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GS Paper: GS2-02.Functions & responsibilities of the Union and the States; issues and challenges of federal structure;

  • Ladakh’s 7 councils & the decentralisation debate

    Why in the News?

    The Ladakh administration announced on Monday that Autonomous Hill Development Councils (AHDCs) will be constituted in all seven districts of the Union Territory, up from the existing two in Leh and Kargil. Ladakh’s two apex civil society bodies, the Apex Body Leh (ABL) and the Kargil Democratic Alliance (KDA). They have opposed the move, arguing it fragments political authority when a unified representative government under Article 371 is being negotiated with the Centre.

    What has the administration announced, and on what grounds does it justify the move as decentralisation?

    1. Seven councils replace two: An Autonomous Hill Development Council will now be constituted in each of Ladakh’s seven districts, following the creation of five new districts, Drass, Sham, Nubra, Changthang and Zanskar, in April.
    2. Official framing: Chief Secretary called the move “a major step towards democratic decentralisation.”
    3. Complementarity claim: The administration holds the councils are compatible with a proposed Union Territory-level representative body under Article 371, on which discussions with the Centre have broadly converged; this body would exercise legislative, executive, financial and administrative powers.
    4. Statutory basis: Section 3 of the Ladakh Autonomous Hill Development Council Act mandates a council in every district, so officials argue seven districts necessitate seven councils.
    5. Geography-based rationale: Ladakh spans nearly 60,000 sq km with barely 3 lakh people, among India’s least densely populated regions, with villages separated by mountain passes and hours of travel .

    Why do Ladakh’s civil society groups see this as a threat to representative government under Article 371?

    1. Shared premise, different objection: Neither the ABL nor the KDA disputes the need for decentralisation; their objection is to the fragmentation of political authority while negotiations over a representative framework are still underway.
    2. Dilution argument: ABL co-chairman argued that empowering seven district councils would leave little meaningful authority for the proposed Article 371 government, since that body is meant to shape Ladakh’s political future.
    3. “Maximum government, minimum governance”: KDA co-chairman Sajjad Kargili termed the move by this phrase, arguing more councils will not improve governance given that existing councils have steadily lost power.

    What powers do Ladakh’s hill councils hold on paper?

    1. Statutory design: The 1997 Act makes the councils responsible for district planning and development, and for preparing budgets and district plans.
    2. Implementation role: The councils are tasked with implementing development schemes and functioning as the district planning and development board.
    3. Land and revenue powers: They are also vested with management of certain local land and collection of certain local taxes.
    4. Relative statutory strength: Excluding territorial bodies under the Sixth Schedule, Ladakh’s councils rank among India’s more powerful statutory district bodies on paper.

    How functional have the councils actually been?

    1. Erosion since UT status: Political leaders across party lines say the councils have steadily lost relevance since Ladakh became a Union Territory in 2019.
    2. Shift in decision-making: Congress leader and LAHDC-Leh Leader of Opposition said decision-making has shifted to the Lieutenant Governor’s secretariat and departmental secretaries, with councils frequently excluded.
    3. Ignored recommendations, shrinking capacity: Critics argued council recommendations on land were frequently ignored, council staff were increasingly redeployed to the UT administration, and council budgets were reduced.
    4. “Virtually defunct”: Even where the law gives them authority over land, recommendations remain pending with the district administration and elected representatives are bypassed.

    How do Ladakh’s hill councils compare with similar bodies elsewhere in India?

    1. Sixth Schedule Autonomous District Councils (Assam, Meghalaya, Mizoram, Tripura): These bodies can legislate on land, forests, village administration and customary practices, subject to the Governor’s assent, a constitutionally entrenched arrangement.
    2. Ladakh’s AHDCs: Unlike Sixth Schedule bodies, they do not enjoy constitutional status, independent legislative powers, or judicial authority over customary matters.
    3. Manipur’s statutory autonomous councils: Ladakh’s councils are broadly comparable to these, both are statutory, not constitutional, bodies, and Manipur’s experience illustrates the limitations that statutory (as opposed to constitutional) autonomy carries in practice.

    What has deepened the trust deficit between Ladakh and the Centre?

    1. Procedural breach over consultation: Ladakh leaders say the seven-council proposal featured in the minutes of a May 22 meeting; they refused to sign that version, after which a revised record without the proposal was prepared and signed. Leaders argue the Centre proceeded with the announcement without consulting them.
    2. September 2025 unrest: Relations deteriorated after violence during protests in Leh, the detention of climate activist Sonam Wangchuk under the National Security Act, 1980 and remarks by political leaders that were interpreted locally as questioning Ladakh’s patriotism.
    3. Voice of Buddhist Ladakh controversy: ABL leaders alleged that this newly emerged organisation, which claims to represent Buddhist interests, was encouraged to weaken the joint Leh-Kargil movement.
    4. Five-district redistricting dispute: The KDA alleged that the April redrawing of district boundaries disproportionately favoured Buddhist-majority districts.
    5. Absence of a legislature and slow negotiations: Unlike Jammu and Kashmir, Ladakh has no legislature under Union Territory status; negotiations over Sixth Schedule-like safeguards and a subsequent Article 371 framework have moved slowly, which civil society leaders attribute to deliberate delay by the Centre.

    Conclusion

    The expansion of hill councils reflects a mismatch between the form and substance of decentralisation in Ladakh. Adding five more councils multiplies administrative units without restoring the powers over land, budgets and planning that existing councils have already lost to the Lieutenant Governor’s secretariat. Ladakh’s civil society groups see this as fragmenting their bargaining position ahead of a possible Article 371 framework rather than genuine devolution. Until the Centre commits to a constitutionally secure, functionally empowered representative structure, expanding the number of councils will not resolve Ladakh’s core demand for real self-governance.

    PYQ Relevance

    [UPSC 2020]  The strength and sustenance of local institutions in India has shifted from their formative phase of ‘Functions, Functionaries and Funds’ to the contemporary stage of ‘Functionality’. Highlight the critical challenges faced by local institutions in terms of their functionality in recent times.

    Linkage: The PYQ directly parallels the article’s finding that Ladakh’s hill councils, despite having statutory functions on paper, have lost functional relevance in practice.

  • HC Halts Byelections in 5 Tamil Nadu Constituencies

    Why in the News?

    The Madras High Court restrained the Election Commission from notifying byelections to five Tamil Nadu Assembly constituencies whose sitting members resigned after the 2026 Assembly election, since election petitions challenging their victories remain pending. The interim order raises the question of whether a resignation-created vacancy is legally “clear” enough to trigger fresh polls when the same seat’s original result is still under judicial challenge.

    What is the factual and procedural backdrop of the Madras High Court’s interim order?

    1. Interim restraint: The Madras High Court restrained the Election Commission from notifying byelections to Tiruchi East, Perundurai, Ambasamudram, Viralimalai, and Karur Assembly constituencies until July 31.
    2. Trigger for vacancy: All five sitting MLAs resigned after winning the 2026 Assembly election.
    3. Core contention: The petitioner argued that byelections before disposal of pending election petitions could create an anomalous situation of dual representation for a single constituency.
    4. Deadline set: The court granted the respondents time till July 31 to file counter-affidavits.

    On what legal doctrine did the petitioner challenge the Election Commission’s power to notify byelections?

    1. Statutory basis challenged: The petitioner argued the Election Commission cannot treat these vacancies as a “clear vacancy” under Section 151A of the Representation of the People Act, 1951. Section 151A: provision requiring the Election Commission to fill a vacancy in a House through byelection within six months of its occurrence.
    2. Precedent cited: Sanjeevayya vs Election Commission of India (1967) held that byelections cannot proceed while an election petition relating to that constituency remains pending.
    3. Precedent cited: Election Commission of India vs Telangana Rashtra Samithi (2011) reinforced the same bar on byelections during pending adjudication.
    4. Precedent cited: Pramod Laxman Gudadhe vs Election Commission of India (2018) extended the same principle.
    5. Consequential prayer argument: All five election petitions sought not only to invalidate the winning candidates’ victory but also to declare the petitioners themselves as winners.
    6. Risk of dual mandate: A byelection conducted before these petitions are decided could produce a second declared winner for a seat where a court may later declare a different winner from the original contest.

    Does the timing of an MLA’s resignation relative to the election petition alter the vacancy’s legal status?

    1. Distinguishing principle raised: The Advocate-General argued that a distinction must be drawn between MLAs who resigned before an election petition was filed and those who resigned after.
    2. Chief Minister’s case: The Chief Minister resigned from Tiruchi East on May 10, before his rival candidate filed the election petition.
    3. Other MLAs’ case: Several other MLAs resigned before the election petitions challenging their victory were filed.
    4. Implication for vacancy classification: A resignation preceding the petition may create a genuinely clear vacancy. A resignation following the petition may not.
    5. Unresolved legal question: The Bench agreed that this timing distinction required deeper examination before final orders could be passed.

    What procedural objections did the respondents raise against the maintainability of the PIL?

    1. Locus standi challenge: Senior counsel representing the Chief Minister, questioned the PIL petitioner’s standing to direct the Election Commission’s conduct. Locus standi: the legal right of a party to bring a case before a court.
    2. Prematurity argument: The petition was argued to be premature since the Election Commission had not yet taken any decision on conducting byelections in the five constituencies.
    3. No notification issued: No notification on byelections had been issued at the time the PIL was heard.
    4. Distinct roles of respondents: The Advocate-General represented the Legislative Assembly Secretary. Separate counsel represented the Election Commission and the Chief Minister.

    How did the Bench reconcile the competing claims in its interim order?

    1. Rejection of narrow standing objection: The Bench held that a narrow and pedantic interpretation of locus standi cannot be applied in matters touching the purity of the democratic process.
    2. Acceptance of AG’s nuance: The Bench agreed that the Advocate-General’s argument on the timing of resignations relative to petition filing required deeper examination.
    3. Deferred decision: The court decided to pass final orders only after notice was issued to all respondents and counter-affidavits were filed.
    4. Interim balance struck: The Bench restrained byelection notification without ruling on the merits of either side’s substantive claim.

    Conclusion

    The order establishes that a resignation-created vacancy is not automatically a “clear vacancy” under Section 151A of the Representation of the People Act, 1951, when the underlying election result is under judicial challenge. The unresolved question is whether the timing of resignation relative to the filing of an election petition changes this classification. Until the High Court examines the Advocate-General’s distinction between pre-petition and post-petition resignations, five Tamil Nadu constituencies remain without elected representation. The case will determine whether electoral finality doctrine can override the Election Commission’s statutory duty to fill vacancies promptly.

    PYQ Relevance

    [UPSC 2022] Discuss the procedures to decide the disputes arising out of the election of a Member of the Parliament or State Legislature under The Representation of the People Act, 1951. What are the grounds on which the election of any returned candidate may be declared void? What remedy is available to the aggrieved party against the decision? Refer to the case laws.

    Linkage: The PYQ asks directly about election petition procedure and remedies under the RP Act. The article’s central dispute is precisely about how pending election petitions interact with byelection notification under this Act.

  • The fiscal tightrope for State Governments

    Why in the News?

    Kerala and Tamil Nadu recently released White Papers describing their outstanding government debt as alarming. This has revived the debate on whether State debt reflects fiscal mismanagement or a structural mismatch between States’ welfare responsibilities and their limited fiscal capacity.

    Why do State governments face a persistent fiscal squeeze despite bearing the bulk of welfare spending?

    1. Vertical fiscal imbalance: The Union government holds the larger share of taxation powers. State governments bear a larger share of overall government spending. Vertical fiscal imbalance: mismatch between a government tier’s revenue powers and its expenditure responsibilities.
    2. Welfare-heavy State budgets: State spending is concentrated in health, education, agriculture, and irrigation. These sectors directly affect livelihoods.
    3. Kerala and Tamil Nadu’s social spending record: Per capita State social expenditure was 30% higher in Kerala and 20% higher in Tamil Nadu than the all-India average (2020-23). It was 35% lower in Bihar and 40% lower in Uttar Pradesh.
    4. Kerala’s own tax effort: Kerala’s per capita own-tax revenue was 1.5 times the national average, driven mainly by SGST and sales tax.
    5. Skewed devolution: Kerala received 1.92% of Union tax devolution in 2023-24. Its population share was 2.6%.
    6. Composition of Kerala’s expenditure: Salaries took up about a fifth of the budget, pensions 15.3%, and interest payments 16.5%. Only 10% of expenditure went to capital expenditure. Capital expenditure: spending that creates productive assets, as against revenue expenditure on salaries, pensions and subsidies.

    Does Kerala’s fiscal stress reflect mismanagement, or an unresolved conflict between protecting welfare gains and financing future growth?

    1. The retrenchment trap: Cutting pensions or retrenching employees would create fiscal space. It would also erode Kerala’s social sector strengths.
    2. The investment deficit: Kerala needs large-scale, State-directed investment in infrastructure, higher education, research, and public transport. This investment is necessary to compete in knowledge-intensive sectors.
    3. Outmigration of talent: Educated youth are leaving Kerala in large numbers. The State cannot create matching educational and employment opportunities.
    4. The affluence paradox: Kerala’s weak public fiscal capacity coexists with visible private affluence, large houses, expensive cars, and a high density of gold shops. This gap threatens to widen inequality.

    Is Kerala’s fiscal constraint a resource problem or an allocation problem?

    1. Low credit-deposit ratio: Kerala’s credit-deposit ratio was around 66% in 2023. The national average was 76%, and Maharashtra and Tamil Nadu exceeded 100%. Credit-deposit ratio: share of a bank’s deposits that it lends out as credit in the same region.
    2. Unutilised savings: Deposits in excess of credit disbursed in Kerala rose from ₹1,388 billion in 2016 to ₹1,906 billion in 2020 and ₹2,792 billion in 2026.
    3. Foregone investment: Kerala’s actual public investment stood at ₹1,134 billion. Potential additional investment financeable from this surplus stood at ₹1,404 billion.
    4. Doubling potential: Kerala’s capital expenditure could have at least doubled between 2016 and 2026 had surplus savings been channelled into investment.

    What does China’s local government financing model reveal about the limits of India’s system?

    1. China-local government bonds (LGBs): Chinese provinces and lower-level governments finance the bulk of investment-led growth through local government bonds. These draw on large domestic bank savings.
    2. China-local government financing vehicles (LGFVs): Off-budget borrowing through LGFVs supplements fiscal transfers. LGFV: an entity set up by a local government to raise off-budget debt for infrastructure projects.
    3. China-centrally coordinated planning: Local borrowing and investment are coordinated through central government planning, keeping decentralised borrowing aligned with national goals.
    4. China-low cost of local borrowing: Chinese local governments borrow from their banking system at around 2%.
    5. India-costlier State Development Loans (SDLs): Indian States pay 6.5% to 7.5% interest on SDLs. SDL: a market security issued by State governments to raise loans. This rate is 0.25 to 0.75 percentage points higher than the Union government’s borrowing rate.

    Should State debt be treated as a liability or as an investment in citizens?

    1. Domestic ownership of debt: State and Union bonds are largely held by domestic commercial banks and insurance companies.
    2. Debt as debt to own people: These institutions channel citizens’ savings into government bonds. The government’s debt is effectively owed to its own people, not external creditors.
    3. Welfare-expanding borrowing: A government that borrows to expand welfare and opportunity serves a larger public purpose than a tight-fisted government.
    4. The reform gap: No fiscal structure currently allows State governments to access domestic savings easily and cheaply for planned development projects.

    Conclusion

    State government debt is not primarily a symptom of profligacy. It reflects a structural mismatch between the Union’s concentration of taxation powers and States’ disproportionate share of welfare and development spending. India worsens this mismatch, unlike China, by failing to channel abundant domestic savings into cheaper, State-directed investment. Fiscal reform must lower the cost and ease the terms of State borrowing, not merely discipline State expenditure.

    PYQ Relevance

    [UPSC 2015] Though the federal principle is dominant in our Constitution and that principle is one of its basic features, it is equally true that federalism under the Indian Constitution leans in favour of a strong Centre. Discuss.

    Linkage: It examines the constitutional design of Indian federalism, including financial powers and Centre-State fiscal relations. The article argues that States bear major expenditure responsibilities but have limited revenue and borrowing autonomy, highlighting the fiscal imbalance within India’s federal structure.

  • Constitutional mechanisms to resolve the inter-state water disputes have failed to address and solve the problems. Is the failure due to structural or process inadequacy or both? Discuss.

  • Many State Governments further bifurcate geographical administrative areas like Districts and Talukas for better governance. In light of the above, can it also be justified that more number of smaller States would bring in effective governance at State level? Discuss.

  • Recent directives from Ministry of Petroleum and Natural Gas are perceived by the `Nagas’ as a threat to override the exceptional status enjoyed by the State. Discuss in light of Article 371A of the Indian Constitution.

  • Though the federal principle is dominant in our Constitution and that principle is one of its basic features, but it is equally true that federalism under the Indian Constitution leans in favour of a strong Centre, a feature that militates against the concept of strong federalism. Discuss.

  • The concept of cooperative federalism has been increasingly emphasized in recent years. Highlight the drawbacks in the existing structure and the extent to which cooperative federalism would answer the shortcomings.

  • Discuss the essentials of the 69th Constitutional Amendment Act and anomalies, if any that have led to recent reported conflicts between the elected representatives and the institution of the Lieutenant Governor in the administration of Delhi. Do you think that this will give rise to a new trend in the functioning of the Indian federal politics?

  • To what extent is Article 370 of the Indian Constitution, bearing marginal note “Temporary provision with respect to the State of Jammu and Kashmir”, temporary? Discuss the future prospects of this provision in the context of Indian polity.