The recent spurt in terrorist violence and the unresolved Cauvery river water dispute brought to the fore once again the imbalanced nature of our federalism. For long scholars have argued with reason that our Constitution is quasi-federal in nature, and in times of emergency (under Article 352) and imposition of president’s rule under Article 356, it becomes completely unitary. These apart, the states in India are completely at the mercy of the Union for their very existence. Articles 2 and 3 of the Constitution give the Union unlimited powers to establish, merge, separate or alter the boundaries of states at will. The only restraint is that the Union shall not introduce a Bill for such purposes in Parliament without first referring it to the Legislature of the State affected by it for expressing its views. All these features, coupled with nomination of governors by the Union, the power of governors to withhold assent to a Bill and to reserve it to President’s assent make our federalism skewed in favour of the Union.
However the developments over the years have restored the federal balance to a great extent. The Supreme Court judgment in the Bommai case made Article 356 practically a dead letter. The Union’s increasing dependence on bipartisan consensus to get any Bill passed in Rajya sabha made adventurism unlikely. Coalition governments with strong presence of regional parties made the Union government dependant on states for its survival. The Forty Fourth Amendment of the Constitution during Janata government made proclamation of Emergency under Article 352 virtually impossible. With economic liberalization and dismantling of license-permit-quota raj, the Planning Commission lost much of its power and control over states. Fiscal devolution in India has been a model of mature and balanced federalism, thanks to Finance Commissions. The states’ share of Union tax revenues is now over 40 percent – 29 percent direct devolution, and about 12 percent through planning commission grants and centrally-sponsored schemes. Even these funds are allocated in a fairly objective manner, based on an agreed formula. True, there are still over 200 centrally sponsored schemes, and there is a case for direct devolution of most of these funds and plan grants through the Finance Commission mechanism. But on balance, we can conclude that our federalism is far more mature and balanced than ever before.
However, there are certain areas in which the Union’s weakness is hurting the country. Take the Cauvery dispute. Year after year the problem surfaces, and the Union is helpless. In 1991, during Bangarappa’s chiefministership, there were serious allegations of government inciting riots and violence against Tamilians in Karnataka. Timely rains rather than good sense of the states or institutional arrangements have been giving us respite in most inter-state river water disputes. The Union is often a helpless bystander as states indulge in political posturing and play dangerously parochial power games. Entry 56 in list-1 is too feeble and inadequate to permit decisive role to the Union. When your state is your constituency, it is difficult to be restrained or fair-minded.
Similarly law and order and crime control are state subjects included in list-2 of the Seventh Schedule. Terrorism, serious financial or banking fraud, cyber crime and drug trafficking do not respect state boundaries. Only well-coordinated, national action can check these offences and safeguard our lives, liberty and vital interests. Often the states lack national perspective, and do not have the expertise to deal with certain crimes. In 1987, when naxals abducted several IAS officials in Gurthedu in East Godavari district, the matter was treated as the State’s problem, and a dangerous precedent was set by agreeing to the terms of extremists. In 1990, when Rubina Sayeed was abducted by terrorists in Kashmir, again the state was forced to capitulate. Such disjointed, knee-jerk responses obviously emboldened terrorists and played havoc with national security. There is obviously a strong case for effective and automatic Union jurisdiction of all such offences.
Inter-state barriers like octroi are another example of parochial interests hurting national economy. We cannot have national unity or economic integration without free trade across the length and breadth of the country. Severe restrictions on education and employment and sons of the soil policies have been impeding growth and diluting standards, particularly in professional courses and universities. Again there is a case for the Union to be entrusted with these subjects.
Finally, linguistic and other minorities are often at the mercy of the state concerned. It is always easy and politically profitable to spread hatred and venom against vulnerable, politically insignificant minority groups. If the Union cannot guarantee life, limb and dignity of all citizens, then nationhood loses its meaning.
These four areas – inter-state river waters, terrorism and other specified crimes, inter-state trade, and protection of vulnerable minorities – need to be transferred to the Union. We certainly need a truly federal state based on the principle of subsidiarity. What can be done locally should never be entrusted to a larger unit. But what clearly can be handled only by the Union should not be entrusted to the smaller units either. Rapid changes in technology and security environment, and threats to our unity, integrity and economic prosperity need to be addressed swiftly and decisively. Balanced federalism must be a two-way traffic. It is in the larger interest of political parties and the Union and states to periodically reexamine the division of powers under Seventh Schedule. A diverse, vast and complex society needs to be alert and sensitive in its response to changing environment. Only then can we secure unity and promote prosperity.