New Delhi: NK Singh, a former bureaucrat and head of the fifteenth finance commission, has a message for Prime Minister Narendra Modi on the need to consult state governments before enacting important laws such as the recently passed farm laws that have seen strong protest from the farmers of Punjab and Haryana.
The former IAS officer turned politician, who was handpicked by then finance minister Arun Jaitley in November 2017 to decide the all-important formula for division of revenue between the Centre and States, also underscored the need to have an expert body like the planning commission, which was scrapped by Prime Minister Narendra Modi in 2014.
The decision to scrap Planning Commission was seen as a strong rejection of the centralised path of economic development laid by the country’s first Prime Minister Jawahar Lal Nehru as PM Modi announced its replacement with a new think tank called NITI Aayog in his first Independence Day speech from the iconic Red Fort in August 2014.
Addressing the annual convention of industry body FICCI on Friday, NK Singh emphasised on the need to restore fiscal trust between the Centre and States by revisiting the seventh schedule of the Constitution, which delineates the area of responsibility between the Central government and States.
“Many have argued that the trust between various forms of government is waning. Are there new seeds of suspicion and mistrust,” asked the former bureaucrat while emphasising the need to fiscally empower all tiers of government by revisiting the basic structure of governance in the country.
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NK Singh said the division of functions under the seventh schedule, which divides the subjects of governance into three lists - Union, State and Concurrent lists, have been eroded over the years. He said it was primarily due to two reasons – establishment of the Planning Commission in 1950s for the centralised planning and shifting of education and forest from the State list to Concurrent list in 1976 through a constitutional amendment.
During the emergency, the Indira Gandhi government carried out the 42nd amendment in the constitution.
“It significantly changed the dynamics,” NK Singh observed.
The former bureaucrat, who also headed the all-important revenue and expenditure departments in the ministry of finance, said that in 2010 Justice MM Punchhi Commission on the Centre-State relations recommended creation of an Interstate Council for consultation between the Union and States for legislation on concurrent subject.
Under the Constitution, the Union government and States can both legislate on the subjects mentioned in the concurrent list but in case of a conflict, the laws passed by Parliament will prevail over the state laws.
He said that even the MM Punchhi Commission was of the view that the Centre should only transfer those subjects into the concurrent list which are crucial for achieving demonstrable national interests.
NK Singh’s comment comes at a time when Prime Minister Narendra Modi’s government is facing strong resistance from farmer groups over the three agriculture laws passed in the Monsoon session in September this year.
The three laws are the Farmers' Produce Trade and Commerce (Promotion and Facilitation) Act, 2020; the Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, 2020 and the Essential Commodities (Amendment) Act of 2020.
The Modi government was criticised by the opposition parties as these laws were passed in the Rajya Sabha by voice vote amid din and ruckus.
Under the Constitution, agriculture, including agricultural education and research is in the State list. Even though the contracts, partnership and other special forms of contracts are included in the concurrent list but the entry specifically excludes the contract related to agricultural land.
These issues have left open these three farm laws to judicial scrutiny as several individuals, including some members of Parliament, have challenged them in the Supreme Court.
The NDA government says these laws will give greater freedom to farmers to sell their produce anywhere in the country and would also allow them to enter into contracts with companies as farmers will be free to sell their produce outside the Mandi system.
Need to revive Planning Commission
While identifying six areas for consultation among the States and the Centre for deeper legislative reforms, NK Singh also advocated the need for reviving an expert body like the Planning Commission.
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“With the abolition of the Planning Commission, many economists and policymakers have argued about an institutional vacuum. While the NDC is performing an important function, the States have pleaded for a credible institution acting as a link for a policy dialogue with the Centre,” Singh told the audience.
The Planning Commission, which was established on March 15, 1950, functioned directly under the Prime Minister. The first five-year plan was launched in 1951 with the chief objective of the development of the agriculture sector.
Since its establishment, the commission formulated 12 five-year plans, the last one was for 2012-17 but the apex planning body was dissolved in the middle of the plan in August 2014 and replaced by the NITI Aayog.
Addressing the industry leaders and policymakers at the FICCI forum, NK Singh said: “We need to give serious consideration for a consultative forum for credible policy dialogue between the Centre and the States.”
“The NITI Aayog has emerged as a credible think tank and their work in the sphere of Centre-State relations needs to be recognized. However, the States are keen to have a different kind of a policy-based consultative forum. This is an area which deserves serious consideration of policymakers,” he told the audience.
