Sarkaria and Punchhi Commission on Center-State relations

This article deals with ‘Sarkaria and Punchhi Commission on Center-State relations .’ This is part of our series on ‘Polity’ which is important pillar of GS-2 syllabus . For more articles , you can click here

1 . Sarkaria Commission

• Three member commission setup in 1983 & submitted report in 1987
• To look into Center-State relationship.

Main recommendations were

1. Didn’t favour structural changes  arguing existing Constitutional Arrangements & principles are sound but emphasized on operational aspect
2. Rejected demand of curtailing powers of Center arguing that strong center is essential to safeguard national unity & integrity , however over centralisation should be avoided
3. Permanent Inter-State Council called the Inter-Governmental Council should be set up under Article 263.
4. Article 356 (President’s rule) should be used very sparingly, in extreme cases as a last resort 
5. Institution of All-India Services should be further strengthened and some more such services should be created. 
6. When the President withholds his assent to the state bills, the reason should be communicated to state government
7. Center should have powers to deploy its armed forces, even without  consent of states. However,desirable that the states should be consulted.
8. Center should consult the States before making a law on a subject of the Concurrent List.
9. Procedure of consulting the Chief Minister in the appointment of State Governor should be prescribed in the Constitution itself.
10. Governor’s term of five years in a state should not be disrupted except for extremely compelling reasons.
11. Steps should be taken to uniformly implement the three language formula in its true spirit.

Till Dec 2007, The Central Government has implemented 179 (out of 247) recommendations of the Sarkaria commission. The most Important was the establishment of Inter-State Council in 1990.

2 . Punchhi Commission

Issues between Center – State are dealt by Punchhi Commission (Detail important for mains because latest such report )

• April 2007  – Commission on Center-State Relations formed
• under the chairmanship of Madan Mohan Punchhi, former Chief Justice of India.
• In 2010, Commission submitted 7 volume report

Issue 1:  Consultation with States while legislating on matters in Concurrent List

• For effective implementation of laws in List III , broad consensus must be reached between states & center
• Inter State Council can be used for this

Issue 2: On Transfer of Entries in the Lists, from List II to List III & List I

• Article 368(2) empowers Parliament to amend any provision of the Constitution . Should Parliament deplete or limit the legislative powers of the States through this process ?
• There should be mechanism to  examine  whether the administration of the relevant subject under the Central law (on the transferred subject) has achieved the objects  . If the findings are not positive it may be worthwhile to  restore the item to its original position in State List 

Issue 3: On Bills reserved for consideration of the President

• Article 201 –  President to assent or withhold assent to a Bill reserved by a Governor for the President’s consideration.
• State’s concern –  Bills so submitted sometimes are indefinitely retained at the Central level even beyond the life of the State Legislature 
• President should decide consenting or withholding assent in reasonable time  (6 months)

Issue 4: On Treaty making powers of the Union Executive and Center-State Relations

There is need for a legislation to regulate the Treaty Making powers of the Union Executive since they are vast & unregulated

• Treaties which affect the rights  of citizens as well as those which  impinge on subjects in State List should be negotiated with greater involvement of States and representatives in Parliament

• There may be treaties or agreements which, when implemented, put obligations on particular States affecting its financial and administrative capacities.  Punchhi Commission recommended that financial obligations arising out of treaties  should be a permanent Terms of Reference to the Finance Commission

Issue 5: On Appointment and Removal of Governors

• Given status & importance of office of Governor , it is important to lay down explicitly qualification & eligibility for being considered for appointment
• Present Status – Only qualification needed is Person should be citizen of India & completed age of 35 years

Recommendations on Appointment

Sarkaria Commission approvingly quoted the eligibility criteria that Jawaharlal Nehru advocated and recommended its adoption in selecting Governors . These criteria were:

• He should be eminent in some walk of life.
• He should be a person from outside the State.
• He should be a person who has not taken too great a part in politics generally and particularly in the recent past.

Punchi Commission  proposed to implement them

Recommendations on Removal

• Phrase “during the pleasure of the President” in Article 156(i) should be substituted 
• It is necessary to provide for impeachment of Governor on the same lines as provided for impeachment of President . Dignity and independence of the office warrants such a procedure.

Issue 6: On Governors’ discretionary powers

• Article 163 – Governor has a wide, undefined area of discretionary powers even outside situations where the Constitution has expressly provided for it. The scope of discretionary powers under Article 163  has to be narrowly construed
• On the question of dismissal of a Chief Minister, Governor should invariably insist on the Chief Minister proving his majority on the floor of the House for which he should prescribe a time limit.

Issue 7: On “Local  emergency”  under  Article  355  and  356

• Given  the  strict  parameters  now  set  for  invoking  the  emergency  provisions  under  Articles  352 and  356  to  be  used  only  as  a  measure  of  “last  resort” ,  it  is  necessary  to  provide  a  Constitutional  or  legal  framework  to  deal with  situations short of National Emergency or President’s Rule

• Providing  the  framework  for  “localized  emergency“  would ensure  that  the  State  Government  can  continue  to  function  and  the  Assembly  would  not  have to  be  dissolved  while  providing  a  mechanism  to  let  the  Central  Government  respond  to  the issue  specifically  and  locally. 

Issue 8: On All  India  Services  and  Center-State  Co-operation  for  better  Administration

• All  India  Services  are  unique  feature  of  the  Indian  Constitution. 
• The  broad  objectives  in  setting up  All  India  Services  relate  to 
  1. facilitating  liaison  between  the  Union  and  States
  2. promote uniform  standards  of  administration
  3. helping  State  administrative  machinery to obtain best available talent with  wider outlook &  broader perspectives
  4. reduce  political  influence  in recruitment 
  5. promote  discipline  and  control  in  administration.

• Considering  the  importance of  these  objectives,  the  Commission  strongly  recommends  the  constitution  of  few  other  All India  Services  in  sectors  like  Health,  Education,  Engineering  and  Judiciary.  

• However,  the  Commission   recommended  proper  integration  of  All  India Services  in  the  context  of  the  introduction  of  the  third  tier  of  governance.

Issue 9 : On Equal  representation  of  States  in  Rajya  Sabha

• There  are   federations  (like  USA)  which  give  equal  number  of  seats to  the  federating  units  in  the  Council  of  States (Senate) irrespective  of  the  size  of  their  territory  and population.  
• If  the  Council  of  States  has  failed  to  function  as  representative  of  States  as  originally  envisaged, it  is  because  of  the unequal distribution of seats
• There  should  be  amendment  of  the  relevant  provisions  to  give  equality  of  seats  to States  in  the  Rajya  Sabha,  irrespective  of  their  population  size.
• The territorial  link  with  that  state  from  which  a  person  is  contesting  for  Rajya  Sabha  membership, which  was  prescribed  by  the  Representation  of  People  Act  (until  it  was  dispensed  in  2003)  is necessary  and  desirable

Issue 10: On Relationship  of  Article  246(3)  and  162  with  Articles  243G  and  243W

• Articles  243G (power,  authority  and  responsibility  of  panchayats)  and  243W  (power,  authority and  responsibility  of  municipalities,  etc.)  are  sometimes  read  to  mean  that  they  leave  it  to  the discretion  of  States  whether  or  not  to  devolve  any  powers  and  functions  to  the  local  bodies.
• Although  States  have  the  discretion  to  decide  and  vary  the  subject matters  in  respect  of  which  it  wants  to  devolve  powers  and  responsibilities,  States  are  not  free to  decide  not  to  devolve  anything  at  all.  

Issue 11 :  Governments’  obligation  to  support  court  expenditure  when  laws  are  made

• Financial  Memorandum attached  to  Bills  usually  do  not  provide  for  adjudication  costs .  This  puts  the  Subordinate  Courts  with  little  or  no resources  to  cope  up  with  additional  workloads  
• Judicial Impact  Assessment  should  be  made  whenever  legislations  are  proposed

Issue 12 : On Judicial  Councils  to  advise  Center-State  share  in  judicial  budgets

• Administrative  expenses  of  the  Supreme Court  & High Court  are  charged  upon  the  Consolidated  Funds  of  Center &  States  respectively, there  is  no  such  financial  arrangement  guaranteed  by  Constitution  for  subordinate  judiciary.
• Judicial  Councils” should be setup to decide
  • Judicial Budget for approval by legislatures
  • Proportion of share between Union and States  based on  workload  of  courts  under  Lists  I,  II  and  III.

Issue 13: On Need for continuing  emphasis  on  federal  balance  of  power

• Framers  of  the  Constitution,  taking  note  of  the  pluralistic identities  of  the  people adopted  federal  system  
• Commission,  however,  is  convinced  that  tilt  in  favour of Union  has increasingly  accentuated  over  the  years  even  outside  the  security  needs  of  the  country.  This  has  to  be corrected  in  the  interest  of better  Center-State  relations and  also  to  sustain  the  unity  and  integrity  

Municipality

• 74th Constitutional Amendment added Articles 243P to 243ZG and Schedule 12 which deals with provisions related to Municipality.

Historical Perspective

1687	First Municipal Corporation in Madras setup
1726	Municipal Corporation setup in Bombay and Calcutta
1870	Lord Mayo’s Resolution on Financial Decentralisation visualised Local Self Government Institutions
1882	Lord Ripon‘s Resolution on Self Government . He is called  Father of Self Government .   But system wasn’t elective in nature and hence criticized
1910s	Royal Commission on Decentralisation headed by Charles Hobhouse recommended Financial Decentralisation but due to World War I , nothing substantive came out of it.
1919	Dyarchy at the State Level started in which all subjects were divided into Reserved and Transferred . Panchayati Raj and Municipality were in Transferred Subjects which were to be headed by Indian Ministers. But in reality, power of control was still in the hands of British government
1935	Provincial Autonomy to States and since Local Government was State Subject, it came in control of Indians. But State Governments lacked resources and time, hence revolutionary changes weren’t introduced .

Constitutionalisation process

Rajiv Gandhi	In 1989 introduced 65th Constitutional Amendment(Nagarpalika) Bill ,passed in Lok Sabha but  failed in Rajya Sabha
VP singh	November 1989 ; but Government lapsed
PV Narsimha Rao	Finally Constitutionalised it with 74th Constitutional Amendment

74th Amendment Act,1992

1 . Three types of Municipalities

Nagar Panchayat	Transitional area between Urban and Rural
Municipal Council	Smaller Urban Area
Municipal Corporation	Larger Urban Area

2. Composition

• All members of Municipality to be elected directly
• State Legislature may provide for
  • Manner of election of Chairperson of Municipality
  • May provide for representation to persons having special knowledge in Municipal Administration without right to vote, MP and MLA from that area

3. Ward Committee

Ward Committees consisting of one or more wards within territorial area of Municipality having population of 3 lakh or more to be constituted

2nd Administrative Reforms Commission has criticized practice of clubbing together more than one ward to form Ward Committees which represent population of more than 3 Lakh (eg in Mumbai, each committee represent around 7 Lakh population) . Also this leads to system of Spoil Sharing with Chairmanship rotating between different Ward Heads. Commission has proposed alternate scheme .

4. Reservation of seats

SC & ST	Reservation to Members and Chairpersons in proportion of their population
Women	Atleast 33.3% seats reserved (including the seats reserved for woman in SC/ST)
OBC	State legislature can reserve seats for them

5. Duration

• Term of 5 years
• If dissolved earlier new elections should be held within 6 months (and hold office for remaining part of the tenure)

6. State  Election  Commission (SEC)

• Under Article 243 (K) and 243 (ZA) , State Election Commissioner has been made responsible for conducting elections of Urban and Rural Local Bodies .
• Election Commissioner to be nominated by Governor at state level
• Vested with powers to superintend elections of municipality and making electoral rolls etc

Role of State  Election  Commission

• Preparation of Electoral Roll
• Conducting elections of Panchayati Raj Institutions and Municipality elections
• Implement  Code of Conduct so that illegal activities and electoral malpractices can be controlled.
• Recommending State Government to give Officers on deputation for conducting elections

7. Finance

• State legislature may authorize Municipalities to levy & collect property tax, duties, tolls & fees or assign municipality taxes or give grant in aid but ceiling and procedure to same can only be decided by State legislature
• After  5 years , Finance Commission to be formed by Governor to review the Financial Position of Municipality and suggest method to distribute taxes

8. Audit & account

• State legislature may make provisions wrt maintenance of accounts by municipality and auditing of such accounts

9. Application to Union Territories

• President can direct to implement these provisions in UTs with modifications 

10 . Exempted areas

• Not apply to Scheduled Areas & Tribal Areas and shall not affect powers of Gurkha Hill Council

11. 12th Schedule

• Contain 18 functional items (29 – in case of Panchayats) placed within purview of Municipalities
  1. Urban planning including town planning.
  2. Regulation of land-use and construction of buildings.
  3. Planning for economic and social development.
  4. Roads and bridges.
  5. Water supply for domestic, industrial and, commercial purposes.
  6. Public health, sanitation conservancy and solid waste management.
  7. Fire services.
  8. Urban forestry protection of the environment and promotion of ecological aspects.
  9. Safeguarding the interests of weaker sections of society, including  handicapped & mentally retarded.
  10. Slum improvement and upgradation.
  11. Urban poverty alleviation.
  12. Provision of urban amenities and facilities such as parks, gardens, play-grounds
  13. Promotion of cultural, educational and aesthetic aspects.
  14. Burials and burial grounds; cremations, cremation grounds and electric crematoriums.
  15. Cattle ponds; prevention of cruelty to animals.
  16. Vital statistics including registration of births and deaths.
  17. Public amenities including parking lots, bus stops and public conveniences.
  18. Regulation of slaughter houses & tanneries

• But provision is – powers may be devolved to enable them to carry responsibilities conferred upon them in Schedule 12 & is not a mandatory provision
• There appear to be certain incongruities in the Twelfth Schedule and several matters listed in the Eleventh Schedule that ought to have been included, have been omitted inadvertently.

Types of Urban bodies

8 types of Urban Local Bodies have been created in India

1 . Municipal Corporation

• For big cities like Delhi, Mumbai, Kolkata, Hyderabad & others
• Created by Acts of Legislative Assembly in State & act of Parliament in Union Territory
• Has three authorities in it

Council	– Deliberative & Legislative body – Consist of Councillors directly elected by people + few nominated members having knowledge of Municipal Administration – Reservation according to 74th Amendment for SC,ST & women – Council is headed by Mayor (can be elected by majority vote or directly . Not Uniform in all States  . He  is ornamental head )
Standing committee	– Council is too large . Hence, Standing Committees created to facilitate working – Deal with public work, education , health, finance etc
Municipal commissioner	– Chief Executive Officer : Responsible for implementation of decisions of Council & standing committee – Appointed by State & is generally an IAS

2. Municipality

• For administration of small cities
• Established by State laws in states & law of Parliament in UTs
• Known by various names like Municipal Council, Municipal Committee, Board etc
• Has same three organs like  Municipal Corporation i.e. Council, Standing Committee & Chief Executive Officer but Council is headed by Chairman & unlike Mayor he has all the Executive Power

3. Notified Area Committee

• For administration of two types of areas
  • Fast developing due to industrialisation
  • Not fulfill all the conditions to form Municipality but are important for state
• Established by state notification in state gazette & those provisions are valid which are notified by state in gazette
• Entirely nominated body + non statutory body

4. Town Area Committee

• For administration of small town
• Created by State Legislation & May be wholly elected or partially elected partially nominated
• Semi- Municipal body & entrusted with limited  functions like drainage, roads etc

5. Cantonment Board

• For administration of civilian population in Cantonment Area
• Setup under Cantonment Act, 2006  by Parliament(no State Act)
• Total 63 Cantonments in India & divided to 4 categories

Category I	Above 50,000
Category II	10,000 to 50,000
Category III	2500 to 10,000
Category IV	Below 2500

• Partly nominated & partly elected
• Commanding Officer of area is Ex-Officio President of board
• Functions performed by the Cantonment Board are similar to those of Municipality

6. Township

• Established by large enterprise to provide civic amenities to its staff & workers who live in housing colonies built near plant
• Enterprise appoint town administrator to look after administration of township
• No elected members & is extension of bureaucratic structure  of enterprise

7. Port Trust

• Established in Port areas like Mumbai, Kolkata, Chennai etc
• To manage & protect ports and to provide civic amenities
• Created by act of Parliament  and perform functions similar to those of Municipality

8. Special Purpose Agency

• These are function based & not area based committees
• Eg : Town Improvement Trust, Urban Development Authorities, Water Development Authorities,Pollution Control Boards etc
• Are either Statutory Bodies or can be created by Department Executive Resolution
• Are not subordinate to Municipal Bodies & act independently in functions allotted to them

Topic : Directly Elected Mayors

2nd ARC	Extensively discussed this topic and recommended Directly Elected Mayors with fixed tenure of 5 years
2016	Shashi Tharoor introduced Private Member Bill to introduce Directly Elected Mayors

Present System

• Chairperson/Mayor in urban local government in most States enjoys primarily a ceremonial status. In most cases, the Commissioner, appointed by the State Government, has all the executive powers.
• Presently, there is not a uniform system for election of Mayors.
  • In most major States, the Chairperson is indirectly elected by the elected Councillors.
  • In Madhya Pradesh, Tamil Nadu and Uttar Pradesh , Chairperson is directly elected by the voters of the city.
• Term of Mayor isn’t uniform in whole country either
  • 5 years in Kerala, Rajasthan, Tamil Nadu etc
  • 1 year in Assam, Delhi, Haryana etc
  • 2.5 years in Gujarat and Maharashtra

Examples from other Cities

• Mayors of New York and London are popularly elected by direct vote every four years.
• Mayor of Toronto is elected by direct popular vote once in three years.

In almost all these cities, the city government is a powerful institution with very real and effective role in the management of most aspects of the city

Various Contexts to decide whether we should adopt system of directly elected Mayors or not

1 . Stability

Indirectly Elected	System prone to horse trading
Directly Elected	Fixed tenure and cannot ordinarily be removed from office by the Councillors

2. Accountability

Indirectly Elected	Held accountable by Councillors for all decisions
Directly Elected	Abuse of authority by the Mayor with a fixed tenure cannot be easily checked.

3. Cohesion

Indirectly Elected	No logjam between the Council and Executive Mayor.
Directly  Elected	It is possible that the Mayor and a majority in the Council may belong to two different parties. This may lead to lack of cohesion causing delays and even paralysis.

4. Representation

Indirectly Elected	When a Councillor elected to represent a ward is elected as the Mayor indirectly, often it is difficult to enlarge his/her vision for the whole city.
Directly Elected	Direct popular mandate gives the Mayor the legitimacy to represent and speak for the whole city.

5. Leadership Development

Indirectly Elected
Directly Elected	In the pre-independence era, great freedom fighters Chitta Ranjan (CR) Das & Netaji Subhas Chandra Bose were Mayors which proved stepping stone in becoming National Leaders   Therefore direct election of the Mayor, is an important source of recruitment of talent into public life and leadership development.

Considering above Pros and Cons, 2nd ARC recommended that it is desirable to choose the Mayors/Chairpersons through popular mandate in a direct election. 

Other suggestion – Instead of directly electing Mayor, Indirect election in which members of Council elects Mayor (as is the present case) but all the Executive Powers can be vested in Mayor can also be considered (instead of Municipal Commissioner)  . This will be more in line with our Parliamentary Government at State and Center level as well.

District Planning Committee

• Under provisions of Constitution, All districts have to constitute District Planning Committee
• Function : To consolidate plan prepared by Panchayats and Municipalities for District as whole
• State Legislature can also make provisions for
  • Composition of Committees
  • Manner of election of members of such committees
  • Manner of election of  Chairperson
• 4/5 members should be elected from Panchayats and Municipalities in proportion of Rural and Urban population
• Chairperson to forward development plan to state government

Metropolitan Planning Committee

• All Metropolitan Areas to constitute Metropolitan  Planning Committee
• Functions : To consolidate plan prepared by Panchayats and Municipalities for area as whole
• State legislature can also make provisions for
  • Composition of Committees
  • Manner of election of members of such committees
  • Manner of election of  chairperson
• 2/3  members should be elected from Panchayats and Municipalities in proportion of rural and urban population

Discussion : Issues with Panchayati Raj Institutions (ie Rural and Urban both)

Even after the passing of the 73rd and 74th Constitutional Amendments, the transfer of funds, functions and functionaries (3Fs) has been nominal in most States with notable exceptions such as Kerala.

• Lack  of  Finance  : Discussed below in detail

• Functions not devolved : Although functions of  Union & state are clearly defined in 7th Schedule but that of Panchayati Raj Institutions are in Schedule XI & Schedule XII with option given to States to devolve these functions at their will.  2nd ARC Suggestion to remove this anomaly,
  • Seventh Schedule should be amended by adding one more list of Local Governments & define functions to be performed by Panchayati Raj Institutions in 7th Schedule itself.

• There  is an acute  shortage  of skilled staff  in  Panchayati Raj Institutions .
  • Programmes to give proper training to employees of Municipalities can be answer . 
  • Restructuring of Bureaucracy keeping in view the requirements of Third Rung of  Government is long overdue

• Central Programs like Smart Cities Program which mandates the creation of special purpose vehicles (SPVs) for Smart Cities which encroaches governance area of Municipalities

• Existence of Parastatals : Parastatals are institutions like District Rural Development Agency (DRDA), District Health Society (DHS) etc formed  for delivery of specific services.  Activities performed by many of these organisations are in the matters in 11th & 12th Schedule and their separate existence with considerable fund and staff , is an impediment to effective functioning of local government .

• Lack of  credible data at  city  level on  jobs,  investments  or tax  collections. Hence, well informed policy cant  be formed

• Election  expenses  and  code  of  conduct  to  be  better  regulated  and  more  powers  should be  given  to  the  State  Election  Commission  to  do  the  same. Most of the Municipal Elections get rigged

Fodder : February 2016 – Municipal Corporation  of  Delhi (MCD)  ran  out  of funds to  pay  salaries  to  its  staffs.  As  a  reaction,  sanitation  workers  went  on  strike  which  created  conditions  of  uncleanliness  on  Delhi roads. 

Discussion : Financial Crunch of  Municipalities

Main Committees regarding this

• 14th Finance Commission
• 2nd ARC
• Insufficient local revenue generation was also highlighted by Economic Survey 2017-18 as ‘Low Equilibrium Trap’, local bodies appear to be not collecting revenues from taxes to the extent they can

Mention these in answers.

Data to substantiate financial crunch of Municipalities

	India	Europe
Local Government Expenditure out of Total Expenditure consisting Union, State & Local	7%	24%

Issues with Municipal Finance

1. Improper Devolution of Taxes :  since it wasn’t necessary condition , most of the states haven’t devolved taxation powers. 
2. Issues with implementation of State Finance Commission (SFC) Recommendations: States don’t accept the recommendations  of State Finance Commissions . 
3. Tied Fund / No Discretion : Major portion of the grants both from Union as well as the State Governments is scheme specific. Panchayats have limited discretion and flexibility in incurring expenditure
4. Lack of Data: due to  poor documentation of land and property, there is leakage in land tax that can be realised 
5. Absence of Taxation leading to lesser Accountability :   in absence of robust Taxation System at local levels, local government is losing its legitimacy.

Way Forward to increase finances

1. Property tax  :
   • Proceeds of the Property Tax  should be given to Municipalities . Municipalities are best suited to collect and use that tax because people of area paying Property tax can hold Municipality accountable to use that tax properly.
   • Frequent revision of  Property Tax  according to Inflation 
   • Other problems :
     • The boundaries of municipal bodies are not expanded to keep pace with the urban sprawl;
     • State laws often provide for exemption to a number of categories of buildings such as those belonging to religious or charitable institutions  
2. Professional tax :
   • Increase from 2500 to 12,000 & give this tax to local bodies as has been done by Kerala & TN . Professional tax can be levied by State Legislature or Municipalities but its maximum limit can be decided by Parliament. 
   • For some cities, Professional tax is the most important source of income after property tax. In the Corporation of Chennai, for instance, it contributes Rs.200 crore annually, half as much property tax.
3. Expand Entertainment Tax
   • Entertainment tax net to be expanded : cable , net  – cafè , boat rides should be included 
4. Amend Article 285(1) –  Union Properties can’t be taxed by State /Local Bodies .  14th Finance Commission recommended that some money should be given in compensation for their  loss
5. Look for Non Tax Revenue
   • Municipalities should look for Non Tax Revenue (as Railways is doing) . Eg : By renting the walls of its  buildings to be used for advertisement
6. Municipal Bonds
   • For the future projects like Smart City etc large investment is needed in the cities. Government is looking towards Municipal Bonds for this
7. Documentation of good practices: NITI Aayog can be roped in to keep inventory of local and international good practices and aid in their implementation.
8. Land Leasing : Local Bodies have ownership of  large chunk of lands. This can be used by Local Bodies to generate funds
   • Many cities in China (eg Shanghai) have financed more than half of their infrastructure investment from land leasing
9. Value Capture Financing : city governments raise resources by tapping a share of increase in value of land and other properties like buildings resulting from public investments and policy initiatives, in the identified area of influence. 

Panchayati Raj

Concept of local self government is not new to our country and there is mention of community assemblies in the Vedic texts. The Greek Ambassador, Megasthenes, who visited the court of Chandragupta Maurya in 303 B.C. described the City Council which governed Pataliputra – comprising six committees with 30 members. Similar participatory structures also existed in South India. In the Chola Kingdoms, the village council, together with its sub-committees and wards, played an important part in administration, arbitrated disputes and managed social affairs. They were also responsible for revenue collection.

History and Evolution

1 . Lord Mayo’s Resolution of 1870

• This started the work of decentralization in India. 

2. Lord Rippon’s Resolution of 1882

• Laid foundation of Local Self Government in Rural India (called father of Self Government in India)
• Passed in 1885 as Bengal Local Self Government Act
• Although Panchayats weren’t democratic institutions but consisted of government nominated members

3 . Gandhi vs Ambedkar and Constitutional Assembly

• They  differed in their idea towards Panchayati Raj

Ambedkar argued in the Constituent Assembly that caste oppression can’t be weakened by Panchayats but Gandhian members differed from him

• Then ultimately Panchayati Raj was given position in Directive Principles as Article 40 i.e. state shall take all steps to organise village Panchayats and endow them with such power & authority as may be necessary to enable them as units of Self Governance 
• Along with that turmoil due to the Partition resulted in a strong unitary inclination in the Constitution. Nehru himself looked upon extreme  localism as a threat to unity and integration of the nation.

Note  – Urban Local Bodies don’t find mention here and Constitution makers had only vision of Gram Swaraj in mind with least focus on Urban Local Bodies.

4. Balwant Rai Mehta Committee

• Constituted in January ,1957 and submitted report in November ,1957
• To examine working of Community Development Program and National Extension Service and suggest measures for their better working
• Recommendation – Establishment of scheme of democratic decentralization which ultimately came to be known as Panchayati Raj to do planning and development at local level.
• Recommendations were accepted by National development Council  but it didn’t insist on single pattern and left it to state to chose their pattern
• Rajasthan first to implement . Till 1960 almost all states implemented

5. Ashok Mehta Committee

• Constituted in December 1977 by Janata Government
• To revive and strengthen the declining Panchayati Raj System
• Main recommendations include
  • 3 Tier System to be replaced with 2 Tier System with Zila Parishad at district level and Mandal Panchayat below it with population of 15,000
• But Janata Government collapsed and no step taken on this report

6. GVK Rao Committee

• Committee on Administrative Arrangement for Rural Development & Poverty Alleviation
• By Planning Commission in 1985
• Committee concluded that development process was gradually bureaucratised and divorced from Panchayati Raj
• Hence, Panchayati Raj institutions must be revitalized and basic decentralised planning function should be done at District Level with District Collector Head of Committee

7. LM Sanghavi Committee

• 1986 by Rajiv Gandhi government
• Titled – Revitalisation of Panchayati Raj Institution for Development
• Main recommendations were
  • Constitutionalisation of Panchayati Raj
  • Establishment of Nayaya Panchayats
  • Villages to be reorganised so that  Gram Panchayats become more viable
  • Emphasis on importance of Gram Sabha

8. PK Thungon Committee

• Formed in 1989
• P.K.Thungon Committee recommended
  • constitutional recognition for the local government bodies
  • A constitutional amendment to provide for periodic elections to local government institutions, and enlistment of appropriate functions to them, along with funds

9. Constitutionalisation process

Rajiv Gandhi	In 1989 introduced 64th Constitutional Amendment ,passed in Lok Sabha but  failed in Rajya Sabha
VP singh	Introduced it in November 1989 ; but government lapsed
PV Narsimha Rao	Finally constitutionalised it with 73rd Constitutional Amendment in 1992

73rd Constitutional Amendment Act

1 . New things added

1. Part IX
2. Article  243 to 243 O
3. Schedule XI – 29 functions

(But provision is –  powers may be devolved to enable them to carry responsibilities conferred upon them in Schedule 11. It is not a mandatory provision)

2 . Gram Sabha

• Gram Sabha is assembly consisting of all persons registered in electoral rolls.
• Gram Sabha to be foundation of Panchayati Raj.

2.1 Functions & Importance of Gram Sabha

• Decide the Beneficiary group for particular scheme .
• Examining the annual statement of the accounts and audit report  of  Gram Panchayat.
• Can check any government document.
• Summon any Government employee as it is given status of Civil Court.
• Can vote on budget of Panchayati Raj Institution and programmes run by Panchayat.
• Mobilisation of voluntary labour and conducting community welfare programmes.  

 Hence, Gram Sabha act as Village Parliament wrt Panchayati Raj System.

2.2 But Gram Sabhas are not performing its role due to following reasons (according to 2nd ARC)

• Meetings not conducted at regular time (although 4 meetings are needed to be conducted in every 6 months)
• There isn’t proper infrastructure like Meeting Hall etc for working of Gram Sabha.
• Due to Caste System and value system of villagers, people don’t speak against elders .
• Bureaucracy also remains apathetic to the demands of Gram Sabha 
• People don’t know their rights and how to exercise them

2.3 Ways to make Gram Sabhas more efficient (by 2nd ARC)

• Funds of MPs and MLAs (MPLADs & MLALADs) should be used to make infrastructure for working of Gram Sabha . According to calculations of 2nd ARC, fund of one year is enough for this.
• If Bureaucracy try to suppress critical voice raised by  Gram Sabha, exemplary punishment should be awarded considering it attack on democracy.
• Recognise importance of Civil Society organisations in making Gram Sabhas effective. Eg : Rajasthan’s Mazdoor Kisan Shakti Sangathan’s Jan Sunvai initiative.

3. Three tier system

• Panchayats at village , intermediate and district levels through out country
• 2018  : Arunachal Pradesh has  passed a bill to do away with intermediate level of the three-tier Panchayati Raj system, and set up a two-tier system in the state because  Constitution  enables a state having less than 20 lakh population not to have the intermediate level, and Arunachal has a population of 13.84 lakh

4. Elections in Panchayati Raj Institution

• Members at all 3 levels to be elected by direct voting
• Election of head

Intermediate and District	Indirectly( by and from among the elected members)
Village	As State Legislature will make law

• Courts cant interfere in electoral matters of Panchayat (anything related to delimitation of constituencies & allotment of seats to such constituencies )

5. Reservation of seats

SC & ST	Reservation to Members and Chairpersons proportional of their population
Women	Atleast 33.3% ie 1/3rd seats reserved (separately  in seats reserved for SC/ST 1/3 should be for woman belonging to SC/ST) for members and chairpersons
OBC	State Legislature can reserve seats for them

6. Duration of Panchayat

• Term of  Panchayat is 5 years
• If dissolved earlier, new elections should be held within 6 months

7. State Election Commission (SEC)

• Election Commissioner to be nominated by Governor at state level .
• Election Commission can be removed in manner similar to removal of Judge of High Court
• Vested with powers to superintend elections of Panchayats and making electoral rolls etc
• Qualifications and Terms of Service (like age of retirement) etc are to be decided by State via Act

Suggestions of 2nd Administrative Reforms Commission (ARC) regarding SECs

• To ensure independence of the State Election Commission, appointment of the SEC should be done by a collegium comprising the Chief Minister, Chief Justice of the High Court and the Leader of Opposition in the Legislative Assembly.
• Uniform criteria need to be evolved and institutionalised regarding the qualifications of appointment, tenure of office and age of retirement.  Commission is of the view that a uniform tenure of 5 years subject to a age limit of 62 years as is applicable to the judges of High Courts would be appropriate
• Institutional mechanism should be created to bring the Election Commission of India and SECs on a common platform for coordination, learning from each other’s experiences and sharing of resources.

8. Finance

• State Legislature can authorise Panchayat to collect taxes or assign panchayat taxes or give grant in aid
• After  5 years Finance Commission to be formed by Governor to
  • Review the financial position of Panchayats
  • Suggest method to distribute taxes
  • Determine taxes to be assigned to Panchayats
  • Grant in aid to Panchayats from  Consolidated Fund of State

9. Audit & Account

• State legislature may make provisions wrt maintenance of accounts by Panchayats and auditing of such accounts

10. Exempted States & Areas

States	J&K, Nagaland , Mizoram and Meghalaya
Other areas	Scheduled and Tribal Areas , Hill area of Manipur for which District Council exist and Darjeeling District of West Bengal

Parliament can extend provisions of Act with certain modifications to schedule areas and for this PESA ACT,1996 enacted.

11. Eleventh Schedule

• Consist of 29 functional items placed within purview of panchayats
  1. Agriculture, including agricultural extension.
  2. Land improvement, implementation of land reforms, land consolidation and soil conservation.
  3. Minor irrigation, water management and watershed development.
  4. Animal husbandry, dairying and poultry.
  5. Fisheries.
  6. Social forestry and farm forestry.
  7. Minor forest produce.
  8. Small scale industries, including food processing industries.
  9. Khadi, village and cottage industries.
  10. Rural housing.
  11. Drinking water.
  12. Fuel and fodder.
  13. Roads, culverts, bridges, ferries, waterways and other means of communication.
  14. Rural electrification, including distribution of electricity.
  15. Non-conventional energy sources.
  16. Poverty alleviation programme.
  17. Education, including primary and secondary schools.
  18. Technical training and vocational education.
  19. Adult and non-formal education.
  20. Libraries.
  21. Cultural activities.
  22. Markets and fairs.
  23. Health and sanitation, including hospitals, primary health centers and dispensaries.
  24. Family welfare.
  25. Women and child development.
  26. Social welfare, including welfare of the handicapped and mentally retarded.
  27. Welfare of the weaker sections, and in particular, of the Scheduled Castes and the Scheduled Tribes.
  28. Public distribution system.
  29. Maintenance of community assets

(But provision is –  powers may be devolved to enable them to carry responsibilities conferred upon them in Schedule 11. It is not a mandatory provision)

12. Compulsory Provisions

• Organisation of Gram Sabha in village or group of villages
• Establishment of Panchayat at village, intermediate & district
• Direct election to all seats at all levels
• Indirect election of Chairman at Intermediate & District level
• 21 years – minimum age for contesting elections
• Reservation of seats (for Members & Chairperson) for SC/ST at all three levels , 1/3rd reservation for woman for Members & Chairperson
• Tenure =5 years & holding elections within 6 months if dissolved earlier
• Establish State Election Commission
• Constitution of State Finance Commission every 5 years

13. Voluntary Provisions

• Giving representation to MP & MLA in Panchayats
• Providing reservation to OBC
• Making them autonomous bodies
• Devolution of powers & responsibilities upon Panchayats to prepare plans for economic development & social justice
• Granting Financial Powers to Panchayats

Panchayat Samiti 

• Second or middle tier of the Panchayati Raj
• Provides a link between Gram Panchayat and a Zila Parishad.
• Strength depends on the population in a Samiti area.
• Some members are directly elected. Sarpanchs of Gram Panchayats are ex-officio members of Panchayat Samitis. However, all the Sarpanchs of Gram Panchayats are not members of Panchayat Samitis at the same time. The number varies from State to State and is rotated annually. It means that only chairpersons of some Gram Panchayats in a Samiti area are members of Panchayat Samiti at a time. In some Panchayats, members of Legislative Assemblies and Legislative Councils as well as members of Parliament who belong to the Samiti area are co-opted as its members.
• Chairpersons of Panchayat Samitis are, elected indirectly- by and from among the elected members

Functions

• Panchayat Samitis are at the hub of developmental activities. They are headed by Block Development Officers (B.D.Os).
• Implementation of some specific plans, schemes or programmes to which funds are earmarked. It means that a Panchayat Samiti has to spend money only on that specific project.

Zila Parishad

• Uppermost tier of the Panchayati Raj system.
• Institution has some directly elected members whose number differs from State to State as it is also based on population.
• Chairpersons of Panchayat Samitis are ex-officio members of Zila Parishads
• Members of Parliament, Legislative Assemblies and Councils belonging to the districts are also nominated members of Zila Parishads.
• Chairperson of a Zila Parishad, called Adhyaksha or President is elected indirectly- by and from among the elected members thereof. The vice-chairperson is also elected similarly.
• Zila Parishad meetings are conducted once a month. Special meetings can also be convened to discuss special matters. Subject committees are also formed.

Functions

• Links Panchayat Samitis within the district. It coordinates their activities and supervises their functioning
• It prepares District Plans and integrates Samiti Plans into District Plans for submission to the State Govt
• Zila Parishad looks after development works in the entire district

Nyaya Panchayats

Gram Nyayalaya Act 2008

• It came into force on 2 October 2009
• It mandates establishing Gram Nyayalayas to make justice easily accessible to the rural population and dealing with the backlog of cases by making courts available at Panchayat level and dispose the work by going to the villages. 

Salient Features

• Each Gram Nyayalaya is a court of Judicial Magistrate of the first class, appointed by state governments
• Established for every Panchayat at intermediate level or a group of contiguous Panchayats at intermediate level in a district.
• Functions as a mobile court and exercises the powers of both Criminal and Civil Courts.
• An appeal against a judgement of the Gram Nyayalaya can be taken to Session Courts in  criminal case and District Courts in Civil cases.

Devolution Index

• Progress in effective decentralisation of governance is not uniform across all states 
• Ministry of Panchayati Raj asked National  Council of Applied Economic Research(NCAER) to develop working devolution index to measure how States are performing in process of devolution 
• Scale ranges from 0 to 1
• Note = Kerala scores highest (Kerala model of Panchayati Raj)

Rashtriya Gram Swaraj Abhiyan  (RGSA)

2018 : Government launched Rashtriya Gram Swaraj Abhiyan on the Panchayati Raj Day.

Main features

• Revamped version of Rajiv Gandhi Panchayat Sashaktikaran Abhiyan
• It is a centrally sponsored scheme
• Aims at making rural local bodies self-sustainable, financially stable and more efficient.
• Strengthening Gram Sabhas to function effectively as the basic forum of people’s participation
• Activities under the scheme will be aligned for achieving the SDGs with main thrust on Panchayats identified under Mission Antyodaya and 115 Aspirational districts 

Critical Analysis of Panchayati Raj

# Pros of Panchayati Raj

1. Some of the most important schemes like NREGA & NRHM are implemented through Panchayati Raj Institution.
2. Bottom up approach of development achieved which is less wasteful and keep in mind local needs of people. Social Audits done by Gram Panchayats have increased the efficacy of outcomes of funds.
3. There are about 2.4 Lakh Panchayati Raj Institutions and number of persons elected in them are 36 lakh in Panchayats & Nagapalikas (even higher than population of Norway )
4. In terms of empowerment of woman , it is the greatest experiment taken by any democracy in the world . More than 10 Lakh woman are elected through Panchayati Raj Institutions 
5.  SC/ST/ OBC have been given reservation . This has helped in breaking the old hierarchy in villages & played part in undermining the institution of caste 

# Cons of Panchayati Raj

Main problems with Panchayati Raj Institutions are – FUNDS , FUNCTIONS & FUNCTIONARIES

1. Powers have not been devolved adequately & Devolution index prepared by NCAER clearly points that 
2. Grant in aid are major component of Panchayati Raj Institutions revenue 
3. Most of the states are not constituting State Finance Commission . Even if they are constituted, their recommendations are not implemented . Panchayati Raj Institutions are always in Financial Crunch 
4. Lack of training programmes for participants of Panchayati Raj Institutions to make them more professional & develop leadership qualities in them 
5. Domination of bureaucracy over Panchayati Raj Institutions
6. Although third layer of Governance has been added by 73rd and 74th Constitutional Amendment but parallel restructuring of bureaucracy hasn’t been done leading to shortage of manpower .
7. Various parallel bodies like DRDA have undermined the importance of Panchayati Raj Institutions . These types of bodies should either be disbanded or made accountable to Panchayati Raj Institutions
8. Elite control over system is a fact till today 
9. State level leaders still see Panchayati Raj Institutions leadership as challenge to their power & do all in their power to undermine their authority

Women and  Panchayati Raj

• Historically , women & lower castes were not allowed membership of Panchayat.
• But  73^rdAmendment Act, 1992, reserved at least 1/3^rd seats at all levels of Panchayat for women.
• Numerically, today India can actually boast that there are more elected women representatives (EWRs) in India that the rest of the world put together.
• Elected women perceived enhancement in their self-esteem, confidence, decision-making ability and respect within the family after winning an election.

Pending  legislative reform

• 110th & 112th Amendment Bill : Reserve  50 % seats for women in PRIs and Urban local bodies
• Bihar, Uttarakhand, Madhya Pradesh, Punjab and Himachal Pradesh have already reserved 50% seats  for women in local governance.

Pending constraints

• Women belonging to disadvantaged sections face double oppression. 
• Acceptability of women as elected representatives . Male members try to create hurdles .
• Issue of Sarpanch Patis, where the husband of the woman sarpanch manages the affairs of the Panchayat and she is only a proxy candidate.  
• Social myths and prejudices create hurdles . For example, tradition of remaining silent before elderly members 

Panchayats (Extension to the Scheduled Areas)  Act,1996 (PESA   Act )

Need of PESA

• Because 73rd Amendment  is not applicable to Scheduled and Tribal Areas

Objectives of PESA

• To extend provisions of Part IX to Schedule Areas
• To make gram sabha nucleus of all activities
• To safeguard & preserve  traditions and customs of tribals
• To prevent Panchayats at higher levels from assuming powers and authority of powers at lower levels

Features of PESA

• Panchayats in these areas to be in consonance with local traditions
• All villages to have Gram Sabha consisting of all whose name is in electoral rolls
• Gram Sabha should approve plans  for social and economic empowerment and identification of beneficiaries of poverty alleviation programmes
• Gram Sabha or the Panchayats’ at ‘appropriate level’ should be consulted for acquisition for development and rehabilitation project
• All Chairpersons in these areas should be STs 
• Gram Sabhas or Panchayats at appropriate level shall also have powers to
  1. manage minor water bodies;
  2. mandatory consultation in matters of land acquisition;
  3. prospecting licenses/mining leases for minor minerals;
  4. regulate and restrict the sale/consumption of liquor;
  5. manage village markets,
  6. control money lending to STs; and
  7. ownership of minor forest produces
• Note – In PESA, Gram Sabha is the lynchpin. Hence, PESA introduces a strong element of subsidiarity

Why poor implementation of PESA ?

PESA has been very poorly implemented across the nine States. Following reasons can be attributed to this

• Absence of Proper definition of Village in consonance with PESA :  All States, without exception, have continued with their earlier revenue definitions of the village. 
• Ambiguous definitions within PESA – definition of many provisions are ambiguous like minor water bodies, minerals in the statute etc
• Lack of coordination and overlapping jurisdiction – Both Ministry of Tribal Affairs and Panchayati Raj have overlapping jurisdiction 
• State government laws and provisions cleverly negate  PESA  : For example, PESA is for rural areas, states upgrade rural panchayats  to urban panchayats to bypass PESA   (Xaxa Committee observation)
• Attitudinal Problem of Bureaucracy: Government functionaries treat tribals as inferior.  
• There is a large number of Centrally Sponsored Schemes which are not compatible with PESA e.g. Policy on wastelands, water resources and extraction of minerals.

Ways to improve

• Define Villages in consonance with the PESA Act
• ‘Prior informed consent  to be taken’ to replace ‘consulted’  for acquisition for development and rehabilitation project
• Representatives should be trained & educated  to use their powers  given to them under PESA effectively
• Proper communication channel between Panchayati Raj and Tribal Affairs ministry
• There is urgent need to amend Indian forest Act and other related Acts in consonance with PESA  
• No state government should have any power to overrule any recommendation of the Gram Sabha.

Way Forward  – In the development offensive against the Maoists, PESA is a crucial weapon. Hence, it needs comprehensive reforms in provisions and implementation for holistic upliftment of tribal areas. 

Amendment of Constitution

• Article 368 of Part XX of Indian Constitution deals with amendment of constitution.

Comments on Indian Constitution

• Neither too rigid like constitution of USA nor too flexible like Britain
• But synthesis of both
• Present situation- Parliament cant amend those provisions which form basic structure of constitution (Supreme Court judgement in Keshavananda Bharti case,1973)

Method of Amendment By Article 368

• Can be initiated in any House of Parliament but not State Assembly
• Can be introduced by Minister or Private Member & doesn’t require permission of President
• Bill must be passed by Special majority in both the houses.
• If there is disagreement between two houses there is no provision of joint sitting
• If Amendment seek to change Federal Structure then must be ratified by half of states by Simple Majority
• After that bill sent to President for his assent and President must give his assent. He can neither hold nor send bill for reconsideration (added by 42nd Amendment)

1 . Amendment by Simple  Majority

• Number of provisions (which are not very significant are) outside scope of Article 368 & can be Amended by Simple Majority
• And these are
  1. Admission or establishment of new states
  2. Formation of new states or changing boundaries of existing states
  3. Creation or Abolition of Legislative Councils in States
  4. Quorum in Parliament
  5. Salaries & allowances of  MPs
  6. Use of English language in Parliament
  7. Delimitation of Constituencies
  8. Use of official language
  9. Fifth  & Sixth schedule
  10. Elections to Parliament & State Legislatures

2. Amendment by Special Majority

• Majority of Amendments of Constitution can be done by Special Majority
• This way Amendments can be done in
  1. Fundamental Rights
  2. Directive Principles of State Policy
  3. All other provisions not included in 1st and 3rd Category

3. Special Majority  and Consent Of States

• Those provisions which seeks to alter Federal Structure of Union done like this
• Include
  1. Election of President
  2. Extent of Executive powers of Union & State
  3. Supreme Court & High Court
  4. Distribution of Legislative Powers of  Union & States
  5. Any of the list of 7th schedule
  6. Representation of states in Parliament
  7. Article 368 itself

Why so many amendments to the constitution ?

• Constitution is the Supreme law of the land . A law can remain supreme and effective only if it can fulfil the interest of the different sections of the society and keep it orderly. Interest of the people evolve with time and in order to remain relevant , constitution has to be dynamic and a living document , thereby , amending it periodically becomes inevitable
• This does not mean that Indian Constitution is too flexible to be easily amended . It is very finely balanced and combines the elements of Rigidity (like US) and Flexibility (like UK) .
  • It gives leverage to Parliament for making cosmetic amendments by Simple Majority and keeps a tight check for critical changes by 2/3 majority 
  • Most importantly , it maintains a Federal Balance with acceptance of amendments  by half the states that relate to Centre State relations
  • Overall, Amendments have helped by creating new articles to meet the changing needs and modifying others to remain relevant .

Jawahar Lal Nehru in Constituent Assembly – ” While we want this Constitution to be as solid and as permanent a structure  as we can make it, nevertheless, there is no permanence in Constitution. If you make anything rigid and permanent , you stop a nation’s growth .”

Basic  Structure of Constitution

Judicial history that led to Doctrine of Basic Structure

IT BASICALLY IS FIGHT BETWEEN EXECUTIVE  & JUDICIARY IN WHICH EXECUTIVE AIMS TO INCREASE ITS POWER AND JUDICIARY TRIES TO SAFEGUARD ITS POWERS

1 . Shankari Prasad vs Union of India(1951)

• Article 368 not only provide method to amend constitution but is also source of power for Parliament to amend constitution (ie Constitutional Amendment is not Law under Article 13 and hence beyond Judicial Review)

2. Golaknath Vs State of Punjab (1967)

• Supreme Court ruled that power to amend constitution of India is not vested to Parliament under Article 368 but under Article 248
• Hence situation was

Article 368	Describes method to Amend Constitution
Article 248	Which states that on Residuary Subjects  ,Parliament will legislate and power to amend constitution also derived from it

Implication: All laws made using 248 are subjected to Judicial Review under Article 13 .

• Supreme Court held that there are implied limitations on Amending Powers of Legislature and Fundamental Rights can be abrogated by Constituent Assembly only.

3. 24th Amendment,1971

• To nullify Golaknath judgement
• Amended Constitution such that
  • Article 368 gives power to Parliament to amend constitution and hence it is out of Judicial Review under Article 13
  • It is compulsory for the President to give assent to the Constitutional Amendment bill

4. Keshavananda Bharti Vs State of Kerala, 1973

• Said three things
  • 24th Amendment is Constitutional
  • It over ruled Golaknath Judgement and said Article 368 gives power to Parliament to amend Constitution
  • But put other restriction on Parliament that Amending Power of Constitution can’t alter BASIC STRUCTURE of Constitution
• And what is Basic Structure would be decided by Supreme Court from time to time

5. 42nd Amendment, 1976

• Amending power of Parliament is Supreme and it can’t be stopped  even on the basis of DOCTRINE OF BASIC STRUCTURE

6. MINERVA Mills Vs Union of India, 1980

• Supreme Court declared above provision of 42nd Amendment to be  Unconstitutional
• Judicial review cant be taken away from Supreme Court as it is Basic Structure of constitution.

7. Waman Rao Case,1981

• Supreme Court adhered to doctrine of basic structure
• Clarified that it would apply to constitutional amendments enacted after April 24, 1973

What is Basic Structure of Constitution ?

• It was propounded in Keshavananda Bharti Case . Supreme Court is yet to define or clarify basic structure. But from various Judgements following things emerged as Basic structure

Supremacy of Constitution	Separation of powers among three organs
Sovereign, Secular & Republican nature	Federal Character of Constitution
Unity & Integrity of nation	Welfare state
Judicial Review	Freedom & Dignity of Individual
Parliamentary System	Rule of Law
Balance between Fundamental Rights & DPSP	Free & Fair elections
Principle of Equality	Independence of Judiciary
Limited power of Parliament to amend constitution	Effective access to Justice
Secularism (SR Bommai Case)	Power of Supreme Court under Article 32,136,141,142

Keshavananda Judgement – Since the Constitution had conferred a limited amending power on the Parliament , the Parliament can not under the exercise of that limited power enlarge that very power into an absolute power . The donee of a limited power cannot by the exercise of that power convert the limited power into an unlimited one.

Reaffirmment of Basic Structure came in Indira Nehru Gandhi vs Raj Narain (1975) which declared 39th Constitutional Amendment to be unconstitutional (39th Amendement removed the power of Supreme Court  and other courts to adjudicate on elections of President, VP , PM etc) . Court held that Free and Fair Elections and Rule of Law are Basic Features of constitution

Present Debate : Where to draw line ?

• There is debate that what constitute Basic Structure of Constitution . Judiciary is increasing the scope of Basic Structure and experts fear that one day, whole of Constitution can be included in Basic Part of Constitution.
• The Constitution of any country is considered to be sacrosanct and foundational law. All articles and provisions of the constitutions are important . The question then arises can it be then interpreted to mean that some provisions are more important or basic and others are secondary. Perhaps it is time , Parliament should sit down and try to debate on what constitutes Basic Structure and insert Basic Features of Constitution by creating Schedule in Constitution itself as done by Germany.

Emergency Provisions

This article deals with ‘Emergency Provisions .’ This is part of our series on ‘Polity’ which is important pillar of GS-2 syllabus . For more articles , you can click here

Introduction

• Article 352 to 360 of Part XVIII of Indian Constitution deals with Emergency Provisions.
• Indian Constitution provides three types of emergencies

Emergency due to War, External Aggression or Armed Rebellion	Article 352	National Emergency
Emergency due to failure of Constitutional Machinery in State	Article 356	Presidents Rule
Financial Emergency due to threat to financial stability of India	Article 360	Financial Emergency

Rationality of Emergency Provisions

• To enable the Central Government to meet any abnormal situation effectively
• Converts federal structure into unitary without any amendment
• Constituent Assembly Debates : Dr Ambedkar claimed that the Indian federation, unlike any other federation, in times of emergency, could convert itself into an entirely unitary State

1 . National Emergency

Grounds on which National Emergency can be declared

• President can declare it when security of India or part of India is threatened by war or external aggression or armed rebellion.
• Can be declared before that happen when danger is imminent

Types of National Emergency

External Emergency	War or External Aggression
Internal Emergency	Armed Rebellion (earlier it was Internal Disturbance – 44th Amendment changed it)

Duration  & Approval

• Must be approved by Parliament within 1 month (44th Amendment Act )( earlier 2 months)
• Need to be approved again after subsequent 6 months(earlier once started remains indefinitely till Executive desired)
• It needs to be passed by Special Majority by both the Houses of Parliament (earlier Simple Majority)

Revocation of National Emergency

• Can be revoked if Lok Sabha passes the resolution with Simple Majority (only Lok Sabha , Rajya Sabha not required) – added by 44th Amendment
• Hence process to declare emergency is difficult than to revoke it

2 . President’s Rule

Grounds on which President’s Rule can be declared

Article 356	If President is satisfied that situation has arisen in State that government cant be carried on in accordance with the provisions of Constitution
Article 365	When State fails to comply with or to give effect to any direction from Centre, it is lawful for President to say that government is not carried in accordance with Constitution

Approval & duration

Approval	Must be approved within 2 months by both Houses with Simple Majority
Duration	If approved continues for 6 months upto maximum period of 3 years with approval each  6 months by Parliament 44th Amendment : can extend beyond 1 year on 2 grounds 1. National Emergency in place in whole country 2. Election Commission certify that situation not conducive to hold elections

Effects of President’s rule

• President dismisses State Executive including Chief Minister
• Governor on behalf of President carries State Administration
• President either suspends or dissolves State Legislative Assembly
• Laws made by President continue to be operative even after President rule is revoked

Use of Article 356

More than 100 times and many times for political and personal gains

Kerala & UP	9
Punjab	8

Arbitrary use of President’s rule

• Issue  : expression “ breakdown of constitutional machinery” has not been defined in the Constitution.
• Although Ambedkar promised Article 356 will remain dead-letter. But history proved him wrong.
  • In March 1953, the country’s first non-Congress government, headed by Gian Singh Rarewala in the PEPSU was  dismissed and President’s Rule was imposed
  • In 1957, Kerala saw the world’s first elected communist government coming into power. A series of progressive measures, opposed by the Catholic Church in Kerala, as well as American pressure engineered by the CIA, made the work of the government difficult. In 1959, then Congress President Indira Gandhi, convinced Prime Minister Jawaharlal Nehru that E.M.S. Namboodripad’s government deserved to be dismissed and President’s rule should be imposed.
• 1988 Sarkaria Commission report  commented on the arbitrariness with which Article 356 was used: only 26 out of 75 cases until then were “just” 
• 1980s : Farooq Abdullah’s government was replaced by his brother in law GM Shah using Article 356. This played major role in alienating people of Kashmir from democratic process .
• In just about 2 years, Morarji Desai and Charan Singh governments dismissed 12 governments. Until the mid-1990s, President’s Rule was imposed in a state roughly every 6 months 
• Central Government use the office of Governor for this. Governor acts as agent of the Union  and many a times try to destabilise the State Governments. Before Bommai Judgement , Governors went to such an extend that he tested the Majority in his official residence.
• Buta Singh Bihar Assembly dissolution case : court observed that Governor’s report could not be taken at face value and must be verified by the council of ministers before being used as the basis for imposing President’s rule.

Judicial Review of President’s Rule + SR Bommai Case Guidelines

Judicial Review is present in case of Article 356

38th Amendment	Presidents decision is final and conclusive& cant be challenged
44th Amendment	President’s decision is not beyond Judicial Review

In S.R. Bommai case 1994, Supreme Court gave guidelines  

April 1989, Karnataka CM S R Bommai requested Governor P Ventakasubbiah for an opportunity to prove his majority in the Assembly as the leader of the Janata Dal Legislature Party. It was denied, and Bommai’s government was dismissed and President Rule was imposed. Ultimately, the matter reached the Supreme Court. Supreme Court ordered that

1. Majority to be tested on floor of the house only & not anywhere else & was confirmed in Rameshwar Prasad v. Union of India (2005)
2. President Rule is under Judicial Review
3. Burden lies on centre to prove the correctness of President rule
4. State Legislature should be dissolved only after Parliament approval (is kept in suspended animation till that time)
5. Secularism is basic feature of Constitution & government pursuing anti secularism is liable to action
6. Article 356 could only be resorted to when there was a breakdown of constitutional machinery, as distinguished from an ordinary breakdown of law and order.
7. Article 356 is an exceptional power to be used in special situation

Supreme Court was of the view that such acts are bad for the democracy because if democratically elected governments are removed like this, people will loose their faith from democracy (reiterated in Uttarakhand and Arunachal Pradesh Case of 2016)

Article 356 was invoked on 40 occasions in the 15 years before Bommai judgement , and only on 11 in the 15 years after 1994. A combination of factors, including the

1. emergence of coalition governments at centre with representation from regional parties,
2. assertive President’s office
3. Assertive judiciary

checked the trend.

Even after Bommai Judgement, trend is emerging that Governor destabilise the government and impose President’s Rule. Since 2 months are given to pass it from Parliament, in the meantime new leader manipulates situation by indulging to horse trading and forming government. Hence, provision of 2 months is used by Governor to abuse his power and virtually this process is outside the oversight of Parliament.

Role of President in Checking this

• President shouldn’t act blindly as in 1997, President K.R. Narayanan, in a first for any Indian president, returned to the cabinet its recommendation to impose direct central rule in Uttar Pradesh. Later, he returned a similar recommendation by another central government to dismiss the state government in Bihar.
• Hence, apart from Judiciary, President can act as check and balance 

Constitution Assembly Debates  on Emergency provisions

• We  included it in the Constitution when B.R. Ambedkar gave an assurance that it would remain a dead letter.
• Shibban Lal Saksena said, “we are reducing the autonomy of the states to a farce”.

Various Commissions on Article 356

1 . Sarkaria Commission (1987)

• Article 356 should be used very sparingly, in extreme cases and only as a matter of last resort.
• No dissolution of Assembly till proclamation is ratified by the parliament

2 . National Commission for Reviewing the Working of Constitution (2002)

• A warning should be issued to the errant State, in specific terms that it is not carrying on the government of the State in accordance with the Constitution. Before taking action under Article 356, any explanation received from the State should be taken into account.
• Safeguards corresponding to that of Article 352 should be incorporated in Article 356 to enable Parliament to review continuance in force of a proclamation.

3. Punchhi Commission (2008)

• Imposition of localized emergency i.e. in only a district or a part of it. 
• It also recommended suitable amendments in Article 356 to incorporate the guidelines of Supreme Court in S.R Bommai case (1994) with regards to invoking of the article.

Use of National Emergency so Far

Has been used three times

1962	– Due to Chinese Aggression – Was in use till 1968 – Hence, no fresh proclamation for Pakistan War of 1965
1971	– Due to war with Pakistan – This emergency was in operation when Third Emergency was provoked. Both ended in December , 1977
1975	– Due to Internal Disturbance ( most controversial so far) – Ended in 1977,December

3. Financial Emergency

Grounds on which Financial Emergency can be declared

• Article 360 : President can proclaim financial emergency if satisfied that situation has arisen in which Financial Stability of country or part of it is threatened

Approval & duration

Approval	Must be approved by both houses within 2 Months  by Simple Majority
Duration	Once approved will remain in effect indefinitely till revoked by President

Effects of Financial Emergency

• Executive at center can direct any state to observe such canons of financial propriety as specified by it
• Ask states to reduce salaries and allowances of all or any class of persons, reserve all money and financial bills for approval by President
• President may issue direction for reduction in salaries and allowances of all or any class of persons serving under union and judges of Supreme Court and High Court

Use of Article 360

• Never used : in 1991 there was financial crisis but not financial emergency

All India Judicial Services

This topic remains in news frequently. For example, check the following news headlines

• 2018 : NITI Aayog in its Report ‘Strategy for New India @75’ mooted the idea of All India Judicial Services (AIJS)
• 2017 : Prime Minister has asked to review the possibility of recruiting judges through an All India Judicial Service (AIJS).

Historical  background

• Original  constitution  didn’t  provide  for  the  creation  of  an  All India Judicial Services  =>  first  suggested  in  Chief  Justices’  Conference in  1961.
• After  Swaran  Singh  Committee’s  recommendations  in  1976,    42nd  Amendment    provided  for  an All India Judicial Services.   
• Law  Commission  of  India  (LCI)  in  its  14th  Report recommended  the  creation  of  All India Judicial Services. 
• Under this
  • District Judges will be recruited centrally through an All India Examination
  • They will then be allocated to each State on the lines of All India Services

Present system 

Lower court judges are recruited by competitive exams conducted by State Public Service Commissions which are inefficient & lack objectivity by themselves & are marred by corruption , nepotism & influence peddling .

Arguments  in  favour  of  All  India  Judicial  Services

1. Shortage of Judges : Existing  system  has  led  to  shortage  of  judges.  There  are  always  20 % vacancies  in  the  courts.
2. In present system , Talent not attracted leading to low quality Subordinate Judiciary 
3. It will provide lot of highly professional judges to be selected for High Court and Supreme Court .
4. Law Commission & Supreme Court Rulings & Committees recommended this
   • Law  Commission  of  India  (LCI)   .
   • Chief Justices Conference
   • Supreme Court Case => All India Judges Association vs Union of India recommended that  an  All India Judicial Services  should  be  set  up
   • Swaran Singh Committee Report 
   • NITI Aayog in its Report ‘Strategy for New India @75’
5. Good example of other All India Services working well (eg : IAS, IPS etc)
6. Creation of highly professional Judiciary of All India Character
7. France has this type of Judicial System and it works with great efficiency

Arguments  against  All  India  Judicial  Services

Some  states  and  High  Courts  have opposed  its  creation  on  the  following  grounds

• Lack of  knowledge  of  regional  languages  would affect  judicial  efficiency
• This  would  lead  to  an  erosion  of  the  control  of  the  high  courts  over  the subordinate  judiciary
• Against Federalism and will lead to excessive Centralisation
• In SC, ST & OBC quota too, regional lowly represented groups in particular states will get marginalised . It is possible that even in North Eastern States, all the ST candidates from other state can get selected
• Avenues  for  promotion  would  be  curtailed  for  those  who  had  already entered  through  the  state  services;

Without  a  push  from  the  judiciary,  the  All India Judicial Services   will  never  come  to  fruition. The  Prime  Minister  and  the  Supreme  Court  are  in  favour  of  All India Judicial Services.  There  is  no time  better  than  now  to  start  doing  something  about  these  problems.

Other alternative

• Why not set up high quality institutions in every state to train fresh recruits before they start hearing cases

Judicial Backlogs

• “Justice delayed is justice denied“- goes the famous adage. 

Statistics & Magnitude:

• Number of Backlogs
  • 3.20 crore cases are pending before various courts.
  • 60,000 cases in Supreme Court
• Number of Judges in India are low
  • Present – 17 judges per 1 million population
  • Required – Atleast 50 judges per 10 lakh (according to recommendations of Law Commission)
  •  In contrast, US has 151 and China has 170 judges for a million population. 

Causes of huge backlog of cases

• Number of the judges is very low , given the size of our democracy.  There were only 17 judges to a 10 Lakh population when there should be at least 50 judges per 10 lakh.
• Even sanctioned posts are vacant.
  • All India vacancy = 26 %
  • Bihar = 45% sanctioned posts vacant (highest)
• Low budgetary allocation leading to poor infrastructure-  India spends only about 0.09% of its GDP
• Tendency to take appeals till Supreme Court
• Increase in PILs & Special Leave Petitions
• Malpractices by lawyers
• Government & its departments act as Compulsive litigant => in 46% cases, government is Litigant  
• Redundant Case Management System (CMS): There is large amount of paperwork , rigid rules , archaic practices
• Complexity in  Indian law with overlapping provisions in different Acts. In September 2014, government setup Ramanujam Committee to identify central government statutes ready for repeal. It identified 1,741 such old statutes 
• Police lacks training for scientific collection of evidences 
• Lack of infrastructure  : such as inadequate support staff for judges and dearth of basic courtroom facilities.

Impact of backlog of cases

• Fundamental Rights like Equal Protection of Law and Right to life (of under-trials) impinged
• Erosion of the rule of law
• A market-based capitalist system can operate efficiently only if judicial processes ensure a fair enforcement of contracts.
• Huge NPAs as commercial litigations not solved
• Low foreign investment as investors are doubtful about timely justice

Remedies

• 245th Law Commission Report on “Arrears and Backlogs: Creating Additional Judicial manpower” has recommended various measures increasing judges , Alternate Dispute Resolution methods   etc
• Constituting an All India Judicial Service to provide more number of highly competent judges
• Using Alternate Dispute Redressal Mechanisms like Lok Adalats, Tribunals for dispute settlement.
• Improving the Courts Case Management System . Initiatives like the Crown Court Management Services of the UK  may be considered.
• Simplification and repealing of outdated laws.
• Judicial Impact Assessment should be introduced while introducing a legislation.
• Government is the biggest litigant in India. It should take steps at – setting up institutional measures for arbitration and dispute resolution. 

• Setting up more courts in areas having more case-load as ordered by  Supreme Court in Imtiayaz Ahmad vs State of Uttar Pradesh (2012). 
• Institution of evening and morning courts to deal with petty matter like traffic violations/challans
• Promoting research and studies on judicial reforms.

Public Interest Litigation

How it all Started

• Concept of Public Interest Litigation (PIL) originated and developed in USA in 1960s  to provide legal representation to previously unrepresented groups and interests.
• First case of PIL can be said to be of Hussainara Khatoon case on Undertrials but real beginning came from SP Gupta Case in which Supreme Court increased the Locus Standii . 
• Under PIL , Courts accept following cases when approached by any Public Spirited Citizen or Social Organisation
  1. Where rights of all citizens are getting violated 
  2. As representative of poor & disadvantaged persons who can’t approach Court of law  
• Justice PN Bhagwati and Justice VR Krishna Iyer were the pioneers of PIL in India

June 2019 update : Top 5 judges can hear PIL matters. Earlier only Chief Justice of India & 2nd topmost Judge could hear PIL.

Flexibility in Standing , Form and Evidence

To encourage PILs, Supreme Court provided following flexibilities

• Increased Locus Standi
• Development of Epistolary Jurisdiction – Cases can be filed through letters and telegrams too. 
• Aid in Evidence – Supreme Court  reduced norms governing evidence and appoints Amicus Curie 

Recent Issues

Recently,  Supreme  Court   voiced  its  concerns on  the  NGO  becoming  a  “proxy  litigant”  and  a  front  for settling  corporate  rivalry  or  personal  vendetta. 

Phases of PIL

Positive contributions of PIL

1. Vehicle  to  bring  social  revolution  through  constitutional  means.
2. It has also  helped in  expanding  the  jurisprudence  of  fundamental  and  human  rights  in  India. eg : Hussainara Khatun Case protecting fundamental rights of under-trials.  
3. PIL  also  become  an  instrument  to  promote  rule  of  law,  demand  fairness  and  transparency,  fight corruption  in administration
   • Corruption: 2G scam was unearthed by PIL filed by two individuals.
4. Through  PIL,  judiciary   filled  legislative  gaps  in  important  areas. For example  –Vishaka  guidelines  on  sexual  harassment  at  workplace.
5. PIL  has helped the  Indian  judiciary  to  gain  public  confidence  and  establish  legitimacy  in  the  society.

Challenges

Main challenge is where to draw line from Judicial Activism to Judicial Adventurism. The PIL project has been amplified much beyond its original conception , giving rise to legitimate criticism that its true purpose has been lost sight of.

1. An unanticipated  increase  in  the  workload  of the  superior  courts. There is huge backlog of cases already and PILs further increases that workload. 
2. Deviated from original rationale for allowing PILs: PILs have become instruments of contestation  of already powerful and well represented groups eg
   • Dr. Dina Nath Batra of the Shiksha Bachao Andolan Samiti, a front organisation for the RSS, has filed PILs to remove “objectionable material” in NCERT textbooks 
3. Settling Corporate rivalry : Sometimes Companies which lose any corporate battle use NGOs as bate to file frivolous PILs as happened in Reliance Jio Case of 2016. 
4. Violation of separation of power: Courts make Laws which is function of Legislature and is against Separation of Power .
5. Ineffective implementation:  Due to plethora of PILs, it becomes difficult for court to ensure effective implementation of its orders, which leads to credibility erosion.
6. Instrument to gain publicity by lawyers : Some lawyers see PILs to increase their publicity and file PILs not with intention to help poors but to gain cheap publicity and buy some time on national news-channels.

Way to correct

• Supreme Court guidelines (Balwant Singh Chaufal vs State of Uttarakhand) : To qualify as a PIL, certain conditions must be satisfied . e.g., letter addressed by aggrieved person, a public spirited individual etc. 
• Heavy Fine against Frivolous PILs : Fine heavily those NGOs & persons who waste time of Court in guise or Public Interest. Eg : in May 2017 : Supreme Court  imposed ₹25 lakh  on Suraz India Trust,  for filing frivolous PILs
• Social Justice Bench- Special Bench christened as Social Justice Bench has been created which will hear all the cases  relating to Social Justice each Friday .

Judicial Activism 

• According to Doctrine of  Separation of Power , the Judiciary cannot formulate policies or make laws. It’s function is just to ensure that the laws and executive actions do not violate the Constitution
• Judicial Activism implies going beyond the normal constraints applied to jurists &  jurists start to make any legislation or policies

Reasons of Judicial Activism

1. Near  collapse of responsible government when the Legislature and Executive fail to discharge their  functions =>  judiciary has to become savior of last resort.
2. Judicial Enthusiasm : judges like to participate in the social reforms 
3. Legislative Vacuum – There may be certain areas which have not been legislated upon. 
4. Constitution of India has itself adopted certain provisions which gives judiciary enough scope to legislate or play active role.

Arguments against Judicial Activism

• Accountability : Judges evolve policies but they are not accountable to people 
• Ideological  :  Goes against the Doctrine of Separation of Power. 
• Epistemic : Judges don’t have enough knowledge on specialized matters.  
• Management : By increasing Locus Standi , they are increasing Litigation work load
• It can hurt the Federal Structure, when Judges do not adhere to Constitutional Principles while adjudicating complex issues.

Supreme Court itself observed in the Aravali Gold Club Case, if the two organs of the State fail to perform their functions properly, it is for the people to provide a corrective. The remedy is not in the judiciary taking over the legislative or executive functions.

History of Judicial Activism

1950s & 60s	– Courts were conservative except for few cases on Right to Property – On personal liberty, court was highly conservative . Eg in AK Gopalan case (1950) , Supreme Court ruled that personal liberties can be taken away by enacting law .
1970s	– Maneka Gandhi  case => if we read Article 21 in conjugation with Article 14 & 19, it is as good as Due Process of Law – Coming to due process clause through the judicial interpretation is creating the problem of Judicial Activism

Judgments of the Supreme Court showing Judicial Activism

1 . Right to life (Maneka Gandhi case) ,1978

• Right to Life under Article 21 is not merely right to physical existence, but to a life of some quality and dignity.

2. Hussainara Khatoon vs State of Bihar (1979)

• Article 21 includes Right to Speedy Trial
• Under-trials must be freed by following certain process

3. SP Gupta Case (1982)

• Supreme Court expanded the Locus Standii
• Note – In Anglo-Saxon Legal system, only aggrieved person can come to court of law but third person can’t approach (with certain exceptions)
• In this case, Supreme Court expanded the Locus Standii. Supreme Court declared that any citizen has standing if
  1. He approach court in case where rights of all citizens are getting violated 
  2. Can become representative of poor & disadvantaged persons who can’t approach Court of law  (this is known as  Public Interest Litigation Jurisprudence)

4. In case of CBI’s autonomy / Vineet Narayan Case

• It asked the Government, to inform it about the steps it was going to take to enact a law for ensuring CBI’s autonomy.

5. In Vishaka (1997) case

•  Supreme Court was dealing with a Writ Petition for enforcement of fundamental rights of working women under Articles 14, 19(1)(g) (the right to practice any profession etc) and Article 21. There was no national legislation, so Supreme Court laid down norms & guidelines, giving them binding force.

6. In Prakash Singh (2007)

• Court felt compelled to give seven directions with regard to Police Reforms

Judicial Overreach

• Above are the cases , where Judicial Activism can be justified. But in garb of Judicial Activism , sometimes Higher Courts have gone too far resulting in Judicial Overreach .
• Judicial Overreach refers to an extreme form of judicial activism where Judiciary forays into domain of legislature & executive with intention of disrupting the balance of powers between executive, legislature and judiciary in its favour.
• Examples of Judicial Overreach
  1. Supreme Court judgement regarding ban of Alcohol Sale within 500 m radius from National & State Highways. 
  2. Madras High Court imposing a dress code in temples in Tamil Nadu
  3. Banning on traditional practices like Jalikattu,
  4. Total ban on diesel taxis in Delhi at the cost of affecting the livelihood of certain section of the population.
  5. Chandigarh High Court ordered, What Rate of tolls should be charged at a toll plaza in Gurgaon.
  6. Iron ore mining has been banned in Karnataka and Goa.

Judicial Restraint

• Judicial Activism and Judicial Restraint are two alternative judicial philosophies in United States.
• Those who subscribe to Judicial Restraint argue that the role of Judges should be scrupulously limited. Their job is merely to say what the law is . 

Examples of self restraint & not curtailing other’s power

• Madhu Holmagi v. Union of India : one Advocate filed a public interest litigation challenging the “Agreement 123” i.e. Indo-US nuclear treaty . Petitioner contended that court must have to scrutinize the all documents . Court dismissed the petition because question raised by the petitioner is a question of policy decision, which is to be decided by Executive