Manik Arora & Mritunjai
India follows an indigenously developed method of ‘Cooperative and Competitive’ Federalism which has strong centralizing tendencies. The Indian Constitution doesn’t have specific provisions regarding the response to a cataclysmic epidemic. The emergency provisions provided in the Constitution make no mention of such a situation. The 7th Schedule of the Constitution further divides entries regarding epidemics among all three lists:
- List I – Inter-State Migration & Quarantine (Entry 81).
- List II– Public Order (Entry 1), Police (Entry 2), Public health, Hospitals & Sanitation (Entry 6), Sports & Entertainment (Entry 33);
- List III – Social security & Insurance; Employment (Entry 23), Prevention Contagious Diseases or Pests affecting Men/Plants/Animals extending from one State to another. (Entry 29).
The Constitutional scheme envisions the States to be at the forefront of the fightback against such epidemics. Furthermore, the 73rd and 74th Constitutional Amendments provide for third-tier governments to be empowered on a range of matters by the States, the most important being ‘health’.
The Constitution thus establishes a division of responsibility among all three tiers of Government in tackling an epidemic such as Covid-19, with the primary responsibility vested with the States.
Two legislations that have been used prominently to combat the Covid-19 outbreak are the Disaster Management Act, 2005 (“DMA”) and the Epidemic Diseases Act, 1897 (“EDA”). In this regard, the EDA is the most directly applicable legislation. As per the provisions of the EDA, the primary authority to take preventive steps and prescribe regulations to prevent the spread of epidemic diseases is assigned to the State Governments, with a secondary responsibility regarding inspection being handed to the Centre.
However, given the brief nature of the EDA, the law which has been utilized far more extensively is the broadly worded DMA. While Disaster Management has no express provision in the Seventh Schedule and can only be traced to Entry 23 of the Concurrent List (Social Security; Employment), the law itself creates a number of authorities at all three tiers of Government, establishes a set chain of command and details provisions on roles and responsibilities.
Impact on Indian Federalism
Fiscal Impact: The finance minister announced an increase in the borrowing limit of the states from 3% to 5% of the Gross State Domestic Product under the Fiscal Responsibility and Budget Management Act, 2005, as a part of the Covid-19 Relief Package in order to help State Governments fight the pandemic. The Government in order to distribute around 4.28 Lakh Crores to the states, imposed conditions such as mandatory promotion of government schemes like “One Nation One Ration Card”. This move is unprecedented as the finance commission only considers factors such as debt-to-revenue ratio, fiscal deficit, etc.
Article 293(1) empowers states to borrow, Article 293(3) empowers the Centre to control borrowing with the consent of the State and Article 293(4) imposes certain conditions on borrowing in certain situations. The Government by confusing its powers under Article 256 with those under Article 293(4), imposed conditions like this promotion of Central schemes, which the drafters of the Constitution did not intend. The conditions under Article 293(4) were meant to protect the creditor status of the Centre and to create a mechanism to facilitate macroeconomic stability as it affected the fiscal health of the nation. The Centre thus misused Article 293 to encroach upon Fiscal Federation.
Another aspect showcasing anti-federal centralization of resources can be found in the Centre’s unilateral decision to suspend the MPLAD scheme as well as the Ministry of Corporate Affairs’ circular directing all CSR contributions directly to the PM Cares Fund, thus arbitrarily and unconstitutionally bypassing CM and State Funds set up for the same purpose.
Impact on Agricultural Sector: The Central Government introduced Ordinances which were responsible for bringing about market reform in the Agricultural Sector. These Ordinances were later passed by the Parliament and attracted strong criticism as they hamper the federal scheme of the Constitution because these laws can only be made by a State since the subject belongs to the State list. The Farmers Produce Trade and Commerce (Promotion and Facilitation) Act, 2020 can be enacted by the state under Entry 28 of the State List (markets and fairs), and The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, 2020 can only be enacted under Entries 14, 18, and 46 of the State List as per the federal structure of the Constitution.
The Central government in its stance has stated that these laws affect only contract farming and intra- and inter-state trade, as these are entries in the Union List, but it is essential to note that as per the Supreme Court, Agriculture is an occupation and not a trade. Most importantly, any activity which does not produce or manufacture anything or is a bare raw material cannot be covered under ‘industry.’ Thus, it is clear that the “One Nation, One Market” motto of the farm bills formulates a devastating attack on the federal rights of states in agriculture making it colourable legislation.
The aspect of the farm laws which tie them to the Covid crisis is the fact that the initial ordinances were passed as a part of the Centre’s “Covid-19 Relief Package” despite having no provisions that provide any sort of short-term relief to farmers.
Impact on Administration: Section 62 of the DMA stipulates extraordinary powers to the union government by which every authority is bound to take direction from the Ministry of Home Affairs (“HMA”) of the Government of India. The HMA, in consonance with this section, issued directions under Article 256 to impose a Pan-India lockdown without consulting relevant stakeholders like the States. These notifications and guidelines issued by the HMA were obligatory which was a great setback to the financial conditions of the states and most importantly, shook the roots of cooperative federalism in the nation. The notifications and the executive orders issued by the Central Government were in direct conflict with the powers of the states under the State list which includes industries (Entry 24), hospitals (Entry 6), shops and markets (Entry 28), agriculture (Entry 14), alcohol (Entry 8) and state government offices (Entry 41).
The totalitarian implementation of Section 62 of the DMA empowered the Union to impose a nationwide lockdown in a measure that imposed a de facto emergency and ceded the administration of the country completely to the Centre. However, Sections 24 and 34 of the same DMA which empower both State and District administrations to control the situation on the ground level by monitoring movement were completely ignored. The provisions of Article 243 which require district administrations to prepare for such situations were treated the same way. This certainly centralized powers in the Union’s hands.
At a time where States were in an extremely vulnerable financial position owing to arrears in GST payments which the Center is responsible for, the Center instead of trying its best to aid this pitiful predicament dangled fiscal relief in front of the State Governments on the condition that Central schemes be promoted. This is all but one example of the egregious manner in which the Center exploited the crisis as an opportunity to further its own concerns. The rushed passage of the farm laws through both the Houses of Parliament and the lack of consultation before the imposition of a lockdown of unseen proportions all point towards gross opportunism and mismanagement.
The mishandling of the Covid-19 epidemic in India can be perfectly encapsulated with an example featuring the contrasting fortunes of the two States. Take the States of Kerala and Odisha; while Kerala was hit much harder by the outbreak, it received just 157 Crores in financial aid from the Center whereas Odisha received 802 Crores. This is so because the distribution of financial aid did not consider factors such as confirmed cases or infrastructure but rather included irrelevant factors such as the area of the State. Adding to its misery, if it was to request more funds, the State of Kerala, would have to promote Central schemes such as ‘Ease of Doing Business’ which it might not want to. This shows how disproportionate the need was to the relief provided.
Inter-state cooperation as is envisioned in the Indian Constitution allowed countries such as Australia to have a highly positive impact on Covid management. India should have utilised Constitutional bodies such as the Inter-State Council (ISC) to strengthen federal ties in this time of crisis rather than look to centralize power. India must also take up the recommendation of the Second Administrative Reforms Commission (2006) and make a new entry in the Concurrent List for “Management of Disasters and Emergencies, Natural or Man-made”. This will help clear all ambiguity in the division of crisis management between the three tiers of Government.
Manik Arora & Mritunjai are 4th Year Law Students at Symbiosis Law School, Pune.
Image Credits: The New Indian Express