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Case Laws
T.N. Cauvery Sangam v. Union of India 1990 AIR 1316
Dabur India Limited v. State of Uttar Pradesh 1990 AIR 1814
State of Rajasthan v UOI 1977 AIR 1361
S.R. Bommai v Union of India AIR 1994 SC 1918
ADM JABALPUR v SHIVAKANT SHUKLA AIR 1975
State of Haryana v State of Punjab (2002)
Shamsher Singh v State of Punjab 1974 AIR 2192
Kesavananda Bharti v State of Kerala AIR 1973 SC 1461
D.C. Wadhwa v State of Bihar 1987 AIR 579
MC Mehta v Kamal Nath
CO-OPERATIVE FEDERALISM
INTRODUCTION
Seeds of cooperative federalism can be traced right from the Regulating Act of
1773 which set up a system whereby the British Government supervised
(regulated) the work of the East India Company but did not take power for
itself. The Government of India Act, 1919 provided for a federal India, however
superficial, by envisaging a dual form of government called ‘dyarchy’. The
Report of the Indian Statutory Commission of 1929 gave a federal solution by
proposing to introduce dyarchy at the centre and to advance from diarchy to
fully responsible government in the provinces. The same was sought to be
achieved by the Government of India Act, 1935. In 1937, after a great deal of
confrontation, Provincial Autonomy commenced. From that point until the
declaration of war in 1939, Lord Linlithgow tirelessly tried to get enough of the
Princes to accede to launch the Federation. The Cabinet Mission of 1946
provided that Union of India should deal with Foreign Affairs, Defence and
Communication and all subjects other than Union subjects and all residuary
powers were to vest in the Provinces.
The Government of India Act, 1919 laid down the foundation of a federal form
of government in India. It introduced diarchy in India. A federal structure
results in the division of powers between the center and the units. The
Government of India Act, 1935 also laid down the provisions for a federal form
of government in India. It provided for the distribution of legislative powers
between the union and the provinces. The Government of India Act, 1935,
further provided for the cooperative relationship between the provinces.
Provisions were laid down to promote harmony and to resolve the differences
between the various provinces.
Sections 131, 132 and 133 of the Government of India Act, 1935 laid down
provisions for resolving the disputes related to waters. These dealt with the
problems relating to inter Province Rivers and river valleys. Section 135 of the
Government of India Act, 1935 laid down provisions for the creation of
councils dealing with the coordination between the various provinces of the
British India. The need for creating a cooperative relation between the provinces
was felt even before the independence. The Government of India Act, 1935 laid
down the foundation for the creation of a cooperative relationship in the federal
structure. The present Constitution has elaborated the principles which were laid
down under the Act.
Division of powers between the federation and the union where they are
given ordinate and equal status with their respective field is known as co-
ordinate federalism. Where the units and the federation do not for a power
but co-operate through various instrumentalies to promote the common
purpose is known as co-operative federalism.
Dr Vijay Kelkar, Who better than Dr Kelkar who headed the 13th Finance
Commission. The speech is full of insights:
While describing federalism, people have described it in many ways. For
instance, some scholars have described federalism as administrative
federalism;” some have argued for “market preserving federalism” and some
others have described it as “coming together federalism” vs. “holding together
federalism”. Countries like USA are supposed to be examples of “coming
together” federalism while India is supposed to be an example of “holding
together” federalism.
In my view, the important feature of Indian federalism is what in India we call
the “cooperative federalism” feature with formal and informal rules for
maintaining the political system as well as for the peaceful change management.
This is the feature that gives the “flexibility” to our Federation.
I think that it is this “flexibility” which helped the country to maintain unity
while strengthening the democracy and I do believe that the democracy is one
of the deep determinants of India’s growth performance. The U.S. constitution,
over its 200 years or more of existence, has been amended only 27 times while
in India, we have amended the Constitution 94 times in the first sixty years. In
my view, this is the strength and not weakness of our system.
INDIAN FEDERALISM AND COALITION POLITICS
The Lokpal Bill has exposed the innerside of party politics in India. During the
winter session the Lokpal and Lokayukta Bill was introduced in the Lok Sabha.
For the introduction of the Bill there was visible pressure of the 'Anna Team'
and the 'Fast Politics' had decided the party and public opinion in the country.
Anna's demand was for a strong Jan Lokpal to root out corruption in the
different layers of the decision making system. After prolonged discussion
between the Standing Committee and the Anna Team the Lokpal issue became
the most heated and hated controversy. The Congress leadership of the UPA
group wanted a constitutional status for Lokpal for which amendment of the
Constitution was a necessity. The Bill also had a component for the institution
of Lokayukta for the states, over which the coalition nature of the Indian politics
found its bitterest outburst in both the debates held in Lok Sabha and Rajya
Sabha. The Trinamul Congress of UPA and BJD were most critical over the
Indian Parliament's attempt to subvert the federal balance in the Constitution.
The Congress leadership took shelter under the provision available in the
Legislative relation between Union and the states to give effect to international
agreements. The voice of the states was echoed by the BJP who wished the Bill
to be discussed under some other provision which was a dilatory move to put
the Indian Federalism and Coalition Politics Prof. Surya Narayan Misra
Congress into an embarrassing situation for not passing the Lokpal Bill. The
politics crossed all its limits in Rajya Sabha and the inevitable happened. In the
name of Federal structure, principle and balance the coalition politics in the
country forgot all kinds of Constitutional principles and proprieties. In this
background it has become necessary to have a fresh look at the structure, nature
and compulsions of the Indian federal system.
The one-party dominant era could consume the Central dominance and we
toyed with the idea of 'Cooperative Federalism'. But the electoral dynamics of
the country and the new political compulsions appeared after the fourth general
elections of 1967 exposed the tension areas of the Indian federal system. The
DMK government in Tamilnadu, Left Front in West Bengal and other non-
Congress dispensations raised the bogey of 'Fiscal imbalance', 'central misrule',
'politics of planning', 'impartial governor' and 'fair deal to the States' etc. These
could not disturb the political balance till the Congress had majority and there
was lack of understanding among the non-Congress Opposition Parties. The
first non-Congress government at New Delhi attempted to have a re-look at the
Federal system but it could not achieve success. During the Janata Party rule at
the Centre the rise of new regional parties and the existing tirade against central
dominance could experience the demand for autonomy by the States like West
Bengal, Tamilnadu, Punjab, J & K etc. Again the political scenario in the
country was changed in 1989. This ushered in the Coalition era in the Indian
politics. The political map of the country was drastically changed and Congress
had a symbolic presence with only 30 % of the country under its political
control. The beginning of 1990s could experience the Constitution of Inter-state
Council under Article-263 for the first time. Some of the political allegations of
use of electronic media and Election Commission also found a positive climate
for discussion at the national level. This could see the Prasar Bharti Act and
multi-member election commission in operation later
COOPERATIVE FEDERALISM UNDER INDIAN CONSTITUTION
With the passage of time, however the concept of competitive federalism slowly
gave way to co-operative federalism. There has been a felt need for a change
from competitive to cooperative relationship in the working of the federal
constitution. Cooperative federalism means that the center and the states share a
horizontal relationship and neither is above the other. This trend has been
promoted by three factors:
(1) The exigencies of war when for national survival, national efforts takes
precedence over fine points of Centre state division of powers;
(2) Technological advances mean making of communication faster;
(3) The emergence of the concept of social welfare state in response to public
demands for various social services involving huge outlays which the
governments of the units could not meet by themselves out of their own
resources.
The concept of cooperative federalism helps the federal system, with its divided
jurisdiction to act in unison. It minimizes friction and promotes cooperation
among the various constituent governments of the federal union so that they can
pool their resources to achieve certain desired national goals.
The Constitution of India provides various provisions dealing with the
cooperative aspect of federal structure. The constitution makers deliberately
provided for such features in the constitution in order to ensure the smooth
working of the government.
Full Faith and Credit Clause (Article 261)
Article 261 of the Constitution of India provides that full faith and credit shall
be given throughout the territory of India to all the public acts, records and
judicial proceedings of the Union and of every State. This is a step to promote
cooperation and faith between the center and the states.
Clause (2) empowers the Parliament to lay down by law the mode of proof as
well as the effect of acts and proceedings of one state in another state.
According to clause (3), final judgments or orders delivered or passed by civil
courts in any part of the territory of India can be executed anywhere in the
country according to law.
The full faith and credit clause promotes uniformity and unity throughout the
territory of India. It develops a sense of harmony and unity in the country. It
promotes cooperation between the states and the center and gives due credit to
all the public acts.
River water Disputes (Article 262)
Article 262 empowers the Parliament to provide by law for adjudication of any
dispute or complaint with respect to the use, distribution or control of the waters
of any interstate river or river valley.
A river board may be established by the Central government for advising the
governments interested in relation to matters concerning the regulation or
governance of an inter State river or river valley.
Inter State Council (Article 263)
Article 263 provides that the President may by order appoint an Inter state
Council if it appears to him that public interest would be served by its
establishment. The President may define the organization, procedure and duties
of the Council.
In T.N. Cauvery Sangam v. Union of India1, the Supreme Court has held that
once the Central government finds that the dispute referred to in the request
received from the State government cannot be settled by negotiations, it
becomes mandatory for the central government to constitute a tribunal and to
refer the dispute to it for adjudication. Further, if the central government fails to
make such a reference, the court may, on an application under Article 32 by an
aggrieved party issue mandamus to the central government to carry out its
statutory obligation.
Sarkaria commission on Centre state relations has strongly recommended for
the establishment of an inter state council to effect coordination between states.
In Dabur India Limited v. State of Uttar Pradesh 2(1990), the Supreme Court
suggested the setting up of a council under Article 263 to discuss and sort out
problems of central state taxation.
Zonal Councils
Zonal Councils have been introduced in India by the States Reorganisation Act,
1956. These councils have been created in order to bring the states of a
particular region in close conformity with each other. The Zonal Councils were
created as an instrument of intergovernmental consultation and cooperation
mainly in socio economic fields and also to arrest the growth of controversies
and particularistic tendencies among the various States.
There exists five Zonal Councils:
1 1990 AIR 13162 1990 AIR 1814
(1) Northern- comprising of the states of Punjab, Haryana, Himachal Pradesh,
Rajasthan, Jammu and Kashmir and the union territories of Delhi and
Chandigarh.
(2) Eastern- comprising of the states of Bihar, West Bengal, Orissa and Sikkim.
(3) Western- comprising of the states of Gujarat, Maharashtra, Goa and the
union territories of Daman and Diu and Dadra and Nagar Haveli.
(4) Central- comprising of the states of Uttar Pradesh and Madhya Pradesh
(5) Southern- comprising of the states of Andhra Pradesh, Tamil Nadu,
Karnataka and Kerala and the union territory of Pondicherry.
Each State included in a zonal council enjoys a complete equality of status as:
(1) Each state has an equality of representation in the council;
(2) Each Chief Minister is to act as the Vice chairperson of the council in
rotation for a year;
(3) Meetings of the council are to be held in each member state by rotation;
(4) The Chief Secretary of a member state is to act as the Secretary of the
council in rotation for one year.
A zonal council is an advisory body and has no executive or legislative function
to perform.
Planning and Finance
Planning makes inter-governmental cooperation very necessary for in a federal
structure, the governments are not arranged hierarchically. The Directive
Principles of state Policy emphasize towards economic democracy, economic
empowerment of the weaker sections of the society, and a welfare state without
which political democracy does not have much meaning for the larger section of
the poor people in the country.
In 1950, the Government of India set up the Planning Commission with the
Prime Minister as its chairman. It has a vice president and a few central
ministers and a few non official experts as its members.
It has been assigned the following functions:
(1)to make an assessment of material, capital and human resources of the
country and investigate the possibilities of augmenting such of these resources
as are found to be deficient in relation to the nation’s requirements;
(2) To formulate a plan for the most effective and balanced utilization of the
country’s resources;
(3) On a determination of priorities, to define the stages in which the plan
should be carried out and propose the allocation of resources for the due
completion of each stage;
(4) To indicate the factors which are tending to retard economic development
and determine the conditions which in view of the current social and political
situation, should be established for the successful execution of the plan;
(5) To determine the nature of the machinery which will be necessary for
securing the successful implementation of each stage of the plan in all its
aspects?
(6) to appraise from time to time the progress achieved in execution of each
stage of the plan and recommend the adjustments of policy and measures that
such appraisal might show to be necessary; and
(7 to make such interim and ancillary recommendations as might on a
consideration of the prevailing economic conditions, current policies, measures
and development programmes, or on an examination of such specific problems
as maybe referred to it for advice by the Central or State governments.
National Development Council
The National Development Council was established in 1952 in order provide a
mechanism to give sense of participation to the states in the planning processes.
It consists of the Prime Minister, the State Chief Ministers, and representatives
of the Union Territories and members of the Planning Commission. In 1967, its
membership was enlarged by the addition of all members of the Union cabinet
and Chief Ministers of the Union Territories.
The functions of the council are to strengthen and mobilize the efforts and
resources of the nation in support of the plans; to promote common economic
policies in all vital spheres and to ensure the balanced and rapid development of
all parts of the country.
The council reviews the working of the plan from time to time, considers
important questions of social and economic policy affecting national
development, and recommends measures for the achievement of the aims and
targets set out in the national plan.
The Sarkaria Commission has suggested that it should be renamed as National
Economic and Development Council and be constituted under Article 263.
Other Bodies
(a) University Grants Commission: The University Grants Commission was
created under the University Grants Commission Act, 1956. It gets its funds
from the center only. It grants fund both for maintenance and development to
central universities while only for maintenance to state universities.
(b) Other bodies to coordinate higher education: The Indian Medical Council,
created under the Indian Medical Council Act, 1956, the All India Council for
Technical Education, formed under the All India Council for Technical
Education Act, 1987 are some of the bodies regulating and coordinating higher
education in India.
(c) Damodar Valley Corporation: The Damodar Valley Corporation is the
joint enterprise of center and the states of Bihar and West Bengal and has been
established under the provisions of Article 262 to develop the inter state valley
of the Damodar river for irrigation, power and flood control.
(d) Drugs Consultative Committee: Section 7 of the Drugs Act, 1940,
empowers the Central Government to constitute the Drugs Consultative
Committee to advise the central and state governments on any matter tending to
secure uniformity throughout India in the administration of the Act. The
committee consists of two representatives of the central government and one
representative of each of the state governments.
Working of cooperative federalism in India- analysis
The planning commission is very instrumental in providing funds and grants to
the states for the purpose of carrying on the centre’s development plans. The
grants are given under the provisions of Article 282. These grants are provided
for the implementation of the centre’s programmes in the states and are an
effective mode of controlling the states by the center. The States want greater
grants from the center but are unwilling to participate in increasing their funds
by taxation. All the states want to increase their shares of grants but do not want
to take any responsibility. It is required that the richer states have a greater share
in raising fund.
Further, the grant of funds by the center to the states is politically motivated
and the center tends to promote some states over the others. The states blame
the center for not providing adequate funds for the purpose of carrying on
various developmental programmes.
There are various conflicts regarding the sharing of river water. States do not
want to help the other water deficit states and there is requirement to make the
states to act for the overall benefits of the country and not act for their
individual interests.
As the Zonal Councils are only advisory bodies, they have not achieved much.
The Sarkaria Commission has expressed that the Zonal Councils have not been
able to fulfil their aims and objectives. It recommended that these should be
reactivated and appointed under the provisions of Article 263 to give them a
constitutional status. With a greater authority, the Zonal Councils will be able to
achieve more.
Position in other federations
The exigencies of war and financial crisis have led to the development of
cooperative features in all the federal constitutions. A strong cooperative
relationship ensures that the nation is unified despite its federal nature.
In U.S.A., the intergovernmental cooperation has been built mostly around the
system of conditional central grants to the states for centrally sponsored
schemes. The Constitution of USA also provides for the inter-governmental tax
immunities between the center and the states.
In Australia, financial difficulties of the state lead to the creation of
Commonwealth Grants Commission as well as the Australian Loan Council in
1927. The council comprises of the Prime ministers of center and states and
meets once a year. This arrangement has reduced competition among the
governments for funds. Further, expedients like conditional grants, loans by the
center to the states, income tax sharing between the center and the states with
accent on state financial needs, have also come to be adopted to promote inter-
governmental cooperation.
In Canada also, cooperative techniques like Central grants to provinces,
delegation of power by the center to the provinces, referential legislation have
been developed.
Thus, a cooperative relationship, in which the two powers are horizontally
arranged instead of hierarchically, has become a rule in all the federations as it
leads to the most productive outcome.
In a vast country like ours, the spirit of co-operative federalism should guide the
relations between the Centre and the States on the one hand, among different
States and between the States and the Panchayati Raj Institutions (PRIs) and the
Urban Local Bodies (ULBs) on the other. The essence of co-operative
federalism is that the Centre and the State Governments should be guided by the
broader national concerns of using the available resources for the benefit of the
people. Co-operative federalism encourages the Government at different levels
to take advantage of a large national market, diverse and rich natural resources
and the potential of human capabilities in all parts of the country and from all
sections of the society for building a prosperous nation. Co-operative federalism
makes it possible to raise all the available resources by the Government at
different levels in a co-ordinated way and channel them for use for the common
good of the people. This requires a harmonious relationship and co-operative
spirit between the Centre and the States and among the States themselves.
While a healthy competition among the States for evolving efficient and
socially desirable policies and programmes is welcome, any competition which
nullifies each other's advantages in development and erodes the resource base of
the States should be avoided. Co-operative federalism is intended to ensure a
minimum bundle of basic services and a nationally acceptable level of living for
all the people of the country.
CENTER-STATE RELATIONS
The relations between the Centre and the States in political, economic, financial
and administrative spheres have been periodically reviewed. The Administrative
Reforms Commission and the Sarkaria Commission were appointed to review
the whole gamut of relations between the Centre and the States and to
recommend measures, including changes in the Constitutional provisions, to
harmonise the relationship between the Centre and the States. While the
Government has accepted and implemented several recommendations of the
Administrative Reforms Commission, the recommendations of the Sarkaria
Commission are under consideration in the Inter-State Council (ISC) which is
trying to reach a consensus on various issues. Out of the 247 recommendations
of the Sarkaria Commission, the Inter-State Council has taken a decision on 91
recommendations. These recommendations pertain to All India Services,
Administrative Relations, Deployment of Union Armed Forces, Agriculture,
Forest, Food, Civil Supplies, Mines & Minerals, Trade, Commerce, Mass Media
etc. The re-activisation of ISC has opened a new chapter in the Centre-State
relations and provided a useful forum for building a common national approach
on various issues.
MOBILISATION AND SHARING OF RESOURCES
The sphere of financial relations between the Centre and the States has been the
most difficult one and despite continuous efforts, unanimity has not been
reached on various issues involved. The issues, which have a bearing on
resource availability, need careful analysis and discussion. The Sarkaria
Commission had paid enough attention to the issue of financial relations
between the Centre and the States and had made a large number of
recommendations in this regard. These are being considered by the Inter-State
Council and its Standing Committee.
Essentially, the problem of resource availability, which affects both the Centre
and the States, can be overcome only if there are greater efforts to tap the
resource potential both at the level of Central Government as well as at the State
Governments. Unless the resource availability of the Central Government
improves, it may not be possible to channelize a larger quantum of Central
assistance or to increase the grant component to the States. The Government of
India has recently agreed to a share of 29% to the States in the total gross
revenues from all the Central taxes with effect from April, 1996. This will
increase the flow of funds in absolute terms on non-Plan account. With this
increased share of the States in the total devolution, the States would be in a
position to benefit from the revenue buoyancy from all the taxes levied by the
Centre. While the share of 29% of the net yield from all Central taxes has not
satisfied all the States, the decision itself marks a watershed in the approach to
the sharing of tax revenues of the Centre, because the sharing which was so far
limited to two taxes, viz., Excise and Income Tax, will now include all Central
taxes. In other words, the divisible pool of Central taxes has been broadened by
implementing the Alternative Scheme of Devolution recommended by the
Tenth Finance Commission.
Notwithstanding such a widening of the divisible pool of Central taxes, the
financial needs of the States will increase during the Ninth Plan because of the
large gaps which remain in the field of BMS and infrastructure. Therefore, the
States need to raise more of their own resources to meet such increased outlay.
In order to improve the resources of the States and to enable them to raise the
required level of resources for Plan purposes, the Centre has to play some
supportive role in certain specific areas. These areas relate to statutory
devolution of funds from the Centre to the States through Finance Commission,
discretionary grants and loans through Planning Commission, revision of
royalty rates once in two years and application of these rates on ad valorem
basis, helping the States to move towards a uniform tax structure and Modvat
with the possibility of imposing Consignment Tax in the interim period. The
Central Government has already constituted the Central Electricity Regulatory
Commission under the Electricity Regulatory Commission Act, 1998. Some of
the States have also set up their own State Electricity Regulatory Commissions
which, inter alia, provide for unbundling and corporatisation of State Electricity
Boards, fixation of electricity tariff and introducing competition. Many other
States are in the process of setting up their own Electricity Regulatory
Commissions in due course. All these steps are expected to improve the
financial health of the State Electricity Boards which would result in increased
size of State Sector Plan Outlay.
INTER-STATE RELATIONS
Harmonious and cooperative relations between different States are as important
as that between the Centre and the States for the healthy functioning of our
federation. Various problems have been cropping up in inter-State relations
from time to time. On the one hand, there are problems like increasing
competition among the States and on the other; there are disputes over sharing
of river water etc.
Industries, the competition among the States for attracting industries and other
economic activities by offering incentives has intensified. While a healthy
competition among the States for providing better and efficient services is to be
welcomed, the practice of granting tax rebates and subsidies need to be seen in
the right perspective of whether they lead to national welfare. Instances are not
lacking where the States have joined a sort of a race in granting sales tax and
other rebates for attracting new industrial units. This has affected the resource
position of the concerned States without commensurate benefits, because in so
far as the same concessions are allowed by a number of States, these
concessions do not remain the main guiding factor for the location of an
industry and other important considerations like efficiency of services and
infrastructure facilities may become more important.
Similarly, often there is a tendency on the part of the States to allow tariff
concessions to various sections. Power tariff is a case in point and many States
have been supplying power to various sectors at a price much lower than the
cost of generation. A national consensus had evolved at the Chief Minister's
Conference for fixing the minimum tariff for agriculture and to move over to a
regime of fixing tariffs for recovering the costs. Some States have, however,
gone against this consensus and allowed free electricity to agriculture sector.
This has not only put the financial condition of the State Electricity Boards in a
precarious position but also created problems for the neighbouring States where
vociferous demands have been made for similar concessions. Populist measures
have a tendency to spread because once they are granted by one State, pressure
builds up in the neighbouring States for allowing the same concessions. Similar
is the position regarding the administrative charges for other services like
irrigation and water. Despite various Commissions recommending minimum
rates for such services, so that at least O & M costs are recovered, many States
have not implemented these recommendations, depriving them of an important
source of revenue and putting their financial position under great strain. It is
essential to have a national consensus regarding such issues like harmonisation
of tax structure, minimum tariff for certain services, cap on the level of
subsidies and facilitation of inter-State trade flows. It is necessary that all the
States should fall in line for implementing mutually beneficial policies.
COOPERATIVE FEDERALISM AND JUDICIARY
A former Justice of the Supreme Court of India, Justice Khanna, well known
for his dissent in the Habeas Corpus case3, has suggested that India was perhaps
the first polity to adopt a model of cooperative federalism. This he defined as
"the practice of administrative cooperation between general and regional
governments, the partial dependence of the regional governments upon
payments from the general governments and the fact that the general
governments, by the use of conditional grants, frequently promote
developments in matters which are constitutionally assigned to the regions"
The Judiciary has used numerous phrases to describe this concept of
cooperative federalism, though all of them, in essence, have the same meaning.
In State of Rajasthan v UOI4, (1977), it was quoted that according to Granville
Austin, the Constitution of India was perhaps the first constituent body to
embrace from the start what A.H. Birch and others have called “cooperative
federalism”. Chief Justice Beg called the Constitution ‘amphibian’,”....If then
our Constitution creates a Central Government which is ‘amphibian’, in the
sense that it can move either on the federal or on the unitary plane, according to
the needs of the situation and circumstances of a case...”.
In S.R. Bommai v Union of India 5(1994), the phrase “pragmatic federalism”
was used. In the words of Justice Ahmadi, “....It would thus seem that the Indian
Constitution has, in it, not only features of a pragmatic federalism which, while
distributing legislative powers and indicating the spheres of governmental
powers of State and Central Governments, is overlaid by strong unitary
features...”
3 ADM JABALPUR v SHIVAKANT SHUKLA AIR 19754 1977 AIR 13615 AIR 1994 SC 1918
In State of Haryana v State of Punjab (2002), “semi federal” was used. And
in Shamsher Singh v State of Punjab 6(1974), the Constitution was called
‘more unitary than federal’.
INDIAN CONDITIONS REGARDING COOPERATIVE FEDERALISM
Mrs Indira Gandhi humbled the Congress machine, re-established the
supremacy of the parliamentary party over the party organisation, broke the
power of state Chief Ministers, and established a new balance or rather,
imbalance between the Centre and the States. And her personality cult slowly
converted Congress into a coterie party. The Congress Government at the
Centre further increased its powers vis-a-vis the states by allotting large funds
mainly for centrally sponsored development projects. These were the projects
that were to be implemented in the states but administered by the centre.
All this however could not stop the formation of new parties which were born
outside the Parliament, based on ideology, like the DMK in Tamil Nadu, Telgu
Desam in Andhra Pradesh and Communist Party in Bengal. Playing with the
country’s inherent federal spirit can be a double edged weapon. The very
policies of centralisation, politicisation and dictatorship that damaged the
federal and democratic structure of the country, led to the rise of a strongly
ideological party on the right i.e. the BJP and a mildly ideological combine on
the Left.
In 1969, Chief Ministers of Andhra Pradesh, Orissa and Kerala met at the Chief
Ministers’ Conference as they were dissatisfied with the issue of centre state
relations. In the 1970 Conference, the then CM of Maharashtra challenged the
very competence of Planning Commission to set norms for giving special
assistance to certain states forming their non-plan commitments. The states
6 1974 AIR 2192
were totally opposed to handing over the administration of agricultural income
tax to the Centre.
In 1971, the North Eastern Council was set up by the North Eastern Council
Act, 1971. Comprising 8 states i.e. the seven sisters and Sikkim, it was to serve
as the nodal agency for socio-economic development of NE region. Unlike the
Zonal Councils, it has to its credit a lot of achievements in the electricity and
education sectors. The Second Administrative Reforms Commission in its 15th
Report on ‘State and District Administration’ suggested that the North Eastern
Council (NEC) should establish an apex Regional Academy for Human
Resource Development as an autonomous body with academic and executive
flexibility.
In the meanwhile, the Rajmannar Committee Report came out in 1971
comprehensively reviewing centre-state relations. It recognised the urgent need
to constitute a non-political advisory body u/a 263 to keep inter-governmental
relations under constant review. Since such a body would be free of politics,
hence it would command greater respect and its advices would be more
acceptable. The ISC should not be merely advisory but be “ordinarily binding”
on both the Centre and the States. No decision of national importance or which
may affect one or more states should be taken by the Union Government except
after consultation with the ISC. Every bill of national importance or which is
likely to affect the state interests should, before its introduction in the
Parliament, be referred to the ISC, and its views thereon should be submitted to
Parliament at the time of introduction of the Bill. It is apparent that the
Rajmannar Committee gave the most proactive recommendations.
It was due to Mrs Indira Gandhi’s misadventures that in Kesavananda Bharti v
State of Kerala 7(1973), the Courts evolved the ‘basic structure’ doctrine to
save the Constitution from the misplaced establishment sovereignty of the 7 AIR 1973 SC 1461
Union Parliament. Chief Justice Sikri clearly stated that the federal character of
the Constitution was a feature of the basic structure of the Constitution which
was, hence, not opens to whimsical amendments. And the Doctrine of
Supremacy of the Constitution is part of basic structure i.e. neither of the three
constitutionally separate organs of the State can leap outside the boundaries of
its own constitutionally assigned sphere or orbit of authority into that of the
other.
Federalism came heavily under pressure with the declaration of emergency on
26th June 1975 under ominous conditions. Apart from damaging the federal
structure, it also sowed the seeds of secessionist militant movement among the
Sikhs in Punjab. However, it must be kept in mind that declaration of
emergency in itself is not an attack on federalism. But if the same is done under
questionable circumstances not in sync with the spirit with which the provision
for it was enacted, then federalism is surely under attack.
The amendments introduced in Article 356 by the 44th Amendment Act helped
to mitigate the abuse of emergency provisions. By deleting the clauses which
made the declaration and continuance of emergency by the President
conclusive, it provided an opportunity for judicial review i.e. the Courts can
now take a more active part in preventing a malafide exercise of power to
impose President’s rule. Quoting Justice P.B. Sawant in S.R. Bommai v Union
of India, “....The courts should not lightly decline to exercise judicial review
when as a matter of common knowledge, the emergency has ceased to
exist.....This amendment has been prompted not only by the abuse of the
Proclamation of emergency arising out of war or external aggression, but even
more, by the wholly unjustified Proclamation of emergency issued in 1975 to
protect the personal position of the Prime Minister”
This declaration of emergency had another significant impact. It gave an
opportunity to the nascent opposition, struggling for its birth, a burning political
cause and a strongly shared grievance that enabled the leaders to sink their
differences and to plan for the future. This led to the rise of the Janata Party,
India’s first alternative to the Congress, which won in 1977 elections, marking a
watershed in Indian politics. It is to be noted that the break up from single party
rule across the country and the rise of regional parties happened simultaneously
with the existing virtually single party rule of Congress. It was because of the
federal structure that people could aspire for share in power.
The National Development Council continued to meet once a year, on an
average, throughout the Seventies, but in the Eighties, as the relations between
the Congress and the opposition grew more and more strained, the frequency of
the meetings declined. In the eighties, it met not more than seven times, and the
meetings were marked by acrimony and tension.
The West Bengal Government Memorandum on Centre State relations, prepared
by the Left Front Government of West Bengal in 1977, reflected the increasing
disagreement with the Centre and portrayed the Constitution as essentially
unitary in character. Many of its recommendations were similar to those of
Rajmannar Committee.
In State of Rajasthan v Union of India, States of Rajasthan, Madhya Pradesh,
Punjab, Bihar, Himachal Pradesh and Orissa challenged the sufficiency of
grounds of action by the governor under Article 356(1). Chief Justice Beg held
that sufficiency or inadequacy of the grounds for declaration of emergency
could not be gone into by the Court. Only if the grounds are disclosed to the
public by the Union Government which revealed that a constitutionally or
legally prohibited or extraneous or collateral purpose was sought to be achieved,
only then the Court would look into it. Dissent was been expressed against this
judgement in S.R. Bommai case which expanded the scope of judicial review.
In 1978, the Chief Ministers’ Conference of non-Janata Party CMs of South
India was held. They discussed the language issue i.e. the imposition of Hindi
on the non-Hindi speaking people, and urged the PM to intervene. Mrs Indira
Gandhi returned to power in 1979. Her highhandedness further invigorated
movements for autonomy within the existing states and movements for
separation from the Union as in Andhra, Assam and Punjab.
In 1983, the Conference of non-Congress ruled states was held. It paved the
way for the formation of Council of Chief Ministers for Southern Region. They
expressed that states should discuss mutual problems at their own level amongst
themselves. Centre should be approached only if they fail in solving the issues
ate their own level. They also felt dwarfed at the meetings of the NDC in which
the Centre and the Planning Commission dominated. The Council of CMs for
the Southern Region was the precursor to the Council of Chief Ministers of all
States. It was in favour of cooperative federalism in true spirit of the
Constitution. Opposition Conclaves took place in different parts of the country
to express views on centre-state relations. In response to the call of CM of
Andhra Pradesh, N. T. Rama Rao, the first Opposition Conclave was held in
Vijayawada in 1983. Fourteen non-Congress parties gathered to criticise the
Centre for encroaching upon the powers of the states and the Centre was held
responsible for all economic problems of the country. In 1984, Delhi Conclave
was held. It was opined that the Union was only a mother organisation to
coordinate the activities of various states, helping them to develop. It could not
operate as an institution or treat the state governments as its branch offices. The
states would soon become just puppets dancing to the Centre’s tune and unable
to exist as viable territorial units. In the Srinagar Opposition Conclave, 10 non-
Congress parties gathered. It was suggested that Governors must be appointed
by the President on the basis of a panel forwarded by the State Governments
concerned and Articles 200 and 201 should either be suitably amended or else
deleted. It also said that it must be mandatory for the President to constitute
ISC. And that the NDC and the Planning Commission should be given
constitutional and statutory status with proper representation of states on these
bodies. The last was the Calcutta Conclave participated by 18 non-Congress
parties accusing Indira Gandhi of engaging in a conspiracy against the
Opposition.
Opposition conclaves should be made a regular feature of our dynamic system.
They symbolise a healthy and responsible federalism. They are a useful forum
for getting to know the other side of the picture. Such conclaves must be held
and thereafter be covered well by the media for the knowledge of the public.
But the same requires a mature Opposition too. If the same is ensured,
opposition conclaves can serve as a fantastic form of institutionalised criticism
and pro activeness. It may even transform into a pseudo shadow cabinet system
found in the UK.
In this background of simmering discontent among opposition ruled states, Mrs
Gandhi constituted the Commission on Centre State Relations headed by Justice
R. S. Sarkaria, a retired judge of the Supreme Court, in 1984 which submitted
its voluminous report in 1988 to the Rajiv Gandhi Government recommending
inter alia, a permanent Inter State Council as an independent forum for
consultation with a mandate defined according to Article 263. It should deal
with subjects other than socio-economic planning and development and have an
advisory role only. Administratively, it should be called Inter Governmental
Council.
Mrs Gandhi was assassinated in 1984. But Congress came to power again due to
sympathy vote for her son Rajiv Gandhi. Steady deterioration of centre-state
relations had come to head under Rajiv Gandhi. Meetings of the NDC became
acrimonious.
Tensions were most acute over financial matters. Rajiv Gandhi further increased
the control of the centre over plan funds to be spent in the States by bringing
majority of the programs under centrally sponsored schemes to include
everything like drinking water and supply of oil seeds. The State governments
were slowly side-lined from all areas of development generating resentment
among the latter. Such a tendency is found even today (Rural Health Mission,
Sarva Shiksha Abhiyan etc.) and it shows lack of confidence in the states and
discourages initiative from the states making them dependent on the Centre for
basics. It does not augur well for progressive federalism. It is also an instance of
the misuse of the grants under Article 275.
In D.C. Wadhwa v State of Bihar8 (1987), the Court upheld the writ petitions
challenging the constitutional validity of the practise of the Governor of Bihar
of repeatedly promulgating the same ordinances without caring to get the
Ordinances replaced by Acts of the legislature. To quote Justice Bhagwati,
“The power to promulgate an ordinance is essentially power to be used to meet
an extraordinary situation and it cannot be allowed to be ‘perverted to serve
political ends’ ”
To control unprincipled defections induced by allurements of office, money and
pressure, the Tenth Schedule was added by the Constitution (52nd Amendment)
Act, 1985. But since the desired goal could not be achieved, law was further
strengthened by the Constitution (Ninety First Amendment) Act, 2003.It deleted
the provision which did not treat mass shifting of loyalty by one-third as
defection.
8 1987 AIR 579
An important Chief Ministers’ conference was held on June 11, 1989 to forge a
consensus on the statutory creation of PRIs.With the economic liberalisation of
the 1990s, State leaders came to demand partnership in the federal policy
making processes that concern multilateral agreements with international
organisations. This brought out into the open the economic and regional
disparities making the same a matter of significant concern all the more for the
federal government. At another level, inter-state competition of sorts came to
mark the behaviour of state governments to attract FDI. Hence, economic
liberalisation prompted a change in federal relations from inter-governmental
cooperation to inter jurisdictional competition among the states.
After the assassination of Rajiv Gandhi on May 21, 1991, there was serious
concern as to whether India really was a viable entity and whether it could hold
together in the face of fissiparous tendencies springing all over the country.
In 1996, a group of Chief Ministers and regional leaders met in Hyderabad to
discuss what they considered to be a paradigm shift in federal relations in India.
The slogan of their meeting was “Federation without a Centre” because they
believed that with the formation of the United Front Government, the pattern of
federal relations in India had undergone such a dramatic change where the
Central government had been rendered superfluous.
BJP came to power again from 1998-2003. It created three new states in 2000 to
recognise the demands around tribal identities. It is important to note that these
new states have emerged very much within the fabric of India which is a “Union
of States”, reinforcing that our federalism is alive and kicking. Indian
federalism has also experimented with sub state regional development councils
to satisfy regional, ethnic and tribal aspirations.
Inclusion of languages has been another mechanism of cooperative federalism.
In 2003, Bodo, Dogri, Maithili and Santhali were included in the Eighth
Schedule of the Constitution. The inclusion allows privileges like simultaneous
translation facilities in Parliamentary proceedings, allocation of central
government funding for development of the language and its literature and is an
effective tool to include the periphery into the mainstream.
The National Commission to Review the Working of the Constitution
(NCRWC) submitted its report in two volumes to the Government on 31st
March, 2002. It recommended that there was a need to institutionalise the
consultation process between the Centre and the states. It considered Article 263
as being in tune with the spirit of cooperative federalism and suggested that the
ISC Order, 1990 may clearly specify in 4(b) of the order the subjects that would
form part of the consultation in the ISC. Article 139A should be amended so as
to provide that it can withdraw to itself cases even if they are pending in one
Court where such questions as to legislative competence of Parliament or State
Legislature are involved. Further, an Inter State Trade and Commerce
Commission should be established.
CHALLENGES
The new challenges facing 21st Century federalism have further necessitated the
pre-existing need for cooperative federalism, thereby making its practice as a
form of governance all the more indispensable. Technological advances have
led to tremendous improvement in connectivity and accessibility, both, physical
as well as electronic.
Environmental challenges of global nature like climate change do not recognise
state frontiers. Pollution and conservation issues reflect the uncomfortable
tension between decision making process of the governments at the centre-state
–local levels. Public Trust Doctrine is a new doctrine of federalism evolved by
the Supreme Court in MC Mehta v Kamal Nath . It has established a direct
link between the State and the public. To quote Justice Kuldip Singh, “The
State is the trustee of all natural resources which are by nature meant for public
use and enjoyment...and is under a legal duty to protect the natural resources.
These resources meant for public use cannot be converted into private
ownership”. Disaster Management transcends inter-state boundaries.
Globalisation has reinforced the need for concurrence between the geographical,
climatic, environmental and technological diversities inter as well as intra states
so that they may link with global processes for viable and sustainable
development and growth. What is being experienced at the global level is also
being felt at the local level. India is making strides in the global sphere and the
local governments that promote shared partnership in development have come
to be noticed today. Hence, whenever development programs or any other
interests of states in matters relating to IT or investment by way of export, trade,
exchange of projects etc. are touched by international agreements, the well-
conceived demands of states should be met in order to promote truly
cooperative, coordinative and multi-dimensional centre state relations. This
requires mutual trust and confidence.
Since the world has become a global village, the country’s internal security and
political problems are open to external influence verging on intervention. For
instance, the US Ambassador to India, Mulford, in 2006, overstepped his
diplomatic role by writing directly to the Chief Minister of Assam offering
assistance from the FBI to investigate a bomb attack in the state. Hence, under
the garb of protecting human rights and on the plea that minorities are being
tortured, big powers can intervene militarily which is against India’s interest.
The states today have acquired sufficient political weight of their own through a
pluralised party system enabling individual states to embark onto bilateral
negotiations with the union bypassing the institutionalised bodies of collective
policy framing that have proved to be ineffective, thus lending a negotiatory
character to our federalism. However, the same must be taken with a pinch of
salt because power sharing by states at the central level has not contributed
towards reducing localism, parochialism and chauvinism of regionalists and
sub-regional parties. Increase in bargaining capacity will serve to strengthen
cooperative federalism only if the supposed drawbacks of centralism are
mitigated through it.
The increasing voices of autonomy and separatism have vitiated the political
and social fabric of the federal structure. States are increasingly harbouring
feelings of deprivation and alienation and have begun viewing all problems
from a narrow parochial outlook. Moreover, their approach is becoming violent
confrontationist. This not only weakens the nation politically and economically
but also makes the land fertile for the growth of terrorism and insurgency. The
Indian Union has united its rich diversity of its humungous population serving
as an example to the rest of the world. This is an asset to be built upon for the
future. To override the fissiparous tendencies, only the legitimate grievances of
the regions or states should be addressed as far as possible within the
framework of the federal Constitution. More importantly, a strong sense of
nationhood is necessary to maintain our territorial integrity and internal
security, and this cannot be accomplished without cooperative federalism.
Terrorism, militancy, organised crimes, problem of internally displaced persons,
refugees – all these require that the country as a whole comes together and the
institutional bodies under state governments help the centre by collectively
making available the necessary information and resources. The need to come
together today is not only the consequence of the new challenges facing the
nation but that the same will serve as an antidote to prevent such challenges
from recurring in future. Cooperative federalism alone strengthens the nation
from within by enabling it to withstand adversities and challenges because of its
inherent resilience and malleability.
CONCLUSION
A cooperative relationship between the Centre and the States is the need of the
hour. Without a cooperative relationship, it will not be possible to move ahead
in the present economic world. The various technological advancements,
economic and trade activities and external aggressions across the world call for
a cooperative relationship between the center and the states in order to provide
stability and security in the country. The Sarkaria Commission report has also
emphasized on the creation of a strong center state relationship. Cooperative
federalism is the means to achieving a strong nation. There is requirement of
giving greater flexibility and authority to the National development council by
constituting it under the provisions of Article 263.
Further, there should be greater involvement of the states in the planning
process and greater coordination in raising the funds for meeting the demands of
the developing economy.
Thus, a cooperative relationship is developed by the creation of various
councils which work for the benefit of the states as well as the center and also
by giving full credit to all the acts throughout the territory of India.
SUGGESTION
For a more effective cooperative federal relationship it is required that the
following steps are taken:
(a) The Zonal Councils should be reorganized under the provisions of Article
263 to give them a constitutional status, thus providing them with greater
authority and flexibility for proper functioning.
(b) The participation of the states in the planning commission and planning
process should be increased so as to ensure the formulation of more object
oriented plans which seek to promote the welfare of all the states.
(c) The states should be encouraged to take a more active part in raising the
funds for their developmental works. More grants should be provided to the
poorer states which cannot raise funds as compared to the richer states.
(d) The grants given by the center to the states should not be politically
motivated but based on the requirements of the states.
(e) The states should act for the overall development of the country and should
not act only for their own individual interests.
Thus, it is required that the cooperative federalism is encouraged over the
competitive relationship between the center and the states.