ONE NATION, MANY GOVERNMENTS- WHY INDIA MUST EMBRACE FEDERALISM

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THE CONTEXT: The COVID-19 pandemic has not only exposed the vulnerability of the marginalized sections of society but has also seen a lack of communication and coordination between central and state governments in India. The failure on the part of the government to establish a robust communication channel, amongst themselves, has aggravated the sufferings of the poor people. This article discusses the challenges of the federal system in India during pandemic situations.

In addition to this, the article will also focus in brief on how due to its unitary nature, India is facing various challenges like

1. Implementation of big-bang reforms like GST and Farm Bills
2. Implementation of various major steps taken by the government like the abolition of Article 370, CAA and NRC.
3. Encroachment on State List by the Centre like amendments to UAPA and NIA laws, Farm Bills, etc.
4. The recent SC judgement on 97^th Amendment Act.
5. The government seems to be on the slow path to reversals of reforms due to a lack of cooperation and coordination between unions and states.

COVID 19 AND FEDERALISM

COVID-19 has shone a light on one of India’s darkest corners that we stoutly refuse to examine – the lack of coordination between the governments in India. In the following issues, there was a lack of coordination between the governments

• Vaccine procurement,*–
• Pricing and disbursal,
• Oxygen manufacturing and inter-state supply,
• GST rates for covid care resources,
• Trans-state migrating labour,
• National lockdowns,
• Elections in various states,
• Religious gatherings of multi-state relevance,

Thus the absence of planning and coordination across the governments in the country has cost lakhs, perhaps tens of lakhs of lives.

THE CONCEPT OF FEDERALISM

Federalism is a system of government in which powers have been divided between the Centre and its constituent parts such as states or provinces. It is an institutional mechanism to accommodate two sets of politics, one at the central or national level and the second at the regional or provincial level.

There are two kinds of federations

Holding Together Federation: In this type, powers are shared between various constituent parts to accommodate the diversity in the whole entity. Here, powers are generally tilted towards the central authority. Example: India, Spain, Belgium.

Coming Together Federation: In this type, independent states come together to form a larger unit. Here, states enjoy more autonomy as compared to the holding together kind of federation. Example: USA, Australia, Switzerland.

FEDERAL FEATURES OF THE INDIAN UNION

Article 1 of the Indian Constitution states, ‘India, that is Bharat, shall be a union of states. The word federation is not mentioned in the constitution.

• Governments at two levels – Centre and states
• Division of powers between the Centre and states – there are three lists given in the Seventh Schedule of the Constitution, which gives the subjects each level has jurisdiction in:

1. Union List
2. State List
3. Concurrent List

• Supremacy of the constitution – the basic structure of the constitution is indestructible as laid out by the judiciary. The constitution is the supreme law in India.
• Independent judiciary – the constitution provides for an independent and integrated judicial. The lower and district courts are at the bottom levels, the high courts are at the state levels and at the topmost position is the Supreme Court of India. All courts are subordinate to the Supreme Court.

THE RECENT FEDERAL ISSUES IN INDIA

COVID-19 and states depend on a Centre: Since March 2020, the states have faced problems of lack of support from countries like

1. Delay in 14^th transfer
2. GST loss due to transfer
3. CSR under PM CARE FUND and its transfer issues
4. The issues related to supply of Oxygen and Vaccines

Such problems are a clear reminder of the lack of robust Centre-State mechanisms for proactive cooperation.

The farm’s bills: The ongoing farm protests show that there was a lack of adequate consultation with stakeholders. The reforms deal with state subjects, but the states have not been adequately consulted.

The post scenario of the abolition of Article 370: The central government seems to have gone backwards on its J & K policy when it invited the leaders of the erstwhile state for consultation. It again reminds us that the Centre unitary approach is backfiring.

Fundamental structure: The problem, of course, goes back to the very establishment of the Union, denying states their sovereignty (unlike in the US) even as it leaned federal. Subsequent purposeful Constitutional amendments, like expanding Concurrent lists, or the GST, have vigorously engendered centralization. However, the real root of federal rot lies more with states and less with the Union.

Defunct Inter-State Council: As per Article 263 of the Indian Constitution, the Inter-State Council is composed of the Prime Minister, who is the Chairperson, Chief Ministers of States and Union Territories and several Union Cabinet Ministers, and cannot be dissolved or reconstituted. India did set up an Inter-State Council, on the recommendation of the SarkariaCommission in 1990, to recommend policy on matters of common interests across states and the Union. It met a dozen times until 2017. It is extant, but defunct, barely meeting once in three years since the establishment and not at all during a pandemic that requires intimate partnerships and collaboration.

GST Council: The GST Council has been established with only the Union Finance Minister as Chair, and the ability to call for meetings. By any measure, the GST is a multilateral matter, with separate stakeholders, the Union being one. There is no reason why Chairpersonship is not rotated or powers (like calling meetings) are not vested in any or all. In fact, Mumbai city with its mammoth pre-GST Octroi has no say in the Council, and neither does any other local government.

Finance Commission: For a Constitutional body that divides monies between states and the Union, and across states, the Union is but one stakeholder. However, the Union assumes all powers in appointment of the Commission and issuing of its Terms of Reference (ToR), an inherent bias for a federal body. That is why there was controversy o the TOR of the 15^th This is exactly what the Inter-State Council is meant to do; ensure that a ToR is negotiated and balanced.

THE CONSEQUENCES OF SUCH DEVELOPMENTS

Such developments have given rise to increasing tension and conflicts between unions and states. Too much politics and too little progress on the quality of governance and grievance Redressal of people. There is also the absence of debate on many matters and issues which reforms are long overdue like criminal justice reforms and police reforms. The issues like disaster management, health, education, etc. Remain like a work in progress. The present government gave a major boost to cooperative federalism and competitive federalism, but the latter is not possible without the former. In fact, collaborative governance has become imperative for any government in contemporary times. The governments need to collaborate and cooperate at multiple levels, but due to the unitary approach, states have less trust in the Centre.

WHAT CAN BE DONE?

Strengthening Inter-State council: State platform that brings States together in a routine dialogue on matters of fiscal federalism could be the starting point for building trust and a common agenda. In this context, the Inter-state council can be revived. Proper utilization of the institutional mechanism of the Inter-State Council must be ensured to develop political goodwill between the Centre and the states on contentious policy issues. The Punchhi Commission on Centre-State Relations had stressed granting functional independence to the Council so that it can engage vibrantly in policy development and conflict resolution.

Relaxing FRBM Norms: The relaxation of limits imposed by the FRBM Act, regarding the market borrowings by the states, is a step in the right direction. However, these borrowings can be backed by a sovereign guarantee by the Union Government. Moreover, the Union government can provide money to states so that they can take necessary action to deal with the crisis at the state level. The gradual widening of the fiscal capacity of the states has to be legally guaranteed without reducing the Centre’s share.

Horizontal federalism: Horizontal federalism is anchored on the building of a relationship between the constituent units of the federal system, with an oversight power to the federal government. Horizontal federalism needs to be viewed differently from cooperative federalism, where the Centre and the states “cooperate” in the larger public interest. However, the horizontal framework facilitates the coordination of inter-see the provinces on matters of common interest.

Political Will: Upholding federalism requires political maturity and a commitment to the federal principle. A politics of deepening federalism will need to overcome nationalist rhetoric that pits federalism against nationalism and development.

LESSON FROM INTERNATIONAL EXPERIENCES

Most large democracies like the US, Canada, Australia, etc. Have many governments – provincial ones and a Union.

Australia

• As soon as the pandemic struck, Australia was to retire its existing Council of Australian Governments, an existing inter-government coordinating body in their federal structure, and create a National Cabinet.
• It is composed of all Chief Ministers, Premiers, the Prime Minister and even representatives from local bodies.
• An empowered executive, with select and expert committees and adjunct councils, decides on federal, financial, pandemic-related health, employment, even women’s and children’s safety and security, and with a legal framework as a buttress.
• For doubters asking if Australia or any of the others in a genuine federal partnership between their in-country governments are managing the pandemic better than India, the answer is crystal clear.

In a Westminster-style democracy, India’s national and sub-national governments are elected for parties’ agendas and as of date, India and its states vest their executive powers in close to 40 distinct ruling parties. So the question before us is not if Australia or countries with federal partnerships within are doing better, but if India will now manage COVID-19, and indeed the country in general, better if its various governments with distinct agendas plan and coordinate regularly.

WAY FORWARD

• For India to leapfrog into a developed country, oft-bandied political rhetoric, the country must first be willing to shed its unitary insecurities, govern via a federal body politic, and defer to local and state governments.
• As things stand, the Union has too much power on inputs and too little stake in outcomes. The Inter-State Council must be resuscitated, reinvigorated and chartered to represent a federal India.
• Matters, not only financial but water management, labour, energy, human trafficking and much more, are cross-state matters, which require an ongoing conference between states.
• Intergovernmental cooperation and coordination, yes, but also as much autonomy and agency, given the differences in the social and economic environments across states.

CONCLUSION: ‘One Nation, Many Governments’ is the reality of India, and the Union is but one among the many. India must strive for a boring Union and vibrant states and that indeed will be the hallmark of success, replete with subsidiarity, decentralization and federalism. The ARC-II also recommended almost a decade back the principle of subsidiarity as the basis for governance. The governments have also taken steps like the minimum government and the maximum governance, but they have hardly any impact on the nature of political governance wherein the Centre with one hand cooperate and with other hand coerce states to achieve their political objective. This must change if India wants to realize its potential.