Centre - State Relation


Administrative
Provisions:
  • Mutual delegation of power
  • role and position of governor
  • Full faith and credit clause
  • AIS
    • increased more such services
  • Inter-state council
    • strengthen the role
  • Zonal council
    • twice a year
  • NITI Ayog
  • National Integration council
    • rejuvenate
  • GST council
  • several conferences like DGP's, DC's etc
Issues
  • abuse of article 356
  • Role of governor
  • Management of All India service
  • Central administrative directions
Legislative
  • overlapping domain:
    • SC: Doctrine of Pith and substance
      • will examine the essence of law weather the trespass is incidental or un-intentional and does not trespass the authorities of other
  • Concurrent list: central has overpowered it 
  • Reservation of bill: abused (Article 201)
  • Residuary powers may be in concurrent list
  • Article 249: parliament to make law on state list (If RS Declares)
    • is abused 
Recommendation:
  • Sarkaria commission:
    • Concurrent:
      • residuary taxation should be in central rest all in concurrent
      • Concurrent list should remain
    • Article 200: center should disposed it off with in 4 months
  • Punchhi commission:
    • RS: equal representation of states in RS
      • Domicile qualification to be restored
    • Concurrent:
      • need for broad consensus with the states
  • Concurrent:
    • Broad law leaving rooms for the states to fill in the details
Financial
Lists are separate
Institutional frameworks
  • Finance commission does the job
issues:
  • poor state finance:
    • factors:
      • Central dominance over major tax avenues like mines, minerals, industries
      • Over dependence over center
      • populist policies
      • less elastics
      • Corruption
      • less expertise
      • Poor performance of public sector at state level
      • Poor accountability
  • Borrowing:
    • From center:
      • issues of interest charged by the center
    • external
  • central fiscal dominance
    • Defence
    • balanced regional development
    • External economic relation
    • foreign aid
    • Big industries
    • Other works
  • Working of FC
    • no representation
    • not consulted for term of references
  • Planning:
    • concurrent list
    • centralized 
    • Uniformity Vs diversity
Solutions:
  • setup of interstate commerce commission
  • Synchronization of SFC and UFC
    • Term of reference of UFC should be consulted with the states
  • State specific approach for fiscal consolidation and not a single FRBM
Principle of fiscal federalism:
  • resource responsibility
  • parity
  • independence
  • elasticity
  • efficiency
  • equal transfer
  • accountability

Demand for abolition of Concurrent list
 Demand from Telanagana CM for autonomy to the states
Seventh Schedule, Union list: Subjects: defence, foreign affairs, railways, banking,
background
  • 42nd amendment act, transferred education, forest, protection of wild animals and birds, administration of justice, and weights and measures.
  • PV Rajamannar committee to look into center state relations.
  • Sarkaria commission was set up but its recommendation were not implemented
  • Residuary powers of taxation, with parliament, others in concurrent list
  • Center should consult states before making law on concurrent list
  • Policy of action is essential
Why concurrent list
  • Concurrent list was to ensure uniformity across the country
  • Few concurrent list subjects required huge finances
Issues with concurrent list
  • States have to comply with laws made on concurrent and provide funds, limited cap
  • Some laws were flexible while others were not
  • Some bills may directly infringe on the rights of states
  • Anti-terrorist laws
  • Lokpal bill
  • Issues with GST and Aadhars
Way forward
  • Strengthening of Inter-state council
  • Autonomy to states

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