Day 10 Mains Questions – Ace Answer Writing Program

Question 1: Analyse the challenges in implementing fiscal federalism in India. How have recent initiatives like the GST regime impacted Centre-State financial relations? (10 Marks, 150 words)

Introduction

Fiscal federalism in India involves the financial relations between the Centre and the States, guided by constitutional provisions (e.g., Articles 268-281) and the Finance Commission.

Body

Challenges in Implementing Fiscal Federalism –

1. Resource Imbalance: Unequal distribution of revenue sources between Centre and States [e.g., higher central revenue share].
2. Expenditure Responsibilities: States have significant expenditure responsibilities without corresponding revenue [e.g., health, education].
3. Vertical Fiscal Imbalance: Disparity between the Centre’s revenue-raising capacity and the States’ expenditure needs [e.g., reliance on central transfers].
4. Horizontal Fiscal Imbalance: Variations in revenue capacity and development needs across states [e.g., rich vs. poor states].
5. Conditional Grants: Centre’s grants often come with conditions limiting states’ fiscal autonomy [e.g., centrally sponsored schemes].

Impact of GST on Centre-State Financial Relations –

1. Unified Tax Structure: GST created a unified tax regime, simplifying tax administration [e.g., single market].
2. Revenue Sharing: GST revenue is shared between Centre and States based on a formula [e.g., 50:50 split].
3. GST Compensation: The GST Compensation Act ensures states are compensated for revenue losses due to GST [e.g., five-year compensation period].
4. Council Mechanism: GST Council provides a platform for cooperative decision-making [e.g., equal representation of Centre and States].
5. Increased Compliance: Improved tax compliance and broadened tax base have positively impacted revenues [e.g., digital filing].

Conclusion

Implementing fiscal federalism in India faces challenges like resource imbalance and conditional grants. Recent initiatives like GST have promoted cooperative federalism and balanced Centre-State financial relations, reflecting the dynamic nature of Indian federalism.

Additional Data –

• Committees: 15th Finance Commission addressed fiscal federalism issues [e.g., revenue sharing recommendations].
• Examples: GST’s impact on state revenues [e.g., Karnataka’s increased GST collections].
• Examples: Centre-state cooperation in GST Council [e.g., consensus on tax rates].

Question 2: Examine the concept of ‘cooperative federalism’ in the Indian context. To what extent has the creation of bodies like NITI Aayog fostered this approach? (10 Marks, 150 words)

Introduction

Cooperative federalism in India emphasizes collaborative governance between the Centre and States, promoting shared decision-making and implementation like the Inter-State Council (ISC) provided under Article 263.

Body

Concept of Cooperative Federalism –

1. Shared Governance: Involves joint decision-making and policy implementation [e.g., GST Council].
2. Resource Sharing: Equitable distribution of financial resources to address regional disparities [e.g., Finance Commission].
3. Policy Coordination: Aligning central and state policies for cohesive development [e.g., National Health Mission].
4. Institutional Mechanisms: Establishment of bodies to facilitate cooperation [e.g., Inter-State Council].
5. Dispute Resolution: Mechanisms to resolve Centre-State conflicts [e.g., Zonal Councils].

Role of NITI Aayog in Fostering Cooperative Federalism –

1. Policy Think Tank: Acts as a knowledge hub, providing strategic inputs for policy formulation [e.g., SDG implementation].
2. Collaborative Forums: Organizes meetings and discussions with state governments [e.g., Governing Council].
3. Resource Allocation: Advises on optimal allocation of resources and development priorities [e.g., Aspirational Districts Programme].
4. Data-Driven Governance: Promotes data sharing and analysis for informed decision-making [e.g., India Innovation Index].
5. Reform Advocacy: Encourages states to adopt best practices and policy innovations [e.g., Ease of Doing Business rankings].

Conclusion

Cooperative federalism in India fosters collaborative governance and balanced regional development. Bodies like NITI Aayog have significantly advanced this approach by enhancing policy coordination and promoting shared goals, reflecting the evolving nature of Indian federalism.

Additional Data –

• Committees: Punchhi Commission on Centre-State relations highlighted cooperative federalism [e.g., recommendations for stronger Centre-State relations].
• Examples: NITI Aayog’s initiatives in education and health sectors [e.g., Performance Grading Index].
• Examples: Successful implementation of joint initiatives [e.g., Digital India Programme].

Question 3: Discuss the issues arising from the distribution of powers between the Union and States in emerging areas like public health and data protection. How can these challenges be addressed? (15 Marks, 250 words)

Introduction

The distribution of powers between the Union and States in India, outlined in the Seventh Schedule of the Constitution (Article 246), often leads to challenges in emerging areas like public health and data protection.

Body

Issues in Public Health –

1. Overlapping Jurisdictions: Both Union and States have responsibilities, leading to coordination challenges [e.g., National Health Mission].
2. Resource Allocation: Inequitable distribution of resources affects healthcare delivery [e.g., budget allocations].
3. Policy Fragmentation: Diverse state policies create inconsistencies in public health standards [e.g., COVID-19 management].
4. Regulatory Conflicts: Differing regulations can hinder effective implementation of health programs [e.g., vaccination drives].
5. Centralization vs. Decentralization: Balancing central directives with state autonomy is challenging [e.g., Ayushman Bharat].

Issues in Data Protection –

1. Legislative Ambiguity: Lack of clear demarcation between Union and State roles in data protection [e.g., Personal Data Protection Bill].
2. Data Localization: Conflicting approaches to data storage and security [e.g., state vs. central regulations].
3. Cybersecurity Threats: Inconsistent policies can weaken overall cybersecurity [e.g., digital infrastructure protection].
4. Privacy Concerns: Ensuring uniform data privacy standards across states is difficult [e.g., Aadhaar data management].
5. Interagency Coordination: Multiple authorities managing data protection can cause inefficiencies [e.g., CERT-IN and state agencies].

Addressing the Challenges –

1. Harmonized Legislation: Enact uniform laws that delineate clear roles for Union and States [e.g., comprehensive data protection law].
2. Collaborative Frameworks: Establish joint task forces for coordinated policy implementation [e.g., inter-state health councils].
3. Resource Sharing: Ensure equitable distribution of resources through collaborative funding mechanisms [e.g., centrally sponsored schemes].
4. Capacity Building: Enhance state capabilities through training and support from central agencies [e.g., health workforce development].
5. Technology Integration: Use digital platforms for real-time data sharing and coordination [e.g., integrated health management systems].

Conclusion

Addressing the issues in the distribution of powers requires harmonized legislation, collaborative frameworks, and effective resource sharing. These steps will ensure cohesive policy implementation in public health and data protection, reflecting cooperative federalism.

Additional Data –

• Committees: Recommendations by the NITI Aayog on health sector reforms [e.g., health sector investment].
• Examples: Successful state-central collaborations [e.g., Swachh Bharat Abhiyan].
• Examples: International models of federal health systems [e.g., US federal-state health collaboration].