by the Union and UT government for harmonious governance of the state
  • Dispute Resolution Mechanism: A more credible dispute resolution system than referring to the president needs to be evolved. An institutionalized dispute resolution mechanism needs to be put in place
  • Urban Local Good Governance: The principle of subsidiarity shall be followed so that ULB manages city’s affairs merged with the para-statal.

Like the states of Himachal Pradesh and Tripura that evolved from UTs into states, the time has come to introspect the need of a representative and accountable government that derives meaningful authority from people’s mandate

Kashmir Issue

Article 370: It conferred special status on Kashmir and allowed several special privileges for the state. Under it, Kashmir was to have a separate constitution and an increased autonomy in managing its affairs. The Centre’s role would be limited to matters of defence, foreign affairs, communication and banking alone.

Special Privileges for Kashmir

  1. No Fundamental Duties
  2. No DPSP
  3. No Financial Emergency in state
  4. State legislature’s power in residuary list and preventive detention
  5. State legislature’s consent for parliament’s law making powers in matters other than those prescribed in instrument of accession
  6. No territorial changes for the state except by sanction of state legislature
  7. Article 35A: state legislature prescribing conditions of residency and special privileges for residents- scholarships, jobs, seats in education

Why Article 370?

Kashmir’s Special Status: Kashmir became an integral part of India following the signing of the Instrument of Accession. Special safeguards were necessary to ensure Kashmir’s identity is conserved and not overhauled by India.

Removal of the article may violate the nature of the instrument of accession and cut off Kashmir’s territorial integrity with India.

Territorial Integrity: In matters of defence of its territory and security, the Article vests authority to Centre. It confirms Kashmir to be an integral part of India despite granting special autonomy and privileges to the state

Unity in Diversity: The Article is an attempt to diffuse the ethnic, cultural, linguistic and religious tensions that may have arisen. It promotes the plural identity of Kashmiris as being Kashmiris as well as Indian.

Is Article Temporary?

The Supreme Court has recently elucidated that the Article is permanent in nature despite the headnote of the article.

Case for Removal of Article

Uniform Polity: The Article makes a distinction between Kashmir and rest of states of India, the removal of which can entail the full integration of Kashmir into Indian polity. It would enable better coordination and administrative convenience between centre and state governments

Better Control for Union Government: The non-state actors behind extremism, separatism and violence in Kashmir can be better controlled by providing central government with a greater degree of control

Integration of India with Rest of Kashmir: Indians from other states can then freely reside, settle and buy property in Kashmir. There can be a cultural synthesis that can be an offset of the increased people to people interaction.

Case Against Removal

  • Alienation: The removal of special privileges to the state can further inflame tensions and further the alienation that the citizenry currently experiences towards the state and the armed forces
  • Link to India: The Article 370 is the constitutional source of Kashmir being an integral part of India and its removal leaves Kashmir in a state of isolation with respect to polity
  • Separatist Tendencies: The removal of the article may boost the separatist movement in the state given the Kashmiri identity would be diluted with the removal of the article. A law and order issue might flame up in the state

Article 35A

  • Incorporated into the constitution in 1954 by presidential order under Article 370(1)(D)
  • Allows president to make certain exceptions and modifications to the constitution for the benefit of state subjects of Kashmir
  • Question arises whether the president can modify an existing article without concurrence of the parliament. Any constitutional amendment requires parliament’s consent although president can modify an article under Article 370, it is not clear if he cannot introduce a new article without the knowledge of the parliament

Features

  • Grants exclusive State subject rights to the people of Jammu & Kashmir.
  • In contravention to Article 14: It advocates that the state shall not deny to any person equality before law and equal protection before laws within the territory of India
  • Article 35A prohibits a non-resident from buying a property and ensures job reservation for residents amongst other welfares of scholarships and public aids to permanent residents of Kashmir
  • Article 35A it is argued discriminates against women having cross-state marital relations of the state for buying property and applying for jobs. Children borne out of cross-marital relations also face discrimination when applying for public sector jobs and with regard to acquisition of property

Consequences of Abolishing Article 35A/ 370

Cons

Alienation of Kashmir: The abolition of the Article would deprive Kashmiris of the special category of permanent residents and with it several privileges of job reservations, scholarships and ownership of property that might alienate the Kashmiri citizenry

Xenophobia: The removal of the article is also seen as an attempt to alter the demography of Kashmir. An inflow of citizens from elsewhere may cause

  • Economic Deprivation: Induce competition for natural resources, education and job opportunities that comes at the expense of Kashmiris
  • Ethnic Tensionsà Violence: A fear of a loss of culture can cause ethnic conflicts particularly in a state as ethnically sensitive as Jammu and Kashmir

Fodder for Separatist Groups: Abolition of the article would be used to induce anti-national sentiments and stoke separatist movements within the valley. In the background of unemployment and poverty, the youth of Kashmir may be enticed to such militant movements on the pretext of loss of privileges for Kashmiri citizens

Pros for Kashmir

Sociological Liberalism: If privileges to citizens are undone, it would open doors for a cultural synthesis of Kashmiris with the rest of India. It may in the future strengthen the unity of the nation due to easier people to people movement between Kashmir and rest of India.

Economic Development of Kashmir: Abolition of Articleà Democratization of Property Ownership-à Investment from outside the state increasesà More Job Opportunitiesà Economic Development

Current Issues in Kashmir

Cross-border Terrorism: Kashmir is reeling from the import of terror from across the border with extra state actors meddling in its internal security.

Separatist Movements: The Hurriyat Conference is leading the charge for Kashmiriyat tapping into the feeling of alienation that exists in the heart of Kashmiris to the Indian state. Pakistan has been alleged to provide fuel to the fire of separatism

Alienation of the Citizens: The citizens of Kashmir are quickly losing trust in the state and Indian democracy. The human rights violations committed by the Indian army further compound the alienation of the Kashmiris

Troubled Youth: Kashmir’s youth remains jobless and poor alienated from the state and its institutions. They are vulnerable to radicalisation and indoctrination. Many are also hit by militancy deprived of lives and livelihoods.

Political Instability: Jammu and Kashmir presented a fractured mandate in the previous state elections. This led to the formation of an unstable coalition that did not possess clarity in restoring peace. The current installation of the Governor’s rule reflects the difficulty for democracy in Jammu and Kashmir

Religious Polarization: The valley and Jammu is polarized religiously like never before. Communal identities have been inflated by political parties and this has deterred brotherhood and fraternity among Kashmiris.

Eg: Hindu Ekta March support for the rapists in the Kathua rape case

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Conclusions      

                The issue of Kashmir is not one of binaries and has several complex layers that must be handled with humanism and dialogue rather than by force alone. The trilogy of Kashmiriyat, Jamoohariyat and Insaniyat of ex-PM Atal Bihari Vajpayee can be a guiding light to resolving the issues Kashmir faces today.               

                The Agenda of an Alliance that is now broken spoke of reconciliation and confidence building within and across the LoC in Jammu and Kashmir to ensure peace in the state. This must be the pathway to peace for Kashmir and for Kashmiris.

Role of Governor in Indian Polity

                The institution of the Governor is vital in promoting cooperative federalism as he acts as a link between the Centre and State. However, the politicization of the institution of governor has soured the federal framework of the country with many a times discretionary powers of the governor arbitrarily misused in favour of the Centre.

Discretionary Powers in Question

Article 163 of the constitution states that there shall be a council of ministers to aid and advise the governor except in so far as he is required to act in his discretion.

  • President’s Rule: The governor can submit a report to the President stating the failure of constitutional machinery and to recommend imposition of President’s rule dismissing state governments through Article 356. In the history of democratic India, more than 120 times President’s rule has been imposed on states.
  • The imposition of President’s Rule in Uttarakhand was struck down by the Supreme Court as it found it arbitrary and abuse of the discretion of the governor
  • Reservation of Bills for Consideration of President (Article 200 and 201): This discretionary power of the governor opens the door to arbitrary scuttling of legislations of the state legislatures at the behest of the centre.
  • Choosing the Chief-Minister in a Hung Assembly: According to Article 164(1), In situations where no party has a clear majority, the governor enjoys situational discretion to call whomsoever he believes can muster up the majority. There have been several cases where such discretions have been misused by governors to favour the party of the Union government.
  • Manipur, Goa and Karnataka have shown differing precedents of appointment of CM: Post Poll Coalition or Single Largest Party
  • Exercising his function as an administrator of a Union Territory: The SC in its observation in the AAP vs Union of India case had stated that the LG shall not unilaterally scuttle democratically elected government’s activities through abuse of powers in state list.

Other issues with Institution of Governor

  1. Appointment by Centre: The constitution’s mandate for central government has been widely used to fill political veterans. Political appointments do not augur well for a constitutional bi-partisan post of governor
  2. Arbitrary Removal: Though the P Singhal vs Union of India case provided for tenure for governors, union governments have tended to arbitrarily remove them from offices. This has impinged continuity, coordination neutrality and fairness in state government functioning

Consequences of Abuse of Discretion

  1. Encourage horse trading subverting the mandate of the people fostering money power and criminalization of politics
  2. Politicization of governor’s office leads to loss of public trust or credibility
  3. Reduces accountability of people on democratically elected government as it creates dual power centres
  4. Subverts federal system of governance for gains of the ruling party at the centre in the event of imposition of President’s rule
  5. Abridges legislature’s sovereignty and delays law making process by reserving bills

Way Forward

  • Sparingly use Article 365: The Supreme Court has laid down several conditions to check the veracity of the imposition of President’s Rule. The Sarkaria Commission has elucidated that it is a mechanism that must be sparingly used and only on account of failure of constitutional machinery and not on maladministration grounds
  • Make Public the Report of the Governor: The report of the governor recommending President’s rule must be made public so that there is adequate transparency as to what was the error on part of the state government
  • Localized Emergency: The Punchhi Commission has recommended the imposition of localized emergency, only a district or part of it instead of a wholesome dismissal of state government
  • Order of Precedence for Appointment of CM: The Sarkaria commission has laid out guidelines for the governor to appoint a CM in case of a hung assembly:
  • Largest Pre-Poll Alliance
  • Single Largest Party
  • Post-Electoral Coalition
  • Post-Electoral Alliance

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  • Prove Majority on Floor of House: In the R. Bommai vs Union of India Case, the supreme court has observed that the confidence that the government commands must be tested promptly on the floor of the house. This limits to an extent the situational discretion that the governor possesses
  • Political Neutrality of the Office of the Governor:
  • A person detached from local politics in the state and ideally someone from outside the state shall be appointed the governor according to recommendation of Sarkaria Commission
  • Limit Arbitrary Removal: Security of tenure can be provided to the office of the Governor by taking out the phrase “pleasure of the president”

Conclusion

                As noted in the S.R. Bommai case, the abuse of president’s rule violates the basic structure of the constitution due to jeopardy of the federal framework of the country. In the words of Ambedkar, a governor should use his discretion as a representative of the people of the state and not as the representative of a party.

Special Category States

Inter-State Water Disputes

Why Inter-state water disputes?

Geographical Reasons: Rivers pass through several different states and lower riparian states seek protection with regard to the use of water resources. Post state reorganization the issue has only been heightened due to increased complexity in determining the share of water

Eg: Mahadayi river water sharing issue between Goa and Karnataka

High demand for water: Competing states demand large amounts of water as share due to high irrigation requirements particularly due to cultivation of water-intensive crops. High industry requirements and domestic consumption also aggravate the issue of river water demand

Eg: The high water-intensive cultivation of sugarcane in Karnataka that puts great stress on the Cauvery

Changing course of rivers: Young rivers, particularly in the northern states of India, change their courses which trigger a need to redefine sharing of its resources

Water Scarcity across the country: This puts greater stress on available water resources and forces states to compete with each other for water resources. In lean monsoon years, there is greater dependence on the scant river water resources for irrigation

The politicization of the Issue: Inter-state water issues are politicized poorly to incite hatred and violence on racial lines in competing states. Hence it erodes national unity by using regional sentiments to vilify opposing states.

Eg: The Cauvery issue had seen a spate of violent incidents on Tamils in Bengaluru

Activities of dam construction taken up by upper riparian states

Constitutional Provisions

  1. Article 262(1) provides that Parliament may by law provide for the adjudication of any dispute with respect to use, control and distribution of waters of any inter-state river or river valley
  2. Article 262(2) empowers Parliament to provide that SC or any other court shall not exercise jurisdiction in respect of inter-state water dispute.

Need for Inter-state water disputes bill

  • Pendency of Issues: Several river disputes dragging on for years with no state ready to accept tribunal’s solutions and cases pending with SC
    • Ravi-Beas water dispute between Punjab, Haryana and Rajasthan have stretched for more than 31 years
  • Frequency of Issues: Rising number of similar incidents in recent times have increased the need for a permanent resolution mechanism as compared to ad-hoc tribunals established earlier
  • Judicial Burden: SC as a federal court may exercise original jurisdiction in hearing cases of inter-state disputes. Establishing a permanent mechanism for its resolution thus relieves SC of the burden of cases
  • Judicious and Rational Division of water resources: An expert committee that evaluates the need of water resources objectively for competing states to secure citizens, farmers and industrialists access to drinking water, irrigation and power

Why the Delay?

  • One Tribunal- One Issue Model: The Inter-state water Disputes Act, 1956 vested the authority with centre to create a tribunal as and when disputes occur. This model has caused inordinate delay as
    • Each dispute needs to be tackled from the start
    • Inconsistency in judgements–> Delay in Resolution
  • No Enforcement of Tribunal Order: The existing mechanism for resolution does not have adequate machinery to enforce the award of the tribunal
  • Issue of Finality: The parties to the dispute invariably seek redressal in the Supreme Court. The reluctance of the state to accept tribunal awards have compounded the delay.

Inter-state Water Disputes bill (Amendment) 2017

  • Permanent Body: It dissolves all existing tribunals and establishes a permanent inter-state river water disputes tribunal with multiple benches that would ensure better consistency in judgements
  • Expeditious Resolution of Disputes: When a state approaches the centre, the dispute is handed over to Dispute Resolution Committee consisting of experts from various fields. If the dispute remains unresolved, the matter is referred to the tribunal
  • Time Bound Resolution: Maximum period of 5 years for resolution
  • Finality of the Decision: Decision of tribunal shall be final and binding
  • Non-judicial Presence: The tribunals constituted for resolving water disputes shall have non-judicial experts to give more weight to ecological concepts such as water basin’s capacity, ground water management and environmental flows.
  • A centralized data bank at the centre to hold data of each river basin

Issues with the Bill

  • Temporary Benches: The multiple benches of the tribunal are to be constituted temporarily thus effectively continuing the temporary nature of dispute resolution
  • SC’s Jurisdiction: Despite legislations putting dispute resolutions outside the purview of the Supreme Court, it has stated that it would continue to hear appeals against the award of tribunals. This could delay the judicial procedures.
  • Enforcement of the award mired in ambiguities

Way Forward

  • Expeditious Use of Inter-State Council: Disputes involving multiple states can be taken up at inter-state or zonal councils where resolutions can be arrived at through debate, dialogue and deliberation.
  • Mediation: The Centre may take the lead for such activities akin to how the World Bank brokered the India- Pakistan Indus Water Treaty
  • Enforcement of the Award of the Tribunal: River Basin Organizations can be set up under the River Boards Act 1956 to implement the award of the tribunal.
  • Rivers as National Property: The Supreme Court has recently stated that rivers are not the property of a state or some states. Declaration of rivers as national property can put an end to the inter-state disputes and can call for equitable sharing of water resources between water surplus and deficient states
  • Water into Concurrent List: The Mihir Shah Committee has recommended to bring water into concurrent list. The Central Water Authority can then manage river water resources
  • Avoid Politicization of water issues
  • Conservation of Water in all forms to reduce the supply side need from rivers utilizing the 4Rs to achieve the SDG6 of “Ensure water and sanitation for all”
  • Inter-linking of river waters

SC’s Verdict on Cauvery river water sharing

  • Not property of one state: The SC has stated that no river shall belong to one state based on historical water flow directions. It is a national asset and needs equitable sharing.
  • Fair and Equitable Sharing: SC has called for fair and equitable sharing of water resources keeping in mind the demand of riparian states’ demands in its principle of equality.
  • Right to Drinking Water: SC’s verdict widened the canopy of water sharing from the earlier limited domain of irrigation to include drinking water right especially taking into account the enormous demand from populous cities like Bengaluru
  • Groundwater was considered as a parameter
  • Helsinki Rules 1966 Parameters: Geography and Hydrology of basin, Climate, past utilization of waters, economic and social needs, dependant population and availability of water resources.
  • Cauvery water management authority (CWMA) and Cauvery Water Regulation Committee (CWRC) established to monitor, regulate, enforce the order and to improve water use efficiency in riparian states. CWRC would also collect data of water levels and climatic variations.

Inter-State Council

                It is a constitutional body that is constituted by the President from time to time to discuss and deliberate between states concerning issues between them and between centre and states.

Functions

  • Promote Cooperative Federalism: The ISC in India’s multi-party democracy can serve as a platform to evolve common ideas, policies and cooperate on matters of common interest through dialogue, discussion and deliberation
  • Bridge Trust Deficit: The inter-state council brings together the representatives of various states and centre on one platform where they can raise issues and concerns and find common ground acting as a safety valve
  • Dispute Resolution: Inter-state and Centre-state disputes including river water disputes can be resolved through expeditious discussion and deliberation. 140 such issues were resolved in 2016.
  • Mutual Accountability on centre and state governments increases as they both act as mutual pressure groups to drive action for developmental priorities and targets
  • Sharing Best Practices: A bottom up approach needs a deliberation platform which the ISC readily provides. Such best state practices can then be shared across the table in spirit of cooperative federalism
  • Emotional Integration of the Country: India’s enormous diversity transcending across religious, linguistic, cultural lines are unified into one platform of the Inter-state council. The discussions on this platform are a celebration of India’s plural identity, co-existence and democratic values.

Issues in the Functioning of Inter-State Council

  • No Frequent Meetings: The last time the inter-state council met was 12 years ago. This shows the lack of political will among various state governments to come together and deliberate on issues
  • No Binding Nature: It acts as a mere talk shopà No binding recommendations on the governments. This reduces their accountability to each other, to national development and ultimately to the people
  • No role in conflict resolution: The inter-state council has been ineffective in resolving the many inter-state water disputes that exists today
    • Cauvery dispute between Karnataka and Tamil Nadu
  • No Administrative Mechanism: The inter-state council does not have an organizational set up that would ensure smooth procedures and expertise.

Way Forward

  • Re-constitute and Re-operationalize: Inter-state council should be reconstituted and should be operationalized again. Punchchi commission recommends that the council should meet at least thrice a year
  • Agenda for Meetings: The meetings of ISC need to be laid out with a definitive agenda to discuss meaningful issues rather than it being merely a talk shop [Punchhi Commission]
  • Power of Dispute Resolution: The Sarkaria Commission has recommended that Inter-state councils be vested with the authority to investigate inter-state disputes as contemplated in Article 263(a) of the Indian constitution
  • Organizational Structure: Punchhi Commission recommends a professional secretariat with experts in Law, Political Science, Environment for the council to attain functional independence
  • Widen Representation to include civil society and corporates
  • Political and Legislative give and take between centre and state

Read Also  Criminal Justice Reforms

Conclusion

 As a constitutionally mandated body, the importance of Inter-state council in ensuring the spirit of federalism in the country cannot be understated. An oft-overlooked7 platform opens a window of opportunities to realise our federal democracies deepest values- discuss, deliberate and resolve.

NITI Aayog and Cooperative Federalism

 NITI Aayog is conceptualised as replacement of the planning commission that emerges as a think tank with greater involvement of states in policy planning and achieving development targets in the spirit of federalism

How it fits the Bill?

  • Stateà National Development Targets: NITI Aayog evolves a shared vision of national development priorities, sectors and strategies with the active involvement of states in light of national objectives and the spirit of Antyodaya
    • SATH: The think tank chooses states for direct cooperation to transform sectors of education and health in accordance with the goals of National Health and Education policy
  • Structured Support Initiatives: The think tank provides structured support initiatives and mechanisms with states recognizing that strong states make a strong nation in the spirit of cooperative federalism
  • Bottom Up Approach: NITI Aayog is an organization that invites greater involvement of lower levels of governments in conceptualisation, planning and implementation of projects. It aims to foster credible programmes at village level and aggregate them progressively at higher levels of government
    • Aspirational Districts Programme incorporates the participation of local communities, district administration and civil society groups to alter the development indicators in backward districts
  • Representation of States: While the planning commission had no representation from the states, the NITI Aayog consists of Chief Ministers of all states + Administrators of UTs with the Prime Minister as the Chairman. The organizational structure is thus synonymous to evolving consensus on national development priorities.
  • Dispute Resolution of State and Centre: Due its buoyant representation to centre and state, the NITI Aayog can very well serve as a platform to resolve issues between Central government and particular state governments
    • NITI Aayog recently took the initiative to resolve pending issues with the State of Telangana
  • Competitive Federalismà Competition to achieve development targetsà National Development Objectivesà Cooperative Federalism

NITI Aayog and Competitive Federalism

  • Ranking of States: NITI Aayog publishes various indexes on a wide variety of socio-economic parameters. They serve the functions of:
    • Pushing states to action by way of Naming and shaming
    • Letting states know areas where attention is wanted
      • Ease of Doing Business Index
      • Logistics Index for states
    • Incremental rankingà States know if they are on the track of progress
      • The Performance of Health Outcomes is an excellent example. It has various parameters viz. neo natal mortality, child mortality, immunization It also ranks states on incremental basis
    • States lacking in areas can include measures taken by well doing states
  • Bà G Linkages: As a think tank, NITI Aayog also brings together investors and governments on the same platform. This enables convergence of interests and states virtually compete for investments by loosening regulations and constraints

Other Domains of Work

  • Inclusive Development: NITI Aayog aims to pay special attention to those sections who are at a risk of not benefitting from development or economic progress in the spirit of Antyodaya
    • Aspirational Districts Programme
  • Knowledge and Innovation Hub: The Aayog has a repository of best policy practices that can be emulated. It seeks to create an entrepreneurial support system for innovation by fostering government-industry-academia linkages.
    • Atal Innovation Mission
  • Evidence Based Policy Making: A data driven expertise policy making is Aayog’s key mandate that helps governments at centre and state evolve holistic diverse policies on a need based basis
    • NITI Aayog’s 3 year action agenda
  • Economic Reforms: The model APMC act, land leasing, PDP, contract farming and doubling farmers income all indicate Aayog’s economic reform agenda
  • Balanced Regional Development: NITI Aayog also focuses on hitherto left out regions to bridge developmental disparities.
    • NITI Forum for North-East on the basis of Composite District Index
  • Environmental Conservation: NITI Aayog has alerted the states and the centre on the impending water crisis as per the Composite Water Management Index

Challenges to NITI Aayog

  • Overlapping Jurisdiction:
    • NITI Aayog’s mandate of achieving Centre-State convergence is akin to Inter-State Council that is a constitutional body and which enjoys greater legitimacy
    • Cabinet Secretary: Coordination among departments can overlap with the office of cabinet secretary
  • Non-statutory Non-Constitutional Nature: As it is established by executive resolution, chances of political interference exist and limits the ability of the Aayog to function as independent organization
  • Lack of Active Actionable Targets: Aayog has not evolved comprehensive policy to deal with immediate challenges of job growth and economic development following GST
  • State wise Disparity: The competitive federalism agenda of Aayog if pressed vigorously disadvantages poor states. It may create disharmony in inter-state relations
  • Skewed Focus on Policy>> Implementation

Conclusion

NITI Aayog is primed to play the role of catalyst in achieving competitive cooperative federalism putting onus on states to achieve SDG targets delving on flagship programmes of Skill India, Make in India, Swachchh Bharat, Housing for All and Saubhagya of the Centre in the spirit of federalism and Antyodaya.

Fiscal Federalism

Issues with Fiscal Federalism

  • Vertical Fiscal Imbalance: Disparities in different components of revenue and expenditure between centre and state. Economic Survey 2017 notes how Indian states raise only 6% of revenue through direct taxes compared to 44% in Germany.
  • Horizontal Fiscal Imbalance: While states like Bihar lag way behind in meeting capacity (37%), rich states like Haryana are much closer to achieving revenue targets (82%) to meet expenditure
  • Liberalization: Rich states able to attract foreign capital, able to produce more for global market. Poor states lose out. Increasing disparity.
  • Financial Deterioration: Poor health of DISCOMs, loan waivers for farm crisis and natural disasters have decreased fiscal capacity of states
  • Residual powers of taxation with centre
  • Effective veto for centre in GST
  • No autonomy for states in taxation with the advent of GST. Thus, state wise needs and demands cannot be met through autonomous taxation

Issues with TOR of 15th FC

  1. Use of 2011 Census: Punishing states of Tamil nadu and Kerala for their family planning initiatives in line with National Population Policy. This threatens to undermine federal spirit
  2. Scepticism on increased devolution threatens to reverse decentralization
  3. Questions States populist expenditures which goes against the spirit of federal autonomy
  4. Encouraging ease of doing business: Focus highly skewed to do away with regulations rather than better it. This may promote race to bottom not in the interests of all
  5. Revenue Deficit grant may be withdrawn
  6. Curtail Borrowing: FC wants to fix borrowing at 1.7% curtailing capital expenditure and infrastructure creation of states

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