GNCT Delhi v. Union of India: An analysis of Dharna and Drama

[Editorial Note: The author issues a public apology for using footnotes in this blog-post as opposed to hyperlinks. This blog-post was written during lockdown 2020, which means before the recent controversial GNCTD (Amendment) Bill, 2021 was under consideration. This blog-post provides a background to the bill as the author analyses the judgment of the Hon’ble Supreme Court which will diluted if this Bill will be passed by the Parliament.]

During the year 2017-18, the people of Delhi were wretched due to ‘policy paralysis’ as there was a tussle between the Delhi Government and Lieutenant Governor of Delhi (hereinafter referred to as LG). There was dharna on one side and drama on the other; that’s how the constitutionally established political system of Delhi was ‘oozing venom’ on each other. The scuffle between the two constitutional authorities raised several legal and constitutional issues on the scope of their respective powers and limitations in the National Capital Territory of Delhi. In this blog-post, the decision of the Hon’ble Supreme Court in the case of Government of NCT of Delhi v. Union of India & Another (hereinafter referred to as the Delhi case), which answered the several questions of law with regard to Delhi, will be analysed and significance of the same would be foregrounded.

Issues

The Delhi case has its own convolution as the main issue in the case was the interpretation of Article 239AA of the Constitution which is a special provision with respect to the National Capital Territory of Delhi. The “centripodal” conundrum was with regard to the administrative powers of the LG, as to whether- (a) he is controlled by the phrase ‘aid and advise’ of the Council of Ministers (hereinafter referred to as ‘COM’) [or]; (b) his power as the administrator of NCT of Delhi remains untouched by the 69th constitutional amendment. Does the constitutional amendment give special status to NCT of Delhi among the Union Territories? Should LG be informed about every decision taken by the COM? Can the LG refer ‘every (or any) matter’ under proviso Article 239AA (4) to the President? What must be the guiding principles when there is difference of opinion between the LG and the COM? These are the few issues which were addressed by the Hon’ble Supreme Court.

The Judgment

Article 239AA of the Constitution confers special status to the NCT of Delhi. It is distinguished from Article 239 and Article 239A as the purpose of inserting this Article was to confer special status to Delhi. The batch of petitions filed before the Supreme Court sought for the judicial interpretation of mainly two clauses, that is, [i] Article 239AA (3)(a) and (b) – which states that the Legislative assembly of Delhi is empowered to make laws with respect to whole or any part of NCT of Delhi with respect to matters enumerated under List II[1] or III and the Parliament, too, will have the power to laws with respect to all the matters and; [ii] Article 239AA (4) and its proviso – which states that there shall be COMs[2] with the Chief Minister at its head to ‘aid and advise’ the LG and if there is a difference of opinion between the two, then the LG can refer the matter to the President for a decision. The judgment aims to resolve any disharmony and anarchy by making the parties realize the feeling of ‘constitutional renaissance’[3]. The purposive interpretation must be adopted to interpret Article 239AA so that the basic structure of the Constitution (i.e., Democracy and Federalism) is augmented in NCT of Delhi which will further reinforce the confidence placed by the people of Delhi in the elected-government.

  • Status of NCT of Delhi

The NCT of Delhi is neither a state nor ‘just’ a union territory, but under the constitutional scheme Delhi and other union territories are not on same pedestal.[4] Its status is unique. By the insertion of Articles 239AA and 239AB, it could be understood that the status of NCT of Delhi is sui generis and it is a class by itself. By the introduction of Westminster style cabinet system of government, the residents of Delhi have a “larger say in how Delhi is to be governed”.

  • Executive powers of COM

The conjoint reading of Article 239AA (3)(a) and Article 239AA (4) reveals that the executive power of the NCTD is coextensive with the legislative power of the NCTD which extends to all the matters in state list (except three matters) and concurrent list. Therefore, the executive power of the COM is coextensive with the legislative powers of the Assembly, so that various policies decisions are implemented smoothly. Further, the executive power of the Union government does not extend to the executive powers of the NCTD, hence, it does not have any say in the policy decision of Delhi’s COM. Only legislative power of the Parliament is conterminous to legislative power of Delhi which basically means that “nothing shall derogate the powers of Parliament to make laws with respect to any matter for the Union Territory of Delhi”[5].

  • Is LG is bound by ‘aid and advise’ of COM?

Under Article 239AA(4), it is stipulated that Delhi now has a Westminster Style cabinet system of government where there ‘shall’ be COM who are responsible to the Legislative Assembly and the COM headed by the Chief Minister shall ‘aid and advise’ the LG. Therefore, the LG is bound by the aid and advise of the COM, as per Article 239AA (4) of the Constitution, only in the matters in which legislative powers has been conferred upon the Assembly (except in the matters where he has been entrusted to act in his discretion). To support this argument, the bench emphasized on section 42 of the 1991 Act which is identical to the clause (2) of the Article 74[6] which is also a manifestation that the words ‘aid and advise’ must be uniformly interpreted. Section 42 states that:

42. Advise by Ministers. The question whether any, and if so what, advise was tendered by Ministers to the Lieutenant Governor shall not be inquired into in any court.

Just like the aid and advise of the Union’s COM is binding on to the President, in the same way the ‘aid and advise’ of the COM of NCT of Delhi must be binding on the LG.

[On a similar note, the COMs are just required to “communicate and inform its various proposals, agendas and decisions to the LG so as to keep the LG apprised and to enable him to scrutinize the same”[7] but there is no need for a prior concurrence of the LG as it will dilute the idea of representative governance and democracy as conceived for Delhi under Article 239AA.]

However, this is subject to the proviso of Article 239AA (4) which confers upon LG the power to refer “any” matter to the President for a ‘binding decisions’, when there is a difference of opinion between LG and COM. “This proviso to clause (4) has retained the powers for the Union/ LG even over matters falling within the legislative domain of the Delhi Assembly”[8], based upon the ‘thoughtful interpretation’ of the LG. But does LG have the power to refer “every” matter to the President? This would be answered in the forthcoming section of this chapter.

  • Can the LG refer “every” matter to the President?

Although the LG is not a titular head of Delhi as rather, he has the power to exercise discretion in certain matters, unlike the President and the Governor. But the LG’s discretionary power is limited to only three matters over which the Assembly does not have any legislative powers, meaning thereby, if the COM makes any policy with regard to any matter which is outside their jurisdiction then the LG would be well within his powers to reject the policy or refer it to the President. Coming to proviso of Article 239AA (4), the term “any” cannot be construed neither broadly, to include every matter, nor narrowly, as argued by the petitioners, rather it must be interpreted in a way where the phrase is workable and the constitutional balance is maintained. The word ‘any’ is unlikely to mean anything under the sun and it must have a limitation on it which must be determined by the context in which it is used.[9] The Court held that the word used in the proviso cannot be construed as ‘every matter’ and it must be interpreted in a manner so as to ‘deduce the real intention of the Parliament’ and the purpose for/in which the word has been used. The Court went further to hold that the rule under the proviso is an exception and not the general norm (Paragraph 233). The LG must act with constitutional objectivity and must be guided by constitutional morality as ‘constitutional trust’ has been reposed in his office. The LG must not refer every matter to the President (‘in mechanical or routine manner’) as it would fail the idea of representative governance and democracy and it must not be taken as if the LG has a “right to differ” from the COMs.

Furthermore, the COM must adhere to the 1991 Act and the rules made therein, hence, the LG ‘must be apprised with every decision taken by the COM’ (Paragraph 233). The LG can differ from the decision of the COMs but, first, the efforts must be made to resolve the conflicts. In case of a difference between the LG and a particular minister, the matter must be referred to the Council; then, if the difference persists, then the matter must be referred to the President. (Here the reference must be made to Rule 49[10] and Rule 50[11] of The Transaction of Business of the Government of National Capital Territory of Delhi Rules, 1993)

CJI Misra demonstrated the role of the LG and COM as (Paragraph 236):

There should   not   be   exposition   of   the   phenomenon   of   an obstructionist but reflection of the philosophy of affirmative constructionism and a visionary. The constitutional amendment does not perceive a situation of constant friction and difference which gradually builds a structure of conflict. At the same time, the Council of Ministers being headed by the Chief Minister should be guided by values and prudence accepting the constitutional position that the NCT of Delhi is not a State.”

Therefore, before making any reference to the President under the proviso, the 1993 Rules must be followed and there must be dialogue and discussions between the COM and LG to resolve the differences. In the words of Justice D Y Chandrachud, “a reference to the President is contemplated by the Rules only when the above modalities fail to yield a solution, when the matter may be escalated to the President” (page 411, Paragraph M (19)). Henceforth, the LG must not have a hostile attitude towards COMs and Chief Minister, rather he should act as a facilitator, “keeping in mind the standards of constitutional trust and morality, the principle of collaborative federalism and constitutional   balance, the concept of constitutional governance and objectivity and  the nurtured and cultivated idea of respect for a representative government” (page 232, Paragraph xviii).

Significance of the Judgment

In Delhi’s case, the Supreme Court declined to lay down an ‘exhaustive’ list where the LG may choose to refer the matter to the President. Rather Justice Chandrachud’s concurring opinion laid down a broader rubric of “national concerns”, where the reference to the President can be made, which is not addressed by the majority judgment. This simply means that LG can refer the matter when the Delhi government touch upon the ‘legitimate interest’ of the Union Government (as it is physically based in Delhi). One example: opening of Mohalla Clinics (by Delhi Government) will not come under “national concerns”, and therefore it is not in the scope of proviso.

With regard to Article 239AA (4) proviso, there is no specificity in the majority judgment as to what could be referred to the President. This could be “ameliorated” by Justice Chandrachud’s concurring opinion. Although the disputes between the Delhi Government and Union are purely “political” in nature, but in such cases, constitutional doctrines and principles can help to resolve the disputes.

Even after this judgment, recently during the COVID-19 crisis, the LG (as Chairperson of Delhi Disaster Management Authority) reversed the decision of the Delhi Government, in which the Government reserved the hospital beds for residents of Delhi only. Although the order passed by the Delhi Government was contrary to Article 21 of the Constitution as it threatens the life of the individuals who are not residents of Delhi, but still ‘reversing’ of the decision of the Delhi Government is contrary to the Delhi’s case and the principles laid down therein. The LG can disagree and refer the matter to the President, but can he just overrule the decision taken by the duly elected government? The new Government of National Capital Territory of Delhi (Amendment) Bill, 2021 makes it possible. Will it held unconstitutional by the apex court? The question remains.



[1] Article 239AA (3)(a)- “The legislative assembly shall have power to make laws…… with respect to state list or concurrent in so far as any such matter is applicable to Union territories except matters with respect to Entries 1, 2 and 18 of the State list and Entries 64, 65 and 66 of that List in so far as they relate to the said Entries 1, 2, and 18.”

[2] COMs to be not more than ten percent of the total number of members in the Delhi Legislative Assembly.

[3] By Constitutional renaissance, CJI Misra meant, “true blossoming of the constitutional ideals, realization and acceptance of constitutional responsibility within the boundaries of expression and silences and sincerely accepting the summon to be obeisant to the constitutional conscience with a sense of reawakening to the constitutional vision” (The Delhi Case at pp. 220-221, Paragraph 275)

[4] New Delhi Municipal Corporation v. State of Punjab, (1997) 7 S.C.C. 339.

[5] Article 239AA(3)(b)

[6] Article 74, Clause 2: “The question whether any, and if so what, advise was tendered by Ministers to the President shall not be inquired into in any court”.

[7] As per, The Transaction of Business of the Government of National Capital Territory of Delhi Rules, 1993, which are framed by the President in exercise of the power conferred upon him under Section 44 of the Government of National Capital Territory of Delhi Act, 1991.

[8] The Delhi Case at pp.161-162, Paragraph 195.

[9] J.L. Austin, How to do Things with Words, The William James Lectures delivered at Harvard University, 1955.

[10]  Rule 49 of T.B.G.N.C.T.D Rules, 1993: In case of difference of opinion between the Lieutenant Governor and a Minister in regard to any matter, the Lieutenant Governor shall endeavour by discussion   on   the   matter   to   settle   any   point   on which such difference of opinion has arisen. Should the   difference   of   opinion   persist, the   Lieutenant Governor may direct that the matter be referred to the Council.

[11] Rule 49 of T.B.G.N.C.T.D Rules, 1993: In case of difference of opinion between the Lieutenant Governor and the Council with regard to any matter, the Lieutenant Governor shall refer it to the   Central   Government   for   the   decision   of   the President and shall act according to the decision of the President.

Guest Post: The PM CARES Fund: A Political Propaganda or a Genuine Attempt?

[This is a guest post by Charvi Devprakash]

Introduction

The Prime Minister of India tweeted, “It is my appeal to my fellow Indians, kindly contribute to the PM-CARES Fund” asking all of the citizens to do their part in creating a healthier India by contributing to the newly founded PM-CARES Fund (Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund). Within a week, reports stated that the fund had managed to collect 65 billion rupees. And now, it is claimed that the fund has crossed the 100 billion dollars mark. 

Though this meant a huge achievement for the country as a whole, as aforementioned many of them began to question why there was another fund created when there already existed the Prime Minister’s National Relief Fund (PMNRF). While some questioned its constitutional validity, others mocked the opaqueness of the fund. While on one hand where some of the citizens filed cases of Right to Information against the Prime Minister, on the other, some demanded the need for the fund to be scrutinized by the Comptroller and Auditor General of India (“CAG”) as CAG is an independent body, free of the government’s influence. While the government fought the RTI petitions by calling the fund ‘not a public authority’, some companies wondered how the PM CARES Fund came under Corporate Social Responsibility (CSR), but not the CM’s COVID Fund. 

Is the PM CARES Fund constitutionally valid?

Recently, in the case of Manohar Lal Sharma v. Narender Damodaran Modi & Ors, the Supreme Court was to hear public interest litigation (“PIL”) filed by one Manohar Lal Sharma on the matter of the constitutional validity of the PM CARES Fund. A bench comprising Chief Justice S A Bobde and Justices L Nageswara Rao and MM Shantanagoudar heard the PIL against the setting up of the PM CARES Fund through video-conferencing. The SC straight away dismissed this petition, thereby indicating that the PM CARES Fund was created in accordance with the constitutional principles. The petition intended to quash down the Fund as it is claimed to have not been formed under the constitutional guidelines as mentioned under Article 266 and 267 of the Constitution of India, 1950 that deal with the Consolidated and Contingency Fund of India respectively. 

However, here are some of the reasons how the constitutional validity of the fund could be challenged on other grounds as well. One could assail the Fund by focusing on the nature of the Fund and the requirement of the auditing to be done by the CAG as it is supposed to be a public fund and not private. Time and again, successive Central Governments have created funds like the PMNRF and PM CARES Fund under the umbrella of ‘private funds’, thereby encroaching upon and depriving the Indian citizens’ Right to Information. The petition could have also challenged the validity of the fund by bringing it within the bracket of the violation of Article 14 of the Constitution of India as the PM CARES Fund demanded or rather received preferential treatment than the other NGOs or Trusts, that haven’t enjoyed such support in the past, pertaining to the exemptions received under Foreign Contribution Regulation Act, 2010 (FCRA).

The need for Transparency

India being a democracy, bestows upon all its citizens the Right to Information under Article 19 (1) of the Constitution. The right to seek information and accountability from the Government strengthens and empowers the citizens. This freedom ensures that there is a good, transparent, accountable and responsive Government. Today, due to the various decisions taken by the Government, RTI is recognised as a fundamental tool to promote openness and responsibility within the Government. It puts people in a position of entitlement and power. 

In the case of SP Gupta v. Union of India, it was held that the people had the right to know about every public act and public transaction undertaken by public functionaries. Furthermore, in the case of People’s Union for Civil Liberties v. Union of India, the judgement of SP Gupta was extended to making Right to Information an indispensable human right necessary for making governance transparent and accountable. Adding on, in the case of State of UP v. Raj Narain, Justice Mathew expressed, 

“It is not in the interest of the public to cover with a veil of secrecy the common routine business the responsibility of officials to explain and to justify their acts is the chief safeguard against oppression and corruption.” 

Where the money is being utilised? When the taxpayers diligently and responsibly donate to a particular government body, the citizens have the right to know how the due amount is being utilized. Similarly, even in the present scenario, the citizens have a right to know, to what use is the money collected being put to, irrespective of the amount donated by each individual. This is precisely where the problem arose in the PM CARES Fund: the lack of transparency

Issue of representation and domination of one political party: The ruling party was quick enough to make a statement that the CAG will not be auditing this fund and that it will be those independent auditors who are appointed by the trust that would audit the funds. However, the committee members or the decision-makers of the fund are unrepresentative. Unlike the PMNRF that comprises the Prime Minister, President and the leader of the Opposition, PM CARES Fund only comprises the ruling party members. While the Prime Minister, in his official capacity, is the ex-officio chair of the Fund, he also has the power to nominate three members as ‘ex-officio trustees’, which in this case are the Finance Minister, Defence Minister and the Minister of Home Affairs, who all are from the same ruling party, thereby making the Fund/trust completely unaccountable and unrepresentative. Despite there not being a legal mandate for the Leader of the Opposition to be a committee member in any of these funds, it has been an unwritten ‘convention’ from centuries across countries to have the opposition party members in such funds in order to encourage opposing points of view. This makes the PM CARES Fund unrepresentative. 

The requirement of auditing by CAG: A fund this unrepresentative also makes the appointment of the independent auditors biased and unfair, which once again calls for an emphasis on CAG to audit this Fund. Although the auditors have to abide by certain set legal standards, the appointment of these auditors will be biased due to the unrepresentative nature of the committee, which might give the ruling party an upper hand in making decisions that are not completely justifiable or transparent. The same can be avoided if the committee is more representative with opposing views. The PMO has also refused to make the relevant documents of the Fund public as it does not come under the ambit of a public fund’, which means it is not controlled or substantially financed by the government and so does not come under the RTI Act. It also means that it cannot be scrutinized by government auditors like the CAG. However, the nomination of the committee members of the Fund speaks otherwise, indicating that the Fund is under complete control of the Government. Therefore, all of these actions of the Government call for the pressing need for ‘Transparency’. As aforementioned, no information has been catered to the donors of this charitable fund, as the fund is considered a ‘private trust’. This called for several RTI petitions being filed against the PMO and the government. However, most of them have been dismissed by the courts and the rest have been quashed down by the trust.

The CSR conflict and Cooperative Federalism

Another issue arising out of this fund is the preferential treatment given to the PM CARES Fund over other state government funds in terms of corporate social responsibility. An intriguing aspect here is that companies cannot file their donations towards state COVID funds under their CSR, while they can only file their donations under CSR if it is towards the PM CARES Fund. Many have questioned the validity of this clause. PM CARES Fund is the only state-owned charitable fund to have been included under CSR by amending the Indian Companies Act. Despite announcing this on a later date, the application of the amendment was retrospective in nature, thereby making all the prior corporate donations eligible under CSR. 

However, this move by the government has its own repercussions. Once the PM CARES Fund was made eligible for CSR funding, many top businesses like the TATA and Reliance donated millions of rupees as donations. This meant that it could lead to a great financial crunch among many other NGOs who majorly depended on such corporate donations. In light of the same, the Rajasthan Government filed a suit questioning as to why only PM CARES and not state COVID funds were made eligible for CSR funding. The only response was that the Union Government barred CM’s Relief Fund to be entitled to CSR donations. This is a blatant violation of Article 14 as this clearly acts as Preferential treatment towards the Central Government’s fund. This might also be an attempt to destabilize the democratic governance founded on the constitutional principle of ‘cooperative federalism’ (The need for Cooperative Federalism was highlighted previously on this blog here).

Cooperative federalism is the existence of a flexible relationship between the Centre and the states where both parties work together in harmony on subjects that concern both. This particular move of the Union on the matter of PM CARES Fund has proven to go against this principle. As a democracy believing in cooperative federalism, it is of paramount importance for the Centre to treat the states as equals and consult them on subjects that are of national concern such as the pandemic. Many state governments in the country became the target of a huge financial crunch as they had neither received the State’s GST collections nor were the residents of those states donating to the CM’s Relief Fund, merely because one could avail the CSR benefit by donating to the PM CARES Fund. This move by the Union is highly condemnable as this was the time for the state governments to be more self-reliant, financially as well as decisively and less dependent on the Centre, but that didn’t seem to happen in this scenario. If cooperative federalism was adopted and respected in its truest sense, then the entire situation would have looked quite different, with more harmonious inter-state and Centre-State relations.   

Conclusion/Suggestions

Looking at all the analysis made above, it is safe to assume that the PM CARES Fund is not only opaque and arbitrary in nature, but also discriminatory. Many NGOs and State COVID funds are at stake due to the revised provision made available to the general public in light of corporate social responsibility. To resolve this issue, some of the plausible suggestions could be:

  1. This turn of events must be put under scrutiny for being violative of Article 14 – as it creates differential treatment of two different subjects which falls under the same class of subjects.
  2. Courts must encourage and allow the PILs and the RTI applications for better transparency. Strict scrutiny of this fund must be done so as to ensure that the public’s trust is restored. 
  3. There is a pressing need for more transparency in the functionality of the fund and hence needs to be made more representative by including members from the opposition and other independent sectors.
  4. Indian Companies Act must be further amended to give the state-relief funds the same position as PM CARES Fund.
  5. Since this is a public-funded initiative, PM CARES Fund needs to come under the ambit of ‘public fund’. 

Therefore, the acceptance of these suggestions will only strengthen the citizens’ belief in the judiciary and will prove the independence of the Judiciary from the Legislature and the Executive. Lastly, COVID-19, is a global pandemic, having taken millions of lives already. This is not a time to put into action the nasty political propagandas, but a time for the entire nation to stay united and fight the virus, democratically.

[The author would like to thank Chaitanya Singh and the team of Constitutional Renaissance Blog for their valuable suggestions and comments.]

Breaking the Complexity of Farm Acts

[This is a post by Surabhi Srivastava, Contributing Editor]

Through this post, I am making an attempt to discuss the new farm bill (now an Act) on a comparative analysis basis. Certain questions, such as whether the Centre had the power to make laws in this area? Or what is the dispute going on between centre and state? Why in certain states there is comparatively more hue and cry regarding this bill? And can the proceedings in the Parliament be challenged in the Supreme Court of India? The final question, whether farmers are in actuality going to get any benefit out of this bill?  Give a quick read to this article and find out the answers!

Understanding the existing Agricultural Produce & Livestock Market Committee system

After the nation got independence in 1947, the farmers used to sell their produce directly to the customers but owing to the Zamindari system and other unavoidable circumstances the farmers had taken a loan from some or the other sources. In result, the money lenders (including Zamindars) use to charge an exuberant amount of interest from the farmers, consequently, the money lenders use to buy the produce of the farmers in the lowest possible price and again when the farmers wished to grow crops etc., he would not have enough fund to conduct his farming activity. Again, the farmers would turn to the money lenders and the story would viciously repeat. The farmer was struck in this merciless situation and their exploitation was on a loop.

 To solve the issue regarding the exploitation of farmers, the government comes into the play and enacts, Agricultural Produce & Livestock Market Committee Act (for brevity Act). This laid the prohibition of direct exchange of goods between the farmer and any other person, rather all the process of sale would take place through mandis which were established through the ACT. The mandis were, however, run by the State Government. Now let us look at the present-day functioning of the APMC ACT, each state has its own APMC and the State divides it area wise according to its own convenience, awarding one mandi to each area. Suppose, if a trader wants to buy some product from that mandi then he would have to acquire the licence of that mandi and similarly if a farmer wants to sell his produce in a mandi he will have to acquire a licence too. This process is a mandate.

Further, if we go on to see how the product is sold according to APMC, then it is according to the auction system, the goods are divided into two categories for the purpose of sale, one being MSP (Minimum Selling Price) and Price Discovery, the price in case of the former is fixed by the Government of India and to be noted that not all crops fall under the category of MSP, there are only 22 crops that are permitted to the credit of MSP. The latter includes all other crops apart from those 22 falling under MSP; here the goods are sold according to the market situation such as demand and supply. Furthermore, in APMC, goods are sold through a chain, in nutshell, there are various middlemen between the farmer and the end consumer, the new Farm Bill is on its way to do away with this system.

However, the present chain functions as follows:

(1) Farmers take produce to APMC

(2) Commission agents (first-person farmers gets in connection within APMC mandi )

(3) Traders (from here it goes to the retailer, wholesaler, vendors etc. and at last reaches the customer)

(4) Transaction agents (approaches the farmer and informs him about the selling price of his produce, and charges at least 3-4% market fees from the farmer)

(5) Farmer

This whole process is not transparent, as in the farmer is totally aloof of the process as to how the price of his produce is fixed. By the time the product actually reaches the customer, there is at least a hike of 50% price from what is being paid to the farmer and about 25% of the total produce of the farmer is wasted. For instance, if an apple has reached a customer for Rs.50/- the farmer has got only Rs.5-7/- for it. The rest of the amount is eaten up by middlemen etc. Thus, this is the existing APMC system.

Now two flaws are patently seen in the system, first- who can become a trader? Since the whole AMPC is controlled by the State Government so much believed fact is that only those people who are politically inclined towards the government attain this position. Second- due to numerous middlemen, the consumer is buying the product at a much-inflated price and the farmer is left with no choice but to sell his produce at a low price.

The APMC act was introduced with a purpose to do away with the exploitation of farmers in the hands of Zamindars and money lenders but with the passage of time, the Act itself has become a means to exploit the farmers. Most of the time, the traders form a cartel and refuse to buy the produce beyond MSP, on the other hand, the production of the farmer is perishable in nature and hence, he is bound to sell it at the lowest cost, quoted by traders. To increase the MSP, farmers of various states have appealed multiple times. Thus, the APMC Act has become counterproductive and failed to fulfil its purpose. Even if we do not come up with a new Farm Bill, still the APMC should be amended for the betterment of farmers. Additionally, the government must interfere a little less in the matters of agriculture to bring in reforms in the hands of private organisations. However, the new mechanism should be well equipped with the problems of the  21st century, such as if the export gets cancelled, who would bear the cost? What should be the consequence if the traders are buying produce in less than MSP?

Findings in the new Farm Bill

On the other hand, the newly passed farm bills will give farmers the freedom to trade across states and empower them to turn into traders of their own products and be in control of the process. The intent behind these three bills is that the new regulation will create an ecosystem where the farmers and traders will enjoy the freedom of choice of sale and purchase of agri-produce and promote barrier-free inter and intra-state trade and commerce outside the physical premises of markets notified under State Agricultural Produce Marketing legislations. Practice similar to the new farm bill has already been adopted by some states in India such as- Karnataka, Bihar and Maharashtra. These states have figured out a remedy of paying penalty for the foul on part of traders to buy produce lesser than MSP and also they talk about paying remuneration to farmers. The agriculture sector is pretty much monopolised, hence it is the need of the hour that the government should withdraw its involvement because a monopoly for that matter is not healthy for any sector. It is a well-established fact that monopoly benefits only a certain section of people and it eradicates fair play.

Why are some states exceptionally vociferous?

Moving on to see the disparity in the intensity of revolt in various states, for which we need to understand that post-independence, not all states have developed at the same level or at the same pace, hence, some states are referred to as rich states such as Maharashtra, Gujarat, Tamil Nadu and Karnataka whereas, some states are referred as poor states such as Punjab. Therefore, for the development of a particular state, the funds are partially raised by the state themselves and some amount is donated by the Centre.  But this donation is not equal for all states. Suppose, all the States and UTs in India pay Rs. 100/- to Centre, now centre after collecting this amount has to redistribute it while redistributing it will not return Rs. 100/- to each state rather some states may get Rs. 15 or Rs. 40 or Rs. 150, depending on their requirement to develop so if it’s a poor state it may get more than it contributes i.e. more than Rs. 100 and on the contrary a rich state may end up getting lesser than-what it contributed, in this example, less than Rs. 100/-

The amount unreturned from the Centre could have been used for the State’s own development. Now let us apply the same logic in agricultural income. For its development, a States relies on its own income and contribution from the state, but we have noticed that during redistribution some states get less than what they contribute, so the States has to fill the monetary gap created by the Centre. The unreturned amount could be used by the state in its rural development, keeping this in mind, let us see case by case analysis.

Say in Punjab, in turn only Rs. 40 comes in lieu of Rs. 100, but it does need funds to develop its state, for this purpose State levies taxes on mandis, this tax is highest in Punjab, for the current year its value was 1750 crore.

It must be noticed that the tax amount is obtained from the mandis but the new system talks about eradicating the mandi system and creating a sort of ecosystem and the tax levied will not be credited into the state’s piggy bank leading to sufferings in the state development. In 2015, Shanta Kumar Committee gave a finding, which said there are only 6% of the farmers who are actually receiving the benefit of MSP. 94% of the farmers are not even aware of the concept of MSP.    

More than half of all government procurement of wheat and paddy in the last five years has taken place in Punjab and Haryana, according to Agriculture Ministry data. More than 85% of wheat and paddy are grown in Punjab, and 75% in Haryana, is bought by the government at MSP rates. Farmers in these States fear that without MSPs, market prices will fall.

Deduction of power to make law on “Agriculture”

The Seventh Schedule of the Constitution contains entries upon which Centre, State or both together can make laws in relation to any issues (i.e. Union List, State List and Concurrent List). List II; Entry 14 of the Constitution specifically provides power to the State for making laws in any matter relating to agriculture. 

Now, on the other hand, the Constitution provides power to the Union under Article 248 to legislate any matter which is of the State List, in the National Interest. This Article breaks all the distinguishing powers and barriers given in List I, List II or List III and provides ultimate power to the Union for making any law in any respect if they ought to believe that it is in the national interest.

On the basis of my understanding, two questions remain unanswered: 1st, what are the criteria to calculate a matter to fall under National Interest and 2nd whether the constitution-makers, while inserting this Article wanted to shadow List II under the power of Union?

Recently Union with the assent of the President passed the Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020, the Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Bill, 2020 and The Essential Commodities (Amendment) Bill 2020 by the use of Entry 33 in the Concurrent List. This is a clear example of the crossing lines and misuse of the power vested under Article 248 of the Constitution by ultimately weakening the power of the State to make law under List II on the matter relating to Agriculture by maintaining the supremacy of the Union to make laws over matters of Agriculture. In the past also by using Entry 33, List III, the Union passed the Essential Commodities Bill, 1955.

To conclude, the farm bills (now Acts) look beneficial on the face of the farmers but it will be fruitful at the cost of state development. Also, the farmers may not be able to sell their produce at MSP since it will not exist anymore. At the same time, the government must do something to educate the farmers regarding their rights and benefits. Farmer’s reforms and farmer development must not be limited to passing bills but letting it reach them too.

Indian Federal Structure: An Umbilical Cord between Centre and State

In this post, I will be analysing the Indian Federal Structure. The structure of the Indian Constitution is so unique that it is impossible to describe it in simple terms. Here, I will try to go through various Constituent Assembly debates and scholarly views to conclude the real ‘character of the Indian Federal Structure’.

“Personally, I do not attach any importance to the label which may be attached to it-whether you call it a Federal Constitution or a Unitary Constitution or by any other name. It makes no difference so long as the Constitution serves our purpose” – Rajendra Prasad.

The Indian Constitution is sometimes called “federal”, “Quasi-Federal”, “Sui-Generis” or “Cooperative Federalism”. But interestingly the founding fathers themselves refused to adhere to any theory or dogma about federalism. As G. Ayyangar said in the assembly, ‘India had unique problems which were not confronted other federations in history’. (CAD Vol. V, page 38). As we all know, federalism does not have any ‘stable meaning’ or definite concept. Therefore, as L.K. Maitra said the founding fathers have pursued ‘the policy of pick and choose to what would suit them best, what would the genius of the nation best’. The outcome that we see today is sui generis (unique) Constitution.

As Granville Austin says the most singular aspect of the drafting of the federal provisions was the relative absence of conflict between the ‘centralizers’ and the ‘provincialists’. There no discussion on the effect of emergency provisions, distribution of powers between centre-state or over the distribution of revenue (which we see as a problem now due to the implementation of GST). The assembly members wanted more revenue for the states but they settled that the Union should collect the money and then distribute. The federal structure, as we see today, was acceptable to most of the members of the assembly. According to Dr Ambedkar,

“Ours is a Federal Constitution inasmuch as it establishes what may be called a Dual Polity which will consist of the Union at the Centre and the States at the periphery each endowed with sovereign powers to be exercised in the field assigned to them.”

Ambedkar said the Constitution avoided ‘tight mould of federalism’ and could be ‘both unitary as well as federal according to the requirements of time and circumstances’.

Reasons for the Centralizing tendencies: A Historical Account

I. Gandhi v. Nehru?

Gandhi wanted political decentralization where the focus is on the micro-level governance as opposed to centralized government. The idea is derived from the drawback of centralized decision making at the macro governmental levels. According to Gandhi decentralization of political power is the basic requirement for the success of true democracy. The concentration of power in his view distorts all democratic values. So he thought that “possession of power makes men blind and deaf; they cannot see things which are under their very nose, and cannot hear things which invade their ears.” Thus, his linking for decentralization originates from his urge for the shrinking of the state and the deepening of the roots of democracy. He, therefore, asserted that “If India is to evolve along non-violent lines; it will have to decentralize many things. Centralization cannot be sustained and defended without adequate force”.

But the assembly had other ideas and the way in which the Assembly framed these provisions, however, it may be helpful to look at the ‘forces bearing on its decisions’. The conditions precedent to the formation of the constituent assembly urged the members to create a powerful centre to prevent the country from disintegrating. Although the Government of India Act of 1935 gave powers to the provinces, the power was always in the hands of the British (centralised). Here the report of the Joint Parliamentary Committee stated that the central government under the 1935 Act would cease to authority over the matters listed under the provincial list, but ‘in virtue of his (Governor-General) powers supervising the Governors, he will have authority to secure compliance in certain respects with directions which he may find it necessary to give’. This centralizing tendency affected India’s future, as Austin says. The Indian never, in reality, got to participate in the ‘real’ federal process as seen in the USA or Australia.

Further, Nehru said, in contradiction to Gandhi, in 1936 that, ‘it is likely that free India may be a Federal India, though in any event there must be a great deal of unitary control’. Communalism also impacted the Indian federal structure and the effect of communal tensions on plans for a federal structure is evident in the reports of Nehru and Sapru Committee. Nehru in the report said, ‘We are called upon to determine the principles of the Constitution after considering these divergent views’ before us and they recommended for centralized federal structure based on 1919 Government of India Act. In the Sapru committee, the members wanted the provinces to have the ‘residuary power’ (as opposed to Indian Constitution currently which resides this power in Centre). But after the bloodshed of partition, the second report of Union Powers Committee dated 05.07.1947 in Paragraph 2 suggested that,

“It would be injurious to the interests of the country to provide for a weak central authority which would be incapable of ensuring peace, of coordinating vital matters of common concern, and of speaking effectively for the whole country in the international sphere… the Soundest framework for our Constitution is a federation with a strong Centre.” (Page 70-71)

In the meeting of the Negotiating Committee of the Chamber of Princes and the Assembly’s States Committee (08.02.1947), Nehru said we need to deal with the situation which might happen after the partition wherein there would be economic, refugee and food crisis. The new provinces might not be able to bear the strains of the new responsibility, hence, it was feasible to adopt a strong central government which could deal with the problems.

II. Communalism: Community rights over States’ rights

The issue of communal politics since the 1920s till the independence also influenced the demand for a strong centre. The need for communal representation was more important than the bifurcation of power between the provinces (states) and the Centre. The emotional Indian, as Austin calls them, wanted community rights over the states’ rights, which were secondary and never assumed the importance they had in Australia and the USA. Even in 1919 and 1935 Acts, more reliance was placed for community rights (Muslims and Hindus) rather than rights of the provinces. The demand for the partition unified the provinces with the centre. Responsible Indian leaders, already confronted with a fragmented society, believed no new, divisive forces should be introduced.

Cooperative Federalism in India

In my opinion, the Indian state is neither quasi-federal nor completely federal. But what we have adopted is Cooperative Federal structure in which all governments has to understand an essential point that they are not independent rather interdependent and they should act for maximization of the common good [as also put forth by Professor M.P. Jain].

Even the Constituent Assembly religiously embraced ‘cooperative federalism’ which is characterized by the interdependence of federal and regional governments. According to Austin, it “produces a strong central government, yet it does not necessarily result in weak provincial governments that are largely administrative agencies for central policies”. Indian federalism has demonstrated this. Also, Geoffrey Sawer proposes that cooperative federalism has the following characteristics: (a.) Centre and States have a reasonable degree of autonomy [as seen in the distribution of lists]; (b.) Each of the parties can bargain about the terms of cooperation, and; (c.) at least if driven too hard, decline to cooperate. Although these pointers are not directly applicable to the Indian scenario, the Union and the States have shown to work in harmony in avoiding constitutional discord.

One of the benefits of this type of federal structure is, in words of Hon’ble Justice Dipak Misra, that the “national vision as set out in the Preamble to our Constitution gets realized”. The approach of the governments might be different, but the ultimate goal and objective remain the same. This will lead to the strengthening of constitutional functionalism in a Welfare state, like India.

The units of in the Constitution should stress on negotiations for achieving common goals amongst different levels of governments. According to Martin Painter, Australian proponent for Collaborative federalism, says

“The practical exigencies in fulfilling constitutionally sanctioned functions should bring all governments from different levels together as equal partners based on negotiated cooperation for achieving the common aims and resolving the outstanding problems.”

Such an approach requires continuous and seamless interaction between the Union and the State Governments. Under the Indian Constitution, we have Article 263 which establishes the Inter-state council whose duty is to “discuss subjects in which some or all of the States, or the Union and one or more of the States, have a common interest” [like COVID-19, 2020] and to “make recommendations upon any such subject and, in particular, recommendations for the better coordination of policy and action with respect to that subject”. Even the existence for Article 239AA aims for cooperative federalism between NCT of Delhi and the Union, as held in the case of NCT of Delhi v. Union of India. Further, the constitutional vision of cooperative governance is enhanced by the provision made in Article 258 under which the President may, with the consent of a State, entrust to it or to its officers, functions concerning any matter to which the power of the Union extends.

Hence, in conclusion, the Indian Constitution provides a platform for cooperation and deliberation between the states and the Union. The process by which national goals set out in the Preamble and DPSPs are achieved, not by the Union government acting alone, but by some or all of the governments and the territories acting collectively in cooperation. This should be the guiding star to them to move on the path of harmonious co-existence and interdependence.