From UPSC perspective, the following things are important :
Prelims level : Seventh Schedule
Mains level : Paper 2- Federal system
The article analyses the issues of distribution of powers under the Constitution and the issues linked with it.
Debate on the role of Centre and states
- There is an argument for the need to re-examine the distribution of powers under the Seventh Schedule so as to rationalise the Centrally Sponsored Schemes (CSSs).
- Under the Centrally Sponsored SchemesCentre extends support in sectors pertaining to the State List.
- Spending by the Centre on a state subject like health and need for states’ contribute to a Union subject like defence is considered.
- However, the constitutional assignments between the Centre and subnational governments in federations, are done broadly on the basis of their respective comparative advantage.
- That is why the provision of national public goods is in the federal domain and those with the state-level public service span are assigned to the states.
3 settled issues in the debate
- The debate seems to have settled on at least three counts.
- One, the federal organisation of powers can be revisited and reframed.
- Two, the CSSs must continue but they should be restructured.
- Three, there is a need for an appropriate forum to discuss the complex and contentious issue of reviewing federal organisation of powers and restructuring of central transfers.
Review of the subjects in lists
- In spite of health being a state subject, the response to collective threats linked to the subject required some kind of organisation of federal responsibilities on a functional basis.
- A typical response is to recommend shifting subjects to the Concurrent List to enable an active role for the Centre.
- The High-Level Group, constituted by the 15th Finance Commission, recommended shifting health from the State to the Concurrent List.
- A similar recommendation was made earlier by the Ashok Chawla Committee for water.
- Shifting of subjects from the State to Concurrent List in times of acute sub-nationalism, deep territorialisation and competitive federalism is going to be challenging.
- The most collective threats and the challenges of coping with emerging risks of sustainability are linked to either the State List subjects or require actions by states — water, agriculture, biodiversity, pollution, climate change.
- This extended role of ensuring security against threats to sustainability of resources forms a new layer of considerations.
- This should define the contours of a coordinated response between the Centre and States — as it happened during the pandemic.
- In fact, such threats and challenges require the states to play a dominant role.
- At the same time, the Centre must expand its role beyond the mitigation of inter-state externalities and address the challenges of security and sustainability.
Consider the question “The federal organisation of powers under the Constitution’s Seventh Schedule needs review. In light of this, examine the problems faced by the distribution and suggest the challenge the review would face.”
The ongoing friction between the Centre and the states over GST reforms tells us that consensus-building is not a one-time exercise. It has to allow sustained dialogue and deliberation. Perhaps it is time to revisit the proposal for an elevated and empowered Inter-State Council.