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Subject: Federal System

  • Power, problems and potential of federalism

    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.

    Challenges

    • 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.

    Way forward

    • 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.”

    Conclusion

    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.

  • New Bill on powers of Delhi government, Lieutenant Governor

    The Ministry of Home Affairs (MHA) is likely to introduce legislation in the ongoing Parliament session to amend a 1991 Act pertaining to the powers and function of the Delhi government and the Lieutenant Governor.

    Try this PYQ:

    Q. Consider the following statements

    1. Union territories are not represented in the Rajya Sabha.
    2. It is within the purview of the Chief Election Commissioner to adjudicate the election disputes.
    3. According to the constitution of India, the Parliament consists of the Lok Sabha and the Rajya Sabha only.

    Which of the statement(s) given above is/are correct?

    (a) Only 1

    (b) 2 and 3

    (c) 1 and 3 only

    (d) None

    Key propositions of the Bill

    • The Bill proposes to clearly spell out the functions of the Council of Ministers and the Lieutenant-Governor (L-G) by giving more discretionary powers to the L-G.
    • As per the Bill, the L-G could act in his discretion in any matter that is beyond the purview of the powers of the Legislative Assembly of Delhi in matters related to the All India (Civil) Services and the Anti Corruption Branch.
    • It will also give more teeth to the L-G, and the validity of any decision taken as per such discretion shall not be questioned.

    Back2Basics: Special provisions for New Delhi

    • The Union Territory of Delhi with a Legislative Assembly came into being in 1991 under Article 239AA of the Constitution inserted by ‘the Constitution (Sixty-ninth Amendment) Act, 1991’.
    • It said that the UT of Delhi shall be called the National Capital Territory of Delhi.
    • The administrator thereof appointed under Article 239 shall be designated as the Lieutenant-Governor.
    • According to the existing Act, the Legislative Assembly of Delhi has the power to make laws in all matters except public order, police, and land.

  • MPLAD Scheme

    While extending support to the move for salary-cut, most Members of Parliament have demanded that the MPLADS funds, meant for development work in constituencies, be restored immediately.

    Try this PYQ:

    Q.With reference to the Parliament of India, consider the following statements:

    1. A private member’s bill is a bill presented by a Member of Parliament who is not elected but only nominated by the President of India.
    2. Recently, a private member’s bill has been passed in the Parliament of India for the first time in its history.

    Which of the statements given above is/are correct?

    (a) 1 only

    (b) 2 only

    (c) Both 1 and 2

    (d) Neither 1 nor 2

    What is the MPLAD scheme?

    • The Members of Parliament Local Area Development Scheme (MPLADS) is a programme first launched during the Narasimha Rao Government in 1993.
    • It was aimed towards providing funds for developmental works recommended by individual MPs.

    Funds available

    • The MPs then were entitled to recommend works to the tune of Rs 1 crore annually between 1994-95 and 1997-98, after which the annual entitlement was enhanced to Rs 2 crore.
    • The UPA government in 2011-12 raised the annual entitlement to Rs 5 crore per MP.

    Implementation

    • To implement their plans in an area, MPs have to recommend them to the District Authority of the respective Nodal District.
    • The District Authorities then identify Implementing Agencies which execute the projects.
    • The respective District Authority is supposed to oversee the implementation and has to submit monthly reports, audit reports, and work completion reports to the Nodal District Authority.
    • The MPLADS funds can be merged with other schemes such as MGNREGA and Khelo India.

    Guidelines for MPLADS implementation

    • The document ‘Guidelines on MPLADS’ was published by the Ministry of Statistics and Programme Implementation in June 2016 in this regard.
    • It stated the objective of the scheme to enable MPs to recommend works of developmental nature with emphasis on the creation of durable community assets based on the locally felt needs in their Constituencies.
    • Right from the inception of the Scheme, durable assets of national priorities viz. drinking water, primary education, public health, sanitation and roads, etc. should be created.
    • It recommended MPs to works costing at least 15 per cent of their entitlement for the year for areas inhabited by Scheduled Caste population and 7.5 per cent for areas inhabited by ST population.
    • It lays down a number of development works including construction of railway halt stations, providing financial assistance to recognised bodies, cooperative societies, installing CCTV cameras etc.

  • [pib] Status of Mahanadi Tribunal

    At present, the Mahanadi dispute is under adjudication in the Tribunal under Section 5 (2) of Inter-State River Water Disputes Act, 1956

    Note the interrelation between the Article 262 and 253.They contain provisions related to international and interstate water sharing.

    Mahanadi Tribunal

    • The Central Government has constituted Mahanadi Water Disputes Tribunal in 2018 under Section 4 of the Inter-State River Water Disputes Act, 1956.
    • It is set to adjudicate on water disputes between the riparian States of Odisha and Chhattisgarh
    • The tribunal is expected to give its verdict within a period of three years.
    • Provided that if the decision cannot be given for an unavoidable reason, within a period of three years, the Central Government may extend the period for a further period not exceeding two years.

    What is the dispute about?

    • Chhattisgarh has been constructing dams and weirs (small dams) upstream the Mahanadi. This is being allegedly carried on without consulting Odisha.
    • It would affect the flow of the river downstream and affect drinking water supply. Also, it would impact the irrigation facilities in Odisha and adversely affect the interests of the farmers.
    • Moreover, the weirs and other projects would impact the flow of water in the Hirakud reservoir, a multipurpose river valley project, which is a lifeline for many in the state.

    Back2Basics: Water Disputes Resolution in India

    • The Interstate River Water Disputes Act, 1956 (IRWD Act) is an Act of the Parliament of India enacted under Article 262 of Constitution of India on the eve of the reorganization of states on the linguistic basis to resolve the water disputes that would arise in the use, control and distribution of an interstate river[1] or river valley.
    • Article 262 of the Indian Constitution provides a role for the Central government in adjudicating conflicts surrounding inter-state rivers that arise among the state/regional governments.
    • This Act further has undergone amendments subsequently and its most recent amendment took place in the year 2002.
    • A/c to art 262, the Parliament may by law provide for the adjudication of any dispute or complaint with respect to the use, distribution or control of the waters of, or in, any inter-State river or river valley.
    • Parliament may by law provide that neither the Supreme Court nor any other court shall exercise jurisdiction in respect of any such dispute or complaint.

    Note: Any river water sharing treaty made with other countries, has to be ratified by the Parliament as per Article 253 after deciding the share of the Indian riparian states per Article 262 to make the treaty constitutionally valid or enforceable by the judiciary. The government has signed Indus Waters Treaty with Pakistan, Ganga water-sharing treaty with Bangladesh, etc. without the ratification by the Parliament and the consent of concerned riparian states per Article 252.

  • What constitutes a breach of the legislature’s privilege?

    A motion for breach of privilege was moved in the Maharashtra Assembly against a news channel’s editor-in-chief. A similar motion was moved in the Maharashtra Legislative Council against an actor.

    Try this PYQ:

    Q.With reference to the Parliament of India, which of the following Parliamentary Committees scrutinizes and reports to the House whether the powers to make regulations, rules, sub-rules, by-laws etc. conferred by the constitution of delegated by the Parliament are being properly exercised by the Executive within the scope of such delegation?

    (a) Committee on Government Assurances

    (b) Committee on Subordinate Legislation

    (c) Rules Committee

    (d) Business Advisory Committee

    Provisions to protect the privileges of the legislature

    • The powers, privileges and immunities of either House of the Indian Parliament and of its Members and committees are laid down in Article 105 of the Constitution.
    • Article 194 deals with the powers, privileges and immunities of the State Legislatures, their Members and their committees.
    • Parliamentary privilege refers to the right and immunity enjoyed by legislatures, in which legislators are granted protection against civil or criminal liability for actions done or statements made in the course of their legislative duties.

    What constitutes a breach of this privilege?

    • While the Constitution has accorded special privileges and powers to parliamentarians and legislators to maintain the dignity and authority of the Houses, these powers and privileges are not codified.
    • Thus, there are no clear, notified rules to decide what constitutes a breach of privilege, and the punishment it attracts.
    • Any act that obstructs or impedes either House of the state legislature in performing its functions, or which obstructs or impedes any Member or Officer of such House in the discharge of his duty, or has a tendency, directly or indirectly, to produce such results is treated as a breach of privilege.
    • It is a breach of privilege and contempt to print or publish libel reflecting on the character or proceedings of the House or its Committees or on any member of the House for or relating to his character or conduct as a legislator.

    Procedure followed in cases of an alleged breach

    • The Legislative Assembly Speaker or Legislative Council Chairman constitutes a Privileges Committee consisting of 15 members in the Assembly and 11 members in the Council.
    • The members to the committee which has quasi-judicial powers are nominated based on the party strength in the Houses.
    • The Speaker or Chairman first decides on the motions.
    • If the privilege and contempt are found prima facie, then the Speaker or Chairman will forward it to the Privileges Committee by following the due procedure.
    • At present, there is no Privileges Committee in either House of the state legislature.
    • The Committee will seek an explanation from all the concerned, will conduct an inquiry and will make a recommendation based on the findings to the state legislature for its consideration.

    What is the punishment for this?

    • If the Committee finds the offender guilty of breach of privilege and contempt, it can recommend the punishment.
    • The punishment can include communicating the displeasure of the state legislature to the offender, summoning the offender before the House and giving a warning, and even sending the offender to jail.
    • In the case of the media, press facilities of the state legislature may be withdrawn, and a public apology may be sought.

  • Kalasa-Banduri Dam Project

    India is on the brink of an acute water crisis, which has, to an extent, fabricated a looming threat of trans-boundary water conflicts. The conflict on the Mandovi / Mahadayi River— flowing through Goa, Karnataka and Maharashtra— is one such example.

    Try this PYQ:

    What is common to the places known as Aliyar, Isapur and Kangsabati?

    (a) Recently discovered uranium deposits

    (b) Tropical rain forests

    (c) Underground cave systems

    (d) Water reservoirs

    Kalasa-Banduri Project

    • The project undertaken by the Karnataka government proposes to divert Mandovi river water from Kalasa and Banduri canals into the Malaprabha river in the state.
    • The project received clearance from the Centre in 2002. It aims to construct a total of 11 dams on the river Mandovi.
    • The diversion of water from Kalasa and Banduri nullahs, however, has been the point of contention between Karnataka and Goa, with the latter claiming it would strip the state of its flora and fauna.

    The conflict

    • The Mandovi originates from Karnataka’s Belgaum district.
    • The Mandovi river basin falls into the states of Goa, Karnataka and Maharashtra.
    • The river is 81 kilometres (km) in length; 35 km of which flows in Karnataka, 1 km in Maharashtra and 45 km in Goa.
    • The seeds of the conflict were sowed over 40 years ago: In 1985, Karnataka initially explored a 350 megawatt-hydro-electric project to divert 50 per cent of the Mandovi river water in Karnataka for irrigation.
    • The plan was also to allow a steady flow of water from the power project’s storage dam after using the water for irrigation purposes in Karnataka.
    • This would have served to drinking water and irrigation purposes in Goa as well.

  • What are Question Hour and Zero Hour?

    The Lok Sabha Secretariat officially released the schedule for the monsoon Parliament session with Question Hour being dropped. Zero Hour will also be restricted in both Houses.

    This newscard is very narrative in its form and scope.

    Q.Discuss the various instruments of Parliamentary Control in India.

    What is Question Hour, and what is its significance?

    • Question Hour is the liveliest hour in Parliament. It is during this one hour that MPs ask questions of ministers and hold them accountable for the functioning of their ministries.
    • Prior to Independence, the first question asked of government was in 1893. It was on the burden cast on village shopkeepers who had to provide supplies to touring government officers.
    • The questions that MPs ask are designed to elicit information and trigger suitable action by ministries.
    • Over the last 70 years, MPs have successfully used this parliamentary device to shine a light on government functioning.
    • Their questions have exposed financial irregularities and brought data and information regarding government functioning to the public domain.
    • With the broadcasting since 1991, Question Hour has become one of the most visible aspects of parliamentary functioning.

    And what is Zero Hour?

    • While Question Hour is strictly regulated, Zero Hour is an Indian innovation. The phrase does not find mention in the rules of procedure.
    • The concept of Zero Hour started organically in the first decade of Indian Parliament when MPs felt the need for raising important constituency and national issues.
    • During the initial days, Parliament used to break for lunch at 1 pm.
    • Therefore, the opportunity for MPs to raise national issues without an advance notice became available at 12 pm and could last for an hour until the House adjourned for lunch.
    • This led to the hour being popularly referred to as Zero Hour and the issues being raised during this time as Zero Hour submissions.
    • Its importance can be gauged from the support it receives from citizens, media, MPs and presiding officers despite not being part of the rulebook.

    How is Question Hour regulated?

    • Parliament has comprehensive rules for dealing with every aspect of Question Hour.
    • And the presiding officers of the two houses are the final authority with respect to the conduct of Question Hour.
    • For example, usually, Question Hour is the first hour of a parliamentary sitting.

    What kinds of questions are asked?

    • Parliamentary rules provide guidelines on the kind of questions that can be asked by MPs.
    • Questions have to be limited to 150 words. They have to be precise and not too general.
    • The question should also be related to an area of responsibility of the GoI.
    • Questions should not seek information about matters that are secret or are under adjudication before courts.
    • It is the presiding officers of the two Houses who finally decide whether a question raised by an MP will be admitted for answering by the government.

    How frequently is Question Hour held?

    • The process of asking and answering questions starts with identifying the days on which Question Hour will be held.
    • At the beginning of Parliament in 1952, Lok Sabha rules provided for Question Hour to be held every day. Rajya Sabha, on the other hand, had a provision for Question Hour for two days a week.
    • A few months later, this was changed to four days a week. Then from 1964, Question Hour was taking place in Rajya Sabha on every day of the session.
    • Now, Question Hour in both Houses is held on all days of the session.
    • But there are two days when an exception is made. There is no Question Hour on the day the President addresses MPs from both Houses in the Central Hall.
    • Question Hour is not scheduled either on the day the Finance Minister presents the Budget.

    How does Parliament manage to get so many questions answered?

    • To streamline the answering of questions raised by MPs, the ministries are put into five groups. Each group answers questions on the day allocated to it.
    • For example, in the last session, on Thursday the Ministries of Civil Aviation, Labour, Housing, and Youth Affairs and Sports were answering questions posed by Lok Sabha MPs.
    • MPs can specify whether they want an oral or written response to their questions.
    • They can put an asterisk against their question signifying that they want the minister to answer that question on the floor. These are referred to as starred questions.
    • After the minister’s response, the MP who asked the question and other MPs can also ask a follow-up question.
    • This is the visible part of Question Hour, where you see MPs trying to corner ministers on the functioning of their ministries on live television.

    How do ministers prepare their answers?

    • Ministries receive the questions 15 days in advance so that they can prepare their ministers for Question Hour.
    • They also have to prepare for sharp follow-up questions they can expect to be asked in the House.
    • Governments’ officers are close at hand in a gallery so that they can pass notes or relevant documents to support the minister in answering a question.
    • When MPs are trying to gather data and information about government functioning, they prefer the responses to such queries in writing.
    • These questions are referred to as unstarred questions. The responses to these questions are placed on the table of Parliament.

    Are the questions only for ministers?

    • MPs usually ask questions to hold ministers accountable. But the rules also provide them with a mechanism for asking their colleagues a question.
    • Such a question should be limited to the role of an MP relating to a Bill or a resolution being piloted by them or any other matter connected with the functioning of the House for which they are responsible.
    • Should the presiding officer so allow, MPs can also ask a question to a minister at a notice period shorter than 15 days.

    Is there a limit to the number of questions that can be asked?

    • Rules on the number of questions that can be asked in a day have changed over the years.
    • In Lok Sabha, until the late 1960s, there was no limit on the number of unstarred questions that could be asked in a day.
    • Now, Parliament rules limit the number of starred and unstarred questions an MP can ask in a day.
    • The total numbers of questions asked by MPs in the starred and unstarred categories are then put in a random ballot.
    • From the ballot in Lok Sabha, 20 starred questions are picked for answering during Question Hour and 230 are picked for written answers.
    • Last year, a record was set when on a single day, after a gap of 47 years, all 20 starred questions were answered in Lok Sabha.

    Have there been previous sessions without Question Hour?

    • Parliamentary records show that during the Chinese aggression in 1962, the Winter Session was advanced.
    • The sitting of the House started at 12 pm and there was no Question Hour held. Before the session, changes were made limiting the number of questions.
    • Thereafter, following an agreement between the ruling and the Opposition parties, it was decided to suspend Question Hour.

  • Need for a Common Electoral Roll

    The Prime Minister’s Office earlier this month held a meeting with representatives of the Election Commission and the Law Ministry to discuss the possibility of having a common electoral roll for elections to the panchayat, municipality, state assembly and the Lok Sabha.

    Try this question:

    Q.Discuss how a common electoral roll and simultaneous elections are ways to save the enormous amount of effort and expenditure on Elections in India.

    Electoral Rolls in India

    • In many states, the voters’ list for the panchayat and municipality elections is different from the one used for Parliament and Assembly elections.
    • The distinction stems from the fact that the supervision and conduct of elections in our country are entrusted with two constitutional authorities — the Election Commission (EC) of India and the State ECs.
    • Set up in 1950, the EC is charged with the responsibility of conducting polls to the offices of the President and Vice-President of India, and to Parliament, the state assemblies and the legislative councils.
    • The SECs, on the other hand, supervise municipal and panchayat elections. They are free to prepare their own electoral rolls for local body elections, and this exercise does not have to be coordinated with the EC.

    So do all states have a separate voters list for their local body elections?

    • Each SEC is governed by a separate state Act. Some state laws allow the SEC to borrow and use the EC’s voter’s rolls in toto for the local body elections.
    • In others, the state commission uses the EC’s voters list as the basis for the preparation and revision of rolls for municipality and panchayat elections.
    • Currently, all states, except UP, Uttarakhand, Odisha, Assam, MP, Kerala, Odisha, Assam, Arunachal Pradesh, Nagaland and the UT of Jammu and Kashmir, adopt EC’s rolls for local body polls.

    Why need a common electoral roll?

    • First, the common electoral roll is among the promises made by the govt. in its manifesto for the Lok Sabha elections last year.
    • It ties in with the party’s commitment to hold elections simultaneously to the Lok Sabha, state assemblies and local bodies, which is also mentioned in the manifesto.
    • The incumbent government has pitched a common electoral roll and simultaneous elections as a way to save an enormous amount of effort and expenditure.
    • It has argued that the preparation of a separate voters list causes duplication of essentially the same task between two different agencies, thereby duplicating the effort and the expenditure.
    • The pitch for a single voters list is not new. The Law Commission recommended it in its 255th report in 2015. The EC too adopted a similar stance in 1999 and 2004.

    How it can be implemented?

    • In the meeting called by the PMO, two options were discussed.
    • First, a constitutional amendment to Articles 243K and 243ZA that gives the power of superintendence, direction and control of preparation of electoral rolls and the conduct of local body elections to the SECs.
    • The amendment would make it mandatory to have a single electoral roll for all elections in the country.
    • Second, to persuade the state governments to tweak their respective laws and adopt the Election Commission’s (EC) voters list for municipal and panchayat polls.

  • New rules for Transaction of Business of the Govt. of UT of J&K Rules, 2019

    The Ministry of Home Affairs (MHA) has notified new rules for administration in the UT of Jammu and Kashmir that specify the functions of the Lieutenant Governor (LG) and the Council of Ministers.

    Tap to read more about: Reorganization of J&K

    New Rules for J&K

    • The new rules have been defined under Section 55 of the Jammu and Kashmir Reorganization Act, 2019.

    What are they?

    (1)Executive functions of the L-G

    • According to the rules the “police, public order, All India Services and anti-corruption” will fall under the executive functions of the L-G.
    • Chief Minister or the Council of Ministers will have no say in their functioning.

    (2)Minority Community interests

    • The proposals or matters which affect or are likely to affect peace and tranquillity or the interest of any minority community, the SCs, the STs and the Backward Classes shall essentially be submitted to the LG through the Chief Secretary, under intimation to the CM, before issuing any orders.

    (3)Service Matters

    • The Council of Ministers, led by the CM, will decide service matters of non-All India Services officers, proposal to impose a new tax, land revenue, sale grant or lease of government property, reconstituting departments or offices and draft legislation.

    (4)Difference of Opinion

    • In case of difference of opinion between the L-G and a Minister when no agreement could be reached even after a month, the “decision of the Lieutenant Governor shall be deemed to have been accepted by the Council of Ministers”.

    (5)Relation with the Centre

    • According to the rules, “any matter which is likely to bring the Government of the UT into controversy with the Central Government or with any State Government” shall be brought to the notice of the L-G and the CM by the Secretary concerned through the Chief Secretary.
    • All communications received from the Centre, including those from the PM and other Ministers, shall be submitted by the Secretary to the Chief Secretary, the Minister in charge, the CM and the L-G for information after their receipt.

    (6)Various departments

    • Under the rules, there will be 39 departments in the UT, such as school education, agriculture, higher education, horticulture, election, general administration, home, mining, power, Public Works Department, tribal affairs and transport.

  • India needs a Fiscal Council

    The newscard highlights the need of bipartisan, independent Fiscal Council to report and analyse FRBM discrepancies by the Government.

    Try this question for mains:
    Q.Fiscal Council is an important institution needed to complement the rule-based fiscal policy. Discuss.

    What is a Fiscal Council?

    • A Fiscal Council is an independent fiscal institution (IFI) with a mandate to promote stable and sustainable public finances.
    • They aim to provide nonpartisan oversight of fiscal performance and/or advice and guidance — from either a positive or normative perspective — on key aspects of fiscal policy.
    • These institutions assist in calibrating sustainable fiscal policy by making an objective and scientific analysis.

    Voices for a Fiscal Council

    • The 13th Finance Commission recommended that a committee be appointed by the Ministry of Finance which should eventually transform itself into a Fiscal Council.
    • The FC expected it to conduct an annual independent public review of FRBM compliance, including a review of the fiscal impact of policy decisions.
    • The FRBM Review Committee too made a similar recommendation underlining the need for an independent review by the Finance Ministry appointing the Council.

    Why need a fiscal council?

    (1)Burgeoning deficits

    • For the current year, even without any additional fiscal stimulus, the deficit is estimated at about 7% of GDP as against 3.5% estimated in the Budget due to a sharp decline in revenues.
    • The consolidated deficit of the Union and States could be as high as 12% of GDP and the overall debt could go up to 85%.
    • Thus it is necessary that the government must return to a credible fiscal consolidation path once the crisis gets over.

    (2)Transparency issues

    • Besides large deficits and debt, there are questions of comprehensiveness, transparency and accountability in the Budgets.
    • The practice of repeated postponement of targets, timely non-settlement of bill payments and off Budget financing to show lower deficits has been common.
    • The report of the CAG of India in 2018 has highlighted various advances done to keep the liabilities hidden.

    Fiscal Council can be a game changer. How?

    • First, an unbiased report to Parliament helps to raise the level of debate and brings in greater transparency and accountability.
    • Secondly, costing of various policies and programmes can help to promote transparency over the political cycle to discourage populist shifts in fiscal policy and improve accountability.
    • Third, scientific estimates of the cost of programmes and assessment of forecasts could help in raising public awareness about their fiscal implications and make people understand the nature of budgetary constraint.
    • Finally, the Council will work as a conscience keeper in monitoring rule-based policies, and in raising awareness and the level of debate within and outside Parliament.

    Issues meddling between

    • The problem is that a Council created by the Finance Ministry and reporting to it can hardly be expected to be independent.

    Diverse role to play ahead

    • According to the IMF, there were 36 countries with IFIs in 2014 and more have been established since.
    • While most of the IFIs are in advanced countries, emerging economies too have also shown growing interest in them.
    • Although their common agenda has been to function as watchdogs, there is considerable diversity in their structure and functions.
    • Over the years, monitoring compliance with fiscal rules and costing policies and programmes have become major tasks of these councils.

    Way forward

    • When the markets fail, governments have to intervene.
    • Whenever governments seem obstructed, it is here that we need systems and institutions to ensure checks and balances.
    • In that respect, a Fiscal Council is an important institution needed to complement the rule-based fiscal policy.

    Conclusion

    • Of course, it is not a ‘silver bullet’; if there is no political will, the institution would be less effective, and if there is political will, there is no need for such an institution.
    • That is also true of the FRBM Act. While we cannot state that the FRBM Act has been an unqualified success, it has also not been an abject failure either.