The recently introduced agricultural reform laws have stirred an intense controversy, with commentators and political leaders from across the world debating the impact of the policy. While the implications of the laws on India’s agricultural sector have been discussed and debated at length, the negative repercussions of the newly introduced legislations on the country’s centre-state dynamics remain relatively unaddressed. While the immediate focus remains on the plight of farmers, the continued erosion of India’s federal structure has escaped the same level of scrutiny. The ruling government of India has used the newly-introduced farm bills as a vehicle to propel its journey along its current path of attempting to permanently alter the country’s enshrined centre-state power dynamic, which portends to have serious long-term implications for the stability of India’s political structure.
Since the onset of the COVID-19 pandemic, the central government has orchestrated several attacks on this carefully balanced dynamic with the state governments. It began with the imposition of the nationwide lockdown, which several commentators have criticised for being done without sufficient consultation and collaboration with the state authorities. In fact, rather than activating the powers under the more appropriate Epidemic Diseases Act, 1897, which concentrates most of the decision-making power in the hands of the state government, the Indian government activated its powers under the Disaster Management Act, 2005, which essentially grants the centre with a majority of the powers. Another blow to the carefully weighed out centre-state power balance was the introduction of economic incentives by the centre, and making access to them conditional on the implementation of specific state-level reforms on issues including agriculture, labour, and land. This clearly demonstrated that the centre would not shy away from using the financial vulnerability of states to coerce them into introducing policy changes that the central government deems necessary.
Despite Indian Prime Minister Narendra Modi’s vociferous promotion of “cooperative federalism,” the manner in which the agricultural reform bills were introduced inevitably raises doubts about his government’s commitment to maintaining a well-balanced centre-state dynamic. Following the introduction of the laws, Amarinder Singh, the Chief Minister of Punjab, called the newly introduced laws “another brazen attempt to erode and destabilise the country’s federal structure.” This accusation is primarily because the three laws were passed as ordinances by sidelining state representatives, therefore circumventing the constitutional process in place to avoid the concentration of powers in the hands of the centre.
The exclusion of states from the decision-making process on the farm bills goes against India’s age-old commitment to federalism, which is deeply embedded in its Constitution. Schedule VII of the Constitution features three lists—the state list, union list and the concurrent list. While states and the centre have the exclusive right to legislate on matters under the state and union list respectively, both can pass laws on issues that feature in the concurrent list. However, in case of a conflict between the state or central laws on a concurrent list entry, the central law prevails. This section of the Constitution has formed the basis of the carefully weighted balance of power between the centre and the states.
The problem with the agricultural reform laws that have been enacted by the centre stems from the fact that, as per the Indian Constitution, the power to legislate on matters related to agriculture rests solely with states. It is essential to allow state authorities to retain this power, especially considering the highly localised nature of agriculture. A central policy on agriculture could have a varied impact on different states, depending on several factors such as the proportion of state revenue earned through agricultural activities. The differentiated effect of a centralised policy on individual states became abundantly clear following the passage of the agricultural reform bills.
One of the laws disallows states from levying market fees or cess outside the Agriculture Produce Marketing Committee (APMC) areas. While this may not be particularly concerning for some states, for others, like Punjab and Haryana, which have also been the epicentre of the ongoing protests, this law alone could lead to a reduction of the states’ yearly revenue by Rs. 3500 crore and Rs. 1600 crore, respectively. Keeping the localised nature of agriculture in mind, the Indian Constitution has specifically enlisted agriculture and related matters under the State list, thereby mandating consultations with state authorities before the implementation of a centralised law on the issue. Hence, by failing to involve state representatives in the decision-making process, the centre has overreached into a domain that traditionally rests with state authorities.
For the centre to legally justify the recent agricultural reform laws, it must call upon Entry 33 of the Concurrent List, which allows the centre to introduce laws on inter and intra-state trade. However, this could set a worrying precedent of allowing the centre to creep into traditionally state-centred issues through more general entries of the Concurrent List, thereby threatening the entire federal balance that was meticulously drafted into India’s Constitution.
Apart from opening the door for further incidents of overreach by the centre, the laws will also set a precedent for “rogue” states to justify circumventing and essentially nullifying central laws through unconventional means. In fact, several states have already expressed their intention to do this. According to the Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, there are two distinct areas—market areas, which are controlled by state authorities, and trade areas, which are regulated by the newly introduced central laws. However, the power to declare a region as a “market” or “trade” area continues to lie with state governments. States have exploited this provision and, in essence, nullified the laws in their territorial jurisdictions. For example, Rajasthan in September reassigned all “centre-controlled” areas to “state-controlled” areas. The Chief Minister of Punjab, too, has indicated his intention to do the same and make the entire state a “market” area. While this may seem like a suitable solution for state authorities, this severely taints the balance of power between the state and the centre. Therefore, just as the centre is attempting to bulldoze constitutionally-mandated state powers, these states, too, are abusing laws to undermine the efforts of the central government, both of which serve to erode the legitimacy and credibility of the federal core of the Indian political system.
The centre’s frustration over the issue may be justified, especially in light of the repeated failure of state governments to introduce much-needed agricultural reforms. Time and again, states have been urged to bring in monumental reforms to improve accessibility, transparency, and competition in the market. Failure to do this has led to significant losses, both economic and environmental, and given rise to issues such as crop burning, which has left India’s capital city facing unprecedented levels of air pollution. However, political motivations and ambitions have consistently acted as an obstacle for political parties to decisively act against this age-old practice and modernise the agriculture industry. Nevertheless, any such drastic reforms require extensive consultation with states, without which such an impasse is difficult to overcome, as the centre requires the cooperation and infrastructure of the state to be able to successfully implement these policies.
Ultimately, there is indeed some weight to the central government’s claim that the reforms are critical for modernising and transforming Indian agriculture. However, by disrespecting and disregarding its commitment to the form of federalism that India has adopted, the centre has endangered the mutual trust on which its dynamic with the states was grounded on. With the already weakening trust between the central and state authorities, the long-term impact of the recent laws could be catastrophic and could permanently scar the Indian political system.
The Farm Bills: Another Nail in the Coffin for Indian Federalism
By circumventing the states while passing the agricultural reform laws, the centre has shaken up the Indian federal system’s carefully struck power balance.
December 10, 2020
SOURCE: INDIA TIMES