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GS Paper: Federalism

  • In news: Sutlej-Yamuna Link (SYL) Canal

    The Supreme Court drew an assurance from the State of Punjab that it will meet the Haryana counterpart within this month to discuss the construction of the Sutlej-Yamuna Link (SYL) Canal which has been languishing for two decades.

    Why in news?

    • The observations came after the Centre complained that Punjab had “refrained” from coming to the negotiating table to engage in talks with Haryana over the issue.
    • The construction of Punjab’s portion of the canal had led to militant attacks in the 1980s.
    • The issue had also been a political thorn for successive governments in Punjab, so much so that it led to the State’s unilateral enactment of the controversial Punjab Termination of Water Agreements Act of 2004.
    • This law was, however, struck down by a Constitution Bench in 2016, dashing the hopes of Punjab’s farmers to reclaim lands acquired for the SYL canal project.

    About Sutlej-Yamuna Link (SYL) Canal

    • Satluj Yamuna Link Canal or SYL as it is popularly known, is an under-construction 214-kilometer long canal in India to connect the Sutlej and Yamuna rivers.

    What is the SYL canal issue?

    • At the time of reorganization of Punjab in 1966, the issue of sharing of river waters between both the states emerged.
    • Punjab refused to share waters of Ravi and Beas with Haryana stating it was against the riparian principle.
    • Before the reorganization, in 1955, out of 15.85 MAF of Ravi and Beas, the Centre had allocated 8 MAF to Rajasthan, 7.20 MAF to undivided Punjab, 0.65MAF to Jammu and Kashmir.
    • Out of 7.20 MAF allocated, Punjab did not want to share any water with Haryana.
    • In March 1976, when the Punjab Reorganization Act was implemented, the Centre notified fresh allocations, providing 3.5 MAF To Haryana.

    Inception of the canal project

    • Later, in 1981, the water flowing down Beas and Ravi was revised and pegged at 17.17 MAF, out of which 4.22 MAF was allocated to Punjab, 3.5 MAF to Haryana, and 8.6 MAF to Rajasthan.
    • Finally, to provide this allocated share of water to southern parts of Haryana, a canal linking the Sutlej with the Yamuna, cutting across the state, was planned.
    • Finally, the construction of 214-km SYL was started in April 1982, 122 km of which was to run through Punjab and the rest through Haryana.
    • Haryana has completed its side of the canal, but work in Punjab has been hanging fire for over three decades.

    Why has the SYL canal come up again now?

    • The issue is back on centre stage after the Supreme Court directed the CMs of Punjab and Haryana to negotiate and settle the SYL canal issue.
    • The apex court asked for a meeting at the highest political level to be mediated by the Centre so that the states reach a consensus over the completion of the SYL canal.
    • The meeting remained inconclusive with the Centre expressing the view that the construction of the SYL canal should be completed. But Punjab CM refused categorically.

    Punjab’s resentment with the project

    • The dispute is based on the bloody history around the SYL canal. The trouble-torn days of terrorism in Punjab started in the early 1980s when work on the SYL started.
    • Punjab feels it utilized its precious groundwater resources to grow the crop for the entire country and should not be forced to share its waters as it faces desertification.
    • It is feared that once the construction of the canal restarts, the youth may start feeling that the state has been discriminated against.
    • The Punjab CM fears Pakistan and secessionist organisations could exploit this and foment trouble in the state.

    Water crisis in Punjab

    • Punjab is facing severe water crisis due to over-exploitation of its underground aquifers for the wheat/paddy monocycle.
    • According to the Central Underground Water Authority’s report, its underground water is over-exploited to meet the agriculture requirements in about 79 per cent area of the state.
    • Out of 138 blocks, 109 are “over-exploited”, two are “critical” five are “semi-critical” and only 22 blocks are in “safe” category.

    Punjab expects a new tribunal

    • The state wants a tribunal seeking a fresh time-bound assessment of the water availability.
    • The state has been saying that till date there has been no adjudication or scientific assessment of Punjab river waters.

    Try this PYQ:

     

    Which one of the following pairs is not correctly matched? (CSP 2017)

    Dam/Lake River

    (a) Govind Sagar: Satluj

    (b) Kolleru Lake: Krishna

    (c) Ukai Reservoir: Tapi

    (d) Wular Lake: Jhelum

     

    [wpdiscuz-feedback id=”pi9dnq0vcr” question=”Please leave a feedback on this” opened=”1″]Post your answers here.[/wpdiscuz-feedback]

     

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  • Skewed divisible pool

    divisible pool Context

    • The centralisation of fiscal powers in India has been blamed for the poor fiscal health of the states.

    Why in news?

    • Chief Ministers expressed their concern about dwindling State revenues in a NITI Aayog meeting chaired by the Prime Minister.
    • They sought a higher share in the divisible pool of taxes and an extension of GST compensation, both of which have long remained a bone of contention between the Union government and the States.

    Need for financial devolution

    • To strengthen democracy at grass root level with more revenue resources for better service delivery.
    • To increase accountability to people so performance can be realized as direct contact with people.

    What is divisible pool of taxes?

    • The divisible pool is that portion of gross tax revenue which is distributed between the Centre and the States. The divisible pool consists of all taxes, except surcharges and cess levied for specific purpose, net of collection charges.

    What is fiscal federalism?

    • Fiscal federalism refers to how federal, state, and local governments share funding and administrative responsibilities within our federal system. The funding for these programs comes from taxes and fees.

    Poor state of state finances

    • Stagnant revenue: Since States cannot raise tax revenue because of curtailed indirect tax rights — subsumed in GST, except for petroleum products, electricity and alcohol — the revenue has been stagnant at 6% of GDP in the past decade.
    • Distorted expenditure: While States lost their capacity to generate revenue by surrendering their rights in the wake of the Goods and Services Tax (GST) regime, their expenditure pattern too was distorted by the Union’s intrusion, particularly through its centrally sponsored schemes.
    • Decline in share: The ability of States to finance current expenditures from their own revenues has declined from 69% in 1955-56 to less than 38% in 2019-20.
    • Stress on finance: States’ financial health had taken a turn for the worse with the implementation of the Ujwal DISCOM Assurance Yojana, farm loan waivers, as also the slowdown in growth in 2019- 20.

    Key fact to remember

    Finance Commission keeps tax devolution for states at 41% in FY22

     

    How fiscal centralisation impacts on states?

    • Cut in the corporate tax: The recent drastic cut in corporate tax, with its adverse impact on the divisible pool, and ending GST compensation to States have had huge consequences.
    • States paying high interest rates: States are forced to pay differential interest — about 10% against 7% — by the Union for market borrowings.
    • Centrally sponsored schemes curbing autonomy: There are 131 centrally sponsored schemes, with a few dozen of them accounting for 90% of the allocation, and States required to share a part of the cost.

     

     Suggestions for strong fiscal federalism

    • Creation of federal institution: We need to create another institution in the form of a GST state secretariat that can bring together senior officers from the Centre and states in an institutional forum registered under the Society Act.
    • State Finance Commissions: should be accorded the same status as the Union Finance Commission and the 3Fs of democratic decentralization (funds, functions, and functionaries) should be implemented properly.
    • Robust GST regime: Transparency, simplification and rationalisation of GST will help states to recover soon.

    Way Forward

    • Relook on various exemptions to rationalise the taxes/levies
    • Augmentation of Tax Administration Structure
    • Technology-based Tax Administration may also be further expanded to cover even utility charges like water, street lights, sanitation charges, etc.

    Conclusion

    • It is important now to rethink the design and structure of a genuine fiscal partnership, which should not merely be a race to garner more resources, but a creative attempt to move towards a vibrant Indian value chain that can catapult India’s growth rate closer to the quest for double-digit growth.

    Mains question

    Q. Why it is important now to rethink the design and structure of a genuine fiscal partnership? Discuss this in context of Skewed divisible pool and state of fiscal federalism in India.

     

     

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  • fiscal federalism in India

    Context

    The centralisation of fiscal powers in India has been blamed for the poor fiscal health of the states.

    Centralisation of fiscal powers: A background

    • Jawaharlal Nehru believed that socio-economic inequities could be addressed through the planning process.
    • A degree of centralisation in fiscal power was required to address the concerns of socio-economic and regional disparities.
    • As a result asymmetric federalism is inherent to the Indian Constitution.
    • India was never truly federal — it was a ‘holding together federalism’ in contrast to the ‘coming together federalism,’ in which smaller independent entities come together to form a federation (as in the United States of America).
    • In fact, the Government of India Act 1935 was more federal in nature than the Constitution adopted on January 26, 1950 as the first offered more power to its provincial governments.
    • Historically, India’s fiscal transfer worked through two pillars, i.e., the Planning Commission and the Finance Commission. 
    • But the waning of planning since the 1990s, and its abolition in 2014, led to the Finance Commission becoming a major means of fiscal transfer as the commission itself broadened its scope of sharing all taxes since 2000 from its original design of just two taxes — income tax and Union excise duties.
    •  Today, the Finance Commission became a politicised institution with arbitrariness and inherent bias towards the Union government.
    • Tamil Nadu government constituted a committee under Justice P.V. Rajamannar in 1969, the first of its kind by a State government, to look at Centre-State fiscal relations and recommend more transfers and taxation powers for regional governments.

    Declining fiscal capacity of the states

    • While States lost their capacity to generate revenue by surrendering their rights in the wake of the Goods and Services Tax (GST) regime, their expenditure pattern too was distorted by the Union’s intrusion, particularly through its centrally sponsored schemes.
    • The ability of States to finance current expenditures from their own revenues has declined from 69% in 1955-56 to less than 38% in 2019-20.
    • While the expenditure of the States has been shooting up, their revenues did not.
    • Stagnant revenue: Since States cannot raise tax revenue because of curtailed indirect tax rights — subsumed in GST, except for petroleum products, electricity and alcohol — the revenue has been stagnant at 6% of GDP in the past decade.

    Implications of fiscal centralisation in India

    • Use of non-divisive cess: Even the increased share of devolution, mooted by the Fourteenth Finance Commission, from 32% to 42%, was subverted by raising non-divisive cess and surcharges that go directly into the Union kitty.
    •  This non-divisive pool in the Centre’s gross tax revenues shot up to 15.7% in 2020 from 9.43% in 2012, shrinking the divisible pool of resources for transfers to States.
    • Cut in the corporate tax: The recent drastic cut in corporate tax, with its adverse impact on the divisible pool, and ending GST compensation to States have had huge consequences.
    • States paying high interest rates: States are forced to pay differential interest — about 10% against 7% — by the Union for market borrowings.
    • Centrally sponsored schemes curbing autonomy:  There are 131 centrally sponsored schemes, with a few dozen of them accounting for 90% of the allocation, and States required to share a part of the cost.
    • They spend about 25% to 40% as matching grants at the expense of their priorities.
    • These schemes, driven by the one-size-fits-all approach, are given precedence over State schemes, undermining the electorally mandated democratic politics of States.
    • In fact, it is the schemes conceived by States that have proved to be beneficial to the people and that have contributed to social development.
    • Driven by democratic impulses, States have been successful in innovating schemes that were adopted at the national level.
    • The diversion of a State’s own funds to centrally sponsored schemes, thereby depleting resources for its own schemes, violates constitutional provision.
    • Deepening inequality: The World Inequality Report estimates ‘that the ratio of private wealth to national income increased from 290% in 1980 to 555% in 2020, one of the fastest such increases in the world.
    • The poorest half of the population has less than 6% of the wealth while the top 10% nearly grab two-third of it’.
    • India’s tax-GDP ratio has been one of the lowest in the world — 17% of which is well below the average ratios of emerging market economies and OECD countries’ about 21% and 34%, respectively.
    • Its income tax base has been very narrow.
    • Indirect tax still accounts for about 56% of total taxes.
    • Instead of strengthening direct taxation, the Union government slashed corporate tax from 35% to 25% in 2019 and went on to monetise its public sector assets to finance infrastructure.

    Conclusion

    In sum, India’s fiscal federalism driven by political centralisation has deepened socio-economic inequality, belying the dreams of the founding fathers who saw a cure for such inequities in planning. It has not altered inter-state disparities either.

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  • How are Districts created?

    The West Bengal cabinet has approved the creation of seven new districts in the state.

    What are Districts?

    • India’s districts are local administrative units inherited from the British Raj.
    • They generally form the tier of local government immediately below that of India’s subnational states and territories.
    • A district is headed by a Deputy Commissioner/ Collector, who is responsible for the overall administration and the maintenance of law and order.
    • The district collector may belong to IAS (Indian Administrative Service).
    • Districts are most frequently further sub-divided into smaller administrative units, called either tehsils or talukas or mandals, depending on the region.

    How are new districts carved?

    • The power to create new districts or alter or abolish existing districts rests with the State governments.
    • This can either be done through an executive order or by passing a law in the State Assembly.
    • Many States prefer the executive route by simply issuing a notification in the official gazette.

    How does it help?

    • States argue that smaller districts lead to better administration and governance.
    • For example, in 2016, the Assam government issued a notification to upgrade the Majuli sub-division to Majuli district for “administrative expediency”.

    Does the Central government have a role to play here?

    • The Centre has no role to play in the alteration of districts or creation of new ones. States are free to decide.
    • The Home Ministry comes into the picture when a State wants to change the name of a district or a railway station.
    • The State government’s request is sent to other departments and agencies such as the Ministry of Earth Sciences, Intelligence Bureau, Department of Posts, Geographical Survey of India Sciences and the Railway Ministry seeking clearance.
    • A no-objection certificate may be issued after examining their replies.

     

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  • Consolidating multiple FIRs

    Context

    The Supreme Court’s (SC) refused to consolidate multiple FIRs filed in several states against former BJP spokesperson.

    When are multiple FIRs clubbed?

    • In 2001, the SC, in TT Antony vs. State of Kerala, made it clear that only the earliest information in regard to the commission of an offence could be investigated and tried.
    • In Babubhai vs. State of Gujarat (2010), the Court explained that the test to determine the sameness of the offence is to identify whether “the subject matter of the FIRs is the same incident, same occurrence or are in regard to incidents which are two or more parts of the same transaction”.
    • the SC extensively relied upon TT Antony while granting similar relief to two journalists.

    Reasons given by the SCs for refusal to club the FIRs

    •  The bench said that party spokespersons and journalists cannot be treated identically.
    • The Constitution creates no hierarchical difference between journalists and ordinary citizens when it comes to the enforcement of fundamental rights.
    • The right to approach the SC under Article 32 is in itself a fundamental right.
    • Nor did the SC craft any distinction on the basis of the status or affiliation of the accused in TT Antony.
    • Second, the bench said that she has not unconditionally apologised for her remarks and her political clout is apparent from the fact that she has not been arrested despite an FIR being filed against her.
    • This view is again misplaced. Whether or not the person has tendered an apology is not germane to the issue at hand.
    • Seeking or tendering an apology may be a mitigating factor while deciding punishment but only after the guilt is proved.

    Why the multiple FIRs should be consolidated

    • Abuse of statutory power of investigation: Filing of successive FIRs amounts to an abuse of statutory power of investigation and is a fit case for the SC to exercise its writ powers under Article 32 because high courts cannot transfer cases from one state to another.
    • Wastage of state resources and judicial time: Prudence demands that state resources and judicial time are not spent on a multiplicity of proceedings.
    • The multiplicity of proceedings would result in violation of fundamental rights under Article 21 as parallel investigations would result in her being forced to join investigations in different police stations in different states.
    • This serves no practical purpose because ultimately it is only one of the police reports that would be tried by a court of law.

    Conclusion

    In the absence of strict guidelines, some degree of caution is necessary on the part of judges to work within the confines of judicial propriety.

     

  • Explained: Inter-State Council

    Tamil Nadu CM M K Stalin wrote to PM asking that at least three meetings of the Inter-State Council should be held every year to “strengthen the spirit of cooperative federalism”.

    What is the news?

    • TN CM suggested that bills of national importance should be placed before the Council before being tabled in Parliament.
    • He said this was because there is no “effective and interactive communication” between the states and the Centre on issues of common interest.

    What is the Inter-State Council?

    • The Inter-State Council is a mechanism that was constituted “to support Centre-State and Inter-State coordination and cooperation in India”.
    • It was established under Article 263 of the Constitution, which states that the President may constitute such a body if a need is felt for it.
    • The Council is basically meant to serve as a forum for discussions among various state governments.

    Its establishment

    • In 1988, the Sarkaria Commission suggested the Council should exist as a permanent body, and in 1990 it came into existence through a Presidential Order.

    Functions of the Inter-State Council

    • The main functions of the Council are:
    1. Inquiring into and advising on disputes between states
    2. Investigating and discussing subjects in which two states or states and the Union have a common interest
    3. Making recommendations for the better coordination of policy and action

    Its composition

    • The Prime Minister is the chairman of the Council, whose members include the Chief Ministers of all states and UTs with legislative assemblies, and Administrators of other UTs.
    • Six Ministers of Cabinet rank in the Centre’s Council of Ministers, nominated by the Prime Minister, are also its members.
    • Its procedure states that the council should meet at least three times a year.

    What issues has TN CM raised?

    • The leader has flagged the lack of regular meetings.
    • The Council has met only once in the last six years — and that there has been no meeting since July 2016.
    • Since its constitution in 1990, the body has met only 11 times,

    Recent development: Reconstitution of the Council

    • The CM appreciated the reconstitution of the Council, carried out last month.
    • The body will now have 10 Union Ministers as permanent invitees, and the standing committee of the Council has been reconstituted with Home Minister Amit Shah as Chairman.
    • Finance Minister Nirmala Sitharaman and the Chief Ministers of Maharashtra, UP, and Gujarat are some of the other standing committee members.

    Why did TN raise this issue?

    • Many CM frequently disagreed with the central government’s policies on matters of taxation, on the medical examination NEET, and often talked about the rights of states.
    • What could be settled amicably among the executive branches is often taken to the doorsteps of the judicial branch.

    Role of TN in the Council’s formation

    Tamil Nadu has long advocated the need for a Council.

    • In 1969, late leader M Karunanidhi, spoke about setting up an expert committee to study Centre-state relations.
    • Months later, his government appointed a committee headed by P V Rajamannar, a former Madras High Court Chief Justice, which submitted a report in 1971.
    • It then recommended “the Inter-State Council should be constituted immediately”.

    What happened in the last meeting of the Inter State Council?

    • In 2016, the meeting included consideration of the Punchhi Commission’s recommendations on Centre-State Relations that were published in 2010.
    • At the time, M Karunanidhi had criticised then CM J Jayalalithaa for not personally attending the meeting.
    • The meeting saw detailed discussion on the recommendations.
    • States asked for maintaining the federal structure amid growing “centralisation”.
    • Imposition of Article 356 of the Constitution, which deals with the imposition of President’s Rule in states, was a matter of concern.
    • Bihar Chief Minister demanded that the post of Governor should be abolished!

     

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  • Implications of GST Council ruling

    Context

    The Supreme Court of India recently ruled that “The recommendations of the GST Council are not binding on either the Union or the States…”.

    About GST Council

    • The GST Council is a federal body that aims to bring together states and the Centre on a common platform for the nationwide rollout of the indirect tax reform.
    • Article 279 (1) of the amended Indian Constitution states that the GST Council has to be constituted by the President within 60 days of the commencement of the Article 279A.
    • According to the article, the GST Council will be a joint forum for the Centre and the States. It consists of the following members:
    • 1] The Union Finance Minister will be the Chairperson.
    • 2] As a member, the Union Minister of State will be in charge of Revenue of Finance.
    • 3] The Minister in charge of finance or taxation or any other Minister nominated by each State government, as members.
    • The Council has to function as a platform to bring the Union and State governments together.
    • As a mark of cooperative federalism, the Council shall, unanimously or through a majority of 75% of weighted votes, decide on all matters pertaining to GST and recommend such decisions to the Union and State governments.
    • Article 279A (4) specifies that the Council will make recommendations to the Union and the States on the important issues related to GST, such as the goods and services will be subject or exempted from the Goods and Services Tax.
    • Article 246A confers simultaneous or concurrent powers on Parliament and the state legislatures to make laws relating to GST.
    • This article is in sharp contrast to the constitutional scheme that prevailed till 2017.

    Background of the case

    • In Union of India Anr. vs Mohit Minerals Pvt. Ltd., the Supreme Court of India on May 19, 2022 ruled on a petition relating to the levy of Integrated Goods and Services Tax (IGST) on ocean freight paid by the foreign seller to a foreign shipping company.
    • Mohit Minerals had filed a writ petition before the Gujarat High Court challenging notifications levying IGST on the ground that customs duty is levied on the component of ocean freight and the levy of IGST on the freight element in the course of transportation would amount to double taxation.
    • GST is paid by the supplier, but if the shipping line is located in a non-taxable territory, then GST is payable by the importer, the recipient of service.
    • Ocean freight is a method of transport by which goods and cargo is transported by ships through shipping lines.

    Important aspects of the judgement

    • Power to legislate simultaneously: Article 246A gives powers to the Union and State governments simultaneously to legislate on the GST.
    • In other words, the two tiers of the Indian Union can simultaneously legislate on matters of the GST (except the IGST, which is in the legislative domain of the Union government).
    • In this case, the Government of India had argued that “Neither can Article 279A override Article 246A nor can Article 246A be made subject to Article 279A.”
    • However, cooperative federalism is to operate through the GST Council to bring in harmony and alignment in matters pertaining to the GST from both governments.
    • Given this background, the Union government had almost delegated the powers to create laws under the GST Act Section 5(1) to the GST Council.
    • Persuasive value only: The Supreme Court of India adjudicated that the GST Council’s recommendations are non-qualified and the simultaneous legislating powers of the Union and State governments give only persuasive value to the Council’s recommendations.
    • The power of the recommendations rests on the practice of cooperative federalism and collaborative decision-making in the Council.

    Issues with voting rights in GST council

    • Inbalance in voting rights: The Union government holds one-third weight for its votes and all States have two-thirds of the weight for their votes.
    • This gives automatic veto power to the Union government because a resolution can be passed with at least three-fourths of the weighted votes.
    • This imbalance in the voting rights between the Union and State governments, makes democratic decision-making difficult.
    • Equal weight to all states creates political problems: Though all the States are not equal in terms of tax capacity, everyone has equal weight for their votes.
    • This creates another political problem as the smaller States with lesser economic stakes can be easily influenced by interest groups.
    • Debate on political lines: The debates in the GST Council will be on political lines rather than on the economics of taxation.
    •  When the States governed by Opposition parties are vocal on counter-points, the States governed by the same party at the Union government are mute spectators.

    Way forward

    • Work in a harmonised manner: The Supreme Court has recorded, “Since the Constitution does not envisage a repugnance provision to resolve inconsistencies between the Central and State laws on GST, the GST Council must ideally function, as provided by Article 279A(6) in a harmonised manner to reach a workable fiscal model through cooperation and collaboration.”
    • Cooperative federalism: The nuanced understanding of cooperative federalism shows that there is no space for one-upmanship in either of the two tiers of the Indian federal government and particularly for the Union government under a quasi-federal Constitution.

    Conclusion

    Given the lopsided power structure favouring the Union government in the GST Council, it is against the spirit of democracy and federalism that the finances of governments can be left to such bodies.

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  • A judicial course that calls for introspection

    Context

    The recent decision of the Supreme Court of India in the case of A.G. Perarivalan has stirred up a hornet’s nest.

    Use of Article 142 to grant pardon

    • The Court has treaded the extraordinary constitutional route under Article 142.
    • The Bench decided to exercise the power of grant of pardon, remission et al., exclusively conferred on the President of India and State Governors under Articles 72 and 161.
    • Against the separation of power: Against the background of separation of powers viz. Parliament/Legislature, Executive and Judiciary, whether the course adopted by the Bench to do expedient justice is constitutional calls for introspection.

    Evaluating the constitutionality of decision

    • The power under Article 161 is exercisable in relation to matters to which the executive power of the state extends.
    • Discretionary power under Article 161: Article 161 consciously provides a ‘discretion’ to the Governor in taking a final call, even if it was not wide enough to overrule the advice, but it certainly provides latitude to send back any resolution for reconsideration, if, in his opinion, the resolution conflicted with constitutional ends.
    • In Sriharan’s case (2016 (7) SCC P.1), one of the references placed for consideration was whether the term ‘consultation’ stipulated in Section 435 Cr.P.C. implies ‘concurrence’.
    • It was held that the word ‘consultation’ means ‘concurrence’ of the Central government.
    • The Constitution Bench highlighted that there are situations where consideration of remission would have trans-border ramifications and wherever a central agency was involved, the opinion of the Central government must prevail.
    • Basing its conclusion on the legal position that the subject matter (Section 302 in the Indian Penal Code) murder, falls within Lists II and III (State and Concurrent lists) of the Seventh Schedule to the Constitution, the learned judges concluded that the State was fully empowered to take a call and recommend remission in this case.
    • If it is a simple case of being a Section 302 crime, the reason for finding fault with the Governor’s decision to forward the recommendation to the President may be constitutionally correct.
    • But the larger controversy as to whether the Governor in his exercise of power under Article 161 is competent at all, to grant pardon or remission in respect of the offences committed by the convicts under the Arms Act, 1959, the Explosive Substances Act, 1908, the Passports Act, 1967, the Foreigners Act, 1946, etc., besides Section 302, is not certain.
    • According to the decision, it is a simple murder attracting Section 302 of the IPC and therefore the Governor’s decision to forward the recommendation to the President is against the letter and spirit of Article 161 — meaning it is against the spirit of federalism envisaged in the Constitution.
    • Constitutionality use of Article 142: There are momentous issues that are flagged on the exercise of the power of remission under Article 142, by the Supreme Court in the present factual context.
    • The first is whether Article 142 could be invoked by the Court in the circumstances of the case when the Constitution conferred express power on the Governor alone, for grant of pardon, remission, etc., under Article 161.

    Way forward

    • Deeper judicial examination: Whether what the State government could not achieve directly by invoking Sections 432 and 433 of Cr.P.C, without concurrence of Centre could be allowed to take a contrived route vide Article 161 and achieve its objectives is a pertinent issue.
    • This aspect requires deeper judicial examination for the sake of constitutional clarity.
    • Timeframe for the Governor: The Constitution does not lay down any timeframe for the Governor to act on the advice of the Council of Ministers.
    • In any event, even if the delay was constitutionally inexcusable or was vulnerable to challenge, the final arbiter of the Constitution (Article 245) could not have trumped Article 161 with Article 142, which is constitutionally jarring.

    Conclusion

    To portray the remission as to what it was not in the State is a sad fallout the lawlords on the pulpit may not have bargained for. And on the constitutional plane, this verdict deserves a relook, even a review, as it stands on wobbly foundations built with creaky credence.

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  • Criminal justice system

    Context

    The key to an improved criminal justice system is quality forensic labs and well-trained staff, not more legislation and harsher punishments.

    About forensic science

    • Forensic science is the application of scientific perspectives and techniques to the legal process, including investigations and courtroom protocol.
    • It is the use of scientific data and procedures specifically for the legal system.
    • There is rigorous procedure involved, including controlled conditions, reliable data collection and the attempt to disprove hypotheses.
    • Methodologies like the autopsy procedures, fingerprinting, testing and matching for poisons, blood spatter analysis, matching guns to bullets fired (ballistics), voice sample matches, handwriting assessments and DNA analysis are all facets of forensic science.

     Inadequate state forensic facilities

    • We have a woefully inadequate number of forensic science laboratories (FSL).
    • There are seven central forensic laboratories in India at Hyderabad, Kolkata, Chandigarh, New Delhi, Guwahati, Bhopal and Pune.
    • Six of these laboratories, barring Delhi, are under the control of the Directorate of Forensic Science Services (DFSS), and its mission is to render high quality and credible forensic services to the justice delivery system.
    • A National Forensic Sciences University was established in Gandhinagar, Gujarat in 2020.
    • The existing National Institute of Criminology and Forensic Science in Delhi has been integrated into this new university.
    • There are 32 state FSLs and about 529 mobile FSL units, of which Delhi has one state FSL and six mobile units.
    • The DNA tests discovered in 1985 are used to identify individuals involved in alleged crimes.
    • In 2017, The Hindu reported that while the United Kingdom completes DNA testing on over 60,000 crimes annually, India with over 13 times the population completes such tests on less than 7,500 cases.
    • The average pendency at each lab is huge.
    • In all states, there were over 50 per cent vacancies in personnel at their facilities.

    Way forward

    • More investment: We certainly need more investment in the establishment of FSL laboratories, the training and appointment of personnel adept at forensic methodologies and reforms within our police to establish a trained and skilled detective cadre tasked with solving complex and heinous crimes.
    • Quality training and accreditation: There is a desperate need for good quality training facilities, standards of accreditation and continuous education programmes for our forensic experts.

    Conclusion

    It is not more legislation and harsher punishments that will solve crimes, but well-trained forensic staff plying their craft in good quality laboratories that will aid our criminal justice system.

  • A new road for India’s fiscal federalism

    Context

    On May 19, in Union of India vs Mohit Minerals, the Supreme Court of India delivered a ruling which is likely to have an impact far wider than what the Centre might have imagined when it brought the case up on appeal.

    Background

    • At stake was the validity of a levy imposed on importers, of Integrated Goods and Services Tax (IGST) on ocean freight paid by foreign sellers to foreign shipping lines.
    • The Gujarat High Court had declared the tax illegal.
    • The Supreme Court affirmed the ruling and held that the levy constituted double taxation — that is, that the importer, which was already paying tax on the “composite” supply of goods, could not be asked to pay an additional tax on a perceived “service” that it may have received.

    Why the ruling could transform the future of fiscal federalism in India

    • Equal powers to legislate on GST: While delivering the judgement, the Supreme Court held that both Parliament and the State legislatures enjoy equal power to legislate on Goods and Services Tax (GST).
    • The Court said that the Goods and Services Tax Council’s recommendations were just that: recommendations that could never be binding on a legislative body.
    • Until now, governments across India have treated the GST Council’s recommendations — even where they disagreed with them — as sacrosanct, because they believed that this was indeed the law.
    • According to the Court, State legislatures possess the authority to deviate from any advice rendered by the GST Council and to make their own laws by asserting, in the process, their role as equal partners in India’s federal architecture.
    • Conflicting taxation regimes: Because of the ruling, the State governments will be free to exercise independent power to legislate on GST.
    • It is possible that this might lead to conflicting taxation regimes, with the idea of ‘One Nation One Tax’ rendered nugatory.
    • Constitutional power cannot be limited through statute: The Court’s ruling does not mean that a legislature — whether Parliament or the States’ — cannot through statutory law make the Council’s recommendations binding on executive bodies.
    • But a constitutional power, in the Court’s ruling, can never be limited through statute. Such curbs must flow only from the Constitution.
    • And in this case, in the Court’s analysis, no restrictions on legislative power can be gleaned on a meaningful reading of the Constitution.

    Background of 101st constitutional Amendment

    • Unification of tax administration: When, in July 2017, the Union government introduced the GST regime through the 101st constitutional Amendment, it did so based on an underlying belief that tax administration across India needed unification.
    • To give effect to this idea, many entries in the State list of Schedule VII of the Constitution were either deleted or amended.
    • A power to legislate on GST was inserted through a newly introduced Article 246A.
    •  No longer could State governments legislate on sale or purchase of goods barring a few exceptions, such as petroleum and liquor through the ordinary legislative route.
    • GST Council: In addition, the 101st Amendment also established, through Article 279A, a GST Council.
    • The Council was given the power to “make recommendations to the Union and States” on several different matters.

    Implications of the judgement

    • The use of the word “recommendations” suggested on the one hand that its decisions would be advisory, at best.
    • But, at the same time, the fact that Article 279A directed the establishment of a mechanism to adjudicate disputes between governments on decisions taken by the Council suggested that those governments would, in fact, be bound by any advice rendered to them.
    • GST would be in jeopardy: If the former reading was to be deployed, the purpose behind the introduction of a common GST would be in jeopardy.
    • But the latter interpretation effectively entailed the destruction of the well-laid plans of the Constituent Assembly.
    • Fiscal responsibilities that had been divided with much care and attention between the Union and the States would now stand dissolved.

    Federal compact

    • Although States had until now proceeded on a tacit belief that the GST Council’s recommendations were binding, such an approach, in Justice Chandrachud’s words, would run counter both to the express words of the Constitution and the philosophical values underlying the language deployed.
    • Article 246A, which was introduced by the 101st Amendment provides concomitant power both to the Union and to the State governments to legislate on GST.
    • It does not discriminate between the two in terms of its allocation of authority.
    • That allocation, according to the Court, cannot be limited by a reading of Article 279A, which establishes a GST Council, and which treats the Council’s decisions as “recommendations”.

    Conclusion

    GST was conceived as a product of what some described as “pooled sovereignty”. But perhaps it is only in an administrative area, animated by contestation, where we can see synergy between different sovereign units, where our nation can take a genuine turn towards a more “cooperative federalism”.

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