Federal crisis

Published February 1, 2014

INDIA’S federal structure is in a crisis. It is exposed to political pulls from the states none had imagined before. Constitutionally and administratively it has become more centralised than what its constitution envisaged.

The Indian constitution establishes an all too powerful centre. Governors of states are appointed by the president on the advice of the prime minister who can supersede a state government and rule directly through the governors.

Shortly after the constitution came into force an extra-constitutional body was set up by a mere executive order, the Planning Commission.

The centre acquired dominant power over the industries, stifling state initiatives. The centre can also veto state legislation though given strict conditions. The centre’s powers were expanded unconstitutionally.

The most harmful consequence of this atrophy of the states’ domain in the economic field is in regard to industries and economic planning. The framers of the constitution advisedly put industries in the State List. However, Entry 24 of the State List relating to industries was made subject to the provisions of Entries 7 and 52 of the Union List I.

Entry 7 of List I relates to industries declared by law to be necessary for the purpose of defence or “for the prosecution of war”. Entry 52 says: “Industry, the control of which by the union, is declared by parliament by law to be expedient in the public interest.”

Parliament enacted the Industries (Development and Regulations) Act, 1951. It specified as many as 38 industries for central control. They include items like zip fasteners, razor blades, matchsticks, hurricane lanterns, cigarettes and toilet preparations.

Industries were essentially a state subject. Only those industries are to be regulated by the centre, the control of which by the Union is declared as expedient in the public interest by parliament. But without an amendment to the constitution, industries were virtually made a Union subject. More than 90pc of the organised industries in terms of value output have been brought under the Union.

Related to this is the growth of the Planning Commission from an advisory body to an extra-constitutional authority wielding enormous powers over the states without any representation on it by the states. It is through the Planning Commission that grants are made by the Union to the states. These are discretionary grants.

Since the Planning Commission consists of the centre’s appointees, the states’ feeling of dependence has been heightened. The authority and jurisdiction of the Finance Commission, set up by the constitution as an umpire for apportioning between the union and the states the taxes divisible between them, has been undermined.

Contrast the constitutional provisions with the political set-up. All political parties are centrist. The party high command awards tickets to candidates for election to parliament and state assemblies. Worse, if its party secures a majority in the state assembly, it is the high command which decides who the chief minister will be and whom it should include in his cabinet. How can such a chief minister stand up to the centre and assert his state’s rights?

However, a new trend began in recent years as regional parties, not beholden to any major national political party, won power in the states. Deriving power from the people, they became stridently assertive.

Punjab Chief Minister Parkash Singh Badal, who leads the Akali Party, complained recently at the distortions in India’s federal system. “When the constitution was made, it was felt that a federal system of governance should be there. Now this federal system has given way to a unitary form of government.

“Powers of the state have been taken away by the centre. They are taking over functions in the State List as well as the Concurrent List. Punjab is an agricultural state. Even in this field, we have no powers. In agriculture there are two components, income and expenditure. Income includes the [minimum support price], while expenditure is on diesel, fertilisers, insecticides. All these are controlled by the centre. The responsibility is ours.

“Several concessions have been extended to the neighbouring state of Himachal Pradesh to attract industry, while we get the blame for not getting industry here. The whole industry has shifted to Himachal Pradesh.”

He read out a veritable charge-sheet with which chief ministers of opposition parties agree.

But some states have begun striking back with a vengeance in fields reserved for the centre. Tamil Nadu successfully prevented Prime Minister Manmohan Singh from going to Sri Lanka to attend the Commonwealth Heads of Government Meeting. West Bengal has wielded a veto on the land border agreement with Bangladesh.

Since 1996 India has been ruled by weak, ramshackle coalitions comprising assertive small parties as partners in a coalition of nearly a score of parties. Some of them represent the state parties and blackmail the centre into submission. Politics have overcome a highly centralised constitution.

The writer is an author and lawyer based in Mumbai.

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