Reaffirm cooperative federalism

Reaffirm cooperative federalism

By, Pranav Verma is a LL.M. candidate at the University of Cambridge and Sughosh Joshi is a 4th year B.A. LL.B. student at NALSAR University of Law, Hyderabad

Introduction

Many exigencies have tested the foundations of our federal democracy, but none as harshly as this pandemic. And when India’s success in defeating COVID-19 actively rests upon Centre-State collaboration, it is indeed its commitment to federalism that is under the most strain.

Cooperative Federalism

Federalism, K.C. Wheare notes, traditionally signifies the independence of the Union and State governments of a country, in their own spheres.

However, there was nothing traditional about the circumstances in which India’s Constituent Assembly met.

Accordingly, even when its members carefully studied the Constitutions of other great federations like the U.S., Canada, Australia and Switzerland, they adopted a ‘pick and choose’ policy to formulate a system suited uniquely to the Republic’s need.

 As a result, India’s Constituent Assembly became the first-ever constituent body in the world to embrace what A.H. Birch and others have referred to as ‘cooperative federalism’ — essentially defined by administrative cooperation between the Centre and the States, and a partial dependence of the States upon payments from the Centre.

Accordingly, Indian constitutional law expert Granville Austin remarks that despite a strong Centre, cooperative federalism doesn’t necessarily result in weaker States; rather, the progress of the Republic rests upon active cooperation between the two.

Fissures in cooperation

Nevertheless, some recent developments have revealed fissures in Centre-State cooperation.

For instance, the zone classifications into ‘red’ and ‘orange’ has evoked sharp criticisms from several States. The States have demanded more autonomy in making such classifications.

This is despite the fact that State consultation is a legislative mandate cast upon the Centre under the Disaster Management Act of 2005 (under which binding COVID-19 guidelines are being issued by the Centre to the States).

The Act envisages the creation of a ‘National Plan’ under Section 11, as well as issuance of binding guidelines by the Centre to States under Section 6(2), in furtherance of the ‘National Plan’.

The ‘National Plan’ then is a broader vision document while the binding guidelines are its enforcement mechanism.

Now, Section 11(2) of the Act mandates State consultations before formulating a ‘National Plan’, and to that extent, when the binding guidelines are ultimately issued under it, they are expected to represent the views of the States.

However, the Centre has not formulated the ‘National Plan’, and has chosen instead to respond to COVID-19 through ad hoc binding guidelines issued to States, thereby circumventing the legislative mandate of State consultations.

In fact, the Home Ministry order ushering in lockdown 3.0 prohibited States from lowering the Centre’s classifications.

This selective application of the Act serves to concentrate all decision-making powers with the Centre.

Lack of funds

The Centre has also declared that corporations donating to PM-CARES can avail CSR exemptions, but those donating towards any Chief Minister’s Relief Fund cannot.

This directly disincentivises donations to any Chief Minister’s Relief Fund; diverts crores in potential State revenues to PM-CARES; and makes the States largely dependent upon the Centre.

Further, the revenue streams of several States have dried up because of the liquor sale ban; negligible sale of petrol/diesel; no land dealings and registration of agreements.

States’ GST collections have also been severely affected with their dues still not disbursed by the Centre.

All this has made it difficult for States to defray expenses of salaries, pensions and welfare schemes.

Way Ahead

As it is the States which act as first responders to the pandemic, supplying them with adequate funds becomes a pre-requisite in effectively tackling the crisis. This requires the Centre to view the States as equals, and strengthen their capabilities, instead of increasing their dependence upon itself.