Centre State Local Relations

Inter-state Water Disputes bill (Amendment) 2017

• Permanent Body: It dissolves all existing tribunals and establishes a permanent inter-state river water disputes tribunal with multiple benches that would ensure better consistency in judgements
• Expeditious Resolution of Disputes: When a state approaches the centre, the dispute is handed over to Dispute Resolution Committee consisting of experts from various fields. If the dispute remains unresolved, the matter is referred to the tribunal
• Time Bound Resolution: Maximum period of 5 years for resolution
• Finality of the Decision: Decision of tribunal shall be final and binding
• Non-judicial Presence: The tribunals constituted for resolving water disputes shall have non-judicial experts to give more weight to ecological concepts such as water basin’s capacity, ground water management and environmental flows.
• A centralized data bank at the centre to hold data of each river basin

Issues with the Bill

• Temporary Benches: The multiple benches of the tribunal are to be constituted temporarily thus effectively continuing the temporary nature of dispute resolution
• SC’s Jurisdiction: Despite legislations putting dispute resolutions outside the purview of the Supreme Court, it has stated that it would continue to hear appeals against the award of tribunals. This could delay the judicial procedures.
• Enforcement of the award mired in ambiguities

Way Forward

• Expeditious Use of Inter-State Council: Disputes involving multiple states can be taken up at inter-state or zonal councils where resolutions can be arrived at through debate, dialogue and deliberation.
• Mediation: The Centre may take the lead for such activities akin to how the World Bank brokered the India- Pakistan Indus Water Treaty
• Enforcement of the Award of the Tribunal: River Basin Organizations can be set up under the River Boards Act 1956 to implement the award of the tribunal.
• Rivers as National Property: The Supreme Court has recently stated that rivers are not the property of a state or some states. Declaration of rivers as national property can put an end to the inter-state disputes and can call for equitable sharing of water resources between water surplus and deficient states
• Water into Concurrent List: The Mihir Shah Committee has recommended to bring water into concurrent list. The Central Water Authority can then manage river water resources
• Avoid Politicization of water issues
• Conservation of Water in all forms to reduce the supply side need from rivers utilizing the 4Rs to achieve the SDG6 of “Ensure water and sanitation for all”
• Inter-linking of river waters

SC’s Verdict on Cauvery river water sharing

• Not property of one state: The SC has stated that no river shall belong to one state based on historical water flow directions. It is a national asset and needs equitable sharing.
• Fair and Equitable Sharing: SC has called for fair and equitable sharing of water resources keeping in mind the demand of riparian states’ demands in its principle of equality.
• Right to Drinking Water: SC’s verdict widened the canopy of water sharing from the earlier limited domain of irrigation to include drinking water right especially taking into account the enormous demand from populous cities like Bengaluru
• Groundwater was considered as a parameter
• Helsinki Rules 1966 Parameters: Geography and Hydrology of basin, Climate, past utilization of waters, economic and social needs, dependant population and availability of water resources.
• Cauvery water management authority (CWMA) and Cauvery Water Regulation Committee (CWRC) established to monitor, regulate, enforce the order and to improve water use efficiency in riparian states. CWRC would also collect data of water levels and climatic variations.

Inter-State Council

                It is a constitutional body that is constituted by the President from time to time to discuss and deliberate between states concerning issues between them and between centre and states.

Functions

• Promote Cooperative Federalism: The ISC in India’s multi-party democracy can serve as a platform to evolve common ideas, policies and cooperate on matters of common interest through dialogue, discussion and deliberation
• Bridge Trust Deficit: The inter-state council brings together the representatives of various states and centre on one platform where they can raise issues and concerns and find common ground acting as a safety valve
• Dispute Resolution: Inter-state and Centre-state disputes including river water disputes can be resolved through expeditious discussion and deliberation. 140 such issues were resolved in 2016.
• Mutual Accountability on centre and state governments increases as they both act as mutual pressure groups to drive action for developmental priorities and targets
• Sharing Best Practices: A bottom up approach needs a deliberation platform which the ISC readily provides. Such best state practices can then be shared across the table in spirit of cooperative federalism
• Emotional Integration of the Country: India’s enormous diversity transcending across religious, linguistic, cultural lines are unified into one platform of the Inter-state council. The discussions on this platform are a celebration of India’s plural identity, co-existence and democratic values.

Issues in the Functioning of Inter-State Council

• No Frequent Meetings: The last time the inter-state council met was 12 years ago. This shows the lack of political will among various state governments to come together and deliberate on issues
• No Binding Nature: It acts as a mere talk shopà No binding recommendations on the governments. This reduces their accountability to each other, to national development and ultimately to the people
• No role in conflict resolution: The inter-state council has been ineffective in resolving the many inter-state water disputes that exists today
  • Cauvery dispute between Karnataka and Tamil Nadu
• No Administrative Mechanism: The inter-state council does not have an organizational set up that would ensure smooth procedures and expertise.

Way Forward

• Re-constitute and Re-operationalize: Inter-state council should be reconstituted and should be operationalized again. Punchchi commission recommends that the council should meet at least thrice a year
• Agenda for Meetings: The meetings of ISC need to be laid out with a definitive agenda to discuss meaningful issues rather than it being merely a talk shop [Punchhi Commission]
• Power of Dispute Resolution: The Sarkaria Commission has recommended that Inter-state councils be vested with the authority to investigate inter-state disputes as contemplated in Article 263(a) of the Indian constitution
• Organizational Structure: Punchhi Commission recommends a professional secretariat with experts in Law, Political Science, Environment for the council to attain functional independence
• Widen Representation to include civil society and corporates
• Political and Legislative give and take between centre and state

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Conclusion

 As a constitutionally mandated body, the importance of Inter-state council in ensuring the spirit of federalism in the country cannot be understated. An oft-overlooked7 platform opens a window of opportunities to realise our federal democracies deepest values- discuss, deliberate and resolve.

NITI Aayog and Cooperative Federalism

 NITI Aayog is conceptualised as replacement of the planning commission that emerges as a think tank with greater involvement of states in policy planning and achieving development targets in the spirit of federalism

How it fits the Bill?

• Stateà National Development Targets: NITI Aayog evolves a shared vision of national development priorities, sectors and strategies with the active involvement of states in light of national objectives and the spirit of Antyodaya
  • SATH: The think tank chooses states for direct cooperation to transform sectors of education and health in accordance with the goals of National Health and Education policy
• Structured Support Initiatives: The think tank provides structured support initiatives and mechanisms with states recognizing that strong states make a strong nation in the spirit of cooperative federalism
• Bottom Up Approach: NITI Aayog is an organization that invites greater involvement of lower levels of governments in conceptualisation, planning and implementation of projects. It aims to foster credible programmes at village level and aggregate them progressively at higher levels of government
  • Aspirational Districts Programme incorporates the participation of local communities, district administration and civil society groups to alter the development indicators in backward districts
• Representation of States: While the planning commission had no representation from the states, the NITI Aayog consists of Chief Ministers of all states + Administrators of UTs with the Prime Minister as the Chairman. The organizational structure is thus synonymous to evolving consensus on national development priorities.
• Dispute Resolution of State and Centre: Due its buoyant representation to centre and state, the NITI Aayog can very well serve as a platform to resolve issues between Central government and particular state governments
  • NITI Aayog recently took the initiative to resolve pending issues with the State of Telangana
• Competitive Federalismà Competition to achieve development targetsà National Development Objectivesà Cooperative Federalism

NITI Aayog and Competitive Federalism

• Ranking of States: NITI Aayog publishes various indexes on a wide variety of socio-economic parameters. They serve the functions of:
  • Pushing states to action by way of Naming and shaming
  • Letting states know areas where attention is wanted
    • Ease of Doing Business Index
    • Logistics Index for states
  • Incremental rankingà States know if they are on the track of progress
    • The Performance of Health Outcomes is an excellent example. It has various parameters viz. neo natal mortality, child mortality, immunization It also ranks states on incremental basis
  • States lacking in areas can include measures taken by well doing states
• Bà G Linkages: As a think tank, NITI Aayog also brings together investors and governments on the same platform. This enables convergence of interests and states virtually compete for investments by loosening regulations and constraints

Other Domains of Work

• Inclusive Development: NITI Aayog aims to pay special attention to those sections who are at a risk of not benefitting from development or economic progress in the spirit of Antyodaya
  • Aspirational Districts Programme
• Knowledge and Innovation Hub: The Aayog has a repository of best policy practices that can be emulated. It seeks to create an entrepreneurial support system for innovation by fostering government-industry-academia linkages.
  • Atal Innovation Mission
• Evidence Based Policy Making: A data driven expertise policy making is Aayog’s key mandate that helps governments at centre and state evolve holistic diverse policies on a need based basis
  • NITI Aayog’s 3 year action agenda
• Economic Reforms: The model APMC act, land leasing, PDP, contract farming and doubling farmers income all indicate Aayog’s economic reform agenda
• Balanced Regional Development: NITI Aayog also focuses on hitherto left out regions to bridge developmental disparities.
  • NITI Forum for North-East on the basis of Composite District Index
• Environmental Conservation: NITI Aayog has alerted the states and the centre on the impending water crisis as per the Composite Water Management Index

Challenges to NITI Aayog

• Overlapping Jurisdiction:
  • NITI Aayog’s mandate of achieving Centre-State convergence is akin to Inter-State Council that is a constitutional body and which enjoys greater legitimacy
  • Cabinet Secretary: Coordination among departments can overlap with the office of cabinet secretary
• Non-statutory Non-Constitutional Nature: As it is established by executive resolution, chances of political interference exist and limits the ability of the Aayog to function as independent organization
• Lack of Active Actionable Targets: Aayog has not evolved comprehensive policy to deal with immediate challenges of job growth and economic development following GST
• State wise Disparity: The competitive federalism agenda of Aayog if pressed vigorously disadvantages poor states. It may create disharmony in inter-state relations
• Skewed Focus on Policy>> Implementation

Conclusion

NITI Aayog is primed to play the role of catalyst in achieving competitive cooperative federalism putting onus on states to achieve SDG targets delving on flagship programmes of Skill India, Make in India, Swachchh Bharat, Housing for All and Saubhagya of the Centre in the spirit of federalism and Antyodaya.

Fiscal Federalism

Issues with Fiscal Federalism

• Vertical Fiscal Imbalance: Disparities in different components of revenue and expenditure between centre and state. Economic Survey 2017 notes how Indian states raise only 6% of revenue through direct taxes compared to 44% in Germany.
• Horizontal Fiscal Imbalance: While states like Bihar lag way behind in meeting capacity (37%), rich states like Haryana are much closer to achieving revenue targets (82%) to meet expenditure
• Liberalization: Rich states able to attract foreign capital, able to produce more for global market. Poor states lose out. Increasing disparity.
• Financial Deterioration: Poor health of DISCOMs, loan waivers for farm crisis and natural disasters have decreased fiscal capacity of states
• Residual powers of taxation with centre
• Effective veto for centre in GST
• No autonomy for states in taxation with the advent of GST. Thus, state wise needs and demands cannot be met through autonomous taxation

Issues with TOR of 15^th FC

1. Use of 2011 Census: Punishing states of Tamil nadu and Kerala for their family planning initiatives in line with National Population Policy. This threatens to undermine federal spirit
2. Scepticism on increased devolution threatens to reverse decentralization
3. Questions States populist expenditures which goes against the spirit of federal autonomy
4. Encouraging ease of doing business: Focus highly skewed to do away with regulations rather than better it. This may promote race to bottom not in the interests of all
5. Revenue Deficit grant may be withdrawn
6. Curtail Borrowing: FC wants to fix borrowing at 1.7% curtailing capital expenditure and infrastructure creation of states