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How has Jammu and Kashmir been altered? Are there other States with special status?

The story so far: The Union government has withdrawn the special status conferred on Jammu and Kashmir (J&K) under Article 370 of the Constitution. It has also divided the State into two regions and declared them as Union Territories. Thus, the government has made a significant alteration in the unique form of federalism that it has been practising in respect of the sensitive border State, which has seen war, terrorism and conflict since Independence. Instead, it has put in place an alternative form of federalism in which the two new units will be administered by the Centre.

How is this debate concerned with federalism?

Nations are described as ‘federal’ or ‘unitary’, depending on the way in which governance is organised. In a unitary set-up, the Centre has plenary powers of administration and legislation, with its constituent units having little autonomy. In a federal arrangement, the constituent units are identified on the basis of region or ethnicity, and conferred varying forms of autonomy or some level of administrative and legislative powers. As the current political status of J&K — as two Union Territories — is a form of demotion from the sort of autonomy it enjoyed, it becomes an issue concerning federalism.

Why is India called ‘quasi-federal’?

The Supreme Court has commented on the nature of the Indian Union in several judgments. It has noted that the essence of a ‘federation’ is the existence of the Union of the States, and the distribution of powers between them. In S.R. Bommai vs. Union of India, it notes the commonly invoked model of federalism is the United States, by which it is clear that it is a federation of States. These States were independent and sovereign in their territories, and decided to form a federation. Their territories cannot be altered by the federal government. In India, on the other hand, Parliament has the power to admit new States, create new States, alter their boundaries and their names, and unite or divide the States. In the latest exercise, the unprecedented act of converting a State into a Union Territory has also been performed. The concurrence of States is not needed for the formation and unmaking of States and Union Territories. Further, the court noted the existence of several provisions of the Constitution that allow the Centre to override the powers of the States. In legislation, there is a Concurrent List, unlike in the U.S., which outlines the powers of the federal government, and leaves any matter not mentioned in it as the legislative field for the States. In India, the residuary powers of legislation, that is the power to make law in a field not specified in the Constitution, is vested in Parliament, whereas in the U.S., residuary powers are with the States. Further, in fiscal matters, the power of the States to raise their own resources is limited, and there is a good deal of dependency on the Centre for financial assistance.

Even though the States are sovereign in their prescribed legislative field, and their executive power is co-extensive with their legislative powers, it is clear that “the powers of the States are not coordinate with the Union”. This is why the Constitution is often described as ‘quasi-federal’.

Why is it said that India has asymmetric federalism?

The main forms of administrative units in India are the Centre and the States. But there are other forms, too, all set up to address specific local, historical and geographical contexts. Besides the Centre and the States, the country has Union Territories with a legislature, and Union Territories without a legislature.

When the Constitution came into force, the various States and other administrative units were divided into Parts A, B, C and D. Part A States were the erstwhile provinces, while Part B consisted of erstwhile princely states and principalities. Part C areas were the erstwhile ‘Chief Commissioner’s Provinces’. They became Union Territories, and some of them initially got legislatures and were later upgraded into States. Himachal Pradesh, Manipur, Tripura, Mizoram, Arunachal Pradesh and Goa belong to this category.

Puducherry and Delhi have legislatures, while the other territories under the Centre do not have legislatures or a ministerial council to advise the administrator. Even between Puducherry and Delhi, there is a notable difference. Puducherry has legislative powers on any matter mentioned in the State List or the Concurrent List, insofar as it applies to the Union Territory. Delhi, which has the same field, has three further exceptions: police, land and public order are outside its purview. However, Parliament has overriding powers over any law made by the Assembly in the Union Territories.

Puducherry has one more unique feature. Despite being a single administrative unit, the Union Territory is ‘non-contiguous’. That is, its territory is limited to one extent of land. Besides Puducherry and its adjoining areas, it has enclaves located within other States: Karaikal (within Tamil Nadu) Yanam (within Andhra Pradesh) and Mahe (within Kerala).

Just as the Centre and the States do not have matching powers in all matters, there are some differences in the way some States and other constituent units of the Indian Union relate to the Centre. This creates a notable asymmetry in the way Indian federalism works.

What is special status? How did it work in J&K?

The foremost example of asymmetry among Centre-State ties was in the way J&K related to India until August 6, 2019, the day the President declared that its special status ceased to be operative. Under Article 370, the State was allowed to have its own Constitution, its own definition of ‘permanent residents’, the right to bar outsiders from holding property, and the privilege of not having any Indian law automatically applicable to its territory. Indian laws had to be specifically permitted by its Assembly before it could operate there. It was allowed to have its own Penal and Criminal Procedure Codes. The President was empowered to notify, from time to time, the provisions of the Constitution that could be extended to the State, with or without modifications.

What does Article 371 provide?

Special status is not unique to Kashmir. However, the sort of asymmetry seen in J&K’s relationship to the Centre is not seen in other States. The ‘special provisions’ applicable to some other States are mainly in the form of empowering the Governors to discharge some special responsibilities. These States are Maharashtra, Gujarat, Manipur, Nagaland, Sikkim and Arunachal Pradesh. The common feature is that wherever Governors have been asked to discharge special responsibilities, their discretionary power overrides the process of consultation with the respective Council of Ministers.

Article 371 says the Governor of Maharashtra has a special responsibility to establish separate development boards for Vidarbha, Marathwada, and the rest of the State, while the Governor of Gujarat has a similar responsibility towards Saurashtra, Kutch and the rest of Gujarat. The responsibilities cover equitable allocation of funds for development expenditure, and providing facilities for technical education and vocational training.

Article 371A confers special status on Nagaland. Under this provision, no law made by Parliament in relation to Naga customary law and procedure, including civil and criminal justice matters, and ownership or transfer of land and resources will apply to Nagaland, unless the Legislative Assembly of Nagaland decides so. The protection of Naga laws and customs was written into the Constitution following the July 1960 agreement between the Centre and the Naga People’s Convention, under which the State was later created. Further, the Governor of Nagaland has a ‘special responsibility’ regarding law and order in the State.

Article 371B contained a special provision for Assam under which a committee of legislators from the tribal areas was formed to look after their interest. The tribal areas later became Meghalaya State.

Under Article 371C, the Hill Areas of Manipur ought to have a committee of legislators. The Governor has a special responsibility to make an annual report to the President on the administration of the Hill Areas. The Centre is empowered to give directions to the State as far as these areas were concerned.

Article 371D is a detailed provision under which the President can pass an order to provide equitable opportunities and facilities to people belonging to different parts of Andhra Pradesh in public employment and education. In particular, the President can create local cadres in various classes of employment and allot civil posts to specified local cadres only. The President can specify any part of the State as a ‘local area’ for this purpose. To give effect to this arrangement, an Administrative Tribunal has been set up. No court, other than the Supreme Court, has any power of superintendence over this tribunal.

Article 371F incorporated special provisions after the addition of Sikkim to India. One major objective was to grant protection to existing laws in Sikkim so that they are not declared unconstitutional after being brought under the Constitution of India.

Article 371G contains special provisions to preserve the religious and social practices of Mizos in Mizoram and their customary law and procedure and administration of criminal and civil justice, besides ownership of land.

Article 371H vests a special responsibility on the Governor of Arunachal Pradesh with respect to law and order. It makes clear that the Governor shall discharge this function after consulting the Council of Ministers, but exercise his individual judgment as to the action taken.

Are there any other examples of decentralisation of power?

There is another significant tier of administration under the larger framework of asymmetric federalism. The Sixth Schedule to the Constitution contains provisions for the administration of tribal areas in Assam, Meghalaya, Tripura and Mizoram. These create autonomous districts and autonomous regions. Any autonomous district with different Scheduled Tribes will be divided into autonomous regions. These will be administered by District Councils and Regional Councils. These Councils can make laws with respect to allotment, occupation and use of land, management of forests other than reserve forests and water courses. Besides they can regulate social customs, marriage and divorce and property issues.

In Assam, the Karbi-Anglong Autonomous Council, Dima Hasao Autonomous District Council and the Bodoland Territorial Council have been set up under the Sixth Schedule. Another six autonomous councils have been formed by Acts of the legislature.

Ladakh has two autonomous hill development councils (Leh and Kargil). The Darjeeling Gorkha Hill Council is in West Bengal.

With inputs from Sumant Sen

Why has the U.S. accused China of deliberately weakening the yuan? What does it mean for the global economy?

The story so far: On Monday, the United States designated China as a “currency manipulator”. The move came immediately after the People’s Bank of China (PBoC), the Chinese central bank, let the yuan weaken past the psychologically significant CNY7 (CNY or the yuan is the basic unit of the renminbi, China’s official currency) to the dollar mark. The yuan, it is important to note, was last at this level against the dollar more than 10 years ago in April 2008. The present devaluation of the currency has gained significance in light of the ongoing trade war between the U.S. and China; both countries have slapped high tariffs on goods worth billions imported into their countries from the other side.

What does the move imply for China?

The tag of a “currency manipulator” per se does not mean any penal action against China. But it could be used by the United States as an excuse to justify other retaliatory sanctions against the country. The U.S. could also drag China to the International Monetary Fund (IMF) although the IMF does not have the teeth to punish China.

Why has the U.S. taken this stand?

The U.S. believes that China has been deliberately weakening its currency (the yuan) in order to boost exports to the U.S. The Trump Administration, which has been trying to discourage the import of Chinese goods into the U.S. by imposing high tariffs since early last year, thinks that the inflow of Chinese goods will affect the business of local U.S. manufacturers. While the tag of a “currency manipulator” that has been slapped on China is largely symbolic, it sends across the signal that economic ties between the U.S. and China are set to worsen further. It is also worth noting that the PBoC exerts far more direct control over the exchange rate of its currency by intervening in the forex market. Other central banks such as the U.S. Federal Reserve for instance, usually employ general monetary policy tools, which they use to regulate the money supply in the overall economy, to weaken or strengthen the exchange rate of their currencies. Although the U.S. accuses China of deliberately weakening the yuan, many analysts believe that while the PBoC may have intervened in the forex market in the past by deliberately selling yuans to weaken the currency against the dollar, it is no longer the case. Instead, they believe that the PBoC today may, in fact, be selling dollars in the forex market to prop up the value of the yuan against the dollar as the market tries to push the yuan down.

Why is China letting the yuan weaken against the dollar?

Devaluing the currency is a common ploy employed by economies that face a slowdown in order to help boost demand for their goods. A currency is devalued (or weakened) using the central bank to increase the supply of the currency in the forex market. This allows more units of the currency to be purchased using fewer units of various other foreign currencies. In the case of the yuan, increasing its supply will allow more units of it to be purchased in exchange for fewer U.S. dollars. This is a way of transferring more of the purchasing power to buy Chinese goods away from the hands of the local Chinese and into the hands of Americans. The Chinese believe this will help boost the value of China’s exports and also kick-start growth. Since the Chinese economy has been witnessing a general slowdown, with growth dropping to a 27-year low of 6.2% in July, it is no surprise that China has decided to depend more heavily on exports as a way to boost demand for its goods.

What does this mean for the global economy?

If the U.S. weakens the dollar to retaliate against China’s yuan devaluation, it will enter a currency war. The U.S. President, Donald Trump, on Thursday, in fact, signalled his desire for a weaker dollar by blaming the U.S. Fed for keeping the dollar too strong with its tight monetary policy. The last time the world was engaged in an all-out currency war was during the Great Depression of the 1930s, when countries facing a domestic slowdown tried to boost their economies by devaluing their currencies in a retaliatory fashion. This caused terrible uncertainty for businesses. Combined with high tariffs, this led to a steep fall in international trade. An all-out currency war would have similar effects today. Currency devaluation will also not undo any of the negative effects of the high tariffs that have already been slapped by the U.S. and Chinese administrations. Tariffs, which are really taxes by another name, will remain and discourage production. Currency devaluation may temporarily boost exports by transferring more purchasing power to the hands of foreigners, but it will not boost domestic production. Eventually, as in the past, such competitive devaluations can cause the size of global trade to shrink.

Why is the Indian Super League set to be named India’s top football competition? What happens to the older league?

The story so far: The long-running battle for one-upmanship between the I-League, India’s top rung of football, and the glitzy Indian Super League (ISL), launched five years ago, is nearing a messy endgame. The All-India Football Federation (AIFF), the sport’s governing body, has recommended to the Asian Football Confederation (AFC) that the ISL be recognised as the country’s top tier. But I-League clubs, including giants East Bengal and Mohun Bagan, are miffed as the coveted spot in the AFC Champions League qualifiers, given to the I-League winners, will now be the ISL’s. And with the latter having no system of promotion-relegation, the clubs feel they are being denied a fair opportunity to compete for a slot among Asia’s elite.

What is the genesis of the tussle?

In 2010, the AIFF signed a Master Rights Agreement (MRA) with IMG-Reliance (IMG-R) that granted the latter control over footballing activities in India for 15 years. The ISL, a closed affair modelled on famed American professional leagues such as the NBA and the NFL, was borne out of a tie-up between the AIFF and the Football Sports Development Ltd. (FSDL), a subsidiary of IMG-R. Armed with funds, ISL attracted top, albeit over the hill, foreign stars, including World Cup winners, and threatened the existence of the I-League. The AIFF president, Praful Patel, an AFC vice-president and FIFA Council member, sought to assuage fears by terming the introduction of the new tournament as more of a “booster dose” to develop Indian football than a disruptive influence.

Unlike the rebel Indian Cricket League which preceded the IPL, the ISL enjoyed official sanction, creating a unique situation of a country having two professional leagues.

In May 2016, the AIFF and the FSDL revealed a grand plan to completely overhaul the structure, starting from the 2017-18 season. The ISL was to be made the premier division, I-League a step below as League 1, followed by League 2. There could only be promotion and relegation between League 1 and League 2. The ISL clubs could not be relegated (for the first 10 seasons) and new teams could only be added as per the league’s wishes and subject to the payment of a hefty franchise fee. But since I-League clubs were not agreeable, the AIFF and other stakeholders decided to run both leagues concurrently, with the I-League holding on to the AFC Champions League slot, until a clear road map could be established through consensus. But the move to place the ISL above I-League has not gone down well.

Why has there been this turn by the AIFF?

On July 9, the AIFF Executive Committee announced that the elevation of the ISL had to happen within five years of its inception as per contractual obligations in the MRA. Among other reasons the AIFF cited was the “fact that the entire Indian National squad was being signed by/playing for the ISL clubs”. It also felt that the ISL clubs should be rewarded for complying with the AFC club-licensing criteria that includes grass-roots and youth development programmes. The AIFF claimed that television viewership and in-stadia audience had grown far more substantially vis-à-vis the Hero I-League. The AIFF also appeared to have been irked by the I-League clubs’ boycott of the Super Cup in March (except Real Kashmir and Chennai City FC) demanding a meeting with Mr. Patel amid reports that the ISL was all set to be granted top status.

In a last ditch effort, I-League representatives sought the Prime Minister’s intervention to probe the AIFF’s functioning.

What do I-League outfits have to say?

Their biggest grouse has been non-transparency on the AIFF’s part. Even as they agree somewhat grudgingly that the AIFF’s intentions to promote the ISL had all along been clear, they allege that the exact terms of the MRA and time frames were never revealed. The argument being that, had they known, a club such as Minerva Punjab, which started playing at the national level only from 2015-16, would have thought twice about investing just to feature in the lower divisions. There is also a strong feeling that I-League clubs have been left to die a slow death. In 2016, protesting the lack of vision, Dempo FC, Salgaocar FC and Sporting Clube de Goa — three Goan clubs with rich history — pulled out of the I-League. The AIFF did little to convince them otherwise. The increase in stadia and television audiences can be attributed to the fact that the ISL matches had prime-time late evening slots, while the I-League, alongside reduced airtime, saw many matches scheduled on weekday afternoons. It was only natural that top players, with better chances of being noticed, flocked to the ISL, thereby making it a better product. But things are not all rosy in the ISL. The excitement of the initial years has dissipated as clubs such as Delhi Dynamos and FC Pune City have struggled to attract fans. It is a fact that East Bengal and Mohun Bagan have fan bases far bigger than the most popular ISL clubs.

Where does the issue stand and what next for I-League teams?

Six I-League clubs, namely Minerva Punjab, Mohun Bagan, East Bengal, Churchill Brothers, Aizawl FC and Gokulam Kerala FC, petitioned FIFA. The world body wrote back to the AIFF asking for an update on a February 2018 report prepared in collaboration with the AFC. The report had instructed the AIFF to run a unified league with promotion and relegation from 2019-20, and also reduce franchise fees and review and reset all agreements signed with FSDL. A ‘League Transition Committee’ was to be formed within six weeks of the AIFF receiving the report; a failure to comply could result in suspension from AFC competitions. That the AIFF dodged the bullet for nearly 18 months, and even convinced FIFA that many aspects of the report needed further consideration, can be termed a mini victory. In fact, FIFA has now asked the clubs to cooperate with the AIFF as the latter was “best-placed” to find a solution to “complex issues”. If the AIFF now goes ahead and elevates the ISL, the matter may finally be decided in the country’s courts.

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