Reforming the Seventh Schedule of the Constitution

WHY IN NEWS?

• Recently Fifteenth Finance Commission Chairman NK Singh calls for review of Seventh Schedule of Constitution based on the needs of contemporary challenges.

ABOUT SEVENTH SCHEDULE

• The seventh schedule under Article 246 of the constitution deals with the division of powers between the union and the states.
• It contains three lists - Union List, State List and Concurrent List.
• Union List:
  • The Parliament has exclusive powers to make laws with respect to any of the matters enumerated in the Union List.
  • This list has at present 100 subjects (originally 97 subjects) like defence, banking, foreign affairs, currency, atomic energy, insurance, communication, inter-state trade and commerce, census, audit etc.
• State List
  • The state legislature has ‘in normal circumstances’ exclusive powers to make laws with respect to any of the matters enumerated in the State List.
  • This has at present 61 subjects (originally 66 subjects) like public order, police, public health and sanitation, agriculture, prisons, local government, fisheries, markets, theaters, gambling etc.
• Concurrent List
  • Both, the Parliament and state legislature can make laws with respect to any of the matters enumerated in the Concurrent List.
  • This list has at present 52 subjects (originally 47 subjects) like criminal law and procedure, civil procedure, marriage and divorce, population control and family planning, electricity, labour welfare, economic and social planning, drugs, newspapers, books and printing press, and others
  • The 42nd Amendment Act of 1976 transferred five subjects to Concurrent List from State List, that is, (a) education, (b) forests, (c) weights and measures, (d) protection of wild animals and birds, and (e) administration of justice; constitution and organisation of all courts except the Supreme Court and the high courts.
• The power to make laws with respect to residuary subjects (i.e., the matters which are not enumerated in any of the three lists) is vested in the Parliament. This residuary power of legislation includes the power to levy residuary taxes.

PREDOMINANCE OF UNION OVER STATE:

• The Constitution expressly secures the predominance of the Union List over the State List and the Concurrent List and that of the Concurrent List over the State List.
• Thus, in case of overlapping between the Union List and the State List, the former should prevail.
• In case of overlapping between the Union List and the Concurrent List, it is again the former which should prevail.
• Where there is a conflict between the Concurrent List and the State List, it is the former that should prevail.
• In case of a conflict between the Central law and the state law on a subject enumerated in the Concurrent List, the central law prevails over the state law. But, there is an exception. If the state law has been reserved for the consideration of the president and has received his assent, then the state law prevails in that state. But, it would still be competent for the Parliament to override such a law by subsequently making a law on the same matter.

RATIONALE BEHIND THE LIST SYSTEM CONTAINED IN THE SEVENTH SCHEDULE:

• Historical reasons:
  • Need for a strong centre to maintain unity of the nation:
    • In light of the tragic circumstances surrounding partition, a consensus emerged that only a strong central government could survive the communal frenzy and manage the increasingly complex administrative problems faced by the new nation.
  • Lack of effective governing system in princely states
    • Most of the princely states which had to be integrated did not have any effective governance systems in place and many were hostile to the idea of cooperating with the newly formed Government of India.
• Enabling responsive governance:
  • Distribution of legislative powers is required for encouraging political participation, the shared accommodation of various views, catering to the local needs etc.
• Balanced economic development:
  • Inclusion of certain subjects such as banking, regulation major mines, major ports etc. are included in the Union List to ensure equitable distribution of wealth and development.

NEED FOR REFORMING THE SEVENTH SCHEDULE

• Division of functions enshrined under Seventh Schedule got increasingly eroded over a period of time. For example:
  • It begin with the constitution of the Planning Commission in 1951
  • Shifting of the subjects like forest and education from the state to the Concurrent List by the 42nd Amendment.
  • Introduction of Goods and Service Tax.
• Union government encroaching into state list:
  • For example Mahatma Gandhi National Rural Employment Guarantee Act of 2005, National Food Security Act 2013, recently enacted farm bills etc. are alleged to be outside the purview of Parliament’s jurisdiction.
• Demand by state governments for reform:
  • Rajamannar Committee in Tamil Nadu, 1969 and the Anandpur Sahib Resolution in Punjab in 1973 recommended transferring several entries to the State List, both from the Union and Concurrent Lists, and vesting residuary powers in the States.
• Emergence of newer challenges:
  • The needs of governance are not static and are bound to change over time.
  • A subject that was vital for legislative allocation in 1950 may no longer be relevant in the present.
  • Concerns such as climate change and emerging technologies amongst others, while not conceivable at the time of constitutional drafting have now become imperatives of governance.
• Distinction between three lists has become opaque over the years:
  • This led to conflict between Centre and State over subject matter of legislations.
• To check states playing competitive populism:
  • States playing competitive populism may destroy macroeconomic stability.
  • For example: In response to new central farm laws, three state assemblies – Chhattisgarh, Punjab, and Rajasthan - passed Bills to amend the central Acts, in their application to these states.

WAY FORWARD

• Adopting Sarkaria Commission recommendations:
  • Residuary powers should be transferred from the Union List to the Concurrent List, except for the residuary power to impose taxes which should be retained in the Union List.
  • States should be consulted by the Centre before the latter exercises its power over Concurrent List entries.
  • Centre should limit the field it occupies with respect to Concurrent List entries to only as much as is necessary for ensuring uniformity in basic issues of national policy, with the details being left for State action.
• Adopting M.M Punchhi commission (2010) recommendations
  • Union should only transfer those subjects into the Concurrent List, which are central to achieving demonstrable national interest.
• Reforming the structure of centrally sponsored schemes:
  • Centrally sponsored schemes should be flexible enough to allow states to adapt and innovate. 
• Institutional framework for centre-state cooperation on subjects under concurrent lists:
  • There is need of a formal institutional structure that requires mandatory consultation between the Union and the states in the area of legislation under the concurrent list.
• Residuary powers should be used sparingly
  • It should be used by Centre only as a last resort and not as the primary means for completing the exhaustiveness of lists.
• Need for periodic review of the lists
• Removing entries that are now obsolete
  • For example
    • Entry 34 of Union List I: Courts of Wards for the estates of Rulers of Indian States
    • Entry 37 of Concurrent List: Boilers
• Formula based appropriation of existing entries:
  • A framework suggested by Vidhi Centre for Legal Policy can be adopted. It consists of
    • Two older principles
      • Ensuring the unity and integrity of India, Achieving balanced economic development - derived from the Constituent Assembly Debates
    • Two new principles
      • Promoting cultural autonomy and diversity, enabling responsive governance that have emerged from India’s post-independence experience
• Adding entries as per present day needs of governance:
  • This will reduce the legislative domain for residuary powers to a minimum
  • For example subjects such as consumer protection, cyber-terrorism, Artificial Intelligence etc. must be added to relevant lists.

PRACTICE QUESTION:

Q. “There is an urgent need to review the Seventh Schedule of the Constitution in the wake of emerging challenges faced by the nation”. Commen