Presentation on Distribution of Powers between Centre, States and Local Governments

1
Presentation on Distribution of Powers between
Centre, States and Local Governments

• Government of India
• Ministry of Home affairs

2
Structure of the Indian Constitution

• India is a Union of States.
• There are
• 28 States and
• 7 Union Territories.
• Neither federal in the classical sense.
• Nor Unitary in character.
• Some call it quasi federal

3
Structure of the Indian Constitution

• Constitution of India follows a sui generis
  system of two-tier polity - the predominant
  strength of the Union is blended with the essence
  of cooperative federalism.
• Several features have been designed to
  institutionalize the concept of cooperation.
• The wide range of Concurrent jurisdiction and
  intertwining of certain items in the State List
  with several entries in the Union List are
  examples.

4
Structure of the Indian Constitution

• Parliamentary / Cabinet form of Government at
  both levels i.e.-
• Union and
• State
• President is de jure head of Union Government who
  acts on aid and advice of Council of Ministers,
  which comprise de facto executive.
• Governor is de jure head of State Government who
  acts on aid and advice of Council of Ministers,
  which comprise de facto executive.

5
Structure of the Indian Constitution

• Parliament for the Union consists of the
  President and two Houses known respectively as
  the Council of the States and the House of the
  People.
• The Legislature of a State consists of the
  Governor and two Houses in case of the States of
  Bihar, Maharashtra, Karnataka and Uttar Pradesh
  and one House in case of all other States.

6
Structure of the Indian Constitution

• The executive power of the Union extends to the
  matters with respect to which Parliament has
  power to make laws
• Executive power of the Union does not,
  ordinarily, extend in any State to matters with
  respect to which the Legislature of the State has
  also power to make laws.
• In other words, normally, the executive powers of
  the Union and the States are co-extensive with
  their legislative powers. However, with respect
  to matters in the Concurrent List, the executive
  power remains with the States unless the
  Constitution or Parliament by law expressly
  provided otherwise.

7
Legislative Relations between the Union and the
States

• Extent of Laws made by Parliament and by the
  Legislatures of State
• Parliament may make laws for the whole or any
  part of the territory of India.
• Legislature of a State may make laws for the
  whole or any part of the State.

8
Division of Legislative Jurisdiction

• There are three lists in the Seventh Schedule
• List I (Union List)
• List II (State List)
• List III (Concurrent List)
• Parliament has exclusive power to make laws with
  respect to any matter contained in List-I (Union
  List). Article 246(1)

9
Division of Legislative Jurisdiction

• Parliament as also Legislature of any State have
  power to make laws with respect to any matter
  contained in List-III (Concurrent List).
• Legislature of any State has exclusive power to
  make laws with respect to any matter contained in
  List-II (State List).
• Parliament can make laws with respect to any
  matter contained in the State List for any part
  of the territory of India not included in a
  State. Article 246(4)

10
Division of Legislative Jurisdiction

• Union List
• The Union List includes matters, such as,
  Defence, Foreign Affairs, Foreign Jurisdictions,
  Citizenship, Railways, Posts Telegraphs,
  Telephones, Wireless, Broadcasting and other like
  forms of communication, Airways, Banking,
  Coinage, Currency, Union Duties and Taxes, etc.

11
Division of Legislative Jurisdiction

• State List
• The State List includes items, such as, Public
  Order, Police, Public Health, Local Government,
  Agriculture, Land, Rights in or over Land, land
  Tenures, Land Improvement, Alienation of
  Agricultural Land, Colonisation, Fisheries,
  Markets and Fairs, Money Lending and Money
  Lenders, Relief of Agricultural Indebtedness,
  etc. and certain duties and taxes.

12
Division of Legislative Jurisdiction

• Concurrent list
• The Concurrent List includes items of concurrent
  legislative jurisdiction of the Union and the
  States, such as, Criminal Law, Criminal
  Procedure, Administration of Justice,
  Constitution and Organisation of all Courts,
  except the Supreme Court and the High Courts,
  Marriage and Divorce, Adoption, Wills, Forests,
  Economic and Social Planning, Population control
  and Family Planning, Social Insurance, Welfare of
  Labour, etc.

13
Division of Legislative Jurisdiction

• Residuary Powers of Legislation
• Parliament has exclusive power to make any law
  with respect to any matter not enumerated in the
  Concurrent List or State List.
• Such power includes the power of making any law
  imposing a tax not mentioned in either of the
  above Lists.

14
Division of Legislative Jurisdiction

• Power of Parliament to legislate on a matter
  contained in the State List
• Parliament can make laws with respect to any
  matter enumerated in the State List if it becomes
  necessary or expedient in national interest.
• The Council of States must pass a resolution
  supported by not less than two-thirds of the
  members present and voting.
• The resolution remains in force for specified
  period but not exceeding one year. It may be
  extended for a further period of one year if and
  so often the Council of States so resolves.
• Such a law remains in force for a period of six
  months after the resolution ceases to be in
  force.

15
Division of Legislative Jurisdiction

• Parliament may legislate on State subject while
  Proclamation of Emergency is in operation
• While a proclamation of emergency is in
  operation, Parliament has power to make laws for
  the whole or any part of India with respect to
  any matter contained in the State List.
• Such a law would cease to have effect after six
  months from the date proclamation of emergency
  ceases to operate.

16
Division of Legislative Jurisdiction

• Inconsistency between laws made between the
  Parliament and laws made by the States
• When Parliament exercises abovementioned
  overriding power to make any law in the national
  interest or while emergency is in operation, its
  law prevails over the law made by the Legislature
  of a State, whether passed before or after.

17
Division of Legislative Jurisdiction

• Parliament may legislate on a State subject if
  two or more States consent
• If Legislatures of two or more States resolve and
  request Parliament to make law on a subject on
  which Parliament has no power, Parliament may
  pass an Act for regulating that matter and any
  Act so passed applies to requesting States and to
  any other State which may adopt it subsequently.
  
• Any Act passed in the above manner by Parliament
  may be amended or appealed by Parliament in like
  manner, but, it cannot be amended or repealed by
  an Act of Legislature of the State to which it
  applies.

18
Division of Legislative Jurisdiction

• Inconsistency between laws made by the
  Parliament and laws made by Legislatures of the
  States
• In the event of an inconsistency between a law
  made by the Legislature of a State and by
  Parliament, the law made by Parliament shall
  prevail. Article 254 (1)
• Where a law of a State on any matter in the
  Concurrent List contains any provision repugnant
  to the provisions of an earlier law made by
  Parliament or an existing law with respect to
  that matter, then, the law so made by the
  Legislature of such State shall, if it has been
  reserved for the consideration of the President
  and has received his assent, prevail in that
  State. Article 254 (2)
• Provided that nothing shall prevent Parliament
  from making at any time any law with respect to
  the same matter including a law adding to,
  amending, varying or repealing the law so made by
  the Legislature of the State.

19
Administrative Relationsbetween Centre and States

• Obligation of the States and the Union
• Normally, the executive powers of the Union and
  the States are co-extensive with their
  legislative powers. However, with respect to
  matters in the Concurrent List, the executive
  power remains with the States unless the
  Constitution or Parliament by law expressly
  provided otherwise.
• Every State, in exercise of its executive power,
  has to ensure compliance with the laws made by
  Parliament and any existing laws applicable in
  the State.
• Union Government can give directions to a State
  for this purpose.

20
Administrative Relationsbetween Centre and States

• Control of the Union over States
• No State can exercise its executive power so as
  to impede or prejudice the executive power of the
  Union.
• Union can give directions to a State to ensure
  the above.
• Union can give directions to a State as to the
  construction and maintenance of means of
  communication of national or military importance.
  

21
Administrative Relationsbetween Centre and States

• In short
• Administration of several matters in the
  concurrent sphere and enforcement of Union laws
  relating to them is secured through the machinery
  of States.
• Three modes for enforcement of Union laws in
  concurrent field
• Administration entrusted entirely to States
• Administration entrusted partly to States
• Whole responsibility reserved by Union

22
Financial Relations between the Union and the
States

• Financial arrangements have two main aspects
• Distribution of taxation heads (Articles 246, 248
  and 265, read with the Legislative Lists I and
  II) and
• Distribution of revenues and sharing of resources
  between the Union and the States (Chapters I and
  II of Part XII of the Constitution).

23
Financial Relations between the Union and the
States

• Distribution of taxation powers
• Separate heads of taxation for the Union and the
  States are provided in Lists I and II.
• No tax can be levied unless it is related to a
  specific head of taxation in List I or List II.
• There is no head of taxation in the Concurrent
  List (Union and the States have no concurrent
  power of taxation).

24
Financial Relations between the Union and the
States

• Distribution of taxation powers
• Residuary power of taxation vests in the Union.
• There are thirteen taxation heads comprised in
  Entries 82 to 92B in the Union List and
• Nineteen taxation items comprised in Entries 45
  to 63 of the State List.

25
Financial Relations between the Union and the
States

• Broad Principle of Allocation of Heads
• Taxes which are location-specific and relate to
  subjects of local consumption have been assigned
  to the States.
• Those taxes which are of inter-State significance
  and where the tax-payer can gain or evade tax by
  shifting his habitat, or where the place of
  residence is not a correct guide to the true
  incidence of tax, have been vested in the Union.

26
Financial Relations between the Union and the
States

• Distribution of Revenues
• The taxation powers allocated to the Union and
  the States are mutually exclusive.
• But the scheme of accrual of revenues envisages
  total assignment to the States of the net
  proceeds of specified taxes and of some others,
  sharing by them.

27
Financial Relations between the Union and the
States

• Distribution of Revenues
• This scheme of distribution contemplates
• Certain stamp duties and duties of excise in the
  Union List are to be levied by the Union but
  collected by the States and the proceeds
  assigned to the States in which collected.
  (Article 268).
• Taxes mentioned in Article 269(1) shall be levied
  and collected by the Union but assigned to the
  States, within which they are levied, as laid
  down in Article 269(2).
• Taxes levied and collected by the Union but
  shared with the States, viz., tax on
  on-agricultural income. (Article 270).

28
Financial Relations between the Union and the
States

• Distribution of Revenues
• Taxes which are levied and collected by the Union
  but may be shared with the States, if Parliament
  by law so provides, viz., Union Excise Duties.
  (Article 272).
• Taxes in the Union List levied, collected and
  retained by the Union subject to the exceptions
  mentioned above.
• Taxes in the State List, levied, collected and
  retained by the States.

29
Financial Relations between the Union and the
States

• Grants
• Union may pay such sums as Parliament may by law
  provide each year as grants-in-aid of the
  revenues of such States as Parliament may
  determine to be in need of assistance.
• Union Government is required to give
  grants-in-aid to the States for the welfare of
  the Schedule Tribes and for raising the level of
  administration in the Scheduled Areas and
  separately for Assam. (Article 275).

30
Financial Relations between the Union and the
States

• Finance Commission
• Determination of shares of the States in the
  aforesaid taxes and duties and their inter se
  allocation as also of grants-in-aid of revenues,
  is done on the recommendations of the Finance
  Commission, constituted every after five years.
• Every recommendation made by the Finance
  Commission together with an explanatory
  memorandum as to the action taken thereon has to
  be laid before each House of Parliament.

31
Judiciary

• Judiciary comprises of Supreme Court at the Apex
  level and High Courts in the States as well as
  Subordinate Courts at the District and below
  level.
• There is hierarchy in respect of jurisdiction
  with the Supreme Court and High Courts who also
  enjoy exclusive powers to enforce fundamental
  rights and adjudicate on any manner relating to
  interpretation of law and Constitutional
  provisions.

32
Judiciary

• Supreme Court does not have any administrative or
  supervisory control over High Courts.
• All the District Courts and other Courts in the
  State are under the administrative control of the
  High Court of that State.

33
Judiciary

• The appointment of Judges in the Supreme Court as
  well as High Courts is made by the President of
  India in consultation with the Chief Justice of
  India.
• In case of appointment of Judges in the High
  Court, the Chief Justice of that High Court as
  well as Governor and Chief Minister of the
  State/province are also consulted.

34
Judiciary

• The Judges of Supreme Court and High Court enjoy
  full security of tenure and are absolutely free
  from any control of Executive or Legislature.
• They can be removed by President only on grounds
  of proved misbehavior or incapacity if the
  Parliament through Motion as prescribed in the
  Constitution makes such recommendation to the
  President.
• The retirement age for the Judges of the Supreme
  Court and High Courts is 65 and 62 years,
  respectively.

35
Judiciary

• The Union Judiciary
• Supreme Court consists of a Chief Justice of
  India and not more than 25 other judges. Art.
  124
• Supreme Court, and no other Court, has original
  jurisdiction in any dispute
• between the Government of India and one or more
  States or
• between the Govt. of India and any State or
  States on one side and one or more other States
  on the other or
• between two or more states, if and in so far as
  the dispute involves any question (whether of law
  or fact), on which the existence or extent of
  legal right depends. Art. 131
• The Supreme Court acts as an Appellate Court in
  appeals from High Court. Article 132

36
Judiciary

• High Courts in the States
• There is a High Court for each State. Article
  214
• High Court is a court of record and has all the
  powers of such a court including the power to
  punish for contempt of itself. Article 215

37
Judiciary

• Subordinate Courts
• Appointments of persons to be, and the posting
  and promotion of, district judges in any State
  are made by the Governor of the State in
  consultation with the High Court exercising
  jurisdiction in relation to such State. Article
  233
• The control over district courts and courts
  subordinate thereto including the posting and
  promotion of, and the grant of leave to, persons
  belonging to the judicial service of a State and
  holding any post inferior to the post of district
  judge is vested in the High Court. Article 235

38
Local Government
39
Salient features of the 73rd Constitution
Amendment Act, 1993

• Constitutional status for Gram Sabha (assembly of
  the community),
• Three tier Panchayat system at the village,
  intermediate and district levels except in State
  with populations of less than 20 lakhs, where
  intermediate Panchayats may not be constituted,
• Reservation of seats and leadership positions for
  SCs/STs and women,
• Regular elections every 5 years,
• Establishment of independent State Election
  Commission,
• State Finance Commissions to be set up once in 5
  years,
• Powers to be so devolved upon Panchayats as to
  enable them to functions as institutions of self
  government (Article 243 G read with Schedule XI).

40
Article 243 G reads as under,

• Powers, authority and responsibilities of
  Panchayats.-
• Subject to the provisions of this Constitution,
  the Legislature of a State may, by law, endow
  the Panchayats with such powers and authority as
  may be necessary to enable them to function
  as institutions of self-government and such law
  may contain provisions for the devolution of
  powers and responsibilities upon Panchayats at
  the appropriate level, subject to such
  conditions as may be specified therein, with
  respect to- 
• (a) the preparation of plans for economic
  development and social justice 
• (b) the implementation of schemes for economic
  development and social justice as may be
  entrusted to them including those in relation to
  the matters listed in the Eleventh Schedule.

41
Eleventh Schedule lists 29 matters as below
Agriculture, incl. extension
Land improvement, land reforms, consolidation
soil conservation.
Minor irrigation, water management watershed
devpment
Animal husbandry, dairying and poultry
Fisheries 
Social forestry farm forestry
Minor forest produce
Fuel and fodder
Maintenance of community assets
Rural housing
Drinking water
Poverty alleviation programme
Public distribution system
Technical training vocational education
Education, including primary and secondary
schools
Cultural activities
Libraries
Adult and non-formal education
Welfare of the weaker sections, in particular of
SCs and STs
Social Welfare, Welfare lf handicapped and
mentally retarded
Women and Child development
Family welfare
Roads, culverts,bridges, ferries, waterways
other means of communication
Non- conventional energy
Health and sanitation hospitals. Primary health
centres dispensaries
Rural electrification, distribution of
electricity
Markets Fairs
Khadi, village and cottage industries
Small scale industries, food processing
industries
42
The Panchayats (Extension to Scheduled Areas)
Act, 1996

• Panchayati Raj extended to Tribal areas with
• State legislation enjoined to give primacy to
  communities to manage their affairs in accordance
  with traditions and customs.
• Gram Sabhas given extensive powers to
• safeguard and preserve traditions, customs,
  cultural identity, community resources and
  customary mode of dispute resolution.
• to approve the plans, programmes and projects for
  social and economic development,
• Identify beneficiaries under poverty alleviation
  and other programmes,
• certify utilization of funds by the Gram
  Panchayat,
• Protect common property resources, including
  minor forest produce,
• Be consulted prior to land acquisition.

43
Central and State Finance Commissions

• State Finance Commission to be appointed every 5
  years
• review the financial position of the Panchayats,
• recommend principles to govern distribution of
  State taxes, duties, etc between State and
  Panchayats,
• Allocation between the Panchayats of their
  respective shares of such taxes etc.,  
• determination of taxes, duties, etc. which may be
  assigned to, or appropriated by, the Panchayats
   
• Recommend grants-in-aid to Panchayats from State
  Consolidated Fund 
• Recommend measures needed to improve the
  financial position of the Panchayats

44
Background Article 280 (2) (bb) of the
Constitution

• The Central Finance Commission shall recommend
• The measures needed to augment the Consolidated
  fund of a State
• to supplement the resources of Panchayats in
  the State,
• on the basis of the recommendations made by
  the Finance Commission of the State

45
Recommendation of Twelfth Finance Commission (TFC)

• Rs.200 million payable during 2005-10 to State,
  to be transferred to Panchayats.
• Allocation amongst various Panchayati Raj
  Institutions and also autonomous councils in
  excluded areas to be made by States.

46
Mode of release of funds

• Two equal instalments in July and January every
  year.
• States to mandatorily transfer the grants
  released by the Centre to the PRIs within 15 days
  of the same being credited to the States
  account.

47
Special monitoring of releases and utilisation of
grants

• Central Review Committee headed by Secretary,
  Ministry of Finance, Department of Expenditure.
• Separate Committee to monitor the release of
  grants to PRIs, headed by Secretary Ministry of
  Panchayati Raj,

48
Urban Local Bodies
49
Constitution (74th Amendment) Act

• Passed by the Parliament in 1992. Came into force
  on 1st June, 1993.
• Aims at Constitutional guarantee to safeguard the
  interest of Urban Local Bodies to enable them to
  function as effective, democratic and
  self-governing institutions at grassroots level.
• Envisages that the Governments of States and
  Union Territories would take action to pass new
  Legislation or amend existing Laws within a
  period of one year, from the date of commencement
  of the Act.

50
Constitution (74th Amendment) Act

• The Act provides for basic framework for Urban
  Local Bodies in India.
• The main provisions cover the following-
• Type and Composition of Municipalities
• Ward Committees
• Reservation of seats for SC/ST and Women
• Term, Powers and Responsibilities
• Financial Powers
• State Finance Commission
• District and Metropolitan Planning Committees
• List of functions in 12th schedule

51
Thank you!