(IGP) GS Paper 1 - Indian Polity & Governance - "Federal System"

Subject - Indian Polity & Governance
Chapter : Federal System

Governments:

On the basis of distribution of power, Governments can be classified into three types

• Unitary
• Federal and
• Confederal

Unitary system

• In a unitary government, the central government possesses preponderant authority and decision-making power. Provincial governments are the administrative arms of the central government.

Federations

• Federation is a system of constitutional governance brought about by the voluntary agreement among states that, join together into a new federal union in which power is divided between the Union Government at the centre (federal government) and states (provinces). A written Constitution divides powers. Thus, there is a dual government with their respective jurisdictions.

Confederations

• They are nations where the provinces have maximum autonomy so much so that they can become members of international organizations, have flag and may even secede.

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Federal System:

• Federal system is adopted so that states can flourish with autonomy and their security is assured by the central government.
• India is essentially a federation though in our case the provinces did not join together voluntarily.
• Federalism is a prescription for our multi-diverse country to pure pluralist polity.
• Federal system is adopted so that states can flourish with autonomy and their security is assured by the central government.
• India is essentially a federation though in our case the provinces did not join together voluntarily.
• Federalism is a prescription for our multi-diverse country to pure pluralist polity.
• Unified and hierarchical judiciary
• Elections are held for assemble under the authority of the Election commission that is appointed by the Union Government
• The role of Governor is pro-Centre
• President’s rule is a threat to the existence of democratically elected state governments.
• All the basic features of federalism are found in the Indian Constitution Since there are strong unitary features as well, it is called quasi-federation.
• It must be clarified that the fact that in Art. 1 of the Constitution India is described as a Union of States’ only stresses the unity among the provinces and not have any unitary implications for our polity.

Union-State relations in India:

Legislative Sphere

• The framework for division of legislative powers in the Indian Constitution is contained in Chapter 1 in Part XI. It comprises in articles- 245 to 255. It should be read with Seventh Schedule. Three fold distribution of the subjects of legislative: power is adopted- Union List (List I); State List (List II); and Concurrent List (List III).

Union List

• Items of national importance are in the Union List- external affairs, defence; banking, communications, currency etc altogether numbering 99.

State List

• Matters of provincial importance are in the State List like agriculture, local self government, law and order; public health etc altogether numbering 61 items.

Concurrent List

• Subjects of common importance are in the Concurrent List, matters that can be legislated upon by both the union and state legislatures - socio economic planning, education, forests, protection of wild animals and birds; ports other than major ports; marriage and divorce; adoption; price control; criminal law; preventive detention, labour, together numbering 52 items.

Parliament can make laws as state list

• Under the following-five circumstances, Parliament can legislate on an item in the State List

• when national emergency is in force. It needs to be emphasized that when there is national emergency (Art. 352), State Legislative Assembly continues to exist but the Constitution gives power to parliament as well to legislate on an item in the State List unlike when the

• President’s rule is proclaimed when the State Legislative Assembly is either suspended (suspended animation) or dissolved and the Parliament can make laws for the State concerned
• Art. 249 says that Rajya Sabha can empower the Parliament to legislate on an item in the State List in national interest by passing the relevant resolution by two thirds majority of the members present and voting.
• In other words, Rajya Sabba authorizes Parliament to legislate on a subject in the State List.

Administrative Relations

• Art. 256-263 in Part XI contain administrative relations.
• Art. 256 talks of the obligation of States and the Union in these words:
  The executive power of every State shall be so exercised as to ensure compliance with the laws made by Parliament and any existing laws which apply in that State, and the executive power of the Union shall extend to the, giving of such, directions to a State.
• Art. 257 talks about control of the Union over States in certain cases:
  The executive power of every State shall be so exercised as not to impede or prejudice the exercise of the executive power of the Union and the executive power of the Union shall extend to the giving of such directions to a State as may appear to the Government of India to be necessary for that purpose.
• The executive power of the Union shall also extend to the giving of directions to a State as to the construction and maintenance of means of communication declared in the direction to be of national or military importance.

Financial Relations

• Art. 268 to 293 in Part XII deal with the financial relations. The Constitution contains a fixed and dynamic scheme for apportioning fiscal resources to the States and the Union. The static part relates to some sources of finance being entirely given to the states taxes and duties specified as such in the Constitution.

• 268. Taxes and duties levied by the Union but collected and appropriated by the States. Ex-medicinal preparation with alcohol in them.

• 269. Taxes levied and collected by the Union but assigned to the States. For example, duties in respect of succession to property other than agricultural land; estate duty in respect of property other than agricultural land central sales tax.

• 270. Taxes levied and collected by the Union and distributed between the Union and the States. Income tax, corporation tax etc.
• 271. Surcharge on certain duties and taxes for purposes of the Union. Surcharges are not shareable.

Finance Commission

Article 280

• The President sets up every five years, or at such earlier time as the President considers necessary, a Finance Commission which shall consist of a Chairman and four other members to be appointed by the President.
• Duties of the FC involve making recommendations to the President as to-
  the distribution between the Union and the States of the net proceeds of taxes which are to be, or may be, divided between the States of the respective shares of such proceeds
• the principles which should govern the grants-in-aid of the revenues of the States out of the Consolidated Fund of India;
• the measures needed to augment the Consolidated Fund of a State to supplement the resources of the Panchayats in the State on the basis of the recommendations made by the Finance Commission of the State

Thirteenth Finance Commission

The five member team, headed by economist Dr. Vijay L Kelkar submitted its report of the Thirteenth Finance Commission to the Government and was tabled in the Parliament during the Budget session 2010. Where it has zeroed on three key objectives of inclusive and ‘green’ growth, macro economic stability and fiscal consolidation for both the Centre and the States particularly in view of the last couple of years when the economy had to undertake fiscal expansion in response to the worst global recession and domestic economy slowdown.

Recommendations-

• On sharing of Union taxes, the core task of the Commission, it has recommended that for its award period spanning from April 1, 2010 till March 31, 2015, the share of States in the net proceeds of Union Taxes be fixed at 32 per cent, against the 12th FC prescribed transfer of 30.5 per cent, an increase of 1.5 per cent.

• It has also said that the total transfers to the States be subjected to an indicative ceiling of 39.5 per cent of the gross tax revenues of the Centre.
• The Commission has recommended a grant of Rs. 51,800 crore for eight States that have a revenue deficit chronically.

• In a bid to de-carbonize development in line with growing interests in promoting green growth, the Commission has favoured a grant of Rs. 15,000 crore, for forest grant promotion of renewable energy and for water sector.

• In the Goods and Services Tax (GST), it has recommended a grant of Rs. 50,000 crore for implementation as per the recommended model.
• On fiscal consolidation, the Commission has drawn a roadmap for fiscal deficit reduction and spelt but a combined debt target of 68 per cent of GDP, against 75 per cent in 2009-10.

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