The entirety of our world is facing an air of uncertainty, confusion, and conflict due to the pandemic. For a country like India, which has several states and union territories, a population of nearly 1.3 billion people, and a spectrum of diversity, the principle which protects the sanity of this hierarchy is federalism. India has been a host to several types of federalisms that have surfaced in different times since independence. However, lately this particular idea of federalism has been slightly dented due to conflicts between the centre and different states especially in the times of COVID-19 pandemic.Continue reading “Guest Post: Federalism Hung by a Thread in India during the times of COVID-19 Pandemic”
Thus far on this blog, the challenge to the Citizenship (Amendment) Act (hereinafter referred to as ‘CAA’) based on violation of the evolving idea of equality, principles of reasonable classification, the basic structure of the Constitution (secularism) et al. have been discussed. Nevertheless, in this post, I would like to discuss the challenge to CAA based on Article 355 of the Indian Constitution.Continue reading “The Constitutionality of CAA: A different perspective through the lens of Article 355”
[This is a guest post by Preetkiran Kaur who is student of RGNUL, Patiala and an editor at Constitutional Renaissance Blog.]
The Constitution of India begins with a declaration that India is a sovereign democratic republic. This idea of vesting real sovereignty in the people of the country was adopted by the Constitution makers during the days of framing the Constitution.
The rule by the people, of the people and for the people along with a Federal Structure was propounded to establish an egalitarian social order. However, a rigid federal model could not be adopted owing to the unique challenges being faced such as building communal tensions, poor state of agriculture and farmers along with low levels of economic development at the time of independence. It was concurred that a cooperative federal model (which has been discussed on this blog, here) shall be implemented where States and Union Territories shall be given certain autonomy in terms of legislative, executive and judicial powers. Geoffrey Sawer defined cooperative federalism as:
A system of governance where ‘each of the parties to the arrangement has a reasonable degree of autonomy, can bargain about the terms of the cooperation, and at least if driven too hard, decline to cooperate.’
Thus, as KC Wheare coined, ‘a quasi-federal model’ was opted for all the states of the nation which would rely on ideas of co-operation, negotiation, statesmanship and constitutional morality. However, the unique position of Delhi as the national capital became a peculiar case of contention. Hence, The Government of National Capital Territory of Delhi Act, 1991 (hereinafter referred to as ‘The Parent Act’) gave it the status of a union territory with a Legislative Assembly and Council of Ministers to aid and advise the Lieutenant Governor. It is neither completely vested with powers of a state but has more rights than a Union Territory.
Thus, Dr BR Ambedkar stated on the floor of the Constituent assembly that the Constitution is “both unitary as well as federal according to the requirement of time and circumstances.”
Over the years, the interpretation of the NCT Act, 1991 has often been examined by the Courts and the landmark judgment of GNCTD v. UOI is an important one in this regard, which is summarised and discussed on this blog, here. The case settled the conflicting questions of law. However, the present Central government in the year 2021 passed the GNCTD (Amendment) Act 2021 (hereinafter referred to as ‘The Act’) which usurped the powers of the Legislative Assembly and the executive of Delhi. The author thus attempts to identify certain constitutional challenges against The Amendment Act, 2021 which undermines the principles of federalism and democracy.
Scrutinising the GNCTD (Amendment) Act 2021
Section 2 of The Act amends Section 21 of The Principal Act and states that “the expression “Government” referred to in any law to be made by the Legislative Assembly shall mean the Lieutenant Governor.” This provision is in direct contradiction with the democratic ideas of representative governance followed in India. The Parliamentary system practiced in India relies on elected representatives chosen on the basis of adult suffrage. Thus, members of the Legislative assembly of Delhi elected under Article 239AA represent the popular will of the People. Sixty-Ninth Amendment was specifically brought to establish the Westminster Model in Delhi and have a democratic set up. The use of the word ‘shall’ in Article 239AA clause (2) signifies that establishing a Legislative Assembly using adult suffrage shall be a mandatory provision. The real power vests with the elected representatives or the Council of Ministers which in turn have a collective responsibility towards the State legislature to ensure accountability. J. Chandrachud in GNCTD v. UOI opines that, “Collective responsibility, as a constitutional doctrine, ensures accountability to the sovereign will of the people who elect the members of the legislature.”
Thus, the democratic idea of representative government is robbed in a case where Lieutenant Governor would be synonymous to the government. The Lieutenant Governor is appointed by the Central government and not directly by the people. The Central government represents a very small section of the population which cannot be vested with the power to replace elected representatives with nominated heads. The Lieutenant Governor has no collective or individual responsibility to the public whereas democracy ensures direct nexus of the two.
Second, Section 3 of The Act amends Section 24 of The Principal Act and states that any matter which does not fall under the Legislative Assembly shall fall within the powers of the Lieutenant Governor. Article 239AA (3)(a) states that the Legislative Assembly shall have the power to legislate on matters in the State Lists except on issues of police, public order and land. These subjects fall under the purview of the Central government. Vesting the power to legislate upon these subjects on a nominated head instead of an elected representative undermines the principles of electoral democracy in India. It was iterated in GNCTD v. UOI that bestowing the Center the powers which have been constitutionally provided to the states is an act against the basic tenets of democracy.
In addition to that, Section 4 of The Act amends Section 33 of The Principal Act and states that rules of procedure for conduct of its business shall be pari materia to the Rules of House of People. In addition to that, it truncates the Legislative Assembly to frame any rules pertaining to its day to day administration and is powerless in terms of conducting enquiries. Article 239AA (3)(a) also explicitly provides the power to the Assembly to conduct its business and frame rules accordingly.
Lastly, Section 5 of The Act amends Section 44 of The Principal Act and states that any executive action can be taken by the Legislative Assembly only after consulting the Lieutenant Governor. The term ‘aid and advise’ has been employed in the Article 239AA implies that the Council of Ministers shall aid him in performance of his duties. In addition to that, the difference of opinion between the Lieutenant Governor and Council of Ministers shall be settled by the Lieutenant Governor only in cases where it is urgent for him to take immediate action. In the judgment of GNCTD v.UOI, the Constitutional Bench held that the phrase ’on any matter’ does not imply ‘every matter’. The primary law making power vests in the assembly and role of the Lieutenant Governor is merely that of an Administrator.
These provisions which are in stark contradiction to the text of supreme lex, i.e. Constitution of India, and they violate the Doctrine of Pith and Substance. The Rule states that the Parliament or State Legislature shall exercise its functions as permitted by the Constitution and cannot encroach upon powers of the other. Here, the Parliament by passing the Amendment Act trespasses its domain and infringes upon the powers of the Legislative Assembly mandated by the Constitution. The Supreme Court in the case of Bharat Hydro Power Corporation Limited v. State of Assam laid down a three tier test to determine the application of the doctrine. For applying the principle of “pith and substance” regard is to be had: 1. The enactment as a whole; 2. To its main objects; and, 3. To the scope and effect of its provisions.
Looking at the Amendment Act as an organic whole and examining its statement of Objects and Reasons, the intent lies to limit the powers of the Legislative Assembly by entrusting legislative powers to the Lieutenant Governor. The effect of the provisions as discussed undermine the principle of representative government and collective responsibility which form the bedrock of democracy.
This rule of ‘pith and substance’ stems from the idea of federalism which in the case of SR Bommai v. Union of India was classified as the basic structure of our Constitution. Encyclopedia Britannica defines federalism as:
“Federalism, mode of political organization that unites separate states or other policies within an overarching political system in such a way as to allow each to maintain its own fundamental political integrity.”
It was held in the celebrated judgment of Kesavananda Bharati v. State of Kerala that the basic structure of the Constitution cannot be amended or abrogated. The same view was reiterated in Indira Nehru Gandhi v. Raj Narain, T.N. Seshan, CEC of India v. Union of India and others and Kuldip Nayar v. Union of India others.
Thus, by disturbing the distribution of powers between Center and state, it becomes an imminent threat on the co-operative federalism model followed in India. The federal balance calls for division of powers between Center and states with a comparatively strong center. However, the Rule of Law does not permit arbitrary interference in the powers of the State without a legitimate cause. Center has a constitutional duty to uphold constitutional morality and cannot act based on its whims and fancies. The Apex Court in the case of In re: Under Article 143, Constitution of India, (Special Reference No. 1 of 1964) held that “the essential characteristic of federalism is the distribution of limited executive, legislative and judicial authority among bodies which are coordinate with and independent of each other.”
To sum up, the author would like to conclude that the controversial Amendment Act passed by the Parliament violates not only the spirit of the Constitution but also the basic structure. The provisions of the Constitution entail a sovereign and democratic spirit where Rule of Law shall prevail. However, as discussed in the article, the legislative intent and the legislation as a whole do not pass the test of democratic federal set up of a nation. The present legislation although received the assent of the President but should be quashed by the Apex Court to fulfil its role of a ‘Guardian’ of the Constitution.
[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.
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.
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 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 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’. 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. 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”.
- 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 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” 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”, 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. 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 and Rule 50 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.
 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.”
 COMs to be not more than ten percent of the total number of members in the Delhi Legislative Assembly.
 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)
 New Delhi Municipal Corporation v. State of Punjab, (1997) 7 S.C.C. 339.
 Article 239AA(3)(b)
 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”.
 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.
 The Delhi Case at pp.161-162, Paragraph 195.
 J.L. Austin, How to do Things with Words, The William James Lectures delivered at Harvard University, 1955.
 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.
 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.
[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)
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.