The Hindu Business Line : Moving on from the metro mindset

If a new commission is set up to look into Centre-State relations, its mandate should be to demarcate the functions of each, empowering the States to create regions of excellence. And the first step for the reform of government is to redefine the division of functions between the Central, State and local governments, with special efforts to enrich the policy space of the last two, says Bhanoji Rao.

IN THE first part of this article (Business Line, February 1), it was suggested that the focus of development should move beyond Delhi and Mumbai to create cities that are unique in terms of industrial structures and accomplishments.

If a number of centres of specialisation and excellence are to come up in the metros and other cities of India, we must provide relatively more policy and programme space for the States.

The issue is one of putting authority where responsibility rests — a cardinal principle of effective management in any sphere of activity, including governance of a large nation. In the Indian context, the policy space enjoyed by States is dictated by the division of responsibilities between the Central and State governments enshrined in the Constitution of India.

The Constitution provides for an exhaustive listing of functions of the Centre and the States in three separate lists.

Lists I and II refer to the functions assigned to the Central and State governments respectively, while List III is the Concurrent List.

The Union List, as one would expect, describes several functions that have a direct bearing on preserving national unity and integrity.

They include, for instance, foreign affairs, defence, communications, currency, central banking, patents, national libraries and museums, and the Supreme Court and High Courts.

In addition, there are many more functions in List I that allow for a relatively strong Central government, an absolutely vital need at the time of Independence and the formation of the Republic, in the context of the Partition and the likely threat to national integrity if any of the erstwhile princely states were to harbour intentions to move away from the Union. List I thus includes, in addition to those noted earlier, railways, national highways, ports, airways, aircraft and aerodromes; foreign loans, external trade, and incorporation, regulation and winding up of trading corporations, including banking, insurance and financial corporations but not including co-operative societies; incorporation, regulation and winding up of corporations, whether trading or not with objects not confined to one State, but not including universities; banking, bills of exchange, cheques, promissory notes and other like instruments; insurance, stock exchanges and futures markets, industries, the control of which by the Union is declared by Parliament to be expedient in the public interest; regulation and development of oilfields and mineral oil resources and other dangerously inflammable substances; mines and mineral development declared by Parliament to be under the Union; regulation and development of inter-State rivers and river valleys as directed by Parliament; scientific and technical education institutions financed by the Government and declared by Parliament to be institutions of national importance; the various taxes levied by the Centre; and any other matter not enumerated in List II or List III.

As for the State List, or List II, ignoring such items as burials and burial grounds, the relatively more important are the following: public order, prisons and reformatories, public health and sanitation, hospitals and dispensaries, production, manufacture, transport, purchase and sale of intoxicating liquor, relief of disabled, communications not specified in List I, agriculture including agricultural education and research, water projects not in List I, land rights, land tenure, rents etc., fisheries, trade and commerce within the State, markets and fairs, theatres and drama performances, sports, land revenue and land records, taxes on agricultural income and, other State taxes and municipal taxes.

List III, the Concurrent List, includes criminal law and procedure, preventive detention, inter-State transfer of prisoners, and marriage and divorce.

Some of the items of significance to economic and social development are: economic and social planning, trade unions, industrial and labour disputes, social security and social insurance, employment and unemployment, labour welfare, education except those relating to items in List I, legal, medical and other professions, registration of births and deaths, production, supply and distribution of products outside the Union sphere, food-stuffs including edible oils, cattle fodder, raw cotton and raw jute, factories, boilers, electricity and acquisition of property.

In the 1991 L. K. Jha Memorial Lecture, the doyen of public policy, Professor Raja Chelliah, outlined a proposal for a decentralised polity. Pointing to the diversities of language and culture in India, he noted that the Indian people are ideal candidates for being governed under a truly federal Constitution.

The following is a pertinent observation of the eminent scholar: "As in the case of the United States of America, for example, such a constitution would have had the necessary minimum provisions to safeguard the unity of the country and to foster a national economy with a common market; its other provisions would have largely been designed to enable and support the autonomous actions of the State governments, subject to the fundamental principles of the Constitution being observed."

This observation has gained much strength in the present national and global economic context, 14 years after the ringing of the reform bells.

Professor Chelliah has suggested the transfer of some subjects from the Union List and the Concurrent List to the State List. For instance, all residual powers (except those in the field of taxation) could be assigned to the States.

As for those in the Concurrent List, two principles were suggested. First, some of the powers could be assigned to the States.

Second, in respect of those still remaining in the Concurrent List, limits should be set on the use of Concurrent Powers by the Centre.

The UPA Government had stated in its Common Minimum Programme that since the issue of Centre-State relations has not been addressed for over two decades after the Sarkaria Commission had done so, the Government would set up a new Commission for this purpose, keeping in view the sea change that has happened in the polity and economy since then.

As and when a new Commission is set up, its terms of reference must clearly state that first, there should be clear demarcation between the functions of the Centre and the States; second, all residual functions should rest with the States, third, there will be no concurrent list; and, finally, the objective of the exercise is to permit the States to excel in one sphere or the other and bring pride to the nation.

In his address to the nation on June 24 last year, the Prime Minister, Dr Manmohan Singh, emphasised that the role of the government includes the provision of social and physical infrastructure for development, the provision of elementary education and public health, providing drinking water and sanitation as well as provision of essential economic infrastructure in the areas of irrigation, power, roads and railways.

Dr Manmohan Singh affirmed: "In each of these areas, at every level of governance, the reform of government is today an urgent task before us."

The first step for the reform of government is to redefine the division of functions between the Central, State and local governments, and strive to enrich the policy space of the State and local governments.

(Concluded)

(The author is Professor Emeritus, GITAM Institute of Foreign Trade, Visakhapatnam. Feedback can be sent to bhanoji@vsnl.net.)

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Growing well

The performing flea of the English language

Budget: Will there be an amnesty scheme?

Moving on from the metro mindset

Power sector reforms: Generating a viable model

Patent Amendment Ordinance — Is it constitutionally valid?

Divest more

Using strikes as a weapon