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Asymmetric Federalism in India: With special Reference to North East States and Jammu and Kashmir | Important Acts and Laws for Judiciary Exams PDF Download

Introduction

  • Federalism explores why regions come together to form federations and how they stay united.
  • It involves bargaining for favorable terms when joining a federation.
  • "Asymmetric federalism" refers to unequal power dynamics among units in a federation.
  • Asymmetry can exist vertically (between the center and states) and horizontally (among states).

Indian Federalism

  • The Indian Constitution is federal with some unitary aspects.
  • Special status is granted to certain states due to cultural diversity and unique socio-political situations.
  • India exemplifies asymmetric federalism, notably with the North Eastern States and Jammu and Kashmir.
  • The recent abolition of Article 370 is briefly discussed.

Key Features of Indian Federalism

  • Cultural Diversity: Different regions with distinct cultures are accommodated within the federal structure.
  • Special Status: States like Jammu and Kashmir have specific privileges due to historical contexts.
  • Asymmetric Nature: Power distribution is not uniform across all states, leading to varying degrees of autonomy.
  • Recent Changes: The removal of Article 370 altered the constitutional status of Jammu and Kashmir.

Distinctive Features of Indian Federation

  • Indian federation differs from classical federations like the USA. It is not an 'indestructible union of indestructible states'. Only the union is indestructible, not the states. Article 3 of the Constitution empowers the Parliament to create new states, alter boundaries, and change names.
  • Equality between the Union and states is not a founding principle of the Indian federation. The central government holds significant powers and can encroach upon the legislative and executive domains of the states.

Role of Asymmetric Federalism in Indian Context

  • Asymmetric federalism in India plays a crucial role in accommodating diverse group interests and identities. It serves both 'coming together' and 'holding together' federalism. However, such accommodations must not compromise the fundamental principles of equality and fair treatment.

Reasons for Federalism

  • Federalism results from rational bargains among different constituents for political or economic benefits.
  • In political bargains, constituents trade political autonomy for security against external threats.
  • Economic bargains aim to establish a common market and optimize public services by leveraging economies of scale and catering to varied preferences.

Motivations for Special Status

  • Special status in federalism may stem from the desire to expand economic opportunities, safeguard against exploitation by more powerful members, enhance freedom and representation, or preserve cultural and religious identities.
  • Differences in bargaining strength among constituent units can lead to asymmetry in federal arrangements.

Asymmetric Arrangements

  • Asymmetric arrangements in federations can be de jure (formalized in the constitution) or de facto (practiced in reality).
  • Special arrangements may evolve over time, providing unique considerations until units are fully integrated into the federation.
  • Political alignments in democratic systems can also lead to asymmetry in federal structures.

Debate on Federal Structures

  • The discussion on the ideal federal structure remains ongoing globally.
  • Indian federalism, with its unique features and special status given to certain states like the North Eastern States and Jammu and Kashmir, raises questions about the effectiveness of asymmetric federalism.
  • Analyses of both advantages and disadvantages of asymmetric federalism in the Indian context are essential to determine its suitability.

Objectives

  • Nature of the study and sources of the data: This project work involves an analytical and doctrinal approach, utilizing both original and secondary sources for information gathering. Books and other references recommended by faculty have provided the foundational structure for this project.
  • Limitations of the study: This study focuses specifically on understanding the asymmetry concerning the North Eastern States and Jammu and Kashmir. References to Union Territories are only incidental in this context.
  • Contribution of the study: This paper delves into an analysis, supported by statistics, of the financial assistance and other benefits extended to special states. It also touches on the recent revocation of Article 370 and seeks to comprehend how the asymmetric feature is significant given the diversity of our nation.

Question for Asymmetric Federalism in India: With special Reference to North East States and Jammu and Kashmir
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What is the main characteristic of asymmetric federalism?
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Evolution of Asymmetric Arrangements in Indian Federalism

  • Historical Background: India's federal structure has evolved over time, accommodating diverse needs and realities across different regions.
  • Examples: For instance, the special status granted to Jammu and Kashmir under Article 370 exemplified a unique arrangement within the Indian Union.
  • Reasons for Asymmetry: Asymmetry in federal arrangements can stem from historical, political, or socio-economic factors.
  • Impact on Governance: Such asymmetrical arrangements can pose challenges for governance, requiring tailored policies and approaches for effective administration.
  • Comparative Analysis: Comparing the asymmetric features of different states provides insights into the varying dynamics of Indian federalism.

Historical Background

  • The power distribution between the central and state governments in the Indian constitution is influenced by historical and political factors.
  • After World War II, the British Cabinet Mission proposed a federal constitution for an independent India, with the central government handling foreign affairs, defense, and communications.
  • The Muslim League's demand for a separate Muslim nation led to the creation of Pakistan with Muslim-majority regions.
  • Instead of a weak federal government, India adopted a strong centralized government to maintain unity among diverse economic, linguistic, and cultural entities.
  • Centralization was deemed necessary to bring together regions previously under direct British rule and numerous princely states.

Understanding Asymmetric Structure at Independence

  • Background of Asymmetric Federalism:
    • Asymmetric federalism in Indian history originates from British colonial rule.
    • The British integrated territories under direct rule differently from princely states.
  • Classification of States:
    • States were categorized into Part 'A', 'B', 'C', and 'D' based on their governance status.
    • Part 'A' included provinces directly ruled by the British with some autonomy.
    • Part 'B' comprised princely states with individual treaties like Hyderabad and Mysore.
    • Part 'C' covered princely states acceding to the Union with specific terms.
    • Part 'D' encompassed territories not fitting the above categories, forming Union Territories.
  • Power Dynamics and Bargaining:
    • Princely states relinquished sovereignty for security and revenue, known as 'privy purses'.
    • Accession terms varied based on bargaining strength, often favoring the Indian National Congress.
    • Exceptions like Hyderabad saw military integration into the Union due to forceful measures.

Assimilation of Units after Independence

  • While many former princely states, particularly the Part 'B' states, continued as administrative units post their integration into India, this continuation was not a mandatory part of the agreement.
  • The reorganization of state boundaries starting from 1953, as freely permitted to the center by Article 3 of the constitution, gradually diminished the significance of these states.
  • The Constitution allowed for sub-state structures for regions closely associated with certain former princely states, although this had limited practical significance as the states emerged as the primary subnational units of governance.
  • In general, princely states ceased to hold relevance as distinct geographic entities. This outcome contrasts with a typical federation scenario where constituents would usually maintain their identities.
  • The asymmetric arrangement acknowledged the diverse set of institutions and administrative norms in the country, which eventually unified over time.
  • The asymmetries observed in 1947 concerning almost all princely states vanished from Indian federalism as the years progressed.

Asymmetries in Practice in Indian Federalism: A Case Study

Importance of Jammu and Kashmir, North Eastern States, and Union Territories

  • Jammu and Kashmir, North Eastern States, and Union Territories hold unique significance within the Indian Federation due to their distinct historical, cultural, and geopolitical contexts.
  • These regions often require special considerations in governance and administration to address their specific needs effectively.
  • For example, Jammu and Kashmir's special status under Article 370 granted it autonomous powers in various domains like land ownership and residency rights.
  • Similarly, the North Eastern States, with their diverse ethnicities and geographical challenges, demand tailored policies for sustainable development and social harmony.

Asymmetries with Special States

  • Asymmetries in Indian federalism manifest prominently concerning special states like Jammu and Kashmir, North Eastern States, and Union Territories.
  • These asymmetries arise from historical legacies, geopolitical considerations, and unique socio-cultural dynamics present in these regions.
  • For instance, the special status of Jammu and Kashmir created a distinct governance framework that differed from other states in India, leading to complexities in policy implementation and administrative practices.
  • In the case of Union Territories, the direct control by the central government highlights asymmetrical power dynamics compared to states with elected governments.

Special Position of Jammu and Kashmir

  • The state of Jammu and Kashmir stood out due to its unique circumstances.
  • In 1947-48, the state acceded to the Indian union under special terms outlined in Article 370 of the Constitution.
  • Article 370 granted Jammu and Kashmir a distinctive status within the Indian union.
  • Under this article, the state had its own constitution and a chief executive with a title akin to that of a Prime Minister.
  • The state was assigned specific functional responsibilities, with the center's authority limited to foreign affairs, defense, and communications.
  • In contrast to other states, Jammu and Kashmir retained residuary powers, showcasing a significant deviation from the norm.
  • Although initially labeled as a temporary provision, the Supreme Court recognized Article 370 as having acquired a permanent status.
  • Recent developments have seen the revocation of Jammu and Kashmir's special status, subjecting it to all constitutional provisions without exceptions.
  • This move raises questions about the federal structure of the country, particularly regarding the unilateral imposition of majoritarian views on a state without its consent.
  • There is a debate on whether the central government can override a state's autonomy, contradicting the federal principles envisaged by the constitution drafters.
  • The interpretation of these issues remains a subject of judicial deliberation.

Integration of North-Eastern Hill States

  • Background of Administrative Reorganization in India:
    • India's administrative reorganization primarily focused on linguistic boundaries.
    • Exceptions were made for the north-eastern region due to its unique ethnic, cultural, and traditional diversity.
  • States in the North-Eastern Region:
    • The north-eastern part of India comprises Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, and Tripura.
    • Among these, only Assam has a population comparable to other Indian states.
  • Political Status of the States:
    • Most of these states were upgraded from Union Territories to states, granting them political status similar to larger Indian states.
    • Each state holds equal weight in constitutional amendments, requiring 50% of states for ratification.
  • Special Provisions for North-Eastern States:
    • Article 371 includes clauses granting special powers to the north-eastern states.
    • These provisions safeguard customary laws, religious practices, land ownership, and migration restrictions.
  • Protection of Group Rights:
    • The Indian Constitution includes provisions to protect group rights and address social inequalities.
    • Various provisions ensure respect for diversity and affirmative action for disadvantaged groups.
  • Ethical and Normative Judgments:
    • Provisions for northeastern states are similar to those for disadvantaged groups, aiming to address specific inequities.
    • These provisions do not necessarily relate to federalism but focus on equity goals.

Formation of Union Territories

  • Union Territories (UTs) are unique federating units in Indian federalism, distinct from states, created due to various reasons like size, cultural differences, or specific needs.
  • Initially, all UTs were centrally administered without a legislature but had representation in the lower house of Parliament.
  • Two new types of UTs, Pondicherry and Delhi, were created with unicameral legislatures where members are directly elected.
  • Both Pondicherry and Delhi have councils of ministers accountable to their legislatures, headed by Chief Ministers, and a Lieutenant Governor appointed by the union.
  • While Delhi's Chief Minister is appointed by the President on the Lieutenant Governor's recommendation, Pondicherry's legislature has partly elected and partly nominated members.
  • Delhi, despite its state-like status, has limited powers as key subjects like land, police, and civil services are under the union government's jurisdiction.
  • Recently, Jammu and Kashmir and Ladakh transitioned into Union Territories by losing their state status.

Asymmetric States Structure

  • Asymmetric states in India exhibit variations in their structures due to factors like cultural diversity, historical reasons, or geographical considerations.
  • These states may have unique provisions in terms of governance, representation, or administrative setup.

Working of Asymmetry

  • Asymmetry in states influences decision-making processes, resource allocation, and policy implementation.
  • It can impact governance efficiency, local autonomy, and overall socio-political dynamics within the state.

Specific Asymmetries in Indian Constitution

  • Administration of Tribal Areas: Special provisions exist for the administration of tribal areas within certain states.
  • Intra-State Regional Disparities: Differences in development and resources allocation within states are addressed through specific measures.
  • Law and Order Situation: Governors in different states have varying responsibilities, such as special duties related to maintaining law and order.
  • Legislative Assembly Seats: Allocation of seats in legislative assemblies is fixed differently for various states like Maharashtra, Gujarat, Assam, Manipur, Andhra Pradesh, Sikkim, Arunachal Pradesh, and Goa.

Special Responsibilities of Governors

  • Maharashtra and Gujarat: Governors have a duty to establish development boards for backward regions with a focus on education, training, and employment.
  • Assam and Manipur: Committees in these states are mandated to look after the welfare of tribal/hill communities.
  • Andhra Pradesh: Ensuring equitable opportunities in public employment and education, including the establishment of a central university.
  • Sikkim and Goa: Legislative assemblies in these states are mandated to have a minimum number of members for representation.
  • Arunachal Pradesh: The governor has a special responsibility concerning law and order, acting based on consultation with the council of ministers.

Debate on Federal Theory

  • Aberrations in Institutions: Scholars have noted some irregularities but highlight the constitutional protection provided to minorities and marginalized groups.
  • Impact of Asymmetrical Federal Arrangements: Discussions on the pros and cons of asymmetrical federal systems, with differing views on their effectiveness in diverse nations.
  • Protecting Minority Rights: Arguments for the equitable and necessary nature of asymmetrical status in protecting minority rights in multicultural and multinational countries.

Economic Asymmetry

  • The formation of a federation involves various states with different histories, resources, policies, and institutions, leading to inherent economic disparities.
  • States in India exhibit significant variations in terms of geography, demography, and economy:
  • Rajasthan is approximately 90 times larger in area than Goa.
  • Uttar Pradesh's population is about 308 times larger than Sikkim's.
  • Population density ranges from 13 in Arunachal Pradesh to 901 in West Bengal.
  • Maharashtra, with the highest Net State Domestic Product (NSDP), surpasses Sikkim's NSDP by 284 times.
  • Per capita incomes also vary significantly, such as Goa's per capita NSDP being nine times higher than Bihar's.
  • States are categorized into special and non-special categories based on economic criteria:
  • Special category states receive special status and assistance from the central government.
  • Non-special category states are further classified based on per capita NSDP into high-income, middle-income, and low-income states.
  • Economic factors do not solely determine the federal structure; non-economic factors play a crucial role:
  • Special category states are often economically unviable, emphasizing the significance of non-economic considerations.
  • Even among non-special category states, disparities exist in terms of size, population, and income levels.
  • Variations within each category of states:
  • Population disparities: Uttar Pradesh's population is 123 times larger than Goa's.
  • Income gaps: The highest and lowest income states differ by 36 times.
  • Unequal economic foundations impact intergovernmental relationships:
  • Non-uniform assignment systems lead to significant fiscal capacity differences among states.
  • Variances in size, population, and terrain result in varied expenditure needs and challenges in equalizing fiscal capacities.
  • Challenges faced by states:
  • States like Sikkim have unique taxation powers due to their economic constraints.
  • Small jurisdictions limit economies of scale in service provision.
  • Hilly terrain increases the unit cost of public services in certain states.
  • Dependency on central transfers:
  • Special category states heavily rely on central transfers for funding, with more than 80% of their expenditures being financed by these transfers.
  • Special category states receive over four times the average transfer compared to general category states on a per capita basis.

Asymmetric Design of the Transfer System

  • The unique positioning of special category states is not only reflected in structural and financial differences but also significantly impacts how central transfers are allocated to states.
  • Due to their relatively small size, special category states benefit from higher per capita transfer amounts which do not burden the nation significantly.
  • Collectively, these states comprise only about five percent of the total population, reducing the perceived cost to the rest of the federation.
  • The smaller size of these states fosters political cooperation, enabling them to form councils for policy coordination and negotiation with the central government, unlike other states where zonal councils are less significant.
  • The transfer system in Indian federalism primarily consists of three sources: statutory transfers recommended by the Finance Commission, plan assistance by the Planning Commission, and specific purpose transfers by individual central ministries.
  • Over 200 schemes administered by central ministries influence resource allocation and regional policies, including direct central investments, in different states.
  • The Finance Commission, appointed every five years, traditionally recommended transfers based on impartial assessments, while the Planning Commission focused on plan requirements.
  • The role of Finance Commissions has shifted towards non-plan requirements, while the Planning Commission handles plan requirements, with the National Development Council setting allocation formulas since 1969.
  • Central assistance for state plans has transitioned from project-based allocations to formula-based distributions, though discretionary elements have increased over time.
  • Discretionary transfers by central ministries under various schemes have grown, with about two-thirds of transfers controlled by the Finance Commission.
  • The proportion of formula-based assistance for state plans has diminished over the years, indicating a rise in discretionary elements within the transfer system.

Finance Commission Transfers

  • Finance Commission transfers consist of tax devolution and grants. The Commission's approach involves evaluating the fiscal positions of both the center and states, forecasting revenues and non-plan expenditures of states for the next five years.
  • The Commission recommends the distribution of central taxes to individual states based on selected economic indicators, aiming to fill the gap between projected revenues and non-plan expenditures with grants-in-aid.
  • Discretionary elements play a role in the formula-based transfers by the Finance Commission. The Commission determines the center and states' shares in central taxes primarily based on past shares and relative requirements.
  • For instance, the Eleventh Finance Commission suggested allocating 29.5% of net collections from 20 central taxes to states for the period 2000-05. This allocation is influenced by general economic variables and their assigned weights.
  • The framers of the constitution intended for the Finance Commission to be the primary body responsible for distributing transfers, acting as a statutory semi-judicial authority.
  • However, recent controversies have arisen regarding the Commission's constitution, approach, methodology, and recommendations.
  • The Ninth Finance Commission faced criticism for using poverty ratio as a criterion for distributing tax shares, which some argue is not the purpose of general-purpose transfers.
  • There is a debate over whether the transfer system should reward states based on poverty alleviation efforts or penalize those not making sufficient attempts to reduce poverty.
  • Criticisms were also directed towards specific discretionary transfers made by certain Finance Commissions, such as funding slum clearance in Bombay and Calcutta or compensating states like Andhra Pradesh for revenue loss due to policy changes.
  • An important concern raised is the heavy reliance of special category states on central transfers, with over 80% of their revenues coming from such sources. This reliance can lead to challenges in reducing deficits and may be viewed as poor state performance.

Question for Asymmetric Federalism in India: With special Reference to North East States and Jammu and Kashmir
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What factors can lead to asymmetry in federal arrangements?
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Understanding Asymmetry in State Plan Assistance

Overview of Plan Assistance Distribution

  • Historically, there has been a noticeable imbalance in the allocation of plan assistance among states, particularly favoring special category states over others.

Reasons for Asymmetry

  • The disparity in plan assistance can be attributed to various factors, including higher costs of providing goods and services in remote areas with geographical challenges.
  • For instance, states located in border regions may require additional investments to enhance infrastructure and security, which contributes to the need for increased transfers.

Political Considerations

  • Political agreements and historical contexts also play a significant role in the distribution of plan assistance, with certain states receiving special provisions based on past events and agreements.
  • For example, states like Sikkim and Nagaland have unique political backgrounds that influence the level of financial support they receive.

Discretionary Component

  • Over time, there has been a notable rise in the discretionary component of state plan assistance, deviating from the original formula-based allocation.
  • This shift is partly a result of political negotiations and restrictions on non-residents' property ownership, impacting investment patterns.

Impact of Loan Policies

  • The volume of loans and interest rate policies can also contribute to asymmetry in state plan assistance, affecting states' financial burdens differently.
  • Recent instances of loan write-offs by the central government in select states raise ethical concerns and highlight potential discriminatory practices within the federation.

Other Sources of Asymmetry

Allocation of Subsidized Food Grains

  • The central government has the authority to distribute food grains to states through fair price shops, with the flexibility to provide more assistance to regions facing natural disasters like droughts and floods.
  • Political bias may influence the allocation, with more support given to states governed by sympathetic parties and minimal aid to those governed by unsupportive parties.

Regional Policies and Discrimination

  • Government decisions on the location of central public sector enterprises and offices can favor certain states over others.
  • Historically, locational choices in the Indian economy were driven by factors beyond pure economic considerations, such as backward and forward linkages in industries like steel and coal.
  • Recent controversies have arisen regarding the placement of key industrial units, indicating a shift in decision-making criteria.
  • The positioning of railway regional offices has also been a contentious issue, potentially leading to disparities between states.

Understanding Asymmetrical Federalism

  • Debate Surrounding Asymmetric Federalism: There is an ongoing debate among scholars about the nature of asymmetric federalism and whether it truly embodies federal principles. While some argue that in a centralized federation, the central government can show favoritism towards certain regions, others contend that it may lead to states seeking secession. However, in the case of India, asymmetric federalism stands out as a unique feature.
  • Need for Asymmetric Federalism: Asymmetric federalism is deemed necessary, especially in countries like India, where significant imbalances exist between states concerning factors such as geography and socio-economic status. To ensure parity and inclusive development, certain states require additional support to progress at a similar pace to others. The concept aligns with the constitutional goal of a socialist state working for the welfare of its citizens.
  • Role of GST in Cooperative Federalism: The Goods and Services Tax (GST) exemplifies cooperative federalism, particularly in fiscal matters, by aiming to establish harmony between the central government and states regarding financial responsibilities and tax distribution. The GST framework includes special provisions for states based on their unique geographical and economic conditions, creating asymmetry in tax collection and allocation. This approach assists states in meeting financial obligations and addressing deficits, encouraging their participation in the federal structure and collaboration with the central government.
  • Compensation Mechanisms in Asymmetric Federalism: The 101st Constitutional amendment encompasses provisions for compensating states that experience revenue losses due to the centralization of tax collection, as seen in the implementation of GST. This initiative incentivizes states to engage in the new federal framework and cooperate more closely with the central government. The compensation mechanisms under asymmetric federalism extend not only to financially vulnerable states but also to economically robust states, promoting greater cooperation and strengthening cooperative federalism.

Question for Asymmetric Federalism in India: With special Reference to North East States and Jammu and Kashmir
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What is the purpose of asymmetric federalism in a country like India?
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Conclusion

In conclusion, this paper has delved into the asymmetrical arrangements present within Indian federalism. It acknowledges that such asymmetry, whether in administrative, political, or economic realms, is not only inevitable but may also be essential for both cohesion and coherence within the nation. However, it emphasizes the importance of transparent and justifiable asymmetric arrangements that contribute positively to nation-building. Conversely, discriminatory policies driven solely by short-term political gains can undermine the long-term interests and stability of federalism. The rationale for asymmetry lies in the understanding that federalism entails a rational negotiation among diverse units, where the terms of participation depend on bargaining strength. Moreover, even in federations lacking provisions for exit, political alignments can influence the bargaining power of different governmental units, potentially resulting in unequal treatment.

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FAQs on Asymmetric Federalism in India: With special Reference to North East States and Jammu and Kashmir - Important Acts and Laws for Judiciary Exams

1. What are the distinctive features of Indian Federation?
Ans. The distinctive features of Indian Federation include a strong central government, division of powers between the center and states, bicameral legislature, and a written constitution.
2. What is the role of asymmetric federalism in the Indian context?
Ans. Asymmetric federalism in India refers to the varying degrees of autonomy granted to different states based on historical, cultural, and geographical factors. It allows for special provisions and arrangements to accommodate the diverse needs of different regions.
3. How did asymmetric arrangements evolve in Indian federalism?
Ans. Asymmetric arrangements in Indian federalism evolved from the historical background of the country, where different regions were assimilated into the federation with varying levels of autonomy. This led to the special position of states like Jammu and Kashmir and the North East.
4. What is the special position of Jammu and Kashmir in Indian federalism?
Ans. Jammu and Kashmir has a special status in Indian federalism, with its own constitution and greater autonomy in matters of governance, legislation, and finance. This special position was granted to the state due to its unique historical and political circumstances.
5. How are asymmetries practiced in Indian federalism, with reference to a case study?
Ans. The case study of Jammu and Kashmir highlights how asymmetries are practiced in Indian federalism, with the state having special provisions and arrangements that differ from other states. This showcases the flexibility of the Indian federal structure in accommodating diverse regional needs.
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