COVID-19 and Dwindling Indian Federalism

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[In this piece Pankhuri Agrawal, introduces the arguments she makes in her piece titled “COVID-19 and Dwindling Indian Federalism” that has been published by the Economic and Political Weekly in their Vol 55 Issue 26-27. Access the Article here, before it goes behind the paywall!]

In the article “COVID-19 and Dwindling Indian Federalism”, the effect of COVID-19 pandemic disaster on legislative, executive and financial federalism in India has been analyzed. The constitutional mandates for functioning of Centre on behalf of States has been missed and recourse to disaster has been taken to create a unified but unconsented measure. The financial position of States in post GST phase is bearing the worse brunt of the actions of government, thereby upsetting their revenue collection more.

The entry 23 of the Concurrent List of Constitution of India, 1950 III i.e. “social security and social insurance; employment and unemployment” requires that the powers of Centre and States ‘should’ remain intact even in a disaster like situation in India.  Under S. 11 of Disaster Management Act 2005 (DMA), the National Plan to deal with epidemic has to be prepared “in consultation with State governments and other expert bodies in the field of disaster management” which in the present COVID-19 pandemic is missed by nullifying the role of the States in formulating a common agreeable plan completely. And interestingly, the central government has declared the national lockdown successively and that too is still without any national plan for it.

The presence of both legislations i.e. DMA and Epidemic Diseases Act 1897 (EDA) show that the States have the primary role in the epidemic-disaster like situation and the Centre has guardian like roles of policy framing, guidelines and monitoring the situation. Unfortunately, the practice of the Centre has been different as the S. 6(2)(i) of DMA has been used by it to give itself the sweeping powers in the times of disaster including epidemics. The simultaneous observance of EDA and DMA maintains the federal relations between the Centre and States as both the governments get their due share of role in accordance with the enunciated fields of legislation in the Schedule VII. The actions of the Centre in subsuming all the legislative and executive functions to itself in difficult times of epidemic using merely one of the listed powers and functions of NDMA is not worthy of any praise.

Interestingly, in view of the constitutionally mandated roles and functions of the State and Central government as highlighted above, the State governments must have equal access to such voluntary contributions i.e. CSR funds as that of the central government, in fact more so. The Centre must coordinate the ways and means to achieve the fair and equal access and sharing of CSR funds with the States rather than making the very linking cord between the companies and States look unappealing to the companies. It requires basic knowledge of finance that the companies would contribute to those funds and activities which make them eligible to meet CSR obligations as well. The issue of non-inclusion of CM Cares Fund becomes more grim in view of the Entry 6 of List II which provides legislative competence to the States in the area of “public health and sanitation” and consideration of contributions to State Disaster Management Authority as CSR expenditure under Item No. (xii) of Schedule VII of the Companies Act. The above discussion shows the intentional dwindling of fiscal federalism in India by the Centre.

The States cannot become ‘aatmnirbhar’ without access to financial resources and avenues to enhance the same. There is a need to have more discussions on such complex intergovernmental problems to preserve the spirit of federalism of the Indian Constitution.

Pankhuri Agrawal is a PhD scholar at NALSAR University of Law, Hyderabad.

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