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Business News/ Opinion / Views/  Revisit the Seventh Schedule to improve Centre-state relations
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Revisit the Seventh Schedule to improve Centre-state relations

What subjects the Union government and states can legislate upon should be updated to the times

Photo: MintPremium
Photo: Mint

The Union government recently revoked the orders and guidelines issued under the Disaster Management Act (DMA), 2005. Many of these were issued once the Act was invoked on 24 May 2020, soon after covid came knocking on India’s doors. The DMA has been the backbone of policy interventions to fight covid. However, since health is a state subject, how was something like the DMA passed in the first place to deal with issues related to health, among others?

Any legislation can be passed under an enabling constitutional provision. Article 246 of the Constitution in the Seventh Schedule has Union, state and concurrent lists. Disasters do not figure in any of these lists. So, under which enabling provision was the DMA passed? Before it was passed, the related Bill was referred by the Rajya Sabha to a parliamentary panel headed by the late Sushma Swaraj. One should quote the 115th report of the Department related Parliamentary Standing Committee, Home Affairs, on The Disaster Management Bill, 2005: “The proposed legislation is relatable to Entry 23 (Social Security and Social Insurance) in the Concurrent List of the Constitution. This will have the advantage that it will permit the States also to have their own legislation on disaster management." It was ‘Social Security and Social Insurance’ which enabled central legislation on disasters.

In the early days of the pandemic, Prime Minister Narendra Modi urged the nation to turn the ongoing crisis into favourable opportunities. However, some states cleverly converted it into an opportunity to fill state coffers. States like West Bengal, Maharashtra, Odisha, Jharkhand and Chhattisgarh legalized the home delivery of alcohol to address a shortfall in tax revenues. Funnily enough, liquor delivery was done under the ambit of the DMA. Ironically, it was invoked for liquor delivery to promote social security and social insurance.

Taxes on alcohol account for a significant share of the total revenue in many states. India’s five southern states cumulatively account for 45% of total domestic consumption, with alcohol accounting for 10 to 15% of state revenues in each. One should probe the correlation between revenue generated from the sale of liquor and good development indicators. That said, whatever might be a state’s stance on prohibition, if a state allows the sale of liquor in its jurisdiction, why can’t it be delivered home?

Apart from political reasons, one reason is the absence of enabling legislation. Now that orders under the DMA have been revoked, unless the states come up with appropriate legislation, they will have to curtail their home delivery of alcohol. The pertinent issue is not the delivery of it, but the impediments that state governments will face in moving such laws on account of inherent issues with the Seventh Schedule.

There are primarily five issues that plague the Seventh Schedule, which is a relic of the colonial past inherited from the Government of India Act, 1935. Why should the same principles be followed even today?

The Constituent Assembly had comprehensively enumerated subjects for legislation in the three lists and expanded them in the Government of India Act, 1935. However, these lists do not reflect the complex realities of India in its 75th year of independence.

There is no dearth of instances in which states shirk their responsibilities for even the subjects covered under the state list. For instance, state highways are often classified as national highways so that they can be properly looked after. Similarly, if the pandemic has taught us something, it is that the Union government should be in a position to legislate more freely on some issues related to health (vaccination, for instance). Another example is of the police. While law and order is a state subject, states often ask for the help of paramilitary forces in times of crisis.

States have also advocated the transfer of some subjects from the Union and concurrent lists to the state list. For instance, entry No. 58 of the Union list is on the manufacturing, supply and distribution of salt by Union agencies; and regulations and control of manufacture, supply and distribution of salt by other agencies. It can be argued that it is unnecessary for the Union to legislate on issues related to salt. States have also criticized the transfer of some subjects from the state list to the concurrent list. ‘

Two key commissions have looked at Centre-state relations, i.e. the Sarkaria Commission and the Punchi Commission. Both advised comprehensive consultation between the Union and state governments before moving anything from the state list to the concurrent list. But neither commission has looked into it comprehensively. N.K. Singh, chairman of the 15th Finance Commission, has time and again argued for reforms in the Seventh Schedule.

Some have even advocated further decentralization of that Schedule by introducing a local government list. This list is especially pertinent in the light of rapid urbanization across countries. While we acknowledge that there are issues with introducing a local body list, the idea is worth a debate.

Thus, there is a need for periodic reviews of these lists—say, after every 20 years. Liquor being linked to disasters is a stark reminder of that.

Bibek Debroy & Aditya Sinha are, respectively, chairman, Economic Advisory Council to the Prime Minister; and additional private secretary, research, at the EAC-PM

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Published: 01 May 2022, 10:48 PM IST
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