[Polity] Punchhi Commission Recommendations in Brief

The Punchhi Commission on Centre – State relation was constituted on April 28, 2007 by the UPA government, under the chairmanship of former Chief Justice of India Justice Madan Mohan Punchhi,
which submitted its report on April 20, 2010. The Punchhi commission made very pertinent observations regarding the qualifications, appointment and removal of governors. As for qualifications pertaining to governor, the Punchhi Commission was forthright in suggesting that the nominee should not have participated in active politics at even local level for at least a couple of years prior to his appointment.

Originally, it had four members: Justice Punchhi (Chairman), former Home Secretaries Dhirendra Singh and V K Duggal, and former Bangalore-based Law School Director Prof. N R Madhava Menon. Later, Dr. Amaresh Bagchi, Professor Emeritus and former Director of the National Institute of Public Finance and Policy (NIPFP) was also made a member of the Commission.

The Commission for Centre-State Relations headed by Justice Madan Mohan Punchhi has submitted its report to the Central government without much fanfare. This is a contradiction to the Liberhan Commission Report which was "full of sound and fury, signifying nothing" and which wasted 15 years.

A comprehensive review of Centre-State Relations was undertaken by the Sarkaria Commission in the mid-eighties. In the two decades that have gone by both the polity and economy have undergone profound changes, posing new challenges for government at all levels and calling for a fresh look at the relative roles and responsibilities of each level and their inter-relations. The present Commission has been entrusted with this task and asked to make recommendations that would help to address the emerging challenges.

The major recommendations may be enumerated as follows

1. There should be an amendment in Articles 355 and 356 to enable the Centre to bring specific trouble-torn areas under its rule for a limited period.

2. The commission has proposed “localising emergency provisions” under Articles 355 and 356, contending that localised areas — either a district or parts of a district — be brought under Governor’s rule instead of the whole state.Such an emergency provision should however not be of duration of more than three months.

3. The commission however supports their right to give sanction for the prosecution of ministers against the advice of the state government.

4. To make an amendment in the communal violence Bill to allow deployment of Central forces without the state’s consent for a short period. It has proposed that state consent should not become a hurdle in deployment of central forces in a communal conflagration. However, such deployment should only be for a week and post-facto consent should be taken from the state.

5. Among the significant suggestions made by the Commission is, laying down of clear guidelines for the appointment of chief ministers. Upholding the view that a pre-poll alliance should be treated as one political party, it lays down the order of precedence that ought to be followed by the governor in case of a hung house:

(a) Call the group with the largest prepoll alliance commanding the largest number;
(b) the single largest party with support of others;
(c) the post-electoral coalition with all parties joining the government; and last
(d) the postelectoral alliance with some parties joining the government and remaining including Independents supporting from outside.

6. The panel also feels that governors should have the right to sanction prosecution of a minister against the advice of the council of ministers. However, it wants the convention of making them chancellors of universities done away with.

7. As for qualifications for a governor, the Punchhi commission suggests that the nominee not have participated in active politics at even local level for at least a couple of years before his appointment. It also agrees with the Sarkaria recommendation that a governor be an eminent person and not belongs to the state where he is to be posted.

8. The commission also criticises arbitrary dismissal of governors, saying, “the practice of treating governors as political football must stop”. There should be critical changes in the role of the governor — including fixed five year tenure as well as their removal only through impeachment by the state Assembly. It has also recommended that the state chief minister have a say in the appointment of governor.

9. Underlining that removal of a governor be for a reason related to his discharge of functions, it has proposed provisions for impeachment by the state legislature along the same lines as that of President by Parliament.This, significantly, goes against the doctrine of pleasure upheld by the recent Supreme Court judgment.

10. Endorsing an NCRWC recommendation, it says appointment of governor should be entrusted to a committee comprising the Prime Minister, Home Minister, Speaker of the Lok Sabha and chief minister of the concerned state. The Vice- President can also be involved in the process.

11. Unlike the Sarkaria report, the Punchhi report is categorical that a governor be given fixed five-year tenure. The Punchhi Commission report also recommends that a constitutional amendment be brought about to limit the scope of discretionary powers of the governor under Article 163 (2). Governors should not sit on decisions and must decide matters within a four-month period.

12. The creation of an overriding structure to maintain internal security along the lines of the US Home­land Security department, giving more teeth to the National Integration Council.

13. For the National Integration Council (NIC), the commission has proposed that it should meet at least once a year. In case of any communal incident, it has said that a delegation of five members of the Council, who would be eminent persons, should visit the affected area within two days National debate and submit a fact-finding report.

14. The commission, however, rejects a suggestion from some stakeholders as well as the Liberhan Commission that the NIC be accorded constitutional status.

15. The commission has also studied new set-ups like the National Investigation Agency, and recommended procedures to ensure smooth co-operation of the states in terror investigations entrusted to NIA. One can say that the extreme politicization of the post of Governor must be decried and certain specific norms for the appointment and removal have to be evolved.

16. The recent ruling of the Supreme Court has indicated that the sanctity of this constitutional post should be preserved.

In democracy, nobody can have absolute power in the name of smooth administration and good governance. The administrative apparatus has to be in the line of the constitution, which was prepared by the people of the country and amended by the elected representative of the people of India. The 'doctrine of pleasure' has to be understood in this light.

M M Punchhi Commission Report on ‘Constitutional Governance and the Management of Centre-state Relation’

The Government of India set up a commission on Centre-state relations on April 27, 2007 to look into the new issues of Centre-state relations keeping in view the changes that have been taken place in the polity and economy of India since the Sarkaria Commission had last looked at the issue of Centre-state relations over two decades ago.

The commission was chaired by Justice Madan Mohan Punchhi, former Chief Justice of India. Shri Dhirendra Singh, Shri Vinod Kumar Duggal, Prof. (Dr.) N.R. Madhava Menon, and Dr. Amaresh Bagchi, were the other members of the commission. Secretary, Inter-State Council served as the secretary of the commission.

The commission examined and reviewed the working of the existing arrangements between the Union and States, various pronouncements of the courts in regard to powers, functions and responsibilities in all spheres including legislative relations, administrative relations, role of governors, emergency provisions, financial relations, economic and social planning, Panchayati Raj institutions, sharing of resources including inter-state river water etc. The commission made a number recommendations in its seven volume report presented to government on March 30, 2010.
Of the seven volumes, the first deals with evolution of Centre-state relations. The second volume goes into the constitutional scheme of things, covering recommendations regarding Article 19, Article 355 and 356 and Article 263. The third volume deals with economic and financial relations, and recommendations include upgrading of the planning model to remove regional imbalances. The fourth volume gives recommendations regarding 73rd and 74th amendments and the Sixth Schedule.

The fifth volume deals exclusively with internal security, covering issues like terror, Naxalism, insurgency and communal violence. The sixth volume goes into environment issues and resource-sharing, particularly of rivers and minerals, while the seventh volume has dealt with social development and good governance.

As per the terms of reference the commission examined and reviewed the working of the existing arrangements between the Union and States as per the Constitution of India, the healthy precedents being followed, various pronouncements of the courts in regard to powers, functions and responsibilities in all spheres including legislative relations, administrative relations, role of governors, emergency provisions, financial relations, economic and social planning, Panchayati Raj institutions, sharing of resources; including interstate river water and recommend such changes or other measures as may be appropriate keeping in view the practical difficulties.

The recommendations tried to address the growing challenges of ensuring good governance for promoting the welfare of the people whilst strengthening the unity and integrity of the country, and of availing emerging opportunities for sustained and rapid economic growth for alleviating poverty and illiteracy in the early decades of the new millennium.

While examining and making its recommendations on the above, the Commission paid particular attention regarding the role, responsibility and jurisdiction of the Center vis-à-vis states – (i) during major and prolonged outbreaks of communal violence, caste violence or any other social conflict leading to prolonged and escalated violence; (ii) in the planning and implementation of the mega projects like the inter-linking of rivers, that would normally take 15-20 years for completion and hinge vitally on the support of the States; (iii) in promoting effective devolution of powers and autonomy to Panchayati Raj Institutions and Local Bodies including the Autonomous Bodies under the 6th Schedule of the Constitution within a specified period of time; (iv) in promoting the concept and practice of independent planning and budgeting at the district level; and (v) in linking Central assistance of various kinds with the performance of the states.

Other areas of emphasis include the role, responsibility and jurisdiction of the Center in adopting approaches and policies based on positive discrimination in favour of backward States. The impact of the recommendations made by the 8th to 12th Finance Commissions on the fiscal relations between the Centre and the States, especially the greater dependence of the States on devolution of funds from the Centre. The need and relevance of separate taxes on the production and on the sales of goods and services subsequent to the introduction of Value Added Tax regime. The need for freeing inter-State trade in order to establish a unified and integrated domestic market . The need for setting up a Central Law Enforcement Agency empowered to take up suo moto investigation of crimes having inter-State and/or international ramifications with serious implications on national security. The feasibility of a supporting legislation under Article 355 for the purpose of suo moto deployment of Central forces in the States if and when the situation so demands.

The volume II of the report on ‘Constitutional Governance and the Management of Centre-state Relation’ recommended the following-

On Consultation with States while legislating on matters in Concurrent List

List III includes subjects on which the Union and the States can both legislate. For cultivating better Centre-State relations and to facilitate effective implementation of the laws on List III subjects, it is necessary that some broad agreement is reached between the Union and States before introducing legislation in Parliament on matters in the Concurrent List. The existing arrangements in this regard require institutionalization through the Inter-State Council. The Council, if found necessary, may use an independent mechanism like a Committee of State Ministers to thrash out contentions issues in the Bill so that there is a measure of support among the States to the administrative and fiscal arrangements the Bill ultimately proposes to Parliament. It is important that the record of proceedings in the Council/Committee including views of States are made available to Parliament while introducing the Bill on Concurrent List subjects.

On  Transfer of Entries in the Lists, from List II to List III

Article 368(2) empowers Parliament to amend any provision of the Constitution in accordance with the procedure laid down therein. Should Parliament deplete or limit the legislative powers of the States through this process unilaterally or otherwise? In a federal system, the existence of the power in the Union does not by itself justify its exercise and it is the considered view of the Commission that the Union should be extremely restrained in asserting Parliamentary supremacy in matters assigned to the States. Greater flexibility to States in relation to subjects in the State List and "transferred items" in the Concurrent List is the key for better Centre-State relations.

In this context, it is worthwhile to examine through a joint institutional mechanism whether the administration of the relevant subject under the Central law (on the transferred subject) has achieved the objects and whether it is desirable to continue the arrangement as an occupied field limiting thereby the exclusive jurisdiction of the States. If the findings are not positive it may be worthwhile to consider restoration of the item to its original position in State List in the interest of better Centre-State relations. Such a step hopefully will encourage the States to devolve the powers and functions on that subject to the Panchayats and Municipalities as stipulated in Parts IX and IX-A of the Constitution. In short, the Commission is of the opinion that the Union should occupy only that much of subjects in concurrent or overlapping jurisdiction which is absolutely necessary to achieve uniformity of policy in demonstrable national interest.

On Management of matters in concurrent jurisdiction

Given the joint responsibility of the Centre and the States it is imperative that legislation on matters of concurrent jurisdiction generally and transferred items from the State List in particular, should be managed through consultative processes on a continuing basis. The Commission recommends a continuing auditing role for the Inter-State Council in the management of matters in Concurrent or overlapping jurisdiction.

On Bills reserved for consideration of the President

Article 201 empowers the President to assent or withhold assent to a Bill reserved by a Governor for the President's consideration. If the President returns the Bill with any message, the State Legislature shall reconsider the Bill accordingly within a period of six months for presentation again to the President for his consideration.

States have expressed concern that Bills so submitted sometimes are indefinitely retained at the Central level even beyond the life of the State Legislature. Allowing the democratic will of the State Legislature to be thwarted by Executive fiat is questionable in the context of 'basic features' of the Constitution. Therefore the President should be able to decide consenting or withholding consent in reasonable time to be communicated to the State. In the Commission's view, the period of six months prescribed 219 in Article 201 for State Legislature to act when the Bill is returned by the President can be made applicable for the President also to decide on assenting or withholding assent to a Bill reserved for consideration of the President.

On Treaty making powers of the Union Executive and Centre-State Relations

Entering into treaties and agreements with foreign countries and implementation of treaties, agreements and conventions with foreign countries are items left to the Union Government (Entry 14 of List I). Article 253 confers exclusive power on Parliament to make any law for the whole or any part of the territory of India for implementing any treaty, agreement or convention with any other country or countries or any decision made at any international conference, association or other body. 11.5.02 In view of the vastness and plenary nature of the treaty making powers with the Union Government notwithstanding the scheme of legislative relations between the Union and States (Article 253), the Commission recommends that Parliament should make a law on the subject of Entry 14 of List I (treaty making and implementing it through Parliamentary legislation) to streamline the procedures involved. The exercise of the power obviously cannot be absolute or unchartered in view of the federal structure of legislative and executive powers. Several states have expressed concern and wanted the Commission to recommend appropriate measures to protect States' interests in this regard. The Commission recommends that the following aspects may be incorporated in the Central law proposed on the subject of Entry 14 of List I:

1. In view of the fact that treaties, conventions or agreements may relate to all types of issues within or outside the States' concern, there cannot be a uniform procedure for exercise of the power. Furthermore, since treaty making involves complex, prolonged, multi-level negotiations wherein adjustments, compromises and give and take arrangements constitute the essence, it is not possible to bind down the negotiating team with all the details that should go into it. Nonetheless, the Constitutional mandates on federal governance cannot be ignored; nor the rights of persons living in different regions or involved in different occupations compromised. Therefore there is need for a legislation to regulate the treaty making powers of the Union Executive.

2. Agreements which largely relate to defense, foreign relations etc. which have no bearing on individual rights or rights of States of the Indian Union can be 220 Report of the Commission on Centre-State Relations put in a separate category on which the Union may act on its own volition
independent of prior discussion in Parliament. However, it is prudent to refer such agreements to a Parliamentary Committee concerned with the particular Ministry of the Union Government before it is ratified.

3. Other treaties which affect the rights and obligations of citizens as well as those which directly impinge on subjects in State List should be negotiated with greater involvement of States and representatives in Parliament. This can assume a two-fold procedure. Firstly, a note on the subject of the proposed treaty and the national interests involved may be prepared by the concerned Union Ministry and circulated to States for their views and suggestions to brief the negotiating team.

4. There may be treaties or agreements which, when implemented, put obligations on particular States affecting its financial and administrative capacities. In such situations, in principle, the Centre should underwrite the additional liability of concerned States according to an agreed formula between the Centre and States.

5. The Commission is also of the view that financial obligations and its implications on State finances arising out of treaties and agreements should be a permanent term of reference to the Finance Commissions constituted from time to time. The Commission may be asked to recommend compensatory formulae to neutralize the additional financial burden that might arise on States while implementing the treaty/agreement.

On  Appointment and Removal of Governors

Given the status and importance conferred by the Constitution on the office of the Governor and taking into account his key role in maintaining Constitutional governance in the State, it is important that the Constitution lays down explicitly the qualifications or eligibility for being considered for appointment. Presently Article 157 only says that the person should be a citizen of India and has completed 35 years of age. 11.6.02 The Sarkaria Commission approvingly quoted the eligibility criteria that Jawaharlal Nehru advocated and recommended its adoption in selecting Governors.

These criteria are:
1. He should be eminent in some walk of life
2. He should be a person from outside the State
3. He should be a detached figure and not too intimately connected with the local politics of the States; and
4. He should be a person who has not taken too great a part in politics generally and particularly in the recent past.

The words and phrases like "eminent", "detached figure", "not taken active part in politics" are susceptible to varying interpretations and parties in power at the Centre seem to have given scant attention to such criteria. The result has been politicization of Governorship and sometimes people unworthy of holding such high Constitutional positions getting appointed. This has led to some parties demanding the abolition of the office itself and public demonstration against some Governors in some States. This trend not only undermines Constitutional governance but also leads to unhealthy developments in Centre-State relations.

The Commission is of the view that the Central Government should adopt strict guidelines as recommended in the Sarkaria report and follow its mandate in letter and spirit lest appointments to the high Constitutional office should become a constant irritant in Centre-State relations and sometimes embarrassment to the Government itself.
Governors should be given a fixed tenure of five years and their removal should not be at the sweet will of the Government at the Centre. The phrase "during the pleasure of the President" in Article 156(i) should be substituted by an appropriate procedure under which a Governor who is to be reprimanded or removed for whatever reasons is given an opportunity to defend his position and the decision is taken in a fair and dignified manner befitting a Constitutional office.

 It is necessary to provide for impeachment of the Governor on the same lines as provided for impeachment of the President in Article 61 of the Constitution. The dignity and independence of the office warrants such a procedure. The "pleasure doctrine" coupled with the lack of an appropriate procedure for the removal of Governors is inimical to the idea of Constitutionalism and fairness. Given the politics of the day, the situation can lead to unsavory situations and arbitrariness in the exercise of power. Of course, such impeachment can only be in relation to the discharge of functions of the office of a Governor or violations of Constitutional values and principles. The procedure laid down for impeachment of President, mutatis mutandis can be made applicable for impeachment of Governors as well.

On  Governors' discretionary powers

Article 163(2) gives an impression that the Governor has a wide, undefined area of discretionary powers even outside situations where the Constitution has expressly provided for it. Such an impression needs to be dispelled. The Commission is of the view that the scope of discretionary powers under Article 163(2) has to be narrowly construed, effectively dispelling the apprehension, if any, that the so-called discretionary powers extends to all the functions that the Governor is empowered under the Constitution. Article 163 does not give the Governor a general discretionary power to act against or without the advice of his Council of Ministers. In fact, the area for the exercise of discretion is limited and even in this limited area, his choice of action should not be nor appear to be arbitrary or fanciful. It must be a choice dictated by reason, activated by good faith and tempered by caution.

In respect of Bills passed by the Legislative Assembly of a State, the Governor is expected to declare that he assents to the Bill or that he withholds assent therefrom or that he reserves the Bill for the consideration of the President. He has the discretion also to return the Bill (except Money Bill) for re-consideration of the House together with the message he might convey for the purpose. If on such reconsideration the Bill is passed again, with or without amendments, the Governor is obliged to give his assent. Furthermore, it is necessary to prescribe a time limit within which the Governor should take the decision whether to grant assent or to reserve it for consideration of the President. The Commission had earlier recommended that the time limit of six months prescribed for the State Legislature to act on the President's message on a reserved Bill should be the time limit for the President also to decide on assenting or withholding of  assent. The Governor accordingly should make his decision on the Bill within a maximum period of six months after submission to him.

 On the question of Governor's role in appointment of Chief Minister in the case of an hung assembly there have been judicial opinions and recommendations of expert commissions in the past. Having examined those materials and having taken cognizance of the changing political scenario in the country, the Commission is of the view that it is necessary to lay down certain clear guidelines to be followed as Constitutional conventions in this regard.

These guidelines may be as follows:

 1. The party or combination of parties which commands the widest support in the Legislative Assembly should be called upon to form the Government.

2. If there is a pre-poll alliance or coalition, it should be treated as one political party and if such coalition obtains a majority, the leader of such coalition shall be called by the Governor to form the Government.

 3. In case no party or pre-poll coalition has a clear majority, the Governor should select the Chief Minister in the order of preference indicated below: (a) the group of parties which had pre-poll alliance commanding the largest number
(b) the largest single party staking a claim to form the government with the support of others.
(c) A post-electoral coalition with all partners joining the government
(d) A post-electoral alliance with some parties joining the government and the remaining including independents supporting the government from outside.

 On the question of dismissal of a Chief Minister, the 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.

 On the question of granting sanction for prosecution of a State Minister in situations where the Council of Ministers advised to the contrary, the Commission would endorse the interpretation given by the Supreme Court to the effect that "if the Cabinet decision appears to the Governor to be motivated by bias in the face of overwhelming material, the Governor would be within his rights to disregard the advice and grant sanction for prosecution". The Commission recommends that Section 197Criminal Procedure Code may be suitably amended to reflect the position of law in this regard.

On Governors as Chancellors of Universities and holding other Statutory Positions

To be able to discharge the Constitutional obligations fairly and impartially, the Governor should not be burdened with positions and powers which are not envisaged by the Constitution and which may expose the office to controversies or public criticism. Conferring statutory powers on the Governor by State Legislatures have that potential and should be avoided. Making the Governor the Chancellor of the Universities and thereby conferring powers on him which may have had some relevance historically has ceased to be so with change of times and circumstances. The Council of Ministers will naturally be interested in regulating University education and there is no need to perpetuate a situation where there would be a clash of functions and powers.

 The Commission is also of the view that Governor should not be assigned functions casually under any Statute. His role should be confined to the Constitutional provisions only.

 On Obligation of the Union to protect States from external aggression and internal disturbance

 Concern for the unity and integrity of India is the rationale for the obligation put on the Union to protect States even against internal disturbances which ordinarily is a matter for the states to handle. This obligation is coupled with the power to enforce that duty, if necessary without any request coming from the State. This is consistent with the 225 federal scheme of the Constitution. Having examined similar provisions in other federal Constitutions and looking at socio-political developments in the country, the Commission is of the view that a whole range of action on the part of the Union is possible under this power depending on the circumstances of the case as well as the nature, timing and the gravity of the internal disturbance. The Union can advise the State on the most appropriate deployment of its resources to contain the problem. In more serious situations, augmentation of the States' own efforts by rendering Union assistance in men, material and finance may become necessary. If it is a violent or prolonged upheaval (not amounting to a grave emergency under Art. 352), deployment of the Union forces in aid of the
police and magistracy of the State may be adopted to deal with the problem. Action to be taken may include measures to prevent recurring crises.

 When does a situation of public disorder aggravate into an internal disturbance as envisaged in Art. 355 justifying Union intervention is a matter that has been left by the Constitution to the judgement and good sense of the Union Government. Though this is the legal position, in practice, it is advisable for the Union Government to sound the State Government and seek its co-operation before deploying its Forces in a State.

The Commission is also of the view that when an external aggression or internal disturbance paralyses the State administration creating a situation of a potential break down of the Constitutional machinery of the State, all alternative courses available to the Union for discharging its paramount responsibility under Article 355 should be exhausted to contain the situation and the exercise of the power under Art. 356 should be limited strictly to rectifying a "failure of the Constitutional machinery in the State".

Conditions for exercise of power under Article 356 11.10.01 On the question of invoking Article 356 in case of failure of Constitutional machinery in States, the Commission would recommend suitable amendments to incorporate the guidelines set forth in the landmark judgement of the Supreme Court in 226 S.R. Bommai V. Union of India (1994) 3 SCC 1). This would remove possible misgivings in this regard on the part of States and help smoothen Center-State relations. Of course, the proper use of Article 356 can ultimately be governed by the inherent decency and honesty of the political process.

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", and the duty of the Union to protect States under Article 355, it is necessary to provide a Constitutional or legal framework to deal with situations which require Central intervention but do not warrant invoking the extreme steps under Articles 352 and 356. 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. The imposition of local emergency, it is submitted, is fully justified under the mandate of Article 355 read with Entry 2A of List I and Entry 1 of List II of the Seventh Schedule. It is submitted that Art. 355 not only imposes a duty on the Union but also grants it, by necessary implication, the power of doing all such acts and employing such means as are reasonably necessary for the effective performance of that duty.

 It is however necessary that a legal framework for exercising the power of "localized emergency" is provided by an independent Statute borrowing the model of the Disaster Management Act, 2005 and the Prevention of Communal Violence and Rehabilitation Bill, 2006. Only exceptional situations which fall within the scope of "external aggression" or "internal disturbance" should be considered for the purposes of separate legislation under the mandate of Article 355. Such situations include (a) separatist and such other violence which threatens the sovereignty and integrity of India, (b) communal or sectarian violence of a nature which threatens the secular fabric of the country, and (c) natural or man-made disasters of such dimensions which are beyond the capacity of the State to cope with. With regard to item (c) a Statute is already in place (Disaster Management Act, 2005) and in respect of situations contemplated in item (b), it is learnt that a revised Bill is being proposed. What is therefore required is a legislation  to provide for Central role in case of separatist and related violence in a State which participates the nature of "external aggression" or "internal disturbance" contemplated in Article 355. The Commission has provided a detailed list of specific conditions to be considered for such a framework legislation enabling invocation of "localized emergency".
It is important that the legislation provides for appropriate administrative co-ordination between the Union and the State concerned. It may also need consequent amendments to certain sections of the Criminal Procedure Code as well. The subject is discussed in greater detail in Volume VI of the Commission's report on the subject of Criminal Justice, National Security and Centre-State Co-operation.

On  Power of Union to give directions to State

Though States have raised objections to the power exercisable by the Union under Articles 256 and 257 on the ground that they are destructive of not only the autonomy of States but also inimical to the very foundation of a federal arrangement, the Commission is of the considered view that there is no case for amendment of these provisions. It must, however, be clarified that favouring the retention of these provisions is entirely different from advocating easy or quick resort to them. Articles 256 and 257 may be viewed as a safety valve, one which may never come into play but which is nevertheless required to be retained.

The above view is substantiated by recent experiences where the Centre had to give directions on containing communal violence or insurgency in certain areas. The question that remains is about the consequence of non-compliance by a State of the Centres' directions in this regard. Though the Constitution has not provided any explicit course of action to such an eventuality, the obvious answer appears to be recourse available under Article 356 which indeed is an extreme step. In the existing scheme of things such a development is unlikely to happen which may explain why the Constitution makers avoided making remedial provision. The Commission is of the view that healthy conventions respecting the autonomy of states and restrained use of the power on behalf of the Union can go a long way to address the concern expressed by States in this regard.

 Another related issue is about the term 'existing laws" used in Article 256 which are in addition to laws made by Parliament to which the executive power of State shall ensure compliance. The Commission is of the view that these relate to other laws including Presidential Ordinances and international treaties and customary international law applicable to the State concerned. Rule of Law demands executive compliance of all laws. Article 51 warrants it and there can be no exception unless a law specifically authorizes deviation.

 A question is raised whether the scope of Article 257 Clause (3) should be widened besides railways to include other vital installations like major dams, space stations, nuclear installations, communication centres etc. The Commission is of the opinion that the executive power of the Union shall also extend to the giving of directions to a State as to the measures to be taken for the protection of Union property declared by the Union Government to be of national importance. Clause (3) of Art. 257 should accordingly be amended.

On Co-ordination between States, Centre-State Relations and Inter-State Council

Federalism is a living faith to manage diversities and it needs to be supported by institutional mechanisms to facilitate co-operation and co-ordination among the Units and between the Units and the Union. Co-operative federalism is easily endorsed but difficult to practice without adequate means of consultation at all levels of government.

 The Constitution has provided only limited institutional arrangements for the purpose and regrettably they are not adequately utilized. In this context, the Commission strongly recommends the strengthening and mainstreaming of the Inter-State Council to make it a vibrant forum for all the tasks contemplated in Clauses (a) to (c) of Article 263.

Though the Article does not provide a dispute settlement function to the Council, it envisages the Council to inquire into and advise on disputes between States towards settlement of contested claims. The Commission is of the view that the Council should be vested with the powers and functions contemplated in Article 263(a) also as it would further enhance the capacity of the Council to discharge its functions in Clauses  (b) and (c) more effectively and meaningfully. The Council can further have expert advisory bodies or administrative tribunals with quasi-judicial authority to give recommendations to the Council if and when needed. In short, it is imperative to put the Inter-State Council as a specialized forum to deal with intergovernmental relations according to federal principles and Constitutional good practices.

 The Commission is of the view that the Council is an extremely useful mechanism for consensus building and voluntary settlement of disputes if the body is staffed by technical and management experts and given the autonomy required for functioning as a Constitutional body independent of the Union and the States. It should have sufficient resources and authority to carry out its functions effectively and to engage civil society besides governments and other public bodies. It needs to meet regularly with adequate preparation of agenda and negotiating points and position papers from parties involved. The Secretariat of the Council may have joint staff of the Union and States to inspire confidence and enhance co-ordination. Negotiation, mediation and conciliation to find common points or agreement and narrowing of differences employed in international intercourse and in judicial proceedings can usefully be cultivated in the Council Secretariat for advancing the cause of harmonious intergovernmental relations. Towards this end, the Commission would recommend suitable amendments to Article 263 with a view to make the Inter-State Council a credible, powerful and fair mechanism for management of inter-state and Centre-State differences.

On Zonal Councils and Empowered Committees of Ministers

The need for more consensus building bodies involving the Centre and the States has been canvassed before the Commission because of a wide spread perception that governance is getting over-centralised and states are losing their autonomy in their assigned areas. While legislative powers are clearly demarcated and the fiscal relations are subject to periodic review by the Finance Commission, the fear on the part of States is more on administrative relations and it is here the need for more forums for co-ordination is felt.

Under the States Re-organization Act, 1956 five Zonal Councils were created ostensibly for curbing the rising regional and sectarian feelings and to promote co-operation in resolving regional disputes. Later the North Eastern Council was created under the North Eastern Council Act, 1971. In each of these Zonal Councils, Union Home Minister is the Chairman and the Chief Ministers of the States in the Zones concerned are members. The Commission is of the view that the Zonal Councils should meet at least twice a year with an agenda proposed by States concerned to maximize coordination and promote harmonization of policies and action having inter-state ramification. The Secretariat of a strengthened Inter-State Council can function as the Secretariat of the Zonal Councils as well.

The Empowered Committee of Finance Ministers of States proved to be a successful experiment in inter-state co-ordination on fiscal matters. There is need to institutionalize similar models in other sectors as well. A Forum of Chief Ministers, Chaired by one of the Chief Minister by rotation can be similarly thought about particularly to coordinate policies of sectors like energy, food, education, environment and health where there are common interests to advance and differentiated responsibilities to undertake. Implementation of Directive principles can be a standing agenda for the Forum of Chief Ministers which can make recommendations to the National Development Council, National Integration Council, Planning Commission etc. on these Directives which, incidentally constitute the Millennium Development Goals set by the United Nations as well. It is pertinent to note that other federations like USA, Australia and Canada do have similar forums to facilitate public policy development and good governance. This Forum of Chief Ministers can also be serviced by the Inter-State Council.

On  Adjudication of disputes relating to waters of inter-State rivers

The Commission has examined the issue in detail in a separate volume of the report. The present state of affairs is obviously unsatisfactory as it is dilatory, timeconsuming and seldom gets settled. Therefore change in the law and procedure is warranted. The possible courses of action are dealt with in volume seven of the Report.

On  All India Services and Centre-State Co-operation for better Administration

The Constitution of All India Services is a unique feature of the Indian Constitution. The broad objectives in setting up All India Services relate to facilitating liaison between the Union and States, promote uniform standards of administration, enabling the administrative officers of the Union to be in touch with field realities, helping the State administrative machinery to obtain the best available talent with wider outlook and broader perspectives and reduce political influence in recruitment, 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. They existed prior to Independence which contributed significantly to the quality of administration.

There are many issues relating to the administration of All India Services which are appropriately discussed in the report of the Administrative Reforms Commission and they are not discussed herein. However, the Commission would recommend proper integration of All India Services in the context of the introduction of the third tier of governance. The local bodies are in dire need of building capacities and strengthening the planning process for which the officers of All India Services can play a lead role.

Equally important is the system of encadrement of officers of state Governments and local bodies into the All India Services. Structural integration at all three levels requires clear demarcation of criteria for encadrement of posts, objective performance appraisal system, systematic career development and professionalization plans and a rational system of postings and transfers. For this purpose, the Commission would suggest constitution of an Advisory Council under the Chairmanship of the Cabinet Secretary with the Secretary Personnel and the concerned Chief Secretaries of States.

On  Rajya Sabha to be a Chamber to protect States' rights

The essence of federalism lies in maintaining a proper balance of power in governance and in this respect the Council of States (Rajya Sabha) occupies a significant Summary of Conclusions and Recommendations.

On  All India Services and Centre-State Co-operation for better Administration

The Constitution of All India Services is a unique feature of the Indian Constitution. The broad objectives in setting up All India Services relate to facilitating liaison between the Union and States, promote uniform standards of administration, enabling the administrative officers of the Union to be in touch with field realities, helping the State administrative machinery to obtain the best available talent with wider outlook and broader perspectives and reduce political influence in recruitment, 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. They existed prior to Independence which contributed significantly to the quality of administration.

There are many issues relating to the administration of All India Services which are appropriately discussed in the report of the Administrative Reforms Commission and they are not discussed herein. However, the Commission would recommend proper integration of All India Services in the context of the introduction of the third tier of governance. The local bodies are in dire need of building capacities and strengthening the planning process for which the officers of All India Services can play a lead role.

On Equally important is the system of encadrement of officers of state

Governments and local bodies into the All India Services. Structural integration at all three levels requires clear demarcation of criteria for encadrement of posts, objective performance appraisal system, systematic career development and professionalization plans and a rational system of postings and transfers. For this purpose, the Commission would suggest constitution of an Advisory Council under the Chairmanship of the Cabinet Secretary with the Secretary Personnel and the concerned Chief Secretaries of States.

On Rajya Sabha to be a Chamber to protect States' rights

The essence of federalism lies in maintaining a proper balance of power in governance and in this respect the Council of States (Rajya Sabha) occupies a significant role. There is no doubt that Rajya Sabha is representative of States of the Union and is supposed to protect States' rights in Central policy making. The Commission is of the considered view that factors inhibiting the composition and functioning of the Second Chamber as a representative forum of States should be removed or modified even if it requires amendment of the Constitutional provisions. This is felt more important now when centralization tendencies are getting stronger and fragmentation of the polity is becoming intense.
Whenever Central policies are formulated in relation to one or more States, it is only proper that Committees of Rajya Sabha involving representatives of concerned States are allowed to discuss and come up with alternate courses of action acceptable to the States and the Union. Thus, compensating the mineral rich States or the Hill States can well be negotiated in the Rajya Sabha Committee. Similarly, States adversely affected by the Centre entering into treaties or agreements with other countries can get appropriate remedies if the forum of the Rajya Sabha is utilized for the purpose. In fact, Rajya Sabha offers immense potential to negotiate acceptable solutions to the friction points which emerge between Centre and States in fiscal, legislative and administrative relations.

On Equal representation of States in Rajya Sabha

The principle of equality and equal representation in institutions of governance is as much relevant to States as to individuals in a multi-party, diverse polity. Equally applicable is the idea of preferential discrimination in favour of backward States in the matter of fiscal devolution from Union to States. There are other federations which give equal number of seats to the federating units in the Council of States irrespective of the size of their territory and population. The number of seats in the House of People (Lok Sabha) anyway is directly linked to the population and there is no need to duplicate the principle. A balance of power between States inter se is desirable and this is possible by equality of representation in the Rajya Sabha. If the Council of States has failed to function as representative of States as originally envisaged, it is because of the asymmetry of coalition politics and the way the party system developed. The functioning of Rajya Sabha can be reformed to achieve the original purpose of federal equilibrium. The Commission, therefore, strongly recommends amendment of the relevant provisions to give equality of seats to States in the Rajya Sabha, irrespective of their population size.

The Commission is also of the considered opinion that the reasoning of the Supreme Court in Kuldip Nayyar V. Union of India [(2006) 7scc1] rejecting the status of Rajya Sabha as a Chamber representing the States in the federal Union is faulty and deserves review. Meanwhile, Parliament should act restoring section 3 of the Representation of People Act as it originally stood to redeem the federal balance in shared governance. The territorial link as prescribed by the Representation of People Act is necessary and desirable to let the States realize that they are equal partners in national policy making and governance.

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

 The detailed analysis and recommendations of the Commission on decentralized governance under the 73rd and 74th Constitutional Amendments are discussed elsewhere in the Report. However, an aspect of Constitutional relevance on intergovernmental relations arising out of the 73rd Amendment alone is stated here for appropriate action through a fresh Constitutional amendment.

 Articles 243G and 243W 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. Such a reading makes the Constitutional Amendments superfluous defeating the whole purpose of the exercise. 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. After all, local bodies have been given the status of "self-government" which term unfortunately has not been defined in the Constitution.

The Commission is of the view that the scope of devolution of powers to local bodies to act as institutions of self-government should be constitutionally defined through appropriate amendments, lest decentralised governance should elude realization indefinitely. The approach should be on the principle of "subsidiarity" which is implicit in the scheme of Constitutional Amendment and letting the State Government confine itself only to matters of policy that cut across the entire domain of local governments. Articles 246(3) and 162 have to be read down in the light of the Amendment giving meaning and content to the expression "as may be necessary to enable them (Panchayats and Municipalities) to function as institutions of self-government.

On  Governments' obligation to support court expenditure when laws are made

The Financial Memorandum attached to Bills usually do not provide for adjudication costs involved in enforcement of the new law. This puts the Subordinate Courts with little or no resources to cope up with additional workloads directly resulting from new legislations put on the Statute Book. An expert Committee has recommended to the Government that judicial impact assessment should be made whenever legislations are proposed and the Financial memorandum should reflect judicial costs as well. This Commission endorses the proposal.

The Commission is of the view that in view of Article 247 read with Entry 11A of the Concurrent List, Government of India is Constitutionally obliged to make financial provision for implementation of Central laws through State Courts in respect of subjects in Lists I and III of the Seventh Schedule.

On Judicial Councils to advise Centre-State share in judicial budgets

Enabling the justice system to discharge its functions efficiently is the joint responsibility of Central and State Governments. While the administrative expenses of the Supreme Court and High Courts are charged upon the Consolidated Funds of the Centre and States respectively, there is no such financial arrangement guaranteed by the Constitution for subordinate judiciary. Judicial planning and budget making ought to be undertaken jointly by the judiciary and the executive for which some joint forum needs to be established. An expert committee set up by the Union Law Ministry recommended the setting up of "Judicial Councils" at the State and Central levels for the purpose which the Commission endorses. These Councils should not only prepare the judicial budget for approval by the Legislature but also decide on the proportion of sharing the budget expenditure between Centre and States on the basis of the data on the workload of
courts under Lists I, II and III.

 The idea is not to make the States bear the entire expenditure on Subordinate Courts which devote substantial time and resources to enforce the laws made by Parliament under List I and List III.

 Finally, the Commission is of the view that Central Government must make an assessment of the number of courts needed for efficient adjudication of disputes arising out of Central laws and establish the required number of Additional Courts as stipulated under Article 247 of the Constitution.

 On Need for continuing emphasis on federal balance of power

On the question whether a fresh balance of power is needed to take governance forward on the path set by the Constitution, the Commission is of the view that the framers of the Constitution, taking note of the pluralistic identities of the people and the diverse historical traditions of the polity, have correctly come to the conclusion that a federal system alone can take the country forward as a united, democratic republic. The Commission, however, is convinced that the tilt in favour of the Union has increasingly accentuated over the years even outside the security needs of the country. This has led to avoidable over-centralisation even in developmental matters. These emerging contradictions in federal constitutional practice have to be addressed early in the interest of not only better Centre-State relations but also to sustain the very unity and integrity for which the tilt in favour of the Centre was originally conceived.

The Commission believes that this balancing of powers and functions which assumed added significance after the introduction of the 73rd and 74th Constitutional Amendments can largely be accomplished through administrative arrangements supported by adequate devolution of finances for which the Finance Commission is a key institution. While security concerns might warrant greater powers to the Union, on the development front (education, health etc.) the Centre should respect the autonomy of the other two levels of government and consciously avoid the tendency to centralize powers and functions. Its role is to be limited in laying down policies, devolving  funds and facilitating co-ordination leaving implementation entirely to States and Local Bodies.

On  Streamlining Administrative Relations

On the more problematic issue of the nature and scope of Centre's directions to the States in matters which are in the domain of States' executive power, the Commission, after having examined the views expressed by the States, has come to the conclusion that the powers under Articles 256 and 257 are necessary to remain with the Centre in order to ensure that the Centre's legislative and executive powers are duly honoured by the States. What directions are to be given by the Centre to the States and when, is for the Central Government to decide, keeping in view the exigencies of the circumstances and administrative necessities.

On  Fiscal Relations to be largely decided by the Finance Commission

On the interplay of Fiscal Federalism and Centre-State Relations, the views of stakeholders and the recommendations of the Commission in this regard are given in the volume on Fiscal Relations. The Commission would like to emphasise here the importance of strengthening the Constitutional scheme of fiscal transfers through Finance Commissions and reduce the scope of other forms of devolution which leads to complaints from States.

There is a case to make the Finance Commission to be a permanent body with membership changing every five years and with a regular Secretariat. The Centre should find a methodology to allow State participation in its Constitution and in formulation of terms of reference so that it may not appear to be a creation entirely of the Centre which is an interested party in the division of the kitty.

 On  Need to strengthen and empower the Inter-State Council

On the issue of creating a forum for co-ordination of intergovernmental relations, this Commission is of the considered view that the Inter-State Council (ISC) need to be substantially strengthened and activised as the key player in intergovernmental relations. It must meet at least thrice a year on an agenda evolved after proper consultation with States.

If decision by consensus does not work in the Inter-State Council, it may be taken by majority in matters of national concern. In other areas, an Empowered Committee of ministers may be asked to study and report within a prescribed time-frame a more acceptable way of resolving the problem. The ISC must be empowered to follow up the implementation of its decisions for which appropriate statutory provisions should be made.

The Government will be well advised to evolve an appropriate scheme to utilize the full potential of ISC in harmonizing Centre-State relations which has become urgent in the changed circumstances. Issues of governance must as far as possible be sorted out through the political and administrative processes rather than pushed to longdrawn adjudication in Court. Inter-State Council appears to be the most viable, promising Constitutional mechanism to be developed for the purpose provided it is properly restructured and duly empowered.

The present status and function of the Inter-State Council set up through a Presidential Order in 1990 are as follows: The Council is a recommendatory body. The meetings of the Council are held in camera, and all questions, which come up for consideration of the Council in a meeting, are decided by consensus, and the decision of the Chairman as to the consensus is final.

The following duties have been assigned to the ISC:

1. Investigating and discussing such subjects, in which some or all of the States or the Union and one or more of the States have a common interest, as may be brought up before it;

2. Making recommendations upon any such subject and in particular recommendations for the better coordination of policy and action with respect to that subject; and

3. Deliberating upon such other matters of general interest to the States as may be referred by the Chairman to the Council.

The Council has not been assigned the function envisaged in clause (a) of Article 263 of the Constitution namely, inquiring into and advising upon disputes, which may have arisen between States as recommended by the Sarkaria Commission.

Very recently (2008) the Administrative Reforms Commission recommended that the conflict resolution role envisaged for the ISC under Art. 263 (a) of the Constitution should be effectively utilized to find solutions to disputes among States or between all or some of the States and the Union. It further added that the composition of Inter State Council (ISC) (of which there can be more than one) may be flexible to suit the exigencies of the matter referred to it under Article 263.

The Supreme Court even suggested an adjudicating role to the Council in certain types of disputes involving the Union and the States. Particularly on matters of policy where a consensual settlement is desired, the ISC could negotiate a more acceptable resolution of the dispute among the Constitutional entities.

The Council is empowered under the Presidential Order of 1990 to work out its own procedures with the approval of the Government.

Together with the full range of functional empowerment under Article 263, the Council should have functional independence with a professional Secretariat constituted with experts on relevant fields of knowledge supported by Central and State officials on deputation for limited periods. The Secretary of ISC should be designated exofficio Secretary of the Department of States reporting directly to the Union Home Minister who is to be ex-officio Deputy Chairman of the Council. Given the Constitutional and quasi-judicial tasks, the Council should have experts in its organizational set up drawn from the disciplines of Law, Management and Political Science besides the All India Services. The proposed legislation should give the ISC an organizational and management structure different from the Government departments and flexible enough to accommodate management practices involving multidisciplinary skills conducive to federal governance under the Constitution.

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