Why federalism in India is more an aspiration than a reality

The founding fathers of the Constitution created two law-making silos, one for the Centre and the other for the states. The third was a mixed bag.
Image used for representational purpose only. (Express Illustrations)
Image used for representational purpose only. (Express Illustrations)

NEW DELHI: Concerns on cooperative federalism were at the heart of the debate in Parliament on the contentious Government of NCT of Delhi (Amendment) Bill, which gives the Centre complete control over the appointments and transfers of bureaucrats in the Delhi government. The new legislation adds to the long list of pain points between the Centre and Opposition-ruled states, such as the appointment of Governors, the National Education Policy, the tussle over the National Eligibility and Entrance Test (NEET) for medical education, devolution of taxes and the GST Council.

The founding fathers of the Constitution created two law-making silos, one for the Centre and the other for the states. The third was a mixed bag. Subjects for all three were listed out and placed in the seventh schedule to define the demarcation of powers. On the Union list were subjects on which Parliament may make laws; matters on the state list were for Assemblies to legislate on; and the concurrent list had items where the rights of both Parliament and state legislatures intersect. The Constitution went on to provide Parliament overriding powers on items on the concurrent list in the event of a Centre-state conflict on legislation. Successive Union governments have been using it to force their will on the states without realising that power does not stay with them forever.

Delhi govt vs Centre

While the Delhi services bill has become law as the Opposition failed to defeat it in Parliament, the legislation at least served to unite them. Most of the Opposition parties termed it anti-constitutional and an attempt to weaken the federal structure of the country. The controversial bill replaced a Central ordinance that restored the Lieutenant Governor’s control over the transfer and postings of bureaucrats in Delhi, a power the Supreme Court had handed to the Delhi government in May.

It made L-G the final authority on appointments and transfers of senior officers in the Delhi administration. The bill provides for setting up a three-member National Capital Civil Services Authority (NCCSA) with the chief minister as chairperson and the chief secretary and the principal secretary as members. The panel will decide the transfer, posting and vigilance matters of all Group A officers and DANICS (Delhi, Andaman and Nicobar, Lakshadweep, Daman and Diu and Dadra and Nagar Haveli (Civil) Services) officers posted in Delhi through a majority of votes. The L-G gets to control the NCCSA through its two bureaucrat-members who are his picks. While the Centre justifies the bill claiming Parliament alone has powers to frame laws for Delhi’s services, the Opposition argues that it is meant to dilute the powers of the CM and paralyse governance in the capital.

NEET row

The long-standing feud between the Tamil Nadu government and the Centre over NEET admissions has now reached a crescendo with Chief Minister MK Stalin demanding that education be shifted to the state list from the concurrent list. While NEET exams for undergraduate medical courses have been conducted since 2013, the TN Assembly passed an anti-NEET bill in 2021 citing student suicides and its detrimental impact on those from economically weaker and underprivileged groups. Governor RN Ravi sent the bill to the President for consideration since education is on the concurrent list. But he recently went on record to say if it were left to him, he would never sign the legislation. It drew fury from the ruling DMK, which saw it as an attempt to curb its rights to implement educational autonomy.

National Education Policy

Another point of contest is the National Education Policy (NEP) with many Opposition-ruled states criticising it for the alleged centralisation of education. Recently, the Karnataka government announced it will scrap the implementation of the NEP from the next academic year, and will introduce a State Education Policy (SEP) instead. States like Tamil Nadu and Kerala, too, have opposed the NEP on many counts. Besides, Tamil Nadu is against the NEP’s three-language policy and has constituted a high-level committee to develop a state education strategy. Many states contend that the authority of the states has been curtailed through the National Education Commission, ABC (Academic Bank of Credit) and CUET (Common University Entrance Test) among others. They also claim that the system of Central grants to universities through UGC has been replaced with a centralised funding body named the Higher Education Funding Authority (HEFA). However, the education ministry states that Universities are still getting UGC grants, adding the HEFA is just supplementing the funding requirement of Universities for infrastructure creation.

Centre vs states

While Opposition-ruled states claim federalism is at the crossroads because of the trust deficit with the Centre, the latter argues that under the federal structure, the Centre and states share the resources and responsibilities for planning and implementation of national development programmes. The concurrent list has 52 items, including health, education, criminal law, criminal procedure, preventive detention, forests, trade unions, industrial and labour disputes. States maintain that legislating on matters in the concurrent list should be initiated only after adequate consultation with them.

Governor vs states

The confrontation between Governors and some state governments has been at its peak in recent times, at times leading to a constitutional crisis. Opposition-ruled states such as Kerala, Tamil Nadu, Telangana and West Bengal have been locking horns with the Governors over pending Bills, Vice-Chancellor appointments in state universities, and intervention in governance among other issues. While the states accuse the Centre of misusing the office of Governors in Opposition-ruled states to hinder governance, Constitutional experts say the deteriorating ties between the Governor and state heads go against the spirit of federalism. In April, the TN Assembly passed a resolution to urge the Centre and the President to fix a timeframe for governors to approve bills adopted by the state House. Governor Ravi is yet to give his assent to a clutch of bills cleared by the TN Assembly. The DMK has even submitted a memorandum to the President seeking the Governor’s sacking.

GST Council

Another major contentious point is the GST Council. Though the GST was implemented as a guiding light for fiscal federalism in 2017, many states are at variance with the Centre on issues of GST compensation and the decision-making structure of the GST Council. After having ceded control of their sovereign tax rights to a federal body, the GST Council, where the Centre has one-third of voting rights, states find themselves in fiscal discomfort. Things worsened after the Centre stopped paying compensation to states for any revenue loss due to the implementation of GST. That compensation was available for the first five years of the implementation of GST alone.

Fiscal federalism

The Centre now transfers 41% to the states from its divisible tax pool as against 32% earlier. However, higher transfers have come at the cost of cuts in funding support to Centrally sponsored schemes, which are now partly funded by states. The bone of contention, though, is the formula based on which each state’s share from the aggregate transferred amount is decided. One of the key factors (15% weightage) that decides each state’s share is the size of the population. While previous finance commissions used the 1971 population as the benchmark to decide the share of the states, the 15th Finance Commission went by the 2011 Census data. Many states, mostly in the South, objected to this as they felt the changed parameters amounted to penalising those that successfully controlled population growth. There are other criteria like income distance (25% weightage)—states with lower per capita income receiving higher funds from the Centre – which favours states like Uttar Pradesh, Bihar and Madhya Pradesh. These three states together account for over 35% of funds transferred to states. Southern states account for over 25% of the direct tax collected by the Centre and 26% of the GST collected. Yet, they get the lowest amount from the divisible pool - just 16% for the five states in the South put together.

Article 370

Taking away Jammu and Kashmir’s special status while the state was under President’s rule and rendering Article 370 ineffective are seen as another example of deviation from cooperative federalism. The matter is now before the SC.

(With inputs from Dipak Mondal)

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