Ashok Mitra on the Constitution Review controversy

Be reasonable, the parties, now in the Opposition, braying against the Union Government's decision to set up a commission to review the Constitution, are palpably on weak ground. Especially since 1977, these parties had themselves been demanding a restructuring of Centre-state relations with a view to ushering in a more democratic and decentralized polity all the way down.

The Congress regime ruling the roost at the Centre at the relevant time, had, it was vociferously complained, procrastinated about implementing the recommendations of the Sarkaria Commission on Centre-state relations. But, then, these parties and political groups had their chance during 1996-98, when their representatives constituted the Union Cabinet, to repair the damage. In fact, the minister for home affairs in that Cabinet happened to one of the top leaders of the Communist Party of India. Two years is a long enough time.

Had that government been smart enough and alert enough, it could have firmed up proposals for amending the Constitution in a manner close to its liking. The reservation these parties have with respect to the manoeuvres of the present Bharatiya Janata Party-led government is not so much that the Constitution is being sought to be amended. Such a stance would be patently irrational. After all, the Constitution has already been amended on nearly 80 occasions in the past.

What is bothering the parties in the Opposition -- and presumably the President too -- is the nature of influence the Rashtriya Swayamsevak Sangh, the Vishwa Hindu Parishad and the Bajrang Dal have over the BJP-led regime. Howsoever unexceptional the composition of the review commission and howsoever broadminded the amendments suggested by it might turn out to be, the apprehension is widespread that only the recommendations sympathetic to the Hindutva cause would be pushed through.

The pertinent question cannot be brushed aside though; how come the two successive regimes, presided over by H D Deve Gowda and I K Gujral, with Indrajit Gupta installed as home minister, failed to legislate those recommendations of the Sarkaria Commission which broadly reflected the progressive cause. To express outrage at the BJP government's running away with the initiative is largely an instance of sour grapes.

This does not mean that every step of the present government should not be watched with care. The RSS-Bajrang Dal-VHP trinity has enough clout to totally emasculate the civilized segment of the BJP coalition regime. Unless some kind of counter pressure is kept up from outside, the possibility exists of mischief-mongering, such as altering on the sly the main features of the Constitution and thereby rendering India an out and out sectarian, authoritarian, quasi-fascist Hindu Kingdom. The Left and their friends therefore deserve to be reprimanded for their lotus eating during the hazy days of 1996-98.

That is only part of the story. The Centre has in recent weeks taken a number of steps which have far reaching implications for Centre-state financial relations. Pundits from the World Bank and the International Monetary Fund have long preserved in the effort to induct New Delhi into the secrets of authoritarian fiscal management.

These two external financial institutions have, on a number of occasions, advised the ministry of finance to improve its own financial health by denying to the states resources which, according to a strict interpretation of the Constitution, ought to devolve to them. Such subversive suggestions have included the reduction of plan assistance to the states and of even grants in aid earmarked for the states as per the dictum of the Constitution.

The states have been hustled into accepting a uniform sales tax administration and uniform rates of sales tax, blatant examples of overbearingness on the Centre's part. This has been followed by a decision concerning a specific recommendation of the 10^th finance commission. This commission had assigned to the states 29 per cent of the gross collections from income tax and corporation tax. New Delhi had dillydallied in the matter for nearly three years. A communique has now been issued claiming the Centre's acceptance of the commission's recommendation.

What has actually been proposed is however an instance of pure hokum. Instead of agreeing to the devolution of 29 per cent of the gross collections from the two direct tax heads, New Delhi has chosen to allocate to the states 29 per cent of only the net realisation from these taxes. The difference between gross and net collections amounts to several thousand crores; the sum the Centre intends to shortchange the states each year.

Should not reference be made to yet another issue here? Guided by Article 270 of the Constitution, the President constitutes a finance commission at the end of every five years. Given the claustrophobic constraint of Article 74, here too the President has to abide by the advice of the Union council of ministers. Representations have been made from several quarters in the past that the Centre should take the advice of the state governments into account while constituting the finance commission.

The commission, it has been maintained, plays the role of an arbiter while allocating the proceeds of income and corporation taxation between the Centre and the states; an arbiter ought to be equidistant from the parties to the arbitration; it is therefore only appropriate that the views of the states too be sought at the time the commission's composition is decided upon. Such representations have been treated with disdain by the Centre; finance commissions have invariably consisted of pliable members invariably toeing the Centre's line.

A finance commission obligated to the Centre had yet recommended the allocation of 29 per cent of gross proceeds from income and corporate taxation to the states. That recommendation has been further slashed down by the Centre to 29 per cent of net proceeds.

Unless this decision is reversed, the consequence will be a further squeeze on resources available with the states, leading to a further weakening of their development efforts. Here are the rudiments of a continuing story. Union ministers and editorial writers in newspapers fail to analyse the reasons for the failure of the state governments of complete -- on many occasions, even start -- new development projects. They attribute the failure to the alleged profligacy and incompetence on the part of the state governments. The actual reasons may be altogether different, such as deliberate withholding of funds by the Centre that should legitimately flow down to the states.

The denial of funds to the states leads to a cutback in outlays to the states leads to a cutback in outlays on schemes initiated or envisioned by state, district, and village level planning administrations. The inability of the states to implement development programmes according to priorities that have received the imprimatur of approval from the community at large adversely affects the integrity and stability of the system itself. The Centre fails to hold, because the Centre is unable to comprehend the crucial significance of devolution.

A final point. Ever since Keshavanand Bharati, the consensus in the nation has been along the lines that howsoever crucial the issue involved, no change in the basic features of the Constitution is to be permitted. If that be so, is there any legitimacy at all in the Centre's decision to abolish additional excise duty on sugar, textiles and tobacco and tobacco products and merge this duty with basic excise duty in substitution of sales tax which, according to the Constitution, the states were entitled to levy on these commodities?

In the name of increasing the efficiency of tax collection, the Centre passed legislation some 30 years ago precluding the states from collecting sales tax for these three items; as nominal compensation, they were allowed to receive the proceeds from additional excise duty imposed on these commodities. Now, this concept of additional excise duty is going to be abolished. By whose authority, one might still ask? If the Constitution says that the states are entitled to levy taxes on the sale of sugar, textiles and tobacco products, can a parliamentary resolution take away this entitlement from them?

Could not a move of this nature be tantamount to an alteration of the basic structure of the Constitution? Will any of the state governments, if not a non-governmental organization, care to file a public interest case with the Supreme Court challenging the validity of the central legislation? Or is it that all passion is spent? Or the proposals in the Union Budget presented this week have thrown the mind so out of gear that issues of substance can no longer be distinguished from those of triviality?

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