MAINS 2021

POLITY & GOVERNANCE

Polity Syllabus: 2

Atish Mathur: MATHUR10

www.atishmathur.com
telegram: https://t.me/csepaper2atish
 POLITY

S.no. Theme
1 Indian Constitution—Historical Underpinnings, Evolution, Features,Amendments, Significant
Provisions and BasicStructure
2 Functions and Responsibilities of the Union and the States,Issues and Challenges Pertaining to the Federal
Structure,Devolution of Powers and Finances up to Local Levels and Challenges Therein.

3 Separation of Powers between various organs Dispute Redressal Mechanisms and Institutions.

4 Comparison of the Indian Constitutional Scheme with that of Other Countries.

5 Parliament and State Legislatures—Structure, Functioning, Conduct of Business, Powers & Privileges and
Issues Arising out of these.
6 Structure,Organization and Functioning of the Executive and the Judiciary—Ministries and
Departments of theGovernment
7 Salient Features of the Representation of People’s Act.
8 Appointment to various Constitutional Posts,Powers,Functions and Responsibilities of various
Constitutional Bodies.
9 Statutory,Regulatory and various Quasi-judicial Bodies.
Year Question Context
2013 Recent directives from Ministry of Petroleum and Natural Gas are perceived by the ‘Nagas’ as a Current Affairs
threat to override the exceptional status enjoyed by the State. Discuss in light of Article 371A of
the Indian Constitution. (10/200)
2013 Many State Governments further bifurcate geographical administrative areas like Districts and Territory CA
Talukas for better governance. In light of the above, can it also be justified that more number of
smaller States would bring in effective governance at State level? Discuss. (10/200)

2013 Constitutional mechanisms to resolve the inter-state water disputes have failed to address and Theory + KN Water Issue
solve the problems. Is the failure due to structural or process inadequacy or both? Discuss.
(10/200)
2013 Discuss the recommendations of the 13th Finance Commission which have been a departure from Current affairs
the previous commissions for strengthening the local government finances.
(10/200)
2014 Though the federal principle is dominant in our Constitution and that principle is one of its basic Theory
features, but it is equally true that federalism under the Indian Constitution leans in favour of a
strong Centre, a feature that militates against the concept of strong federalism. (12.5/200)
2015 The concept of cooperative federalism has been increasingly emphasised in recent years. Highlight Theory
the drawbacks in the existing structure and extent to which cooperative federalism would answer
the shortcomings. (12.5/200)
2015 In the absence of well – educated and organised local level government system, Panchayats and Edu based reservation in Raj
Samitis have remained mainly political institutions and not effective instrument of governance.
Critically Discuss. (12.5/200)
 Year Question Context
2016 Discuss the essentials of the 69th Constitutional Amendment Act and anomalies, if any, that have led to recent Delhi Govt issues
reported conflicts between the elected representatives and the institution of the Lieutenant Governor in the
administration of Delhi. Do you think that this will give rise to a new trend in the functioning of the Indian
federal politics? (12.5/200)
2016 To what extent is Article 370 of the Indian Constitution, bearing marginal note “temporary In debate CA
provision with respect to the State of Jammu and Kashmir”, temporary? Discuss the future
prospects of this provision in the context of Indian polity. (12.5/200)
2016 Did the Government of India Act, 1935 lay down a federal constitution? Discuss. (12.5/200) Theory (overlaps with
theme 1)
2017 “The local self government system in India has not proved to be effective instrument of Theory
governance”. Critically examine the statement and give your views to improve the
situation. (10/150)
2017 Explain the salient features of the constitution(One Hundred and First Amendment) Act, 2016. CA
Do you think it is efficacious enough ‘to remove cascading effect of taxes and provide for
common national market for goods and services? (20/250)
2018 Whether the Supreme Court Judgement (July 2018) can settle the political tussle between the CA
Lt. Governor and elected government of Delhi? Examine. (15/250)

2018 Assess the importance of the Panchayat system in India as a part of local government. Apart Theory
from government grants, what sources the Panchayats can look out for financing developmental
projects? (15/250)
 Year Question Context

2019 From the resolution of contentious issues regarding distribution of Theory

legislative powers by the courts, ‘Principle of Federal Supremacy’ and
‘Harmonious Construction’ have emerged. Explain. (10/150)

2020 How far do you think cooperation, competition and confrontation have Concept + examples from
shaped the nature of federation in India? Cite some recent examples to CA
validate your answer (10/150)
2020 Indian constitution exhibits centralising tendencies to maintain unity and CA
integrity of the nation. Elucidate in the perspective of the Epidemic
Diseases Act, 1897; The Disaster Management Act, 2005 and recently
passed Farm Acts. (15/250)

2020 The strength sustenance of local institutions in India has shifted from their Theory
formative phase of ‘Functions, Functionaries and Funs’ to the
contemporary stage of ‘Functionality’. Highlight the critical challenges
faced by local institutions in terms of their functionality in recent times.
(15/250)

PREVIOUS YEARS’ QUESTIONS

WHAT TO PREPARE for 2021 ?
Ø Consolidated Answers on India’s Federal
Structure
Ø CA : Delhi, Lakshadweep,
Ø NE : Manipur, Assam Accords

Ø 15th Finance Commission

Ø Institutions : ISWT & Niti-Aayog
Ø Reorganisation of States
Ø Federalism & COVID 19
Ø Consolidated Answers LSG
 Federalism
Introduction
Ø It is a form of government in which the
sovereign authority or political power is
divided between the Centre and the States,
each of whom are independent in their own
sphere.
Essential features
Ø Dual Polity / Distribution of power: Usually, matters of national importance
are entrusted with the Centre, whereas local matters remain with state.
Ø Supremacy of the Constitution: Having the powers originate from the
constitution ensure no authority arbitrarily takes over the powers of the
other.
Ø Written Constitution: ensures there is no misunderstanding or
disagreements.
Ø Rigidity of the constitution: A rigid constitution makes amendments very
complicated and tough, thus ensuring that none of the governments can
change it unilaterally. And any change in the constitution stems from both
the authorities.
Ø Authority of the courts: Since federalism is based on division of power
between co-ordinate governments, it is essential to maintain the same and
ensure none transgresses into the domain of other. This has to be done by
some independent and impartial authority i.e. The judiciary. The Judiciary
has the final authority to interpret the constitution and sit as an arbitrator
of disputes between Centre and state
Federalism
Centralizing features of Indian federalism:
(Centre > States)
Ø Emergency provisions
Ø Integrated judiciary
Ø Sharing of revenue through FC
Ø Concurrent list
Ø Residual powers lie with the Centre
Ø States not destructible
Ø Flexibility of the Constitution
Ø Veto over State Bills
Ø Appointment of Governor
Ø Parliament’s authority over State list
Federal features of the Constitution:
Ø Dual polity (Art 1) (Art 246)
Ø Supremacy of Constitution (Art 368)
Ø Written Constitution (Art 368)
Ø Rigidity of Constitution (Art 368)
Ø Independent judiciary (Art 131)
Acts giving Centre the power to issue directions to State
governments: (Latest CA: during Covid-19 lockdown)
Ø Farm acts have been implemented under the Concurrent list.
Therefore, laws will be upheld even if the States oppose.
Ø The DMA, enforced during the Covid-19 pandemic, has been
enacted under the residual powers.
Ø Epidemic Diseases Act: Health is a state subject, but by invoking the
provisions under this Act, advisories and directions of MoH&FW
will be enforceable.
Federalism
DEVIATIONS FROM FEDERAL CHARACTERISTICS/UNITARY BIAS

Ø Article 1 mentions India i.e. Bharat as a Union of states and not a federation of states.
Ø Legislative Relations:
Ø Article 248 confers residuary power in the Union
Ø U/a 249 Parliament is empowered to make law with matters enumerated in List II if necessary, in national
interest.
Ø Power of Parliament to legislate with respect to any matter in the State List if a Proclamation of Emergency
is in operation u/a 249.
Ø Parliament can also make laws for the states if two or more states request the parliament for the same u/a
252.
Ø Similarly, for giving effect to international agreements, Parliament can make any legislation (Article 253)
Ø In case of inconsistency between laws made by Parliament and the state with respect to concurrent list
matters, the laws made by parliament will prevail over law made by state to the extent of inconsistency
(Article 254)
Ø Previous sanction of President is required to introduce certain bills in state legislature u/a 304
Ø Financial Relations: States largely depend upon the center for financial assistance through grants-in-aid.
Further the taxation power of state is comparatively restricted as compared to the Union because more
important taxes such as income tax, wealth tax , excise duty etc. are reserved for the Union.
Federalism

Executive/ Administrative Relations:

Ø U/a 256,the executive power of every State shall be so exercised as to ensure compliance with the laws made by
Parliament
Ø U/a 257 talks about control of union over states in certain situations , wherein the Union will have the power to give such
directions to a State as may appear to the Government of India to be necessary for that purpose.
Ø Article 356 authorizes the President to hold that governance of a state is not being carried ed out in accordance with the
constitution ,if the state fails to comply with directions of the Union and can impose State emergency.
Ø Article 312 which speaks about all India Services ensures that the officers of such service at the state level ensure that
Union’s law and policy ae being implemented properly.
Ø Parliament’s power to form new states and alter the boundaries of existing sates u/a 3 proves that states do not enjoy
territorial integrity and depend upon the sweet will of the Union.
Ø Appointment of Governor- Governors are appointed by President and answerable to him, hence they act in a manner
suitable to the center (as they are an agent of center in the state) even at the cost of the interest of the sates.
Ø Emergency Provisions: During emergency the normal distribution of power undergoes drastic change, in favor of center.
U/a 356 state legislatures can be dissolved, and President’s rule can be imposed.
Ø Freedom of trade and commerce: The provisions of part XIII seeks to make India a single comprehensive economic unit
for purpose of trade and commerce under the overall control of the Union.
Ø Single and uniform citizenship for the whole of India ,unlike USA where states have separate citizenship.
Ø Uniform and integrated Judicial system ▪ Hence India is considered as an “Indestructible Union of destructible states”
 Federalism

SUPREME COURT’S VIEWS

Ø In Ram Jawaya Kapoor, it held federal principle or doctrine of separation of power is not incorporated in Indian constitution in strict and rigid
form.
Ø In State of West Bengal V UOI, court said “Indian constitution is not truly federal because Union enjoys greater power and state are not co-
ordinate of the Centre.
Ø In State of Haryana V UOI, it held that a semi-federal system of government has been adopted in India.
Ø Kuldip Nayyar v UOI – though federal principle is dominant and one of the basic features, but it is true that federalism in India leans towards
a strong Centre.

NATURE OF INDIAN CONSTITUTION

Ø Austin and A.H. Birch used the term “Cooperative federalism’ for Indian system i.e. Neither purely federal nor purely unitary but
combination of both. To ensure cooperation between the two, strong Centre is there but regional governments are not weak and there
is mutual dependence amongst the two.
Ø Dicey feels federalism has been watered down in India in order to meet the needs of a country which has to remain nationally
integrated, politically and economically coordinated and socially uplifted.(Quoted in State of Rajasthan Union of India)
Ø Dr Ambedkar considers Indian constitution both federal and unitary depending upon situation and circumstances.
Federalism

CONCLUSION
Ø India adopted a federal structure as different parts of the country were at
different stages of development, but we needed a strong Centre to maintain
unity and integrity especially considering the heterogeneity of the population
and experience of partition. Indian federalism is sui generis / of its own kind
because of its mode of formation i.e. from Union to states (Union divided into
states) and not vice versa like in case of USA (states came together to form
union)
Ø The constitution is neither purely federal nor unitary. It is a Union of
composite States as neither the parliament nor the states are sovereign
because each of them are limited by the constitutional provisions affecting the
distribution of power.
Ø Thus, Indian constitution is mainly federal with unique safeguards for
enforcing national unity and growth
Federalism
ASYMETRICAL FEDERALISM
Ø It is understood to be the unequal distribution
of power amongst the constituting units of a
federation in political ,administrative and fiscal
spheres. In India, this asymmetry is both
vertical ( between centre and states ) and also
horizontal ( amongst the states )
Ø Like many federations, India has certain de
facto asymmetrical federal features with regard
to differences of size, population, wealth, and
influence between the federating units
VERTICAL ASYMMETRY
Ø It is a settled fact that India is not a true federation
because the of the strong unitary tendencies. The
main provisions which point to this asymmetry are –
Ø In India only the union is indestructible and not
the states because they have no defined
territory integrity as is clear from Article 3.
Ø Creation of Union Territories.
Ø Emergency provisions.
Ø States do not have equal say in case of
amendments and are asked to ratify law only if
their interest is involved.
Ø Centre enjoys an overall legislative,
administrative and fiscal precedence over the
states in India.
Federalism

HORIZONTAL ASYMMETRY
A) Among States : Not all states are equal in India and there is difference in order to accommodate specific local, historical
and geographical contexts.
Ø Unequal representation in Rajya Sabha based on the population of the state.
Ø Special provisions’ applicable to some States u/a 371 by empowering the Governors to discharge some special
responsibilities, which he does in his discretion.
Ø Article 371 says the Governor of Maharashtra has a special responsibility to establish separate development boards for
Vidarbha, Marathwada, and the rest of the State, while the Governor of Gujarat has a similar responsibility towards
Saurashtra, Kutch and the rest of Gujarat.
Ø Under Article 371A no law made by Parliament in relation to Naga customary law and procedure, including civil and
criminal justice matters, and ownership or transfer of land and resources will apply to Nagaland, unless the Legislative
Assembly of Nagaland decides so. Further, the Governor of Nagaland has a ‘special responsibility’ regarding law and
order in the State.
Ø Article 371B contained a special provision for Assam under which a committee of legislators from the tribal areas was
formed to look after their interest. The tribal areas later became Meghalaya State.
Federalism

ØUnder Article 371C, the Hill Areas of Manipur ought to have a committee of
legislators. The Governor has a special responsibility to make an annual report
to the President on the administration of the Hill Areas. The Centre is
empowered to give directions to the State as far as these areas were
concerned.
ØThe Sixth Schedule to the Constitution contains provisions for the
administration of tribal areas in Assam, Meghalaya, Tripura and Mizoram.
These create autonomous districts and autonomous regions administered by
District Councils and Regional Councils. These Councils can make laws with
respect to allotment, occupation and use of land, management of forests,
regulate social customs, marriage and divorce and property issues. E.g. In
Assam, the Karbi-Anglong Autonomous Council, Dima Hasao Autonomous
District Council etc. Ladakh has two autonomous hill development councils (Leh
and Kargil).The Darjeeling Gorkha Hill Council is in West Bengal.
Federalism

B) Among Union Territories: Union territories are also not equal as –

Ø Puducherry and Delhi have legislatures, while the other territories under the Centre do not
have legislatures or a ministerial council to advise the administrator.
Ø Even between Puducherry and Delhi, there is a notable difference as Puducherry has
legislative powers on any matter mentioned in the State List or the Concurrent List, insofar as
it applies to the Union Territory but Delhi cannot make laws on matters of police, land and
public order.
Ø However, Parliament has overriding powers over any law made by the Assembly in the Union
Territories.
Ø Puducherry has one more unique feature. Despite being a single administrative unit, the
Union Territory is ‘non-contiguous’. That is, its territory is not limited to one extent of land as
it has enclaves located within other States: Karaikal (Tamil Nadu) Yanam (Andhra Pradesh)
and Mahe (Kerala).
Federalism

IMPORTANCE OF ASYMMETRIC FEDERALISM IN INDIA:

ØEnsures unity in diversity as it helps to respects and preserve vulnerable groups
through special powers.
ØSatisfy different needs of various federal units which are a result of an ethnic,
linguistic or cultural difference
ØHelp to protect fundamental rights and compensate for initial inequalities in the
social system.
ØAllowance for separate laws to govern different religious groups, and provisions
for various kinds of affirmative action for extremely disadvantaged groups help in
ensuring social justice to them.
ØGives better representation to minority areas in the democracy
Federalism

COOPERATIVE AND COMPETITIVE FEDERALISM

Ø Federalism is form of government where there is distribution of power amongst two or more coordinate authorities who
are independent in their sphere.
Ø Based on the relationship between the central and state government–the concept of federalism is divided into- Co-
operative federalism and Competitive federalism.
In short,
Term Definition Examples
Cooperation (includes Cooperative Centre = States Schedule VII, NITI Aayog, Zonal councils,
federalism) Share a horizontal relationship NDC, COVID-19 Lockdown: cooperation in
solving migrant crisis and enhancement of
testing facilities
Competition (includes Competitive Centre > States Post 1991 LPG reforms: attracting FDI &
federalism) C and S share a vertical relationship GDP growth rates; More recent: EoDB,
S and S share horizontal relationship Logistics Index, Swachh Bharat Sarvekshan

Confrontation Result of Central government transgressing Historically: Inter-State Water Disputes,

into the powers of the State government Sharing of taxes, A.356, CBI jurisdiction
More recent: GST Act, PM-JAY, recent farm
bills
 Federalism
COOPERATIVE FEDERALISM:
Ø It is a type of federalism wherein the interaction between the constituent authorities is based on “cooperation” so that they
can collectively use their energy and resources to promote and maximize public welfare and national goals.
Ø Governments in cooperative federalism share a horizontal relation rather than a hierarchical one and common policies are
promoted not by dictation but by discussions, agreements and compromise.
Ø It is an important tool which enables greater participation of state governments in formulation and implementation of
national policies.
Indian Constitution envisages in the spirit of Cooperative federalism –
Ø Schedule VII gives the three lists and provides for the center-state cooperation on legislative matters.
Ø U/a 263 Interstate council has been provided to resolve any kind of disputes between the center and the states or amongst
states
Ø Establishment of zonal councils under state reorganization act 1956, as instruments of intergovernmental consultation and
cooperation.
Ø National Development Council (NDC) is the apex body for decision making and deliberations on development matters has
representation from both the Centre and State. Thereby making states part of development process
Ø Interstate water disputes Act and River Boards Act provide means to adjudicate disputes relating to using and sharing of
interstate rivers.
Ø The 73rd and 74th constitutional amendment introduced Panchayati raj (Rural) and Municipality (Urban) system to
strengthen the roots of cooperative federalism in India
Federalism
OTHER MEASURES TAKEN IN RECENT PAST

Ø Abolition of the erstwhile Planning Commission and setting up of NITI Aayog which has made states a
party to the developmental plan and policies of the government.
Ø Implementation of GST and establishment of GST council
Ø Increase in the share of divisible tax-pool from 32% to 42% for the states as per recommendation of 14th
Finance Commission.
Ø The NITI Forum for North East has been constituted and tangible sectoral proposals are being
implemented by the States in partnership with the North East council.
Federalism

CHALLENGES

ØTrust deficit between Centre and States

ØMultiparty system
ØRegionalism, terrorism, naxalism etc.
ØSuperior legislative power of the center due to residuary power
and legislative precedence
ØWider taxation power to the center etc.
Federalism

COMPETITIVE FEDERALISM
ØIn Competitive federalism there is competition between the Centre and the State
and also amongst the State governments, to get maximum benefits in order to
facilitate better administration and enhances developmental activities.
ØPost 1990s economic reform gave ground to the idea of competitive federalism as
inequalities and disparity grew. Today in a free market economy, endowments,
funds, investments, available resources etc. all have fostered a healthy
competition where every government is striving to get the maximum in order to
improve physical and social infrastructure within the state. Competitive
federalism follows the concept bottom-up approach as it will bring the change
from the states.
ØFor e.g. The investors prefer more developed states for investing their money.
Union government devolves funds to the states on the basis of usage of
previously allocated funds.
Federalism
STEPS BEING TAKEN TO FOSTER COMPETITIVE FEDERALISM
Ø Competitive federalism though is not part of the basic structure of Indian constitution but of late is
being actively encouraged by the Central Government especially NITI Aayog in order to fasten the
development in the states.
Ø The NITI Aayog will also provide for the appointment of Regional Councils with specific mandates for
specific time period
Ø The central government enhanced the borrowing limit of state governments from 3 percent to 5
percent of their gross state domestic product.
Ø States compete to attract FDI. And positively so, the Centre is not being seen as an obstacle but as a
facilitator. Still, approval for FDIs are centralized with the DPIIT being the nodal Ministry at the centre
for FDI approvals.
Ø Para-diplomacy by the States - INVEST IN VIBRANT GUJARAT
Federalism

ØRestructuring of centrally sponsored Schemes.

ØFinancial sector bailout programme under UDAY scheme to state
DISCOMs
ØAspirational District Programme and Smart cities Mission.
ØIt promotes competitive federalism principally through pushing its
sectoral indices which are put out in the public domain. The indices on
water, education, health, innovation, export preparedness, and
Sustainable Development Goals (SDGs) have attracted significant
positive attention. State wise Ease of Doing Business ranking to build a
huge sense of competition.
ØRanking states on various social indicators - Swachh Bharat Ranking
system, School education quality index ,composite water management
index. SDG India Index etc.
Federalism

SOME EXAMPLES OF STATES MOVING TOWARDS COMPETITIVE FEDERALISM

Ø Though competitive federalism has not been embraced by all states ,however some of them have jumped
the bandwagon by facilitating reforms in terms of ease of doing business ,expediting the pending project
clearances ,attracting investments etc. Most of the state now organizes investors meet to showcase
facilities in their state to attract business and investment. This has led to improvement in business
environment in various state.
Ø Gujarat has amended its land acquisition act to attract more investment.
Ø Maharashtra has amended the Maharashtra Land Revenue Code, allowing the sale of certain publicly-
owned lands that were previously slated only for leasing.
Ø The Andhra Pradesh legislature has passed a bill extending land leases from the government to private
entities from 33 years to 99 years.
Ø Gujarat and Karnataka have passed various reforms in labour laws.
Ø Uttar Pradesh has approved the Uttar Pradesh Information Technology & Start-Up Policy 2016. To
encourage start-up growth, the policy waives taxes on land purchased for office use, as well as electricity
dues for five years.
Federalism

CHALLENGES

Ø Despite Centre increasing the States’ share of the divisible pool, the revenue of the states have come down because of
which allocation towards social sector schemes has also reduced.
Ø It is in a way increasing gap between developed and under developed states.
Ø Not all states are taking equal part and only richer states like Gujrat ,Maharashtra, Tamil Nadu etc are competing.
Ø The present inter-state competition in attracting investment is too early to determine whether it will really encourage
competitive patterns of investment on a continuous basis.
Ø Since the socio-economic parameters and development of each State in India is different, only those states who have
made substantial progress in terms of employment, literacy and creating a conducive environment for doing business
and investments are actually competing . other states are mute spectators.
Ø The states like West Bengal, Bihar, Orissa, and Assam have protested against the uniform approach in funding because
of their special situations in which the central government has to provide special funds to these states. Without special
funding these states cannot imagine their participation in competitive federalism.
Ø Though the states are provided with financial independence, not all states would perform uniformly in the process of
development because while some states have favorable factors like skilled labour, capital and infrastructure, innovative
service industries other states lagging behind.
Federalism

ARE THEY BOTH COMPLEMENTARY?

WHAT SHOULD INDIA FOLLOW?
Ø Though cooperative and competitive federalism seem to be contrary, they are in fact sides of the same coin
as they have the same basic underlying principle – progress of the nation as a whole. In fact the NITI Aayog
e-book talks of competitive federalism as a force multiplier to achieve the objective of cooperative
federalism.
Ø Competitiveness is an idea that has stood the test of time and India can only achieve its ambitious growth
targets by enhancing competitiveness at all levels of government. However, improving competitiveness
requires economic and social development, which in turn requires coordination of our economic and social
policies across various levels of government.
Ø For example, implementing GST required consensus among states and now, we have the GST Council, with
states as equal members who are part of national fiscal policy.
Ø Another example is India’s improvement in the World Bank’s Ease of Doing Business Index. We have been
able to jump 65 positions in the rankings only because states brought about many reforms. This was made
possible through the creation of an EoDB Index for Indian States and the release annual rankings to indicate
areas in which they are lagging.
Federalism

ØAnother major success story is Aspirational Districts Programme (ADP) which is a programme
with convergence, collaboration and competition as the core tenets. States are the main
drivers behind this programme but are working with central government detect opportunities
for immediate improvement.
ØSimilarly promoting one Smart City in each state is cooperative federalism but states
encouraged to come up with their own plans for smart cities is competitive federalism.
ØIn future also agriculture can be reformed in the same way. Though agriculture is state subject
,however we need coordination and consensus-building to unlock the agriculture market in
India. Prime Minister has already established establishing a “high-powered committee of chief
ministers” to recommend reform in Indian agriculture markets.
ØThe two together will also lead to good governance as there is naming the best performers
and shaming the worst. Since these rankings are in the public domain, the accountability of
both elected officials and administrators has risen ,thereby leading to good governance
ØNudge of the competition ensures that states work hard towards reform and improve their
social parameters. But at the same time cooperative federalism provides motivation and the
support to the states to up their game and contribute in nation building.
Federalism

WHAT INDIA CAN DO TO IMPROVE?

Ø Cooperative and competitive federalism are complementary ideas that will drive India’s growth story in the coming decades.
However certain reforms can be done to improve both.
Ø Centre’s support would be required by some states, like Bihar, Odisha, Jharkhand, NE states etc to have a meaningful
participation in competitive federalism .some states are deficit or backward ,hence they should not be treated at par with
the well-off states.
Ø Strong states make strong nation and to realize this vision, it requires a “Team India” approach to work for India’s
development.
Ø Reconstitution of the Inter State Council recently is a step in the right direction
Ø State must be given greater autonomy with regards to issues like health, education, land, labour, natural resources etc.
Ø States/UTs should be assisted through the help of expert panels to make competitive and robust policies which are more
acceptable and transparent
Ø On contentious issues like land, labour and natural resources, a sound mechanism should be developed to resolve issues and
promote development
Ø On issues like international treaties, WTO obligations, or the environment an institutional mechanism must be evolved where
important decisions are appropriately discussed with states.
Ø Best practices amongst states should be widely publicized.
Federalism
CONCLUSION

India needs a mix of both competitive and cooperative federalism or as NITI Aayog
calls its competitive cooperative federalism, to move ahead. In fact, instituting a
system of cooperative and competitive federalism has been a hallmark of India’s
policy-making in the past five years and has achieved considerable results.
Competition is required to fight the complacency of cooperation and cooperation
helps to balance out the vigor of competition.
• A diverse and large country like India requires a proper balance between the six pillars of
federalism: autonomy of states, national integration, centralisation, decentralisation
nationalisation, and regionalisation.
• Extreme political centralisation or chaotic political decentralisation can both lead to the
weakening of Indian federalism.
• Controlling these extremes is a challenge, as federalism must reconcile the need for national
unity on the one hand, and on the other, regional autonomy.
 15th FC

• Introduction
• Mandate Issues
• Allocation Criteria
• Resources
• Expenditure Issues
 Introduction
• The final report of the Fifteenth Finance Commission is titled “Finance
Commission in COVID Times—Report for 2021–26
• The commission’s term was ex- tended by one year in November 2019 after the
bifurcation of the state of J&K in August 2019
• This was the First Finance Commission of the post-planning commission era
• Second FC to submit two reports
• Key Data Points
• 6 Hindi Belt States (42.85% Population) – 48.57% of shareable pool
• 5 Southern States (21.32 % Population) – 15.87% of shareable pool
• 7 Northern/Eastern/Western States (30.61 % Population) – 25.31.87% of shareable pool
• 8 NE States (sans J&K) (5.32 % Population) – 10.48% of shareable pool
Mandate Issues
• Article 280(4) of the Constitution gives the finance commission absolute
independence to “determine their procedure” and exercise “such powers in the
performance of their functions as Parliament may by law confer on them
• Some clauses of TOR alleged to affect federal fiscal balance
• measurable performance-based incentives for states
• progress made in moving towards replacement rate of population growth, implementation of
flagship schemes, promoting ease of doing business, sanitation, solid waste management and
bringing in behavioural change to end open defecation
• expansion and deepening of tax-net under GST
• control or lack of it in incurring expenditure on populist measures

• larger issues of public financial management on which the commission neither has
the authority nor the expertise, and for which bodies of elected representatives
should be the appropriate fora.
• The term “populism” itself is open to differing interpretations and changing
perceptions
Allocation Criteria
• As per Article 280(3) of the Constitution, the primary task of an finance com-mission is to
• make recommendations for the horizontal and vertical sharing of the net proceeds of taxes in the
divisible pool between the union and the states
• determine the principles for union government grants-in-aid to the states
• recommending measures to supplement the resources of the local bodies.
• Finance commissions’ recommendations broadly follow three principles:
• Equity - parameters like population and area of a state –
• 10% weightage to the 2011 population to take into account the demographic changes, including
interstate migration, since 1971 ;
• It changed the population criteria from 1971 Census to 2011 Census, which upset most states outside
the Hindi heartland as it placed them at a disadvantage for successfully containing heir population
growth
• Equalisation - parameters related to the distance of per capita income or fiscal capacity of
a state from the most prosperous one - 50% weightage to in- come distance, 15% to area,
and 7.5% to the forest cover in a state
• Efficiency - parameters such as tax effort and fiscal discipline – NO specific criteria
• 42% after raising it by 10%, while reducing the grants drastically
• 42% reduced to 41% allocating 1% for J&K
Resources
• Recommendation for reducing off budget borrowings and for ensuring the
stability of direct tax rates and thresholds have already been acted upon by
the finance minister in the 2021–22 budget
• However, another important recommendation was ignored
• restoration of the revenue neutrality of the GST rates
• recommended for a rationalised structure of GST by merging the rates of 12% and
18% slabs and converging into a three-rate structure of a merit rate, a standard rate,
and a demerit rate of around 28%–30%
• The need for reducing the multiplicity of rates that gives rise to endless classifica- tion
disputes and for simplifying the GST structure are long overdue, and its in- deed time
the governments acts on this.
• Indexing the professional tax, which is levied by 21 states at the 1988 rate
with a ceiling of only `2,500 on income from professions, etc, for the
accumulated inflation since then, which will immediately raise the ceiling to
18,000.
Expenditure Issues
• It recommended that health expenditure should constitute more than 8% of their
budget by 2022
• public health expenditure of the union and the states together should be in- creased in
a progressive manner to reach 2.5% of the gross domestic product (GDP) by 2025
• Given that the current healthcare expenditure is less than 1%, the allocation is unlikely
to achieve the target of 2.5% of the GDP by 2025.
• The commission also did not indicate any road map for this, except broadly
recommending increases in allocation by individual states and the union.
• It has, however, correctly noted that centrally sponsored schemes (CSS) such as the
National Health Mission and the Pradhan Mantri Jan Arogya Yojana (PMJAY) account for
the major healthcare expenditure of the union, which are primarily top-driven and
need much more flexibility for the states to “adapt and innovate” to tailor these to their
specific needs; besides, there is also an urgent need to shift the focus from inputs to
outputs and outcomes, away from the current focus on line items and activities
• The commission drew attention to the fact that 15 of the 30 umbrella CSS account for
90% of the total allocation under CSS.
Policy Ideas
• a dedicated non-lapsable modernisation fund for defence and
internal security (MFDIS) in the Public Account of India to bridge the
gap between the projected capital requirements and budgetary
allocations for modernisation of de- fence and state police forces.
• recommended a restructuring of the Fiscal Regulation and Budget
Management (FRBM) Acts of the union and the states after the
examination by a high-powered intergovernmental group.
• suggested introduction of a system of credit rating of the states
• setting up of an independent, advisory fiscal council with powers to
access governmental records
 Special Cases – Special Areas UTs
• imilar to many federations, India has certain de facto asym- metrical federal features
with regard to differences of size, popu- lation, wealth, and influence between the
federating units
• Nagaland (Article 371A of the Constitution),
• Sikkim (Article 371F), and Mizoram (Article 371G)
• Jammu and Kashmir (Article 370 of the Constitution abrogated in August 2019)
• Further, the Fifth Schedules of the Constitution comprise numerous distinctive provisions
for administration and protection of Scheduled Areas and Scheduled Tribes in any state
• States of Assam, Meghalaya, Tripura, and Mizoram (Sixth Schedule).
• UTs are administered in accordance with the provision of Articles 239 to 241 of the
Constitution.
• The justification for the creation of separate union territories is due to their small size,
far-flung locations on the coasts, cultural heterogeneity, interstate disputes, particular
needs of National Capital Territory (NCT), different colonial heritage etc.
• In terms of the economic powers of union territories, it needs to be
emphasised that all union territories, except Delhi and Puducherry—which
have their own legislative assemblies—have limited financial powers and
lack their own public accounts
• Thus, they do not have their own budgets and, therefore, no powers of
taxation
• Rather, their revenues and expenditures are part of the union budget,
under the budget head of the home ministry.
• Delhi and Puducherry have unlimited powers as long as they are generating
their own resources. However, the budget presented by the government of
the NCT of Delhi before being presented to the Delhi legislative assembly
needs a prior approval of the President, exercised by the home minister.
Union Territory of Puducherry
• Puducherry comprises four enclaves of former French India: Puducherry
district—formerly Pondicherry district, and the capital of the union territory—
aber which it is named; Karaikal district bounded by Tamil Nadu; Yanam district
situated between Andhra Pradesh and the Bay of Bengal; and Mahé district
enclosed by Kerala.
• Four-language Formula - The language formula says that Tamil will be the
official language for all or any of official purposes, whereas Malayalam may be
used for the official purpose in the Mahé region, and Telugu in the Yanam
region. English has been given the status of a link language and may be used in
all or any of the regions.
• NominaCon Powers of Lieutenant Governor - the Supreme Court upheld the
induchon of the three BJP members as MLAs in the assembly of the union
territory of Puducherry by the centre unilaterally without consulhng the elected
local Congress government.
• SC Pending case - Union of India v K. Lakshminarayanan : Whether Lt. Gov is
Admin Head of Puducherry Govt
 Delhi
• Delhi owes its distinctive status to its long history and its capital city-
state status
• As the capital of the nation, Delhi performs certain unique functions
such as aiding the union government to fulfil its constitutional
mandate of maintaining macroeconomic stability and handling
currency, defence, internal security, external relations and diplomatic
missions
 Delhi Developments :
• 69th Amendment to the Constitution in 1991 that added a new
Article 239 AA, which renamed the union territory of Delhi as the
National Capital Territory of Delhi (NCTD) and designated the
lieutenant governor as the administrator with powers to promulgate
an ordinance when the legislative assembly is not in session
• it became neither a “state,” nor even a “half-state.”
• It remained a union territory, but was granted a legislative assembly, like
Puducherry
• Government of NCT of Delhi v Union of India 2018 :
• Lieutenant governor’s agreement is not necessary for every decision the Delhi
Government makes
• The bone of contention is the “discretionary” nature of reference made by
the lieutenant governor to the President under 239AA (4)
• The lieutenant governor need not, in a mechanical manner, refer every
decision of the ministers to the President.
Local Self-Govt.
HISTORICAL CONTEXT
In the Rigvedic period, i.e. around 1200 B.C. there
Ø Further in the Montego Chelmsford Reforms that
were Sabha that has the primary function of the
were carried out in 1919, right aqer the World
administration of the area. This concept of Sabha
War I wherein England was not in a strong
gradually converted to the panchayat and it was so
posiron, some autonomy to the provincial
called because it was headed by 5 people
government was given to the provincial
Ø In the Medieval period, the Panchayati system government and some powers were given to the
deteriorated because of the increase in the elected representarves.
Zamindari system in the rural areas.
Ø There were two separate Lists under the laws,
Ø With the change in the dynasties ruling India, the one for the Governor and second for the elected
concept of Kotwal came with the Mughal era whose local representaTves.
task was to undertake the administration of the area
assigned, to collect tax and other incidental Ø Further, under the Government of India Act,
functions. 1935 all the powers were taken back because
both the lists that were legislated were repealed
Ø In the British era, the Government was not in favor and therefore the decentralizaron was again
of any decentralization, therefore after the mutiny of withdrawn.
1857, they came with the Government of India Act,
1858 and removing the decentralization
Local Self-Govt.
POST 1947
Ø Panchayati Raj was kept under the heads of Directive Principles of State Policy under Part IV of the Constitution
mainly because of the political instability of the new government and the paucity of funds and therefore it was
not practically possible for the newly formed India
Ø Balwant Rai Mehta Committee, 1957: this committee mainly it advocated for the basic level of administration
be at the Block level.
Ø K. Santhanam Committee, 1963: advocated that the Panchayati Raj Institution (PRI) be given the powers to
levy tax and it should become as the main source for the funding of the institution.
Ø Ashok Mehta Committee, 1978: This committee suggested that the Panchayati Raj Institute shall be a two tier
body which should operate at the Zilla level and the Mandal level. The nodal area would be at the Block Level
(taken care of by the Block Development Officer) and Zilla Parishad shall have an advisory role to both, the
State Government and to the Block level institution.
Ø G.V.K. Rao Committee, 1985: this committee again advocated for a three tier system. It said that the PRIs
should be at district and local level. The District Development Officer (DDO) shall be appointed for the main
administration of the village units.
Ø L.M. Singhvi Committee, 1986: this committee advocated that in order to establish a governing body for any
part of India, it must be given a Constitutional structure. As a result, 73rd Amendment was made to the
Constitution and Part IX A was inserted as PANCHAYATS.
 Local Self-Govt.
BASIC FEATURES
Ø Established in 1992 by the 73rd and 74th Amendment to the Constitution – the Panchayati Raj and the Municipality. Features
include:
Ø 3 tier system for rural and 2 tier system for urban
Ø Minimum age for voting is 18 years
Ø Minimum age for contesting election is 21 years
Ø 1/3rd of seats reserved for women at all levels
Ø Reservations introduced for SC/ST category of persons
Ø Introduction of two bodies – State Election Commission and State Finance Commission
 Local Self-Govt.

LegislaXve Executive
Local Self Rural Urban
Govt Rural Urban
Elected Permanent Elected Permanent
Zilla Parishad Municipality/ Head, Civil Police Mayor Civil Police
Municipal Council +
Council/ ADM + SP + ASP + Council ACP +
DM/Commissi
District Municipal Officers Officers oner + Officers
Corporation Officers

- - - SDM + SDPO + - SDM + SDPO +

Sub Division Officers Officers Officers Officers
Panchayat Samiti - Head of Block IC + Officers - City executive -
Panchayat Development (since no Officers +
Samiti, Officer + legislative Officers
Block rep here)
Council Officers

Gram Sabha Ward Sarpanch, Section Constable Head Section Constable

Panchayat Officers of Officers
Ward/
Village Wards
+
Council
Local Self-Govt.
THE STATUS OF PRIS CAN BE
REVIEWED IN TERMS OF
FOLLOWING PARAMETERS:
(i) Conduct of Panchayat elections;
(ii) Devolution of Financial Powers;
(iii) Devolution of Functions and
Functionaries;
(iv) Constitution of District Planning
Committees (DPCs);
(v) Status of Gram Sabha;
(vi) PESA of 1996;
(vii) Checks and Balances over PRIs and
Accountability
CONDUCT OF PANCHAYAT
ELECTIONS:
As a result of election to PRIs in
States/Union Territories, 2,27,698
Panchayats at village level, 5906
Panchayats at intermediate level
and 474 Panchayats at the district
level have been constituted in the
country. These Panchayats are
being manned by about 34 lakhs
elected representatives at all levels;
of them one-third are women. This
is the broadest representative base
that exists in any country in the
ward.
Local Self-Govt.

DEVOLUTION OF FINANCIAL POWERS TO PRIs

Ø The recommendations of the State Finance Commissions can be divided into three categories:
(i) assignment of taxes, duties, levies and tolls to local bodies;
(ii) sharing of revenue proceeds; and
(iii) transfers on account of grants-in-aid and other financial assistance.
Ø Many of the State Governments have agreed to give PRIs a specific percentage of share in some
of the State taxes like land revenue and cess on it, additional stamp duty, entertainment tax,
royalties on minerals and mines, forest revenue and market fees; these taxes are less buoyant
in nature and have no relation to the powers and functions to be devolved upon Panchayats.
Ø All SFCs have put great emphasis on internal revenue mobilization, but none has suggested any
effective mechanism for PRIs to generate their own revenue
Ø However, the SFCs suggest better use of the existing tax jurisdiction by referring the system of
property taxation and giving greater autonomy to local bodies in matters relating to tax rate
setting
Local Self-Govt.

Ø Till such time that they are financially dependent on funds from the State Governments, the
State Budgets should specify the amount earmarked for district sector plans under Panchayati
Raj as also their distribution among the three tiers. It is suggested that 30-40 percent of a
State's Plan be devolved on local bodies as already done in the State of Kerala.
Ø In addition, a part of the finances should be in the form of untied funds so that the funds can be
utilized as per the felt needs of the Panchayats.
Ø Training and capacity building of PRI functionaries is essential and devolution of financial
resources must be accompanied by suitable strengthening of PRIs through transfer of
departmental functionaries.

DEVOLUTION OF FUNCTIONS AND FUNCTIONARIES

Ø Initiatives such as taken by Madhya Pradesh, and Kerala need to be taken by all the States and
Union Territories if Panchayats are to be established as institutions of local self-government.
Ø In respect of the 29 subjects identified in the Eleventh Schedule it is necessary for the State
Governments to clearly identify what would be done by the three tiers of Panchayats at their
levels.
Ø NO STATE HAS TRANSFERRED ALL 29 SUBJECTS
Local Self-Govt.
In short, Local-self government: formative to contemporary stage

Formative phase- ‘functions, functionaries and

funds’
Ø Initiatives like MP and Kerala should be taken by
all States and UTs
Ø In respect of the 29 subjects under the Eleventh
Schedule, State govts need to clearly identify the
functions of the various tiers of Panchayats at
their levels
Ø No State has transferred all 29 subjects
Ø Devolution of financial powers are decided by the
SFC
Ø Emphasis has been put on internal revenue
mobilization, but none have suggested measures
for PRIs to generate their own revenue
Contemporary stage- ‘functionality’
• Encroachment in their functioning by various
parastatal bodies of the state such as water
development bodies, smart cities special
purpose vehicle
• Appointment of the Commissioner by the state
in the Municipal bodies and Gram Sevak at
Panchayat level
• Lack of capacity to deal with issues such as
climate change, suburban sprawl, demographic
dividend etc
Local Self-Govt.

CONSTITUTION OF DISTRICT PLANNING COMMITTEES (DPCS):

ØDespite long years of delay, many States are yet to constitute the DPCs. Only
nine States, namely, Haryana (just in 3 Districts), Karnataka (10 out of 27
districts), Kerala, Madhya Pradesh, Rajasthan, Sikkim, Tamil Nadu, Tripura and
West Bengal and two Union Territories, namely, Andaman & Nicobar Islands
and Daman & Diu have taken action to constitute DPCs
Ø In Kerala, a Voluntary Technical Corps (VTC) has been created consisting of
about 10,000 technical experienced people to vet and re-work projects
prepared by the panchayats.
Local Self-Govt.

STATUS OF GRAM SABHA

Ø It has been observed that most of the State Acts have not spelt the powers of Gram Sabhas nor
have any procedures been laid down for the functioning of these bodies.
Ø For instance,
(i) the law in most States prescribed at least two meetings of the Gram Sabha in a year.
Unfortunately, the minimum has been interpreted as a maximum.
(ii) Provision doing away with the need for quorum for adjourned meetings of the Gram
Sabha has reinforced the tendency to view Gram Sabha meetings as a mere formality;
(iii) State laws set out highly ritualistic functions for the Gram Sabhas.
Ø Gram Sabhas are to recommend and suggest, consider annual accounts, administrative
reports, audit notes, etc. These suggestions and recommendations of the Gram Sabhas could
be ignored by the Gram Panchayat.
Ø It may be confined to a single village or may span 2-3 villages. Where the Gram Sabhas cover
more than one village, their meetings qualitatively are seen to be very poor.
 Local Self-Govt.
PANCHAYATS (EXTENSION TO SCHEDULED AREAS) ACT, 1996

Ø The provisions of the Panchayats (Extension to the Scheduled Areas) Act, 1996 (PESA) have come into force on 24th December
1996
Ø The Act extends Panchayats to tribal areas of eight States namely, Andhra Pradesh, Bihar, Gujarat, Himachal Pradesh,
Maharashtra, Madhya Pradesh, Orissa and Rajasthan
Ø Enable tribal society to assume control of its own destiny to preserve and conserve the traditional rights over natural
resources.
Ø It gives radical self-governance powers to the tribal community and recognizes its traditional community rights over
natural resources.
Ø Prior to passage of this Act, laws passed by central and state governments were applied mechanically to tribal areas even
when these contravened traditional tribal practices and institutions
Ø In fact this is the first law that empowers people to redefine their own administrative boundaries

Ø PESA provides that the tribal gram Sabha so defined would be empowered to approve all development plans, control all
functionaries and institutions of all social sectors as well as control all minor water bodies, minor minerals and non-
timber forest resources.
Local Self-Govt.
ISSUES
Ø Implementation of the law has been severely hampered by the reluctance of most state governments to make laws
and rules that conform to the spirit of the law.
Ø Enforcement of PESA is perceived as weakening the stranglehold of the forest bureaucracy, and it is instructive to
study the interpretation of PESA favored by the state governments for attempts to minimize the bureaucratic loss of
control.
Ø Governments to make appropriate amendments in their State Laws which impinge on specific provisions contained in
the Central Act namely
(i) Land Acquisition Act;
(ii) Excise Act;
(iii) State Irrigation Act;
(iv) Minor Forest Produce Act;
(v) Mines and Minerals Acts;
(vi) Land Revenue Code / Act;
(vii) SC/ST Land Alienation Act;
(viii) Money Lenders Act; and
(ix) Regulated Market Act. No doubt, some State Governments (MP) have already amended some of the relevant
Acts; others are yet to follow suit.
Local Self-Govt.

CHECKS AND BALANCES OVER PRIs & ACCOUNTABILITY

Ø Under the State laws, wide powers of suspension and dismissal have been vested in the State
bureaucracy. This straightaway places Panchayati Raj Institutions in a position of disadvantage vis-a-vis
even middle rung functionaries of State Governments.
Ø Another important aspect of the administrative restructuring process is the merger of District Rural
Development Agencies (DRDAs) with Zilla Parishads. In the light of the 73 Constitution Amendment Act,
DRDAs need to be restructured to suit the changed scenario. They should work under the overall control
and supervision of the Zilla Parishads.
Ø Instances have been reported where the Gram Panchayat Sarpanches have to spend a good lot of time
visiting Block Offices and of harassment by Block level officials
Ø The three tiers also compete for funds and powers. The lower tiers are normally the losers in this
process. This would make decentralized development, within a district plan, infructuous and non-
sustainable
Ø A massive awareness generation programme needs to be taken up to inform Gram Sabhas about their
rights in planning, implementation and audit of development programmed and in control over natural
resources, land records and conflict resolution.
Local Self-Govt.
WAY FORWARD
Ø Popular projects undertaken by the Panchayats by utilizing funds granted by the Finance Commission are Road
Construction and maintenance and supply of drinking water.
Ø The Garib Kalyan Rozgar Abhiyan has been launched to actively engage Panchayats in generating employment for
newly returned migrant workers displaced due to the COVID-19 pandemic; with the Chief Ministers of Bihar,
Jharkhand, Punjab, Himachal Pradesh, Rajasthan, Kerala and Odisha holding regular video-conferences with
Sarpanches to review measures taken to curtail the COVID-19 pandemic and generate employment.
Ø Rashtriya Gram Swaraj Abhiyan
Ø Launched for the period of April 2018 to March 2022 with the primary aim of strengthening Panchayati Raj
Institutions (PRIs) for achieving Sustainable Development Goals.
Ø The emphasis has been on strengthening Panchayati Raj institutions by ensuring basic orientation training for
the Elected Representatives of Panchayats, within six months of their election and refresher trainings within
2years.
Ø Introduction and increased use of e-governance and technology driven solutions at Panchayat level is key for
attaining increased administrative efficiency, improved service delivery, and greater accountability.
Local Self-Govt.

LSG IN TIMES OF COVID-19

Ø Gram panchayats in Odisha worked to ensure that beneficiaries under the ration distribution
schemes announced by the Central Government received their entitlement under the public
distribution system in advance for three months.
Ø In Sukma, a tribal district in Chhattisgarh, the gram panchayat provided ration to families without
waiting for supplies from the state government.
Ø Community kitchens have been set up to provide cooked food for those without access to rations.
Ø In Chhattisgarh’s Kanker district, Sivni gram panchayat’s self-reliance in vegetable production is
inspirational.
Ø Gram panchayats across India are supporting transiting migrants, and employment is being
generated for displaced migrants.
Ø In many cities, Municipal councils have taken an initiative to sell ‘vegetables on wheels’ to its
citizens, so that they do not have to step out of the house to procure them, limiting their contact as
far as possible.

THANK
YOU