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Admin 2020-07-29

29 July 2020: The Indian Express Editorial Analysis

1) Running dry-

 

GS 3- Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment

 


CONTEXT:

  1. The issue of compensating states for the shortfall in their goods and services tax (GST) collections has been contentious(problematic).
  2. Several states have argued that the Centre has been delaying the compensation owed to them due to lower collections through the compensation cess(tax on tax) route.
  3. To address this issue, on Monday, the Central government announced that it had released Rs 13,806 crore to states for the compensation owed to them for March 2020.
  4. It also noted that the entire amount upto 2019-20 had been released.

 

 

FALLING SHORT:

  1. According to the data, as against cess collections of Rs 95,444 crore, the total compensation paid to states stands at a staggering Rs 1.65 lakh crore in 2019-20.
  2. The data underlines(focusses) the extent of slippage(gaps) in state GST collections in 2019-20.
  3. The situation is likely to worsen this year.
  4. With economic activity likely to remain well below pre-COVID levels, state GST collections will fall well short of expectations.
  5. Collections through the compensation cess will not be enough to offset the shortfall in states’ revenues as measured against their protected revenue growth.
  6. As income from GST accounts for a significant share of state revenue, this needs attending to.

TRIVIA:

Cooperative federalism, also known as marble-cake federalism, is a concept of federalism in which federal, state, and local governments interact cooperatively and collectively to solve common problems, rather than making policies separately but more or less equally (such as the dual federalism of the 19th-century United States) or clashing over a policy in a system dominated by the national government.

 

 

OPTIONS AVAILABLE:

  1. The GST Council, in which the Centre effectively has a veto, is expected to meet shortly to deliberate on this issue.
  2. While the rationale for assuring states a fixed growth rate of 14% for their GST collections can be debated, not abiding by its promise is certainly not in line with the spirit of cooperative federalism.
  3. It will set a bad precedent(example).
  4. The challenge, therefore, facing the GST council is two-fold.
  5. First, how to compensate states for the greater than expected shortfall this year, and second, whether or not the compensation cess should be extended beyond the five-year period that was originally agreed upon.
  6. Several options have been debated.
  7. First, market borrowing has been discussed as a possible way out of this quagmire. However, its legality will need to be examined.
  8. Hiking tax rates, or the compensation cess, may not be appropriate at the current juncture.
  9. With states also likely to witness a significant shortfall in tax devolution this year, as compared to the budget estimates, further shortfalls in their revenue, despite the additional borrowing space, will severely restrict their spending.

 

CONCLUSION:

  1. Given that states are at the forefront of fighting the COVID pandemic, the council must ensure adequate(enough) flow of resources to them, and reduce the uncertainty in state finances.
  2. GST Council must decide on how to protect states’ GST revenues, reduce uncertainty.

 

 

2) Rajbhavan dharma-

 

GS 2- Appointment to various Constitutional posts, powers, functions and responsibilities of various Constitutional Bodies

 


CONTEXT:

  1. The political turmoil(disturbance) in Rajasthan has, once again, brought into light(focus) on the office of the governor.
  2. On Monday, Governor Kalraj Mishra stalled the Ashok Gehlot government’s recommendation for an assembly session.
  3. A few days ago, he vetoed(rejected) the state government’s proposal for a floor test.

 

TRIVIA:

  1. A floor test is a motion through which the government of the day seeks to know whether it still enjoys the confidence of legislature. In this procedure, a CM appointed by the Governor can be asked to prove majority on the floor of the Legislative Assembly of the state.
  2. The chief minister has to move a vote of confidence and win a majority among those present and voting. If the confidence motion fails to pass, the chief minister has to resign. The idea behind a floor test is to ensure transparency in the constitutional process.

 

DELAY:

  1. The governor has said that “the Raj Bhavan has no intention of not calling an assembly session” and asked the state government to submit a fresh proposal.
  2. But his repeated queries and the delay in convening(calling) the assembly — citing the COVID situation, among other reasons — invite questions about his commitment to the Constitutional principles.
  3. By all accounts, the chief minister himself has vacillated in the last few days on the question of the floor test.

 

SC OBSERVATION:

  1. Articles 163 and 174 of the Constitution deal with the governor’s role in convening an assembly session.
  2. The latter(174) gives Raj Bhavan the power to summon, “the House or each house of Legislature to meet at such time and place as he thinks fit”.
  3. However, the Supreme Court has removed any confusion that might arise over the governor’s discretion(wish) in the matter.
  4. In 2016, the Court noted that the framers of the Constitution, “decided not to vest discretion with the Governor, in the matter of summoning and dissolving the House, or Houses of the State Legislature.”
  5. Observing that the governor was a nominee of the president, the SC said that “such a nominee cannot have overriding powers over the representatives of the people and/or even the executive government”.

 

POLITICAL PARTISANSHIP:

  1. Accusations of political partisanship(bias), or failure to abide by the letter and spirit of the Constitution, have for long dogged the governor’s office.
  2. But it was in the 1980s and 1990s, when it became common for individuals still in active politics to be ensconced in Raj Bhavans, that charges of blatant politicisation of the gubernatorial(governor’s) office became more frequent.
  3. In 1994, the SC’s landmark Bommai judgment sought to curb the misuse of Article 356 to unseat state governments led by parties opposed to the ruling party at the Centre, and laid down clear limits of the governor’s authority.
  4. However, the trend of governors exceeding their brief in the formation and bringing down of governments has persisted.
  5. The governor’s role has been questioned at least six times after the Narendra Modi government assumed office — the Supreme Court has been called to intervene on three occasions.
  6. These interventions have meant that however politically murky(dirty) Rajasthan’s crisis might be, its legal and constitutional aspects are lucid(clear).

 

CONCLUSION:

Against this backdrop, the Rajasthan Governor’s procrastination(delay) in convening the assembly session only confirms the widely held impression that the high office may be taking its cues from the Centre, not the Constitution.