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Subject: Federal System

  • Rajpath, Central Vista lawns renamed ‘Kartavya Path’

    Rajpath and Central Vista Lawns in the national capital will now be known as “Kartavya Path”, the New Delhi Municipal Council (NDMC) announces.

    Updating to Kartavya Path

    • The entire stretch and the area from the Netaji statue under the Grand Canopy to the Rashtrapati Bhavan will be known as Kartavya Path.
    • Kartavya Path, which will be opened to the public at the end of the official function, will exhibit landscapes, lawns with walkways, added green spaces, refurbished canals, amenity blocks, improved signages and vending kiosks.
    • New pedestrian underpasses, improved parking spaces, new exhibition panels, and upgraded night lighting are some other features that will enhance the public experience.
    • It also includes a number of sustainability features like solid waste management, storm-water management, recycling of used water, rainwater harvesting, water conservation and energy-efficient lighting systems, among others.

    Kingsway to Rajpath

    • Called Kingsway during British rule, the three-km stretch was built as a ceremonial boulevard by Edwin Lutyens and Herbert Baker, the architects of New Delhi, more than a hundred years ago.
    • The capital of the Raj moved to New Delhi from Calcutta in 1911, and construction continued for several years thereafter.
    • Lutyens conceptualised the modern imperial city centred on a “ceremonial axis”, which was named Kingsway in honour of the then Emperor of India, George V.
    • He visited Delhi during the Durbar of 1911, where he formally proclaimed the decision to move the capital.
    • The nomenclature followed that of the Kingsway in London, an arterial road built in 1905, which was named in honour of King Edward VII, the father of George V.
    • Following Independence, the road was given its Hindi name, Rajpath, on which the Republic Day parades took place over the decades that followed.

    Why sudden renaming?

    • During his address from the Red Fort on August 15, Modi had stressed on the abolition of symbols of colonialism.
    • The new name and look of Rajpath, as well as the installation of the 28-foot statue of Netaji under the Grand Canopy under which a statue of George V once stood, are meant to represent that spirit of the proud new India.

    Significance of all recent event

    • The construction of the Central Vista Redevelopment Project began in February 2021, with the new Parliament building and redevelopment of the Central Vista Avenue in the first phase.
    • The aim is to build an iconic avenue that truly befits the New India, the government has said about the Rs 608 crore Central Vista Avenue project.
    • It symbolizes a shift from erstwhile Rajpath being an icon of power to Kartavya Path being an example of public ownership and empowerment.

     

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  • 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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  • Concerns around Aadhaar-Voter ID linkage

    Reports have surfaced online of instances where block level officers have asked individuals to link their Aadhaar with their Voter IDs, failing which their Voter IDs could be cancelled.

    What is the news?

    • This furore comes in the aftermath of the Election Commission’s (EC) campaign to promote the linkage of Voter ID and Aadhaar that began on August 1.
    • In the first ten days since its launch, the campaign saw almost 2.5 crore Aadhaar holders voluntarily submitting their details to the EC.

    Aadhaar-Voter ID linkage: Why does the government want this?

    • The EC conducts regular exercises to maintain an updated and accurate record of the voter base.
    • A part of this exercise is to weed out duplication of voters.
    • There have been migrant workers who may have been registered more than once on the electoral rolls in different constituencies or for persons registered multiple times within the same constituency.
    • As per the government, linkage of Aadhaar with voter IDs will assist in ensuring that only one Voter ID is issued per citizen of India.

    Is the linking of Aadhaar with one’s Voter ID mandatory?

    • In December 2021, Parliament passed the Election Laws (Amendment) Act, 2021 .
    • This was to amend the Representation of the People Act, 1950 and Section 23(4) was inserted in the RP Act.
    • It states that the electoral registration officer may require voters to furnish their Aadhaar numbers to verify Authencity of voters list.

    Why is it making headlines now?

    • There has been the use of discretionary language throughout the amendments.
    • This has been accompanied by assurances that linkage is optional by both the government and the EC.
    • Alternative is provided to only who does not have an Aadhaar number.
    • To that extent, the limited element of choice that has been incorporated in the amendments seem to be negated or at the very least thrown into confusion.

    Why there is such proposal for linking?

    The preference to use Aadhaar for verification and authentication, both by the state and private sector, stems from few reasons:

    • Increase in UID-holders: First, at the end of 2021, 99.7% of the adult Indian population had an Aadhaar card.
    • Most versatile document: This coverage exceeds that of any other officially valid document such as driver’s licence, ration cards, PAN cards etc. that are mostly applied for specific purposes.
    • Reliable source of authentication: Since Aadhaar allows for biometric authentication, Aadhaar based authentication and verification is considered more reliable, quicker and cost efficient when compared to other IDs.

    Issues with mandatory linking: Puttaswamy judgment highlights

    • Puttaswamy judgment: The above reasons do not suffice the mandating of Aadhaar except in limited circumstances as per the Puttaswamy judgment.
    • Indispensability of the purpose: It needs to be considered whether such mandatory linkage of Aadhaar with Voter ID would pass the test of being “necessary and proportionate” to the purpose of de-duplication which is sought to be achieved.
    • Constitutional ambiguity: In Puttaswamy, one of the questions that the Supreme Court explored was whether the mandatory linking of Aadhaar with bank accounts was constitutional or not.
    • Against informational autonomy: It is the right to privacy which would allow a person to decide which official document they want to use for verification and authentication.

    Other judicial observations: Lal Babu Hussein (1995) Case

    • The Supreme Court had held that the Right to vote cannot be disallowed by insisting only on four proofs of identity.
    • The voters are entitled to rely on any other proof of identity and obtain the right to vote.

    What are the operational difficulties?

    • Aadhaar is not a citizenship proof: The preference to Aadhaar for the purposes of determining voters is puzzling as Aadhaar is only a proof of residence and not a proof of citizenship.
    • Excluding non-citizens is not easy: Verifying voter identity against this will only help in tackling duplication but will not remove voters who are not citizens of India from the electoral rolls.
    • Estimate of error rates in biometric based authentication: This certainly differs. As per the UIDAI in 2018, Aadhaar based biometric authentication had a 12% error rate.
    • Disenfranchisement of existing voters: Errors have led to the disenfranchisement of around 30 lakh voters in AP and Telangana before the Supreme Court stalled the process of linkage.

    Key concern: Right to Privacy

    • Some civil societies has highlighted that linking of the two databases of electoral rolls and Aadhaar could lead to the linkage of Aadhaar’s “demographic” information with voter ID information.
    • This could lead to violation of the right to privacy and surveillance measures by the state.
    • This would leave the EC with the option of verifying its information only through door-to-door checks.
    • There is a lack of enforceable data protection principles that regulate how authentication data will be used.

    What lies ahead?

    • Even as the amendments have been made and the EC has launched a campaign for linkage, a writ petition has filed with the Supreme Court challenging the same.
    • It challenges the amendments as being violative of the right to privacy.
    • The Supreme Court has transferred the writ to the Delhi High Court.
    • In the meantime, it is important that the government clarifies through a correction in Form 6B that the linking is not mandatory.
    • The govt should expedite the enactment of a data protection legislation that allays concerns of unauthorized processing of personal data held by the government.

     

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  • Jharkhand CM may face disqualification

    Jharkhand CM’s chair remains uncertain as the Election Commission (EC) is understood to have conveyed its decision in an office-of-profit complaint against him to the Governor.

    Why in news?

    • Under Section 9A of the Representation of the People Act, 1951, the CM could face disqualification for entering into a government contract.
    • The Constitution of India does not define the Office of Profit. It has only mentioned it under Article 102 (1) and Article 191 (1).

    What is Office of Profit?

    • MPs and MLAs, as members of the legislature, hold the government accountable for its work.
    • The essence of disqualification is if legislators hold an ‘office of profit’ under the government, they might be susceptible to government influence, and may not discharge their constitutional mandate fairly.
    • The intent is that there should be no conflict between the duties and interests of an elected member.
    • Hence, the office of profit law simply seeks to enforce a basic feature of the Constitution- the principle of separation of power between the legislature and the executive.

    What governs the term?

    • At present, the Parliament (Prevention of Disqualification) Act, 1959, bars an MP, MLA or an MLC from holding any office of profit under the central or state government unless it is exempted.
    • However, it does not clearly define what constitutes an office of profit.
    • Legislators can face disqualification for holding such positions, which bring them financial or other benefits.
    • Under the provisions of Article 102 (1) and Article 191 (1) of the Constitution, an MP or an MLA (or an MLC) is barred from holding any office of profit under the Central or State government.

    An undefined term

    • The officials of the law ministry are of the view that defining an office of profit could lead to the filing of a number of cases with the Election Commission and the courts.
    • Also, once the definition is changed, one will also have to amend various provisions in the Constitution including Article 102 (1) (a) and Article 109 (1) (a) that deal with the office of profit.
    • It will have an overarching effect on all the other sections of the Constitution.

    Factors constituting an ‘office of profit’

    • The 1959 law does not clearly define what constitutes an office of profit but the definition has evolved over the years with interpretations made in various court judgments.
    • An office of profit has been interpreted to be a position that brings to the office-holder some financial gain, or advantage, or benefit. The amount of such profit is immaterial.
    • In 1964, the Supreme Court ruled that the test for determining whether a person holds an office of profit is the test of appointment.

    What is the ‘test of appointment’?

    Several factors are considered in this determination including factors such as:

    1. whether the government is the appointing authority,
    2. whether the government has the power to terminate the appointment,
    3. whether the government determines the remuneration,
    4. what is the source of remuneration, and
    5. the power that comes with the position.

     

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  • What is Floor Test?

    Bihar Chief Minister has won the floor test in the Assembly.

    What is a floor test?

    • A floor test is a measure to check whether the executive is enjoying the confidence of the legislature.
    • It is a constitutional mechanism under which a Chief Minister appointed by the Governor can be asked to prove majority on the floor of the Legislative Assembly of the state.

    How is it conducted?

    • As per the Constitution, the Chief Minister is appointed by the Governor of the state.
    • When a single party secures the majority of the seats in the house, the Governor appoints the leader of the party as the Chief Minister.
    • In case the majority is questioned, the leader of the party which claims majority has to move a vote of confidence and prove majority among those present and voting.
    • The Chief Minister has to resign if they fail to prove their majority in the house.
    • This happens both in the parliament and the state legislative assemblies.
    • In situations when there are differences within a coalition government, the Governor can ask the Chief Minister to prove majority in the house.

    Can a floor test be postponed?

    • The Supreme Court recently had given some respite to some rebel leaders in Maharashtra to respond to the disqualification notice issued by the Speaker.
    • Citing this as the reason, the original party leaders and loyalists have stated that it is ‘unlawful’ to initiate a floor test when the disqualification decision of the rebel leaders is pending.
    • However, the previous judgments of the Supreme Court had ruled that the floor test needs not to be deferred even if the decision to disqualify the members is pending.
    • In the 2020 Shivraj Singh Chouhan v/s Speaker case, the court had clarified the same.
    • Additionally, the top court had allowed the rebel leaders to skip the floor test during the political crisis in Karnataka in 2019.

    What is composite floor test?

    • There is another test, Composite Floor Test, which is conducted only when more than one person stakes claim to form the government.
    • When the majority is not clear, the governor might call for a special session to see who has the majority.
    • The majority is counted based on those present and voting. This can also be done through a voice vote where the member can respond orally or through division voting.
    • Some legislators may be absent or choose not to vote.
    • In division vote, voting can be done through electronic gadgets, ballots or slips.
    • The person who has the majority will form the government. In case of tie, the speaker can also cast his vote.

    Governors’ discretion

    • When no party gets a clear majority, the governor can use his discretion in the selection of chief ministerial candidate to prove the majority as soon as possible.

    Issues with the floor test

    • Sometimes ruling party MLAs are lured with rewards, political or otherwise.
    • Thus, the “floor test” becomes constitutionally immoral and unjust.
    • This will amount to circumventing the Tenth Schedule through engineered defections through the judicial process.

    Back2Basics: No Confidence Motion

    • The process is explained under rule 198 of the Lok Sabha.
    • Though there is no mention of the term ‘No confidence motion’ or ‘floor test’ in the Constitution, Articles 75 and 164 do mention that the executive both at the Centre and state is collectively responsible to their respective legislatures.
    • Any member from the Opposition can move the no-confidence motion against the ruling government.
    • The motion has to receive the backing of at least 50 members before it is accepted and subsequently.
    • A date for the discussion of the motion is announced by the Speaker, which has to be within 10 days from the date of acceptance.

     

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  • Kashmir Voters’ List Upgrade to include Non-Locals

    Kashmir Voters’ List Upgrade to include Non-Locals

    Recently the J&K Chief Electoral Officer (CEO) announced that anyone “who is living ordinarily in J&K” can avail the opportunity to get enlisted as a voter in the Union Territory in accordance with the provisions of the Representation of the People Act.

    Why in news?

    • Many people who were not enlisted as voters in the erstwhile State of J&K are now eligible to vote after the reading down of Article 370 on August 5, 2019.
    • The Election Commission of India (ECI) was expecting an addition of 20-25 lakh new voters in the final list in J&K.
    • This has created furore among the out-streamed politicians of the erstwhile state.

    What did the EC announce?

    • There is no need to have a domicile certificate of J&K to become a voter.
    • An employee, a student, a labourer or anyone from outside who is living ordinarily in J&K can enlist his or her name in the voting list.
    • Around 25 lakh new voters are expected to be enrolled in J&K, which has 76 lakh voters on the list. The projected 18-plus population of J&K was around 98 lakh.
    • After the abrogation of special provisions of Article 370, the Representation of the People Act 1950 and 1951 is applicable in J&K, which allows ordinarily residing persons to get registered in the electoral rolls of J&K.

    New Voters in J&K

    • Armed forces posted in J&K could also register as voters and could possibly participate in the first ever Assembly polls in the youngest Union Territory (UT) of the country.
    • The existing electoral roll is being mapped into the newly delimited Assembly constituencies as per the Delimitation Commission’s final order made applicable by the Union Law Ministry.

    Why are electoral rolls being revised?

    • The ECI is working on fresh electoral rolls in J&K after the J&K Delimitation Commission carved out seven new Assembly constituencies in the UT earlier this year.
    • The Delimitation Commission has re-drawn many constituencies and fresh electoral rolls are essential to prepare the ground for any announcement of elections in J&K.
    • The last Assembly elections took place long back in 2014.
    • In a latest move, the ECI has decided that it will also include any person who has attained the age of 18 years on or before October 1, 2022 in the fresh electoral rolls.
    • The final electoral roll would be published in November.

    Why such move?

    • Prior to August 5, 2019 when J&K had special constitutional powers, the Assembly electoral rolls in the State were drawn up according to the separate J&K Representation of the People Act 1957.
    • Therein only permanent residents of J&K were eligible to get registered in the Assembly rolls.
    • To get voting rights, Permanent Resident Certificate and domicile certificates had to be shown.
    • Several lakh residents from West Pakistan and Pakistan Occupied Kashmir, who had migrated to J&K and were living there for decades,
    • They had no voting rights in Assembly elections till August 5, 2019 but were able to vote in the parliamentary elections.

    Why has the ECI announcement caused a furore?

    • All pseudo liberal and fundamentalist political parties in J&K have reacted sharply to the ECI announcement.
    • J&K’s main regional parties also called Gupkar parties have expressed concerns that the move will open the floodgates and turn locals into an electoral minority.
    • Separatists expressed concern that there was a plan to bring 25 lakh non-locals and make them eligible to cast their votes in the next J&K elections.

     

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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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  • SC to take up plea to ban convicts from polls for life

    The Supreme Court has said that it would consider a plea seeking a lifetime ban on people convicted of offenses from contesting elections and becoming MPs and MLAs.

    Why such petition?

    • The petition has made a very logical argument that even a constable can lose his job after conviction for corruption.
    • The Centre maintained affirmation on the existing (namesake) bar of disqualification was enough for legislators.
    • The disqualification under the Representation of the People Act of 1951 is the period of prison sentence and six years thereafter.

    What did the Centre argue against lifetime ban?

    • In 2017, the ECI endorsed the call for a life ban in the top court. This was a boost for the cause of decriminalisation of politics.
    • In Dec 2020, the Centre rejected the idea of a lifetime ban on convicted persons contesting elections or forming or becoming an office-bearer of a political party.
    • It had reasoned that MPs and MLAs were not bound by specific “service conditions”.
    • They are bound by their oath to serve citizens and country along with propriety, good conscience and interest of the nation.

    Criminalization of politics: Indian Case

    • The criminalization of politics has become a headache for the Indian democracy and it is a harsh reality now.
    • Criminalization of politics in India includes political control of the police, state money, corruption, weak laws, lack of ethics, values, vote bank politics and loopholes in the function of the election commission.
    • Deep down, it’s a large nexus of police, money, corrupt bureaucracy, casteism, religion and the drawbacks of functioning in the election commission.

    Why are tainted candidates inducted by political parties?

    • Innocent until proven guilty maxim: The other reason offered by political parties is summarised by the maxim of Indian law, which is that any accused is innocent until proven guilty.
    • Popularity: Such candidates with serious records seem to do well despite their public image, largely due to their ability to finance their own elections and bring substantive resources to their respective parties.
    • Prospected victory: The logic of a candidate with criminal charges doing better for the cause of people of is another flawed argument.
    • Destabilizing other electors: Others do not seek to punish these candidates in instances where they are in contest with other candidates with similar records.
    • Vested interests: Some voters tend to view such candidates through a narrow prism: of being able to represent their interests by hook or by crook.

    A harsh reality of Political Asylum

    • The NN Vohra committee’s report on the criminalization of politics discussed how criminal gangs flourish under the care and protection of politicians.
    • Many times the candidates themselves are the gang leaders.
    • This protection is paid back to them during elections through capital investment in election spending and voter support.

    Issues with Criminals in Politics

    • Morality of the process: It is extremely important that the people who enter the field of politics have a clear image and high moral character.
    • No rule of law: A leader with criminal character undoubtedly tends to undermine the rule of law.
    • Violation of right to equality: There were 4.78 lakh prisoners (as of December 2019) of whom 3.30 lakh were under trial, i.e. not yet proven guilty.
    • Problem of undertrial: An “innocent” undertrial cannot vote, but a man chargesheeted for murder can even contest election from jail.

    Supreme Courts guidelines in this regard

    The Supreme Court earlier in Feb 2020 had ordered political parties to publish the entire criminal history of their candidates for Assembly and Lok Sabha elections.

    • Reasons for nomination: It has also asked for the reasons that goaded them to field suspected criminals over decent people.
    • Publication of records: The information should be published in a local as well as a national newspaper as well as the parties’ social media handles.
    • 48hr time frame: It should mandatorily be published either within 48 hours of the selection of candidates or less than two weeks before the first date for filing of nominations, whichever is earlier.
    • Contempt for non-compliance: It also ordered political parties to submit compliance reports with the Election Commission of India within 72 hours or risk contempt of court action.
    • No escape: The judgment is applicable to parties both at Central and State levels.

    Immediate Reason for Judicial Action

    • The immediate provocation is the finding that 46% of MPs have criminal records.
    • The number might be inflated as many politicians tend to be charged with relatively minor offences —“unlawful assembly” and “defamation”.
    • The real worry is that the current cohort of Lok Sabha MPs has the highest (29%) proportion of those with serious declared criminal cases compared to its recent predecessors.

    Way forward

    (1) ECI suggestion on vendetta politics

    The ECI has suggested some safeguards against vendetta politics.

    • First, only offences that carry an imprisonment of at least 5 years are to be considered.
    • The case against the candidate should have been filed at least six months before the scheduled elections for it to be considered.
    • And finally, a competent court must have framed the charges.

    (2) Speedy trials

    • An alternative solution would be to try cases against political candidates in fast-track courts.
    • The SC had sent a directive in 2014, directing that cases against political candidates must be completed within a year, failing which the matter should be reported to the CJs.

    (3) Legislative reforms

    • We must have a law which debars persons with serious criminal cases from entering the assemblies and the Parliament.
    • There must be stringent criteria in Representation of Peoples Act as well.

    (4) Revamping Criminal Justice System

    • The criminal justice system must be revamped as recommended by the Malimath Committee.
    • An institution comprising representatives of the police/CBI/NIA, IB, IT department, Revenue Intelligence and Enforcement Directorate should be set up to monitor the activities of the mafia and criminal syndicates in the country.

     

     

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  • Election Symbols Issue in Maharashtra

     

    The Supreme Court has said it would decide the question of referring the battle between a political party leader and Maharashtra Chief Minister over the “real” heir of a political party to a Constitution Bench.

    What is the news?

    Why the split leader (the CM) is making such claims?

    • One of the cardinal issues, as pointed out by the CJI, would be whether the dissent of split faction, without subsequently forming a new party or merging with another, amounted to a “split” from the original political party.
    • The anti-defection law cannot be an “anti-dissent” law.

    Issues raised by the apex Court

    • The Bench warned that if the split is completely ignoring the political party after being elected then it is a danger to democracy.

    Note: For aspirants, one thing is very clear. The Supreme Court will definitely give another landmark judgment in this regard. Arriving at a conclusion is a tight rope walk for the judiciary too. But our judiciary never disappoints!

    EC’s powers in Election Symbol Dispute

    • The question of a split in a political party outside the legislature is dealt by Para 15 of the Symbols Order, 1968.
    • It states that the Election Commission of India’s (ECI) may take into account all the available facts and circumstances and undertake a test of majority.
    • The decision of the ECI shall be binding on all such rival sections or groups emerged after the split.
    • This applies to disputes in recognized national and state parties.
    • For splits in registered but unrecognized parties, the EC usually advises the warring factions to resolve their differences internally or to approach the court.

    How did the EC deal with such matters before the Symbols Order came into effect?

    • Before 1968, the EC issued notifications and executive orders under the Conduct of Election Rules, 1961.
    • The most high-profile split of a party before 1968 was that of the CPI in 1964.
    • A breakaway group approached the ECI in December 1964 urging it to recognize them as CPI(Marxist). They provided a list of MPs and MLAs of Andhra Pradesh, Kerala and West Bengal who supported them.
    • The ECI recognized the faction as CPI(M) after it found that the votes secured by the MPs and MLAs supporting the breakaway group added up to more than 4% in the 3 states.

    Options for ECI

    • The ECI in all likelihood can freeze the symbol so that neither of the two sides is able to use it until a final decision is made.
    • EC hearings are long and detailed and may take at least six months.

    What was the first case decided under Para 15 of the 1968 Order?

    • It was the first split in the Indian National Congress in 1969.
    • Indira Gandhi’s tensions with a rival group within the party came to a head with the death of President Dr Zakir Hussain on May 3, 1969.

    Is there a way other than the test of the majority to resolve a dispute over election symbols?

    • In almost all disputes decided by the EC so far, a clear majority of party delegates/office bearers, MPs and MLAs have supported one of the factions.
    • Whenever the EC could not test the strength of rival groups based on support within the party organization (because of disputes regarding the list of office bearers), it fell back on testing the majority only among elected MPs and MLAs.

    What happens to the group that doesn’t get the parent party’s symbol?

    • The EC in 1997 did not recognize the new parties as either state or national parties.
    • It felt that merely having MPs and MLAs is not enough, as the elected representatives had fought and won polls on tickets of their parent (undivided) parties.
    • The EC introduced a new rule under which the splinter group of the party — other than the group that got the party symbol — had to register itself as a separate party.
    • It could lay claim to national or state party status only on the basis of its performance in the state or central elections after registration.

     

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