• brillopedia

COMPARATIVE STUDY: FUNCTIONING OF THE EXECUTIVE AND CENTRE-STATE RELATIONS

Updated: Feb 6

By

Chinmayee Ashutosh Katre, B.A.,LL.B. from ILS Law College, Pune


Federalism in the US has transformed twice; once from competitive to cooperative and then from cooperative to new. In India, it has been cooperative from the beginning. However, with the influx of the pandemic, there has been a surge for the urge for more autonomy by the states. When the lockdown was announced by Prime Minister, on 24th March 2020, no prior discussion between the Centre and the State happened. The coordinated between the Centre and State has always been tied with loose strings in India. The Inter State Council is a constitutional body that only exists for the sake of it. The Council has met 11 times during the past 30 years. The frequency of its meetings speaks for itself. The approach of handling the pandemic has differed in the US and India; but the common factor is the lack of cohesion between the Centre and the States.


The Inter State Council can be created in public interest by the President under Article 263 of the Indian Constitution. The Prime Minister is the Chairman. The Chief Ministers of all the states, the Chief Ministers of the Union territories that have legislative assemblies and six Cabinet Ministers as nominated by the Prime Ministers are the members of this Council. It was not there during the Nehruvian Era. It was formed for the first time after the recommendation of the Sarkaria Commission. It is not a permanent body. Its membership does not involve the participation of civil society, corporations or any non-governmental organizations. It needs to be revamped because its potential is currently underutilized. The Sarkaria Commission recommended that it should give the power to investigate the matters under enquiry. The participation of people is essential for it to become a democratic institution. The Punchhi Commission further recommended that it should be a permanent body that meets thrice a year mandatorily. NITI Aayog, the successor to the Planning Commission, has played a pivotal role in the overall development of the country, but that body is not constitutional. Hence, it is not the best forum for the Centre and States to come together and work parallel to each other.


The Pandemic

A National Emergency was declared by President Trump on 13th March, 2020. The strong federal structure of the United States ensued into a constant tussle between the Federal Government and the states. The President insisted on taking the orthodox federal approach by shrugging the off the responsibility of handling the crisis. The conflict was prominent between the states with a Democrat majority. The exercise of executive power also depends on the person occupying the position, and the transactional nature of the American President took a toll on people’s health in that country. Autonomy to the states proved to be helpful because states had the discretion to decide the lockdown policies in their respective territories.

Even though no national emergency was formally declared in India, the Centre did take matters into its own hands.


A nation-wide Janta Curfew was declared on 19th March 2020 and following that pattern, a national lockdown was declared on 24th March 2020, by invoking Section 2(d) of the Disaster Management Act, 2005. The Essential Commodities Act, 1955 was also amended to include sanitizers and masks. Overpricing of these would result in imprisonment until 7 years or a fine or both. The instructions to handle the epidemic were issues by the Ministry of Home affairs. In other words, the Centre took over and India had a unitary form of government during the initial days of the lockdown.


Distribution of powers

The legislative relations between the Centre and the states are discussed from Article 245-255 of the Constitution of India. Under Article 245, the Parliament has the power to make laws for the entire territory of India or any part of it. The State Legislatures have the power to make laws for the entire state of any part of it. The Parliament also has the power to make extra-territorial laws if they pass the test of ‘territorial nexus’ that was first elucidated by the Privy Council in Wallace vs. Income Tax Commissioner, Bombay. It was stated that there must be a nexus between the subject matter and the extra territorial law enacted. The power of the Parliament to make laws is not absolute. There are three exceptions:

  • Under Article 240, the President can make regulations for peace, progress and good governance for the 4 Union Territories of Dadra & Nagar Haveli, Daman & Diu, Andaman & Nicobar Islands and Lakshadweep. He can also amend, modify or repeal any law made by the Parliament for these states.

  • Under Schedule V of the Constitution, in the scheduled areas, the Governors of the state have the power to declare that the law made by the Parliament is inapplicable in those areas.

  • Under Schedule VI of the Constitution, in the tribal areas of Assam, Mizoram, Meghalaya and Tripura, the Governors may decide at any time that the laws made by the Parliament would not be applicable to those areas, or that those laws should be modified or amended before being applied.


The subject matter jurisdiction has been divided into three lists, viz. the Union List, the Concurrent List and the State List.


In the United States, Article I, Section 9 and 10 lay down the distribution of powers between the Federal Government and the State Governments. Unlike the positive designation of subject matters for both the governments in India, they have the enumerated powers for the federal government, the powers denied to the federal government; the concurrent powers; and the powers enumerated for the state governments and the powers denied to the state governments.


Constitutional Provisions relevant to Covid-19

By the virtue of the 10th Amendment, it is evident that the residuary powers lie with the states or the people. This had been the stance for a very long time. In McCulloch v. Maryland, Marshall, J. stated that the power of the Congress to create a bank was legitimate and also that no state could supersede those powers. That was a turning point.


In India, Article 249 makes it clear that the Centre has the power to make laws regarding the subject matters that are in the State List, in national interest. A strong centre has always been a unique feature of Indian Federalism.


Under the 16th Constitutional Amendment to the US Constitution, the Federal Government can provide funds to the state and local governments. The states enjoy police powers under the 10th Constitutional Amendment. This implies that they have the power to ask people to self-isolate quarantine and restrict businesses from operating. The power to regulate the health and safety of residents within the states is also within the ambit of state powers.


Under the Indian Constitution, it is pertinent to note that Entry 81 of the Union List includes inter-state migration and inter-state quarantine. Entry 1 (Public Order), Entry 2 (Police) and Entry 6 (Public Health) of the State List are relevant. In the Concurrent List, Entry 23 contains social security and employment and Entry 29 talks about prevention of the spread of contagious diseases from one state to another.


On a joint reading of both the Constitutions, it can be understood that both the Central/Federal Government and the State Governments had to coordinate with each other and work together.


Covid-19 Legislation

In the US, a special legislation was enacted with respect to Covid-19, viz. the Corona Virus Aid Relief and Economic Security Act – the CARES Act. It made provisions for cash payments to individuals and corporations that were hurt by the pandemic on a weekly basis. An amount of USD 339 Million was designated as funds to the state and the local governments.

On the contrary, no special legislation to handle the pandemic was enacted. The existing legislations were tailored a little to suit the requirements of the pandemic, viz. the Disaster Management Act, 2005, the Indian Penal Code, 1860 and the Essential Commodities Act, 1955.


Centre-State Coordination

When the signs of the pandemic were first spotted, the Trump Administration ignored those signs. He closed the borders but failed to manage the pandemic internally. There was chaos and confusion because people did not know whom to hold accountable – the federal government or the state government. A Twitter battle ensued between the President and the Governors of states, especially the states governed by the Democrats. While all this was happening, the civilians faced atrocities and were distressed. One in 1450 African Americans died in July, from Covid-19. The African American community faced discrimination with respect to access to health care. Hence, they remained medically disadvantaged. They also comprised a major chunk of the “essential worker” category. Native Americans and the Hispanic population faced a similar situation.

During the initial stages of the pandemic, there was total discord between the Centre and States in India. There was no planning, and the states were informed about it in a hasty manner. They only discussed the strategy to ensure an uninterrupted supply of essential commodities. Migrant workers were hit the worst. On March 24, when the railways and buses were suspended, thousands of workers who were stranded at the station without notice of the means of transport being suspended had nowhere to go. Neither could they return home nor could they go back to their life.


Allocation of Funds

The problem with the funds in the US was regarding the states not having enough money to make the payment for the unemployment insurance. In the state of Pennsylvania, the minimum weekly payment was USD 76 and the maximum weekly payment was USD 580, for duration of 18-26 weeks. Under the CARES Act, it was stated that everyone getting unemployment benefits from the state government would also be eligible for receiving an additional amount of USD 600 per week, and the duration was also extended by another 13 weeks. This meant that the state of Pennsylvania was obliged to pay its residents benefits for almost 39 weeks. However, they had the funds enough only for 11 weeks. Maryland had funds only worth 4 weeks. The rest of the amount had to be borrowed by the states from the federal government.

In India, the Central Government allocated Rs. 11,092 crores under the State Disaster Management Risk Fund. The worst hit states received more funds. Maharashtra received Rs.1611 crores.


Tax Collection

The tax collection of states dropped during Covid-19 because of unemployment. There was a drop in the collection of corporate tax and sales tax. Since people were unemployed, the demand for goods and services also dropped. The states faced budget deficits close to USD 300 billion. The Governor of Pennsylvania laid off many state employees. Retail stores were shut. The travel and entertainment taxes, viz. hotel taxes, concert taxes, taxes collected on lotteries and casinos, also dropped because of the closing down of businesses in many states. The National Governors’ Association came together to ask for funds to the Federal Government.

The 42nd and the 43rd GST Council Meetings took place in October 2020. They highlighted the differences between the Centre and the State. There was no consensus between them. The question before them was how the shortfall faced by the states was supposed to be met. When the GST Compensation cess was introduced in 2017, the Centre had promised the states an annual growth of 14% in revenue. However, if they failed to achieve that growth, they would be compensated by the Centre. The GST Compensation Fund was disbursed by the Centre to the states annually. During the first half of the Financial Year 2020-21, no compensation was paid by the Centre. The cess collected by the states was Rs. 0.65 lakhs. The states faced a shortfall of Rs. 2.35 lakhs. Two options were offered by the Centre to the states. The first option was that the Centre would lend the states Rs. 92,000 crores with a reasonable rate of interest. This amount was later negotiated and increased to Rs. 1.1 lakhs. This amount could be repaid by the states through the cess levied by them. The second option was that the states would have to borrow the entire sum of Rs. 2.35 lakhs from the Centre, and then they would have to return the same to the Centre from the state revenue. Some states also chose the second option because a consensus could not be established.


This lack of consensus poses a question; are we descending the ladder from cooperative federalism to competitive federalism?


Executive vs. Judiciary

The nation-wide protests against the Citizenship Amendment Act, 2019 and now against the three farm laws are proof of the executive taking matters in its hands. These laws were made without enough consultation by the Centre with the states. The Chief Justice of India, Bobde, J. made a remark that he wanted to apologize to the Union for not being able to solve the problem. He further alleged that the Executive had gone ahead and made the laws without enough consultation, leading to protests. Hence, it was their responsibility to solve the differences and make peace with the states. This was just the tip of the iceberg. The Monsoon Session of the Parliament was also cancelled under the garb of Covid-19. One would think that times had changed after the autocracy exercised after the first few decades of independence.


People’s Reaction

When the government introduced the lockdown, with police patrolling, the people in India accepted those restrictions on their freedom and bowed down to it. Indians are known for their tolerance, and they lived up to that. In India, the code that was followed initially was the same, and then the Centre delegated the responsibility to the states.


However, in the US, people were not ready to stay at home or shut their businesses. In Washington, they said that the Governor was exceeding his constitutional authority by imposing a lockdown in the state. Due to state autonomy, every state had a different approach towards handling the pandemic.

In my opinion, the pandemic has had a greater impact on the centre-state relations in India than in the United States because state autonomy is the reality in the US while it is still a dream in India.