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Volume Ii: Constitutional Governance and the Management of Centre E C F S N O N A O T N I R N T E E A V L M O E E T G R G L A E A N T CH 2010 ON N ATE RELATIONS A A T O M REPOR S I OLUME - II MAR - T E V COMMISSION E U H R T T T I T N D S E N CENTRE-ST N C A O C REPORT OF THE COMMISSION ON CENTRE-STATE RELATIONS. MARCH 2010 VOLUME - II CONSTITUTIONAL GOVERNANCE AND THE MANAGEMENT OF CENTRE-STATE RELATIONS COMMISSION ON CENTRE-STATE RELATIONS REPORT VOLUME II CONSTITUTIONAL GOVERNANCE AND THE MANAGEMENT OF CENTRE-STATE RELATIONS MARCH 2010 THE COMMISSION CHAIRPERSON Shri Justice Madan Mohan Punchhi (Retd.) Former Chief Justice of India MEMBERS Shri Dhirendra Singh Shri Vinod Kumar Duggal Former Secretary to the Former Secretary to the Government of India Government of India Dr. N.R. Madhava Menon Shri Vijay Shanker Former Director, Former Director, National Judicial Academy, Bhopal, and Central Bureau of Investigation, National Law School of India, Bangalore Government of India Dr. Amaresh Bagchi was a Member of the Commission from 04.07.2007 to 20.02.2008, the date he unfortunately passed away. The Commission expresses its deep gratitude to late Dr. Bagchi for his signal contribution during his tenure as a Member. SECRETARIES Shri Amitabha Pande (17.07.2007 - 31.05.2008) Shri Ravi Dhingra (25.06.2008 - 31.03.2009) Shri Mukul Joshi (01.04.2009 - 31.03.2010) i ii The Commission on Centre-State Relations presents its Report to the Government of India. Justice Madan Mohan Punchhi Chairman Dhirendra Singh Vinod Kumar Duggal Member Member Dr. N.R. Madhava Menon Vijay Shanker Member Member New Delhi 31 March, 2010 iii iv INDEX Chapter No. Subject Page Nos. 1. INTRODUCTION 1 2. ISSUES AND CONCERNS IN 9 INTERGOVERNMENTAL RELATIONS 3. LEGISLATIVE RELATIONS BETWEEN 17 THE UNION AND STATES 4. ROLE OF GOVERNOR AND 53 CENTRE-STATE RELATIONS 5. EMERGENCY PROVISIONS AND 89 CONSTITUTIONAL GOVERNANCE 6. ADMINISTRATIVE RELATIONS AND 129 CENTRE-STATE CO-ORDINATION 7. SMALLER STATES AND BALANCE OF POWER IN FEDERAL GOVERNANCE 151 8. DECENTRALIZED GOVERNANCE AND INTERGOVERNMENTAL RELATIONS 171 9. OBLIGATIONS OF STATES AND UNION IN RESPECT OF SUBORDINATE COURTS 181 10. INTERGOVERNMENTAL RELATIONS REVISITED : TOWARDS A FRESH BALANCE OF POWER 195 11. SUMMARY OF CONCLUSIONS AND RECOMMENDATIONS 215 v vi CHAPTER 1 INTRODUCTION CONTENTS Sections/Headings Para Nos. Page Nos. 1.1 The Mandate 1.1.01-1.1.02 3 1.2 The Appraisal of the Existing Framework of Centre-State Relations 1.2.01-1.2.17 4-7 1.3 Concluding Remarks 1.3.01-1.3.04 7-8 1 Report of the Commission on Centre-State Relations 2 1 INTRODUCTION 1.1 The Mandate 1.1.01 The broad mandate of the Commission is "to review the existing arrangements between the Union and States as per the Constitution of India in regard to powers, functions and responsibilities in all spheres including legislative relations, administrative relations, role of Governors, emergency provisions, financial relations, economic and social planning, Panchayati Raj institutions, sharing of resources, including inter-state river water and recommend such changes as may be appropriate keeping in view the practical difficulties". In doing so the Commission is asked to keep in view the social and economic developments that have taken place over the years and the need to address the growing challenges of ensuring good governance and of availing emerging opportunities for sustained and rapid economic growth. The recommendations are to be directed at promoting the welfare of the people and towards alleviating poverty and illiteracy whilst strengthening the unity and integrity of the country. In short, the mandate of the Commission is to recommend steps to promote good governance for improving the quality of life of the people within the broad framework of the Constitution and in the context of socio-political developments overtaking the country in quick succession. 1.1.02 Besides the above broad mandate, there are a dozen specific terms of reference on subjects which throw up continuing challenges in Centre-State relations and good governance. The Commission grouped those items into six convenient themes and have devoted independent volumes on each theme analyzing its concerns and making specific sectoral recommendations on them. In view of this approach, this volume will limit itself to looking at the original scheme of Centre-State relations, examine the friction points which arose in the working of the scheme and how they were addressed, study the issues which continue to disturb smooth relations between the Union and the States and finally review the adequacy or otherwise of the Constitutional arrangements for promoting social welfare and good governance. 3 Report of the Commission on Centre-State Relations 1.2 An Appraisal of the Existing Framework of Centre-State Relations 1.2.01 The Constitutional scheme of governance at the Centre and in the States is provided in Part XI (Articles 245 to 263), and Part XII (Articles 264 to 298), with few related provisions on trade and Commerce in Part XIII and on All India Services in Part XIV. Broadly it deals with three types of relations namely (a) Legislative Relations (Articles 245-255); (b) Administrative Relations (Articles 256-263); and (c) Financial Relations (Articles 264-293). The Report is prepared following this scheme and analyzing the issues and challenges under each of the three types of Centre-State relations. 1.2.02 The Scheme on legislative relations is largely based on the federal principle of "subsidiarity" under which what can best be administered from the Centre are kept with the Union (Union List) and those which are more of regional or local interest are assigned to the Units (State List) with some items of common concern in what is called in the Concurrent List. Part XI distributes the legislative powers between the Union and the States. The subject-matter of legislation are listed rather exhaustively in the three Lists given in the Seventh Schedule. Constitution gives autonomy to Centre and States within their respective fields. Parliament may make laws for the whole or any part of the territory of India and the State Legislature for the whole or any part of that State. However, applying the doctrine of territorial nexus, State laws having extra-territorial operation have been held valid by the court. There are several judicial doctrines evolved by the Supreme Court to interpret possible overlapping of jurisdictions in the matter of legislative powers of Centre and States. By and large the scheme worked reasonably well, though States have complained about the Union transferring items from the State List to the Concurrent List without adequate consultation. 1.2.03 In the event of a conflict between a Union law or State law, Article 254 stipulates that the Union law will prevail irrespective of whether the Union law is enacted prior to the State law or subsequent to the State law. This means in effect that Parliament can repeal a State law at any time with respect to a matter in the Concurrent List, even if made with consent of President. Parliamentary supremacy in matters falling under List I and III is secured by the Constitution. Furthermore residuary powers of legislation is exclusively with the Union (Article 248). 1.2.04 The supremacy of the Union in legislative matters is further clear from the extent of powers the Union enjoys to legislate on subjects in the State List under certain circumstances. These include: 4 Introduction (i) Power of Parliament to legislate in national interest under a Resolution of the Upper House (Article 249) (ii) Power of Parliament to legislate during operation of Emergency (Article 250) (iii) Parliament's power to legislate with the consent of States (Article 252) (iv) Legislation for giving effect to international treaties and agreements (Article 253) (v) Power to legislate in case of failure of Constitutional machinery in States (Article 356) 1.2.05 Again, another issue in respect of legislative relations which caused friction between Centre and States is the power of Governor to reserve any Bill passed by the State Assembly for consideration of the President, sometimes for an indefinite period! A law adopted, sometimes more than once, by the Assembly can therefore become a law in the State only if assented by the President (Articles 200, 201). 1.2.06 It is more in the sphere of administrative relations; the scheme was put to test on several occasions. The scheme is aimed to facilitate implementation of Union laws in States, achieving co-ordination for administrative efficiency, resolving disputes when they arise and to ensure that the Union intervenes whenever a State is threatened by external aggression or internal disturbance. 1.2.07 The division of executive power is co-extensive with the division of legislative power of both the Governments (Article 73 and 162). 1.2.08 The issue of Centre-State co-ordination in administrative matters has been a complex issue though the Constitution did provide some mechanisms. For example, by agreement or legislation (Article 258) delegation of administrative powers is provided for. Greater inter-state co-ordination is also sought to be achieved through All India Services the control on which vests jointly on Union and States. 1.2.09 Article 257(1) says that the executive power of the State shall be so exercised as not to impede or prejudice the exercise of executive power of the Union. The Centre is empowered to give directions to States in this regard. If directions are not complied, emergency provisions may be invoked by the Centre.
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