India's Experience With Federalism: Lessons Learnt and Unlearnt

India’s Experience with Federalism: Lessons Learnt and Unlearnt Balveer Arora Centre for Political Studies Jawaharlal Nehru University New Delhi. A paper presented at an international seminar on "Constitutionalism and Diversity in Nepal" Organized by Centre for Nepal and Asian Studies, TU in collaboration with MIDEA Project and ESP-Nepal 22-24 August 2007 Kathmandu, Nepal 1 Draft Outline: Not for Citation India’s Experience with Federalism: Lessons Learnt and Unlearnt Balveer Arora, 1 India’s federal experiment has undergone, over the past sixty years, many trials and tribulations. In this presentation, we seek to capture the defining features of this experience, the hesitations, mistakes and failures as well as the innovations and successes. During this period, the system has sought to explore and to innovate, trying to discover how much diversity it was possible to accommodate without sacrificing the essential unity. Indian federalism remains in essence work in progress, and we attempt below to highlight fifteen major features which have marked its development, and to see if there are any lessons to be learnt. But at the outset, many dictates of conventional wisdom had to be set aside, much to the dismay of constitutional purists.2 Unlearning was as much a part of the learning process as the inspired search for solutions to problems never before encountered in quite the same way. 1. The Legacy of Partition and the Weight of History Historical legacies are undoubtedly important in the shaping of any polity. Colonial rule wrecked the economy but had several unintended consequences for the polity. Through the development of means of communication, the spread of the English language and mass mobilisation under Mahatma Gandhi, it forged a political unity which the national leadership could build upon. Disorderly decolonisation imposed an urgent need for consolidation of the young independent State. If Mahatma Gandhi was the father of the nation, Jawaharlal Nehru was the father of the Indian state. The wisdom of the founding fathers in the Constituent Assembly lay in not mistaking the quelling of existing turmoil as their main mission. They transcended the immediate context to lay the foundations of a durable democracy, forsaking neither their principles nor their vision of what the Indian Republic was intended to represent. The Unitarian temptation was strong and so was the urge to situate India ideologically as a reaction to the immediate context and the tragic turn of events. After intense debate, the Constituent Assembly opted for a secular Republic with its own brand of federalism. Not surprisingly, its credentials to be considered federal were deemed dubious. A literal reading of the Constitution was admittedly misleading, because it was easy to overlook 1 Dr Balveer Arora is Professor of Government and Politics and former Rector, Jawaharlal Nehru University, New Delhi. 2 Sir Kenneth Wheare and Sir Ivor Jennings. The Sri Lanka Constitution lasted all of seven years. Fali Nariman, ‘Constitution under Threat’. 2 the significant ways in which the federal principle had been superimposed on the parliamentary system. 2. The Fear of Federalism and Disunity. Traumatised by the unprecedented horrors and dislocation of Partition, the Constituent Assembly was obsessively focussed on the need for ensuring the unity and integrity of the new nation. The fear of excessive federalism was cogently articulated, the risks of centrifugal and fissiparous forces overwhelming the young Republic were passionately evoked. The framework finally adopted departed significantly from all existing models of federalism. The Constituent Assembly devised a system which seemed most suited to the needs of the time and the requirements of a federal society. Political processes generated by the logic of a federal democracy completed this work in course of time. In the absence of any track record or reliable radar to assess departures from the existing template of norms and yardsticks, which were derived from the then dominant models, jurists found it difficult to certify that the system was indeed federal. It was therefore declared ‘Quasi-Federal’. Today, India’s political institutions are widely recognised as a vigorous albeit hybrid variant of the federal species. Self rule and shared rule have been combined in unorthodox ways which have enabled the Indian Union to not only survive but also flourish in all its diversity. 3. Recognising Diversity The recognition of linguistic identities as the basis for territorial organisation surfaced as a major issue in the Constituent Assembly. It had its roots in a promise first made during the national movement, and then deferred through a misreading of priorities and popular sentiment. The power of recognition and the costs of non-recognition created serious problems for the polity throughout the 1950s and the 1960s. In retrospect, there was avoidable loss of life and property through prolonged agitations. Variable Geometry and flexible States Reorganisation was incorporated in the Constitution, raising many eyebrows. How has it worked in practice? The Centre has generally dragged its feet and eventually agreed, when popular pressures built up. The use of languages for official purposes, the protection of linguistic minorities, and the flowering of 22 languages alongside English are durable legacies. The political process in the first two decades of independence was thus marked by a mix of the politics of identity and the politics of scarcity. Tension areas of this period were around identity, language and boundaries. 4. The Strong Centre Framework: Functional or Dysfunctional? The Constituent Assembly created an ‘Indestructible Union of Destructible States’ Secession was banned explicitly in the early years, but constitutional flexibility enabled other forms of search for solutions. 3 Overall, the shift from reluctant to robust federalism was spurred on by the political process, which made it difficult to ignore the true nature of the Indian federation. The Strong Centre framework has proved remarkably resilient, even during the phase when the clarion call was to roll back the State. Given the nature and extent of social diversities and cleavages, the judicious intervention of a Strong Central State is often considered indispensable for maintaining social harmony. This phase of India’s federal development was marked by the stunted growth of institutional devices designed to cope with the needs of cooperation and coordination. Single party dominance obscured the challenges that lay ahead. Even in the economic liberalisation phase, the Centre retains control over all the macro-economic levers of command. While deregulation in some areas has given more scope for state initiatives, the needs for central regulation in new areas has emerged. The strong centre framework is not challenged or sought to be replaced even by proponents of state autonomy. What they want is strong states and more state autonomy within the same framework. 5.The Distribution of Powers and Responsibilities : The Lists The Cardinal Principles of the new Constitution, as defined by B.R.Ambedkar, were: (a) A single judiciary (b) Uniformity in fundamental laws, civil and criminal (c) A common All-India Civil Service for important posts It is important to recall that the original design vested substantial legislative powers and responsibilities in state governments for key developmental activities. Table 1: Distribution of Legislative Powers and Executive Responsibilities between the Union Parliament and the State Assemblies in Key Areas.3 Development Area List I: Union’s Powers 1. Land List II: States’ Powers List III :Concurrent Land rights, tenures, rents, transfer (18) Forests (17A) 2. Water Inter-state rivers and river valleys notified by law in public interest (56) Water supplies, storage, power, irrigation and canals (17) 3. Electricity, Power & Energy Atomic energy and mineral resources (6) related Natural and Bio-Gas (25) Electricity(38) 4. Agriculture Fisheries Fishing/Fisheries territorial waters (57) beyond Agriculture(14); Livestock (15), Fisheries within territorial waters (21) Wild Animals (17B) & 3 Compiled from Constitution of India , Seventh Schedule. Numbers in brackets refer to item numbers in the concerned list. The Union List included obvious sovereignty functions such as defence, foreign affairs and currency, while maintenance of public order and police functions are assigned to the states. Residuary powers are vested in the Union 4 5. Industry Industries notified by law for national defence (7) or to be in public interest (52) Industries other than those in List I(24) Mines, Mineral oil / Petroleum (53), Mines and minerals notified to be in the public interest (54) Mines and minerals other than those in List I(23) & Foreign trade and commerce, import/export, customs frontiers(41) Inter-state trade & commerce (42) Trade & commerce within the state (26) Production, supply and distribution of goods (27) Markets & Fairs (28) Trade, commerce, production & distribution of foodstuffs, edible oils, cotton & jute (33) 8. Transport & Communications Railways (22), national highways (23), national waterways (24), maritime shipping (25) major ports (27) airways (29) rail/sea/air transportation (30) Roads and means of communication other than those in List I(13) Minor ports (31), shipping & navigation on inland waterways (32) 9. Education Universities & Institutions of national importance for scientific/technical education and research (63-66) Incorporation and regulation of Universities, literary and scientific societies, associations, cooperatives (32) Technical, medical, and university education including vocational and technical training (25) 10. Information & Broadcasting Posts/telegraph/telephone/wire less/broadcasting and communication.(31) Cinema censorship (60) Theatre, Cinema, Sports (33) 11. Public Health and Social Welfare Port quarantine (28) Public health and sanitation/ hospitals & dispensaries (6) Relief of disabled/ unemployable (9) 6. Oil, Minerals, 7. Trade Commerce Infectious and contagious diseases (29) Economic & social planning (20) Population control (20A) social security/insurance & employment / unemployment (23) Labour welfare (24) Municipal corporations & local self - government (5) Public works (35) Cooperative societies (32) 12. Local government, public works & cooperatives 13.Taxation Powers and Financial Resources Factories(36) Taxes on Personal Income (82), Corporate Income (85), Capital (86), Estates (87), Rail/Sea/Air Transportation (89), Services (92). Land Revenue (45), Agricultural Income Tax (46), Lands and Buildings Tax (49), Alcohol (51). Electricity (53), Sales of Goods (54), Vehicles (57), Cinema (62). A literal reading of the Indian Constitution can however be misleading. Multiple overlaps have occurred, not merely in the concurrent spheres of jurisdiction but also in spheres explicitly assigned to the states. Financial constraints of the states have led to the proliferation of central schemes and national missions. The all encompassing ambit of entry 20 in List III, social and economic planning, provided the constitutional basis for the planned development model of the first phase. 5 New elements of the division of powers and responsibilities have begun to assume importance, overshadowing to a certain extent the issues which dominated the reform agenda of the earlier period. While the issue of distribution of responsibilities and powers in federal political systems is generally contentious, a gross mismatch between the two can lead to serious tensions. The federal dialogue with the states is often pre-empted by central administrative and policy decisions. The Centre often decides on a particular course of action and only thereafter seeks inputs from the states. Consensus building is after the decision, not before. This mode of decision-making is contested. 6. Asymmetric Federalism: The acceptance of inequality of states. Unequal States give rise to the need for the constitutional recognition of inequality, to be built into the federal polity in ways which protect diversity without sacrificing unity or imposing uniformity. Related to the quest for a more responsive and participatory federal democracy is the notion of asymmetric federalism. As political and economic asymmetries get accentuated, demands are bound to grow for statutory asymmetric arrangements. In India, the inequality of states, and of regions within states, has commonly generated tensions and dissatisfactions. Asymmetrical federalism and special status provisions, including special fiscal regimes and incentives, have helped address these problems to some extent. Special Status provisions have been used to resolve issues arising from history, geography and culture. Articles 370 and 371 provide examples of such accommodative constitutional engineering. Special status and unique relationships to meet specific needs and requirements were very much a part of the original constitutional design from the outset. Sub-State autonomy structures and autonomous district councils have had a mixed record. Some have been mere transit points towards statehood, others have proved more durable. Combining self rule and shared rule can assume many forms: fragmentation and non-viable units have to be weighed against the advantages of integration and size. The creation of north-eastern states raised this issue in a particularly acute form. 7. Executive Federalism, All-India Services and Inter-Governmental Relations. The growth of Executive Federalism is one of the noteworthy features of India’s federal development. It is linked to the parliamentary system where the executive is part and parcel of Parliament. Legislative federalism as embodied in the Rajya Sabha remains weak and underdeveloped, whereas executive federalism has acquired new dimensions. What has been the record of the role and contribution of the All-India services to Indian federalism? Their existence is unique among federations which are generally marked by horizontally layered bureaucracies. 6 The basic postulates and assumptions need to be stated and revisited in the light of experience. The ‘ring of service’ that Sardar Patel evoked, binding the union and injecting into policy making an awareness of constraints faced by each level, remains an interesting experiment. Among the institutional experiments in executive federalism, the most noteworthy is the Inter-State Council (ISC), which was established in 1990 under article 263 and was intended to bring together Chief Ministers at regular intervals to discuss issues of national policy and action. The reasons for the stunted growth of this institution are not difficult to comprehend: it was conceptually flawed from its inception as it lacked the requisite status and authority to mediate effectively between the Centre and the States. Sarkaria, who submitted his report in the twilight years of Congress party hegemony and dominance, recognised the need for such a Council. In fact, he recommended two, the second one to replace the National Development Council The tensions of this phase emerge clearly in the Sarkaria Report : less central intervention and more states’ participation. 8. Judicial Power. The Judiciary is assigned a major role in all federal systems through the power of judicial review. The Indian Judiciary has changed its stance on the nature and extent of federalism embodied in the Constitution. The first phase was marked by a literal reading of the Constitution and giving the Centre the benefit of the doubt in most cases. Subsequent events, notably the experience of the Emergency (1975-77) changed the perception of the Judiciary. The Central perspective ceased to be the dominant reference point for judging federal issues. The point of view of the states began to be heard with greater attention and respect. It has recognised the trends towards greater assertion of federal principles and has supported this development in recent years. The independence of the Judiciary has been a major pillar of the federal democracy edifice. 9. Multilevel Government –Opposition relations The 1990s can be viewed as a defining transition for India’s polity; they paved the way for a political system more federal than ever before. New modes of participation and decision-making emerged through the mechanism of federal coalitions, to which the parliamentary system and the Constitution have yet to adapt in a formal sense. Through federal coalitions, the power and influence of state-based parties increasingly shapes national policy as well as the course of Centre-State relations. More importantly, single-state and multi-state parties have engineered, through the political process, an enhanced degree of participation in national policy-making that they 7 could not achieve through formal institutions of co-operative federalism. In effect, federal coalitions have given them participatory opportunities that were earlier denied to them. Two main factors can be flagged as the driving force behind this transition. First, globalisation has added a new dimension to the polity, with economic reforms assigning new roles and responsibilities to the States. Second, the federalisation of the party system, which has brought in its wake a new dynamic, with its own mix of ‘competing logics’ is a crucial development. The interplay of local aspirations articulated by state-based parties with the imperatives of national cohesion derived from a different discourse is at the core of this debate. The complex power sharing that results from this multilevel relationship is a significant factor in holding the system together. 10. Emergency Powers and Constitutional Dictatorship: Emergency provisions exist in all democratic constitutions to protect and preserve the State, give it the powers to defend itself from its enemies, both internal and external. However, important differences with regard to the limitations, checks and safeguards provided. Preventing abuse has been a major preoccupation ever since Hitler constitutionally seized absolute and total power under the Weimar Constitution. Major lessons were learnt in this area on the possibilities of abuse. A trusting Constituent Assembly had devoted little thought to tight safeguards, given the context of the debate and the impeccable democratic credentials of the national leadership. The need for tighter safeguards arose sooner than expected. Uncertainties surfaced over civil-military relations. Abandoning the bumpy road of democracy has its own charm and temptation in periods of intense political turmoil. The difficulties arise in choosing the moment for reviving the democratic process. Hence the need for stringent limitations and safeguards to ensure that this state of exception remains as short as possible, with other institutions pushing towards a return to normalcy at the earliest. Suspension of federalism was a major consequence of the utilisation of emergency powers, quite apart from its effects on fundamental rights and freedoms. 11. Governors and their Discretionary Powers. Governors as the eyes and ears of the Central Government were a legacy of colonial rule. It was considered necessary to retain this institution, which became the most controversial instrument of central intervention. Is the Institution Necessary? The question has been posed repeatedly, when efforts to curb abuse and reform the system met with little success. Federal flexibility was ironically one major reason and defence of the institution. The fundamental issue if the illegitimate exercise of legitimate powers, the abuse of powers. The Judiciary has been a major force in curbing this trend, laying down norms and guidelines for the exercise of gubernatorial powers. 8 12. Regional Inequalities and Redistribution: Independent Finance Commission The Finance Commission, with its independent constitutional status, was expected to engineer the necessary balance between the needs of the Centre and the states. A new phase in India's political and economic development began in the early 1990s with liberalisation and an increased role for market forces. This shift has given rise to new contradictions and cleavages between market driven economics and politics based on universal suffrage. Earlier, it was the State that had the primary role in mediating these tensions. It sought to reconcile those excluded by markets by including them through the policies and processes of political democracy. In addition to wide income disparities the Indian Union is characterised by vast regional inequalities too. Here again, the State was earlier assigned a primary role in mitigating the consequences of geographically uneven development Thus the situation today is largely the outcome of the conjunction of two factors: the economic liberalisation reform programme and the federalisation of the party system. The problem of growing inequalities is equally complex. How social and economic inequalities are viewed is a core issue in the debate on the new role of the State. Greater reliance on market allocation of capital investments has given rise to competition among states that are unequally equipped and endowed for it. This has given rise to competitive federalism. The impact of competition for attracting investments to the states is to be understood at two levels. On the one hand, states are under pressure to provide good governance and to manage their finances with prudence. On the other hand, they are acutely aware of the negative impact of many of these reform measures on their electoral popularity. 13. Creating an Internal Common Market. The sequence adopted was to aim for political integration first, and the building of a common market was considered a relatively easier task, given the existence of a common currency, a central bank, and central government control over other macro economic parameters. The development of fiscal federalism however created new obstacles in the path of this delayed integration. States developed as centres of power and complex negotiations had to be conducted to persuade them to forego sources of revenue resulting from inter state tariff barriers. Introduction of VAT was a long drawn out process, with Tamil Nadu and Uttar Pradesh holding out till recently. It now paves the way for freer inter-state trade and commerce, dismantling of tax & excise barriers, and creation of a belated common market. An integrated Goods and Services Tax, though announced for 2010, is still problematic. 9 14. Internal Security, Public Order: Roles and Responsibilities. The role of an All-India Police Service and the growth of central armed police and para - military forces have also been questioned in the debate on states’ rights and autonomy in the first phase. In the subsequent years, states have tended increasingly to lean on central forces to supplement their own often inadequate police apparatus. The role of Central Forces in areas which fall primarily within the sphere of States Responsibilities has been a contentious issue. The cases of Ayodhya and Godhra can be cited in this context. The power of the Centre to issue directives to states and to interpret noncompliance as constitutional breakdown has been selectively invoked. 15. Multilevel Federalism and Local Self Government. This idea took legislative shape with the 73rd Constitutional Amendment (1992), which effectively came into operation in 1995. The new framework of self-government institutions effectively gives constitutional recognition to a third tier of the federal structure. However, this does not mean that multilevel federalism is already a generalised ground reality, or that it is likely to be so in the near future. It is important to note that there are powerful interests in the states, both within the political class and the bureaucracy, which resist this decentralisation. Was it wise to model these on Panchayats or to fashion them as District Governments? These institutions are in essence the building blocks of a new experiment in self-government Table 2.: List of Developmental Responsibilities for Local Governments Development Area Subjects 1. Land Land improvement, implementation of land reforms, land consolidation and soil conservation (2) 2. Water Drinking water (11) Minor irrigation, water management and watershed development (3) 3. Electricity, &Energy Power Rural electrification and distribution of electricity. (14) Non-conventional energy sources (15) Fuel and fodder (12) 4. Agriculture & Fisheries Agriculture (1) Fisheries (5) Animal husbandry, dairying & poultry (4) Social/farm forestry (6) Minor forest produce 5. Industry Small-scale industries, food processing (8) khadi / village / cottage industries (9) 6. Oil, Mines, Minerals, None 7. Trade & Commerce Markets and fairs (22) 8. Transport &Communications Roads, culverts, bridges, ferries waterways and other means of communication (13) 9. Education Education, including primary and secondary schools (17) Technical training and vocational education (18) Adult & non-formal education (19) 10. Information Broadcasting & Libraries (20) Cultural activities (21) 11. Public Health Health and sanitation, including hospitals, primary health centres and dispensaries (23) 12. Social Welfare and Poverty alleviation programme (16) Family welfare (24) women and child welfare (25) 10 Security Social welfare (26) Welfare of weaker sections (27) Public distribution system (28) 13. Local government & co-operatives Maintenance of community assets (29) The gradual growth of the panchayat system, working in tandem with civil society institutions of the voluntary sector, is a defining development of the federal system. The pressures that are being generated at this level hold the promise of developing into powerhouses for bringing about further changes in the institutional design. Within the framework of this multilevel federalism, the recently enacted Right to Information Act appears to be a potentially powerful weapon for effective decentralisation and democratisation. While it favours, in a general way, the development of transparency and accountability in governance, it is capable of producing significant results in smaller settings of decentralised democratic institutions. In this sphere, civil society institutions and particularly voluntary sector organisations are playing an increasing role. *** Lessons Learnt and Unlearnt: Concluding Remarks After 60 years, Indian Federalism is still work in progress. Witness the appointment of the Second Commission on Centre-State Relations. Five dimensions can be highlighted in conclusion. (a) Unresolved issues and new reform agenda Identity related: Second SRC or recasting the federal system. Statehood demands: Telangana, Vidharba and the restructuring of Uttar Pradesh. Resource Related: Water resources, long standing inter-state river water disputes (Cauvery, Narmada) and compensation through equalisation formula for unequally endowed states. Institutional Agenda: Governors, Presidents Rule, and the future role of the Inter-State Council. Sectoral issues: relating to health, education and social security combined with jurisdictional roadblocks in the development of infrastructure and basic minimum needs water, power, transport and connectivity. (b) Political Parties and Federalism The growth in power and influence of state-based parties now shapes the course of Centre-state relations primarily through the mechanism of coalition governments at the Centre. More importantly, some parties have engineered, through the political process, an enhanced participation in national policy-making that they could not achieve through formal institutions of co-operative federalism. In effect, federal coalitions have given them participatory opportunities that were earlier denied to the states in institutions such as the Planning Commission, the National Development Council or the Inter-State Council. (c) Economic Reforms and Social Justice Structural changes conducive to an increased role for the market have obviously had an impact on intergovernmental relations. This has prompted fears that the gap between the more developed and the less developed states could widen, with the latter being left behind in the competition for economic growth. Education and Healthcare remain critical areas and the 11 policy of quotas and reservations for deprived sections is an important component of the social justice agenda. Affirmative action has of late come under attack from the Supreme Court which has viewed it as anti-merit. (d) Reinforcing Governance Capabilities of the States The challenge is simultaneously to invent new ways of facilitating the participation of states in the formulation of national policies and motivating them for effective implementation in key infrastructural areas such as power, roads, and basic civic amenities. In the context of a multi-party system and the need to forge federal coalitions for national governance, this becomes all the more necessary. The political process is able to achieve this to some extent, but is no substitute for effective institutionalised arrangements. (e) The Role of Voluntary Sector Institutions They now interface in more effective ways with multilevel federalism. Local government issues, concerned as they are with basic land use, water and electricity supply, education, health and food security concerns, are increasingly becoming the privileged arena for determining the electoral fate of parties. Performance or non-performance in this area is bound to increase in significance as pressures on resources intensify. <<<<<<<<<<<<<<<<<<<<<<<<<<<>>>>>>>>>>>>>>> REFERENCES: Alam, Javeed (2004), Who Wants Democracy? Ambedkar,B.R., (1948)’ Unusual Features of the Constitution’ , Speech in the Constitutent Assembly of India, 4 November , CAD,VII(1). Arora, Balveer and Douglas V. Verney Eds. (1995) Multiple Identities in a State: Indian Federalism in Comparative Perspective. Single Arora, Balveer & Beryl Radin eds. 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