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Essential features of federalism: A study of federal evolution in India's Capital Territory

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Essential features of federalism: A study of federal evolution in India's Capital Territory

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Content ESSENTIAL FEATURES OF FEDERALISM: A STUDY OF FEDERAL EVOLUTION IN INDIA'S CAPITAL TERRITORY by Vandana Prakash A Dissertation Presented to the FACULTY OF THE GRADUATE SCHOOL UNIVERSITY OF SOUTHERN CALIFORNIA In Partial Fulfillment of the Requirements for the Degree DOCTOR OF PHILOSOPHY (PUBLIC ADMINISTRATION) December 2002 Copyright 2002 Vandana Prakash Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. UMI Number: 3093806 Copyright 2002 by Prakash, Vandana All rights reserved. ® UMI UMI Microform 3093806 Copyright 2003 by ProQuest Information and Learning Company. All rights reserved. This microform edition is protected against unauthorized copying under Title 17, United States Code. ProQuest Information and Learning Company 300 North Zeeb Road P.O. Box 1346 Ann Arbor, Ml 48106-1346 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. UNIVERSITY OF SOUTHERN CALIFORNIA THE GRADUATE SCHOOL UNIVERSITY PARK LOS ANGELES, CALIFORNIA 90089-1695 This dissertation, written by under the direction o f h dissertation committee, and approved by all its members, has been presented to and accepted by the Director of Graduate and Professional Programs, in partial fulfillment o f the requirements fo r the degree o f DOCTOR OF PHILOSOPHY Director December 18, 2002 Date_________________________ Dissertation Committee Chair Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Dedication To my parents, grandparents and Denny. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Acknowledgements I would like to express my most sincere appreciation to my advisor, Prof. Shui Yan Tang, for his valuable support and guidance over the past years. He generated challenging ideas and oppurtunities for me to acomplish this formidable task. I would also like to thank Prof. Robert P. Biller for having initiated me into research and for his guidance and support of my work. I thank Prof. John R. Hubbard and Prof. Terry L. Cooper for their guidance and Prof. John Tinker (Stanford University) for all he has taught, and continues to teach, me. I benefited greatly from their knowledge and experience. One could hardly ask for better instructors than those who guided me and I feel very fortunate to have had the opportunity to work with them. I hope that these associations continue beyond this thesis. I thank Prof. Grazman, Prof. Robertson and Prof. Hariharan for kindly serving on my qualifying examination committee. I owe a special thanks to my father, Mr. Virendra Prakash and my husband, Dr. Puneet Sharma for providing unrelenting support and guidance. I am also thankful to the School of Policy, Planning and Development for financial support that gave me independence to pursue my ideas. Last but not the least, I would like to express my gratitude to my family, Babaji, Ma, Eugene, G.da, Rachu, Chachiji and Chachaji for not only encouraging me to complete this dissertation but also providing the much needed moral support during this long journey & to Akash for livening up the hard days. iii Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Any mistakes, omissions and belmishes of this dissertation are attributable to and me alone. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Table of Contents Dedication..................................................................................................................................ii Acknowledgements..................................................................................................................iii List of Tables :............................................................................................................. viii List of Figures.......................................................................................................................... ix Abstract......................................................................................................................................x Chapter 1 Introduction to Dissertation.....................................................................................1 1.1 Motivation and Context of the Study:........................................................................... 1 1.2 Defining the Scope of the Study:................................................................................... 8 1.3 A Word about the Cases and their Role:.....................................................................16 1.4 A Word About What Follows: Anticipating the Conclusions and Identifying the Research Contributions:......................................................................................................17 1.5 Road Map for the Dissertation:................................................................................... 25 Chapter 2 An Introduction to the Cases................................................................................ 27 2.1 India, Delhi, and Federalism:...................................................................................... 27 2.2 Governance in Delhi: A Brief Recapitulation:...........................................................32 2.3 Our Cases:.....................................................................................................................43 2.4 Rationale for Comparing the Enabling and Functional Domains:........................... 46 2.5 Justification for our Choice of the Enabling Domain in Delhi:.................................53 2.6 Justification for our Choice of the Functional Domain of Environmental Management in Delhi:........................................................................................................ 56 2.7 Conclusion:....................................................................................................................58 Chapter 3 Examination of Related Literature........................................................... 60 3.1 Introduction:..................................................................................................................60 3.2 Defining Federalism:....................................................................................................60 3.3 Federation and Confederation:.................................................................................... 66 3.4 Studies of the Forms of Federalism in Practice:.........................................................69 3.5 Defining Characteristics/ Features of Federalism:.....................................................77 3.6 Conclusion:....................................................................................................................86 v Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Chapter 4 The Theory: The Essential Features Identified..................................................... 88 4.1 Introduction:.................................................................................................................. 88 4.2 Essential Features of Federalism:................................................................................ 92 4.3 Conclusion:.................................................................................................................. 119 Chapter 5 Multiple, Independent Governments..................................................................124 5.1 Introduction:................................................................................................................ 124 5.2 Multiple, Independent Governments in Enabling Domain:..................................... 126 5.3 Multiple, Independent Governments in the Functional Domain of Environmental Management:..................................................................................................................... 140 5.4 Conclusion:.................................................................................................................. 144 Chapter 6 The Constitution.................................................................................................. 147 6.1 Introduction:................................................................................................................ 147 6.2 The Constitution and Constitutional Provisions in the Enabling Domain:............152 6.3 Constitution and Constitutional Provisions in the Functional Domain of Environmental Management:...........................................................................................159 6.4 Conclusion:.................................................................................................................. 164 Chapter 7 Empowerment...................................................................................................... 167 7.1 Introduction:................................................................................................................167 Chapter 8 Conflict Resolution..............................................................................................211 8.1 Introduction:................................................................................................................211 8.2 Conflict Resolution in the Enabling Domain:..........................................................212 8.3 Conflict Resolution in the Functional Domain of Environmental Federalism:.....223 8.4 Conclusion:..................................................................................................................228 Chapter 9 Partnership and Cooperation..............................................................................229 9.1 Introduction:................................................................................................................229 9.2 Partnership and Cooperation in the Enabling Domain in Delhi:............................ 230 9.3 Partnership and Cooperation in the Functional Domain of Environmental Management:.....................................................................................................................233 9.4 Conclusion:..................................................................................................................236 vi Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Chapter 10 Conclusion and Looking Beyond: Suggestions for Future Research........... 239 10.1 Scope of the Study and its Theoretical Backdrop:.............................................. 239 10.2 The Essential Features of Federalism Defined in Theory and Examined and Developed Empirically:............................................................................................... 244 10.3 Directions for Future Research: Some Ideas:...................................................... 259 10.4 Conclusion:..........................................................................................................275 Bibliography...................................................................................................................277 Appendix A .....................................................................................................................290 Appendix B .....................................................................................................................295 Appendix C .....................................................................................................................296 Appendix D .....................................................................................................................297 Appendix E .....................................................................................................................298 vii Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. List of Tables Table 1: Varying Evolution of Essential Features in Different Domains..................................48 Table 2: Standard Matrix-based Framework comparing Types of Decentralization of Major Government Functions {From: Cohen and Peterson (1999): Administrative Decentralization: Strategies for Developing Countries (Connecticut, USA: Kumarian Press), p.32}........................................................................................................ 105 Table 3: Shortages in Delhi.........................................................................................................198 viii Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. List of Figures Figure 1: Hierarchical Structure of Governments in D elh i....................................................... 33 Figure 2: Organizational Structure of the M CD .........................................................................40 Figure 3: Continuum of Political Systems ................................................................................. 69 Figure 4: Picket Fence Federalism............................................................................................... 72 Figure 5: Bamboo Fence Federalism ..........................................................................................73 Figure 6: Coordinate Authority M odel........................................................................................74 Figure 7: Overlapping Authority Model .................................................................................... 75 Figure 8: Inclusive Authority M odel...........................................................................................76 Figure 9: Overlap of Activities Between National and Sub-national Levels..........................112 ix Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Abstract Federalism is not just a theoretical construct—it is a form of governance increasingly in practice globally. Yet, in real life its practice is plagued by excessive conceptual diversity and lack of commonly accepted, widely applicable framework. To overcome this problem, this dissertation culls-out both the defining features as well as the varieties of the federal form, to provide the foundations for an alternative approach. The dissertation argues for a qualitative shift—from first generation theories to second—in the studies of federalism, adopting pragmatic—rather than narrow, dogmatic—approach. Thus, using an eclectic framework—building on theoretical knowledge and practical experience of countries—the dissertation develops five Essential Features of Federalism (EFF) as: 1) Multiple, Independent Governments 2) Constitution (written and accepted by all the participating entities) 3) Empowerment of all levels with emphasis on decentralization and sharing of powers 4) Conflict resolution mechanisms 5) Partnership and cooperation. Going beyond the minimal defining features, the EFF are deemed essential for smooth working of federal systems—the ones that must be promoted zealously to realize the full potential of this form of governance. Case studies from Delhi help illustrate, examine and justify the EFF. Each feature is studied in two distinctly defined domains (each representing key areas of governmental activity)—the enabling domain and the functional domain of environmental management. x Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. While in the enabling domain, intergovernmental relations fall under a sharp focus, the study of EFF in environmental management demonstrates the crucial importance of the interplay of informal, formal, civil society as well as governmental forces in shaping the evolution of federalism. Compared with the enabling domain, the role of the features varies over time and across domains, influenced by the forces within the domain. The case studies prove the utility of federalism for providing limited, decentralized government with due checks and balances, promoting citizen participation and harmonizing the interests of diverse groups of people. Finally, this dissertation suggests directions for future research—indicating three other possible candidates for EFF and the relevance of EFF in decentralization even in unitary systems. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Chapter 1 Introduction to Dissertation 1.1 Motivation and Context of the Study: Extensive literature on federalism bristles with a great deal of complexity and confusion about what federalism precisely is. One author has gone so far as collecting no fewer than 497 definitions of federalism in his work1! Such a wide range of conceptual diversity can scarcely be conducive to a precise discussion of issues pertaining to this important form of government around the world. Different scholars seem to have got around the problem of defining federalism at least in terms of its basic ingredients or characteristics by confining themselves to a 'y narrow definition limited to the purpose of their own study. An unfortunate outcome of this case-by-case approach has been that a commonly accepted definition of the concept, delineating its essential features, has escaped being adopted in the literature dealing with studies in federalism. Though these studies accurately describe different federal forms, they end up neglecting the common features, concentrating more on divergences and distinctions. Nor do they analyze commonly replicable features that can help federal systems enhance their performance. Many attempts have been confined to studying the phenomena within 1 Stewart, William H. (1984): Concepts of Federalism (Lanham, MD: University Press of America). 2 For example the characterization of the different phases of American federalism as Marble Cake and Layer Cake federalisms. 1 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. federalism (for example Layer-Cake federalism versus Marble-Cake federalism)— without any attempt at broader characterization cutting across different federal forms. Often the characteristics highlighted are so peculiar that it is unreasonable to expect any generalization or conscious replication in other systems. This includes, for example, Raz’s idea of tolerance in Morality o f Freedom3 or Scheppele’s ideas of mutual tolerance and moral pluralism in “The Ethics of Federalism”4 or Vincent Ostrom’s discussion of the origins of American federalism in Christianity’s basic covenant, “Do unto others as you would have others do unto you.” Additionally, different approaches and perspectives result in varying definitions of the same phenomena. For example the underlying motivation for choice of federalism for America has been viewed differently by different scholars.5 One of the primary views tracing the theoretical grounding of the Founding, that of John Roche,6 argues that the Founders were not chasing theoretical political ideas or concerns but that they had a more practical approach. They were seeking a blueprint that would enable the infant nation to 3 Raz, Joseph (1986): The Morality of Freedom (Oxford: Clarendon Press and New York: Oxford University Press). 4 Scheppele, Kim Lane (1989): “The Ethics of Federalism,” in (Scheiber, H. N. and Malcolm M. Freely, Eds.) Power Divided: Essays on the Theory and Practice o f Federalism: Papers presented from the Third Berkeley Seminar on Federalism (Berkeley, California: Institute of Government Studies, University of California at Berkeley). 5 McWilliams and Gibbons (ed.) 1992 volume, The Federalists, the Anti-Federalists and the American Political Tradition (New York: Greenwood Press) reconstructs the debate over the founding of American federalism very well. A couple of pieces offering a more complete bibliography on this topic include: - Onuf, Peter: “Reflections on the Founding: Constitutional Historiography in Bicentennial Perspective,” William and Mary Quarterly, 3r d Series, 4 6 ,2 April 1989, pp.341-75; and: - Bernstein, Richard: “Charting the Bicentennial,” Columbia Law Review, 87, 8, (December 1987) pp. 1565-1624. 2 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. deal with its real political problems. Another tradition, led by Charles Beard,7 establishes that the motivation of the Founders was economic or commercial and that they were working to aid and advance the competing property interests that they represented.8 Similar to this reasoning based on commercial or economic motivation for founding of federalism in America, McDonald9 and Wolin1 0 also offer an economic view. Wolin argues that the founding involved a shift from the politics-based philosophy of a nation to an economics-based philosophy, rooted in human self-interest. Nedelsky1 1 accepts both the political and economic bases but argues (like Beard) that property rights was, by far, the dominant thought. Kenyon1 2 too has argued that both ideological context and economic motivation were important in the Founding of a federal constitution in America. Still others (Richard B. Morris and Harry N. Scheiber) regard the Founding to 6 Roche, John (1961): “The Founding Fathers: A Reform Caucus in Action,” American Political Science Review, 55,4, (December), pp. 799-816. 7 Beard, Charles (1913): The Economic Origins o f the Constitution (New York: Macmillan). 8 Gordon S. Wood notes that “Beard wrote out of a desire to strip away the high-sounding rhetoric of the Founding Fathers and to lay bare ‘those realistic features of economic conflict, stress and strain’ that he and much of his generation believed really motivated people.” {Wood in Foreword to Cecilia M. Kenyon (ed.) volume The Antifederalists (Boston: Northeastern University Press, 1985), p. v}. 9 McDonald, Forrest (1956): We The People: The Economic Origins o f the Constitution (Chicago: University of Chicago Press). 1 0 Wolin, Sheldon (1989): The Presence o f the Past: Essays on the State and the Constitution (Baltimore: The Johns Hopkins University Press). 1 1 Nedelsky, Jennifer (1990): Private Property and the Limits o f American Constitutionalism: The Madisonian Framework and its Legacy (Chicago: University of Chicago Press). 1 2 Kenyon, Cecilia M. (1955) “Men of Little Faith: The Anti-Federalists on the Nature of Representative Government,” (William and Mary Quarterly, 3r d Serial, XII). 3 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. have been motivated by a desire to create a national character. Scheiber1 3 sees the creation of a republican spirit as the dominating force. Morris1 4 sees the restoration of congressional power and prestige as the driving force. Many debate over whether liberalism1 5 or republicanism1 6 was the dominant idea in the Founding or did some synthesis1 7 of the two guide the Founders. 1 3 Scheiber, Harry N. (1992): “Constitutional Structure and the Protection of Rights: Federalism and the Separation of Powers,” in A. E. Dick Howard (ed.) The United. States Constitution: Roots, Rights and Responsibilities (Washington: Smithsonian Institution Press). 1 4 Morris, Richard B. (1979) “Federalism: USA Style” {Bijdragen en Mededelingen betrejfende de Geschiedenis der Nederlanden (Netherlands) 1979, 94 (3), pp. 451-468}. 1 5 The following promote liberalism as the dominant idea of the Founding: • Appleby, Joyce Oldham (1978): Economic Thought and Ideology in Seventeenth Century England (Princeton: Princeton University Press); Capitalism and a New Social Order: The Republican Vision of the 1790s (New York: New York University Press, 1984); “Republicanism and Ideology”, American Quarterly, 37, 4, (Fall 1985), pp. 461-73; and “Republicanism in Old and New Contexts”, William and Mary Quarterly, 3r d Serial, 43, l(January 1986), pp.20-34. » Kramnick, Issac (1982): “Republican Revisionism Revisited”, American Historical Review, 87, 3(June 1982), pp.629-664. • Pangle, Thomas (1988): The Spirit o f Modem Republicanism: The Moral Vision of the American founders and the Philosophy of John Locke (Chicago: University of Chicago Press). 1 6 Proponents of republicanism as the dominant idea include: • Arendt, Hannah (1963): On Revolution (New York: Viking Press). • Bailyn, Bernard (1973): The Ideological Origins o f the American Revolution (Cambridge: Harvard University Press). • Banning, Lance: “Republican Ideology and the Triumph of the Constitution, 1789 to 1798”, William and Mary Quarterly, 3r d Serial, 31,2 (April 1974), pp. 167-188; and “Jefferson Ideology Revisited: Liberal and Classical Ideas in the New Republic”, William and Mary Quarterly, 3r d Serial, 43, l(January 1986), pp.3-19. • Epstein, David (1984): The Political Theory o f the Federalist (Chicago: University of Chicago Press). • Pocock, J.G.A. (1985): The Machiavellian Moment: Florentine Political Thought and the Atlantic Republican Tradition (Princeton: Princeton University Press, 1975); Virtue, Commerce and History: Essays on Political Thought and History, Chiefly in the Eighteenth Century (Cambridge: Cambridge University Press). • Wood, Gordon (1969): The Creation of the American Republic, 1776-1787 (Chapel Hill: University of North Carolina Press) and “The Creation of the American Republic, 1776-1787: A Symposium of Views and Reviews,” William and Mary Quarterly, 3r d Serial, 44, 3 (July 1987), pp.549-640. 1 7 The following works argue that several traditions, including both republicanism and liberalism, influenced the beliefs of the Founders: 4 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. It is reasonable to expect greater divergence of views, variation and complexity in the task of defining federalism as a more generic concept. And thus many different definitions of federalism are available in literature. However merely recounting each definition serves little purpose. It is more meaningful, particularly for the purposes of this study, to utilize the works of different scholars for drawing out the common and mutually reinforcing elements. Many scholars consider federalism to be defined by a combination of two or more states in which some independence is retained by the states (Freeman,1 8 1863; Sharma, 1953; A. Ray, 1966; B. Ray, 1967, etc.). Some others place their emphasis on the unity and equal partnership of the states1 9 . Some stress the idea of a common power dominating in matters of common interest (Herman Finer,2 0 Freeman, etc.). Still others consider division of authority to be the critical idea (Most notably Hamilton in The Federalist Papers', Wheare, 1953; Diamond, 1961; Dicey, 1952; V. Ostrom, 1988; etc.). Some consider federalism to be contractual and hence advance the idea of a contract or a constitution as a pre-requisite (Dicey, 1952; V. Ostrom, 1994; Sharma, 1953; A. Ray, • Leinesch, Michael (1988): New Order o f the Ages: Time, the Constitution, and the Making of Modem American Political Thought (Princeton: Princeton University Press). « Matson, Cathy D. and Peter Onuf (1990): A Union o f Interests: Political and Economic Thought in Revolutionary America (Lawrence: University Press of Kansas). 1 8 Freeman, Edward A. (1863): History o f Federal Government (Macmillan Co.). 1 9 Sharma (1953) proposes the New Theory of Internationalism. He says that given the increased interdependencies in the world, isolationist existence is impossible and hence the states must live with unity as in a “family.” 2 0 Finer, Herman (1932): Theory and Practice o f M odem Governments. 5 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 1966; B. Ray, 1967). One author has also expressed federalism as a mathematical equation with environment, history, socio-economic factors etc. as its variables.2 1 In counter-distinction, we approach the subject from a more holistic viewpoint in defining what we regard as the essential features of federalism. These go beyond the defining characteristics and include features that smoothen the process of adoption and development of federal systems. Our Essential Features of Federalism are distinct from the defining features of federalism discussed in previous paragraphs. Those are the basic characteristics of federalism that cannot be ignored. Our analysis takes these as given (and hence the importance of recapitulating these which we do in chapter 3) and from there it takes the next step in the discourse on federalism. The essential features of federalism are designed to smoothen the process of adoption and development of federal systems—through both enhancing theoretical understanding (which is a precondition for successful practice) as well as through the creation of institutions that can aid the working of federal systems. While the defining characteristics underlie our formulation, from our point of view these are also rather limited. Such studies do not respond to the needs of a growing and developing system like federalism and in that sense are not adequate. In considering only three defining features,2 2 they neglect other features and conditions that, though not definitional, are essential for effective and efficient organization of government under this form. 2 1 Sharma, B.M. (1953): Federalism in Theory and Practice, (Lucknow, India). 2 2 These authors—for example: Dicey (1889), Sharma (1953), Riker (1964) and Ray, Bharati (1967)— consider a short list of three essentials for federalism—one, coexistence of two governments; two, a supreme constitution, and three, judiciary as the interpreter of the constitution. 6 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Federalism is not just a theoretical construct. It is a form of governance in practice that is increasingly being adopted around the world. This is because federalism accommodates a great deal of diversity in the nature and in the form of power structures within different societies.2 4 Consequently, it spawns a diversity of institutional arrangements in the real life situation. Yet there are some inalienable elements that lie at the core of the federal form and go to distinguish it from other systems of governance. Early studies diligently identified the minimum basic features. In this study, we will recapitulate these basic features of federalism with the aim to create a crystallized picture of the concept. Thus, we also aim to consolidate the literature in order to arrive at a common framework, thereby seeking to fill a major gap in the field. In order to provide a clear understanding of the concept of federalism and its distinguishing features, we will 2 3 Thimmaiah (in Jafa (ed.) 1999) discusses this trend. He includes in this also the formation of a federation by many nations— including the ever-neutral Sweden—in Europe as the European Union to reap the benefits of larger markets, economies of scale etc. Also, we recall Elazar’s statistics that nearly 80% of world’s population lives in federal or near-federal polities. {Elazar, Daniel J. (1994): Federal Systems of the World: A Handbook o f Federal, Confederal and Autonomy Arrangements, 2n d ed., p.xv (New York: Stockton Press)}. 2 4 Hamilton has noted this in The Federalist Papers (1964 edition) in stating that: “the extent, modifications and objects of the Federal authority are mere matters of discretion. So long as the separate organization of the members be not abolished, so long as it exists by a constitutional necessity for local purposes, though it should be in perfect subordination to the general authority of the Union, it would still be, in fact and in theory, an association of States, or a confederacy. The proposed Constitution, so far from implying an abolition of the State Governments, makes them constituent parts of the national sovereignty by allowing them direct representation in the senate, and leaves in their possession certain elusive and very important portions of sovereign power. This fully corresponds, in every rational import of the terms, with the idea of a Federal Government.” Among the more recent views, Nice and Fredericksen (1995) also emphasize this. They say: “Federal systems can distribute powers and responsibilities in many ways, ranging from systems in which the national government is relatively weak and the sub-units are dominant, systems that are often called confederations, to systems that give the national government most of the authority and leave the sub-units with a relatively minor role. Moreover, the division of power and responsibility in a system can change overtime, as it has in the United States, and can very from one program to another. Responsibilities can be divided, with some given to the national government and others to the sub-units, or responsibilities can be shared.” 7 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. also conduct an extensive survey of the literature. This is important given the excessive conceptual diversity and consequent lack of clarity in the field—being all the more crucial for us as the definition and defining characteristics provide the given groundwork for our theory. This is also important for locating our study in the context of the state of the filed. Furthermore, it shows how our work advances the current state of knowledge and how it is distinct from available current understanding, thus moving a step forward. The literature both theoretical and empirical forms the cornerstone of our study—we draw upon the available knowledge to formulate the essential features of federalism. Such a theoretical examination, in addition to our own formulation, forms a major part of the dissertation and is covered in the first four chapters. 1.2 Defining the Scope of the Study: Be it for concerns of efficiency or a quest for more egalitarian systems, scholars have long struggled to design a perfect (or nearly so) system of governance or the ideal method of organizing governance (Elazar, 1987; Hult and Walcott 1990; Walcott and Hult 1996; Vyatkina2 5 ). The search for effective systems for organization of governance is all the more crucial given that the choice of different institutions results in differential impact on the future course of development of society (Moe and Caldwell, 19942 6 ). In a broader perspective, this study can be located as another attempt in the same direction. 2 5 Vyatkina: “Division of Legislative Powers under Federalism” (http://blaeklilia.tripod.com/federalism.htm) (Last Accessed on June 3, 2002). 2 6 Moe, T. and M. Caldwell (1994): ‘The Institutional Foundations of Democratic Government: A Comparison of Presidential and Parliamentary Systems” {Journal o f Institutional and Theoretical Economics, vol. 150}, pp.171-195. 8 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. The study of federalism focusing on the essential features in this dissertation does not follow a rigid viewpoint (: as we emphasize later, we favor a pragmatic approach for studies of federalism as against the often-adopted dogmatic one) nor does it approach this vast subject with any preconceived notions of what these must be. As will come-out in the subsequent discussion, but must nevertheless be underlined here, the approach is essentially eclectic: so that the possibility of great diversity of concept and praxis is not merely accepted but considered a positive aspect of the system making for its wider adoption across a wide swath of nations in different stages of governmental evolution and experiential maturity. Based on an examination of the theoretical literature and the studies of federations at work in different parts of the globe, it is possible for such a study to identify the features that are essential2 7 for well-functioning federalism—which is not to say that the essential features constitute the necessary and sufficient conditions for successful federations. All of them may or may not be present in a given system—but their combined presence would go a long way in making the system effective and efficient. It is important to note here that different features may be present in different federal systems in varying degrees, leading to correspondingly differing consequences. Depending on the particular domain and type of system, some features may or may not be present. Also, depending on the extent of evolution of the system, some features may 2 7 The use of “essential” should not mislead the reader into thinking about the canon of “Essentialism” as criticized by Popper {Reference: Popper, KR (1950) The Open Society and its Enemies (Princeton, NJ: Princeton University Press). We do not claim that these are the “Essence” of federalism; on the contrary, we particularly distinguish them from the necessary, defining features of federalism. We argue that the list 9 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. only be partly developed. A careful cognizance of this aspect would enable us to analyze the relative importance of the different features for strengthening federal systems and for their smooth working. In the second part of this dissertation, we will focus on two specific cases from the capital territory of India—Delhi—to study the evolution of federalism in the context of the features outlined in the first part. These features and the subtle aspects will be both examined and demonstrated in this second part. As mentioned before, a major shortcoming of the literature on federalism has been a lack of generally applicable theoretical formulations—theory has been oblivious of its responsibility to the practice of federalism. Our study hopes to serve as a step in overcoming this deficiency. By developing a list of essential features it is also hoped that some consolidation of the literature will be achieved. This dissertation will also later attempt to empirically explain and justify such a list. The same features will be explored and examined in two cases to show the differing real life manifestation and variations of the features. We will simultaneously compare the two cases to show the differential impact or result of presence (or absence) of the features in differing degrees (we will explain these ideas in some depth in section 4 below where we anticipate the conclusions of the dissertation). We rely on the early works for a list of defining features of federalism. Early scholars, as mentioned above and as detailed below in this dissertation, have provided the basic characteristics of federalism. Different definitions of federalism have been of essential features of federalism provides a set of conditions conducive for effective federal working and it is an empirical— and not a metaphysical— claim for effective and efficient federalism. 10 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. provided. We will review these in a subsequent chapter (chapter 3), to provide a bird’s eye view of the state of the field as well as to provide a clear understanding of the concept, which is critical for our work. Further, we also discuss different models of federalism to recall some important forms of federalism discussed in the literature. Examples here include: Watts’ varying federal arrangements coming out of different combinations of self-rule and shared-rule,2 8 or Nice’s three broad kinds of federal arrangements,2 9 Competitive, Cooperative, or Functional, and Wright’s Coordinate, Overlapping, and Inclusive authority models, arising from varying kinds of overlaps of authorities between governments.3 0 Peterson (1995) has a practice-oriented approach in enunciating his theories of federalism.3 1 Under the Functional Theory, he identifies which government will be most effective in which area of functioning. In the Legislative Theory, he identifies how and what pressures (like political pressures) can cause governments in federalism to deviate from the ideal distribution of responsibilities. Since federalism manifests differently across time and space, these models serve the useful purpose of defining some broad categories of federal systems. 2 8 Reference: Watts, Ronald L. “International Examples of Political Partnerships” (Policy Options, March 1998, pp.47-49). 2 9 Reference: Nice, David C. (1987): Federalism: The Politics o f Intergovernmental Relations (New York: St. Martin’s Press), pp. 4-13. A more updated version of the text is available as: Nice, David and Patricia Fredericksen (1995): The Politics of Intergovernmental Relations (Chicago: Nelson Hall). 3 0 Reference: Wright (1988): Understanding Intergovernmental Relations (Pacific Grove, California: Brooks/ Cole Publishing Co.) p. 39-58. 3 1 Reference: Peterson, Paul E. (1995): The Price o f Federalism (The Brooking Institution, Washington, DC), pp. 16-49. 11 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Probably Hayek (1948) had a concern similar to ours in enunciating “the conditions for interstate federalism.”3 2 He says that a successful federation requires simultaneous economic and political union with free movement of men, capital and goods, one single market, a uniform monetary system, a federal reserve system, and common economic policies. It must also have common rule of law, common foreign and defense policies, and common control of communications. He adds that “causes of friction” must be eliminated and means provided to settle disputes and prevent war. Time and experience have supported Hayek’s wisdom and future scholars must understand and develop it further. As development experiences have shown even economic development must come with a social face; thus this dominantly economic focus of Hayek needs to be rendered holistic. Furthermore, these conditions need to be updated keeping in view the changing requirements of the half-century that has since passed. Thimmaiah (1976) too might have had a purpose similar to ours in discussing the conditions for a stable federation3 3 —in addressing the pragmatic aspects of a functional federation. Thimmaiah provides a set of economic, fiscal and non-economic conditions for a stable federation. The non-economic conditions call for “cultural, language, ethnic and racial equality” and require that the military strength of the federation exceed that of its units combined. The economic conditions require an agreement among all the 3 2 Reference: Hayek, Friedrich A. (1948): ‘The Economic Conditions of Interstate Federalism” in Individualism and Economic Order (Chicago: The University of Chicago Press), pp.255-272. 3 3 Reference: Thimmaiah (1976) Federal Fiscal Systems o f Australia and India: A Study in Comparative Relevance (New Delhi, India: Associated publishing House). 12 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. members of the federation to ensure economic equality and also require that the GNP of the federation exceed the sum of its units’ GNP. The fiscal conditions require national government to adjust for the discriminatory and adverse impacts of fiscal policies, especially on poorer regions. While Thimmaiah proposes interesting conditions, they need validation (or rejection) through examination of actual experience. Also, given that they are ‘conditions’ and that they are ‘normative’ (: as brought out by Thimmaiah’s stress on ‘should’ or ‘must’ rather than the ‘positive’ ‘is’), they are very different from our features. They are not the essential features for good governance in federalism. For example, it is possible to visualize that a unit (say the center) having excessive military power may usurp a regional authority, thus defeating the very purpose (and even existence) of a federation. Additionally, his emphasis is not on actual practice—for example, how can we actually establish that in practice a nation has perfect language or racial or cultural or ethnic equality (even though the federation desires these). Our emphasis, on the other hand, is strongly on praxis and real life experience of nations; thus, we draw heavily on the ‘positive’ (on the way things are in actuality) in our analysis. The foregoing discussion of different models of federalism points to the way in which federalism has evolved in response to differing social and political environments in different soils. We must stop to ask whether there are certain underlying aspects cutting across these different forms and if so, how far they aid the success of the federal endeavor. This is precisely the aim and ambit of the present exercise. We aim at reaching out to their pragmatic role in, and contribution to, the success of federalism in a 13 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. specific real life case. Thus, our concern is more with the features that are essential to the smooth and effective functioning of federalism and not so much with those that only define federalism. Moving beyond descriptive models and building upon a survey of the vast literature marks a milestone in our current quest. This leads us to identify five features that can be called the Essential Features of Federalism—essential for the successful adoption or implementation of federalism, especially in an array of newly self-governing nations grappling with the daunting task of achieving development and good governance as they emerge from the shadows of their colonial past. A qualifying statement is necessary here. This is not a study of federal governments across a number of nations from which lessons on the reasons for failure or success are drawn. Rather, our study relies on a close examination of the operation of the Essential Features of Federalism (identified from the literature) in the empirical case of India with particular focus on the National Capital Territory of Delhi (NCTD) where federal evolution is taking place. Considering that India, the largest country under continuous democratic rule, is a relative success in governance among the post-colonial nations and cognizant of the reality that a great churning is afoot in its national capital to face up to the glaring failures of governance through the democratic process, the study bases itself upon intellectually reliable foundations. Hopefully, it would also offer significant lessons and important pointers to other similarly placed nations. As noted above, we emphasize the importance of praxis and experience in the development of essential features of federalism. Such a list is based on experiential 14 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. learning and must continue to be enriched by this. In that sense it is not an exhaustive list—we expect that future studies will draw on diverse influences to caution federal systems against likely practical problems and also predict for them ways of handling them through the adoption of appropriate practices, through the creation of appropriate institutions. Thus we do not claim to establish sufficient conditions for federalism—which can change with time and with systems. Neither do we claim to be establishing the necessary conditions. At a minimal level, the defining features of federalism are the only ones that can be understood as the preconditions, the necessary conditions. Hence, to avoid any ambiguity, we must note that the features of our formulation are not designed as the necessary conditions (though some of them closely correspond to the characteristics of federalism earlier proposed in theory)—maybe some of these conditions exist in reality only in a very limited form or they may even be altogether absent. For example, as our examination of the cases from Delhi shows, separation of powers between the state and local levels is yet to be perfected. And trust between governments there is altogether absent. Also, by no means do these features provide a set of sufficient conditions—since given the uniqueness of each federal set-up at best only research specific to the particular case can hope to arrive at some sufficiency requirements for that system. But these are more in the nature of desirable conditions—desirable for the development and smooth functioning of a federal system so that good governance can be achieved and federalism has the means for self-correction and to address systemic problems like ethnic strife, varying regional requirements, etc. 15 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 1.3 A Word about the Cases and their Role: Available theoretical and empirical literature provides us with a wealth of material from which to cull out the features that are essential for smooth functioning of the federal form and make it deliver good governance in complex societies. It also throws light on the relative importance of different essential features in different situations advancing our understanding of their contextual significance in making the system work. The contextual aspect of federalism may broadly be viewed in two parts. First, the stage of federal evolution in the society under study. Second, the domain (e.g., finance or education or environment) in which we examine federalism in action. Our choice to study federalism in the NCT of Delhi provides us with ample scope to study both these aspects in depth. For, Delhi’s case offers a study in evolving stages of federalism in two major domains—one, the overall enabling domain and the other, a functional domain, namely environment management, —both currently witnessing a lot of action and reaction. Our first case study focuses on federalism in the enabling domain in Delhi, India. Enabling Domain, a major aspect of the basic governance structure, is comprised of the legal, financial, administrative and such crosscutting functions of an organization.3 4 Specifically, we will see whether the essential features of federalism are present in this domain and to what extent. This analysis not only helps to demonstrate our theory but it also helps further develop the features because the features may evolve in somewhat varying forms in different systems, thus offering some flexibility in definition of ideas. 3 4 We provide a detailed definition and explanation of the enabling domain in Chapter 2, Section 2 below. 16 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. In the second case study, of the functional domain, we look for the presence of the essential features of federalism in environmental management in Delhi. Environmental management is an area of comparatively recent concern in Delhi. And it has seen important changes in intergovernmental relations in the past few years. One notable change, brought about in the early 1990s, was to take environmental management closer to the people, thus affecting the federal-state relations significantly. Federalism was adopted in the country as the basic governance structure with the adoption of the constitution in 1950 and there has been much evolution in intergovernmental relations in the enabling domain over time and particularly in the recent years. Thus the two cases offer an interesting study and a useful comparison. As we shall see, the experience of each has useful lessons to offer for the other as well as for other nations in similar positions, and for large capital cities that often find themselves facing similar dilemmas. 1.4 A Word About What Follows: Anticipating the Conclusions and Identifying the Research Contributions: Since the early days of federalism, much evolution of this form has occurred and much experience has accumulated. Hence there is a need to ensure that the features are applicable to a modem day federation and that they help it in working smoothly, efficiently and effectively. This does not diminish the importance of earlier works that define federalism, identify its distinguishing features or propose theories to generally characterize the forms of federalism. Instead, we aim to take these works further by providing a set of practical, generally applicable features that will aid in the working of 17 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. federalism. While the list thus far extends to eight features (we hope that future work will enrich this further), five of them have been explored in detail; the other three are only suggested. Due to the inadequate development of these in theory itself or due to a lack of their development in the empirical cases, they cannot be examined in detail. The five essential features of federalism, which we develop and justify, building on the wealth of theoretical literature and on the examinations of experiences of different countries, are: Multiple, Independent Governments - Constitution (written and accepted by all the participating entities) - Empowerment of governments at all levels, especially the sub-national governments - Conflict Resolution Mechanisms - Partnership and cooperation Admittedly, the existence of multiple governments, functioning independently within their own jurisdictions is the hallmark of federalism. A Constitution embodying the key points of the covenant and an independent judiciary to interpret, arbitrate and enforce the compact is another. Decentralization of powers and empowerment of sub-national governments to an extent that gives real meaning to their independence lies at the very heart of a genuine federal design. In order that decentralization does not degenerate into disintegration or fragmentation of governance, the division of powers must take the form of a creatively shared endeavor aimed at maximizing the synergy of the system. While competition among multiple governments is to be welcomed, there is also the need to prevent it from taking the ugly form of destructive conflict between them. Not only must the scope of conflict among the multiple, independent governments be duly recognized 18 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. and provisions made in the constitution and otherwise for obviating or resolving them, the need to refine the conflict resolution mechanism from time to time in light of experience must also be underlined. Finally, the success of a joint enterprise like federalism requires the conviction as well as matching conduct inspired by partnership and cooperation, based on a realization that “we are all in this boat together.” Thus a theoretical examination forms the first part of this dissertation. The second part of the dissertation conducts an empirical examination of the five essential features identified in the fourth chapter. Starting with an introduction to the empirical part of the dissertation, we go on to explore each feature in the two domains in a chapter of its own. Using the cases of the enabling domain and the functional domain of environmental management (which we have introduced above and which we discuss in detail in the following chapter), we will demonstrate our theory. The cases are used to examine, explain and justify empirically the essential features. The cases also help enhance the understanding of the features further. Depending on the state of federal evolution in a country and the particular domain, the features manifest themselves differently. The cases show this variation, thus also exposing the shades of federal evolution. We simultaneously compare the features in the two domains to show how the features may evolve differently in each domain and with what consequence. This discussion must of necessity also demonstrate the evolutionary processes involved in the development of the features (or lack of it) in Delhi. So, anticipating the discussion, if we take the example of Decentralization, we find that the evolution of decentralization has 19 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. varied vastly between the overall or crosscutting enabling domain and one of the functional domains, viz., of environmental management. While the absence of specific constitutional provisions for empowerment of local bodies posed an insurmountable obstacle in the case of the former, in the latter, decentralized working is taking place due to the urging and emerging needs of the situation. Thus, we find, that a variety of forces are at work in each case to both aid and hamper the development of the particular feature and of federalism. For example, in some cases the formal constitutional provisions have a significant role to play (as in Decentralization in the enabling domain). In others, forces other than specific constitutional provisions or even day-to-day working can informally—but significantly—influence this evolution.3 5 The form and evolution of the features affects each other’s development. Their practical manifestation influences the development of federalism in general and the efficacy within the domains in particular. Let us take the example of Empowerment of local bodies in India. Despite the provision for it under the Directive Principles of State Policy, the development and empowerment of local bodies was completely stalled, in fact detrimentally affected, for almost four decades in the absence of provisions guaranteeing their existence. Thus, the 1992 Amendment to the Constitution surfaced as an explicit pre-condition for empowerment of the sub-state level. Furthermore, as the experience of local bodies in India shows, the recognition of the need as well as of the likely obstacles in the development of a feature is an important 3 5 This is illustrated by the Relocation of Industries case study in environmental management—-in Partnership and Cooperation and in Decentralization respectively. 20 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. first step. Another example of this can be found in the discussion of Conflict Resolution Mechanisms. As we build below, some conflicts can be foreseen and provisions to avoid or resolve them can be made. Others may surface in the course of working of federalism and will need to be addressed as they appear. There will be conflicts which can be addressed under the available umbrella provisions and still others requiring specific provisions. The state-local inter-governmental relations in India (due to the recent empowerment of local bodies) and in Delhi (due to the recent provision of state-level government for the capital-city) provide and may continue to offer a fertile field for this inquiry. For example, as the recent conflicts between the local (Municipal Corporation of Delhi) and state (Government of National Capital Territory of Delhi) governments indicate as local governments exert their powers and realize their positions, conflict between these levels is likely to develop. The provisions for the Election and Finance Commissions at the state-local levels anticipate the possibility of such conflicts and also reflect the understanding of the need for solutions (to provide conflict resolution mechanisms). The history of experiences in federalism, both at the center-state and state- local levels, is witness to the struggle for control over finances, power, elected bodies, etc. and hence the need for conflict resolution mechanisms for a smoothly functioning federalism. Thus our research argues that the essential features need to be developed for the smooth working of federal systems. It shows some of the varying shades of evolution of the features, thus substantiating our argument for a flexible approach to the study of federalism. We propose widely applicable features and argue for a flexible approach. 21 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. This is also supported by the flexible and malleable nature of our features when analyzed in the Delhi case studies. As our two cases show, the features may be present in varying degrees in different set-ups. And, even in the same system, they may have evolved to different degrees (and hence may be apparent in different forms) at different points of time. Thus as opposed to a rigidity in examination of the federal form, a flexibility of mind-set may be more desirable. Many earlier formulations can be criticized for developing features that are very narrow in their scope. For example, Elazar’s3 6 or Ostrom’s3 7 biblically rooted features. In some ways these authors limit federalism by requiring religious grounding - and given the diversity of nations adopting federalism, such theories allow only a limited the scope for federalism. As the practice of federalism in different nations of the world shows, federalism has moved much beyond these bases and hence a more open and general examination is desired. We thus propose for federalism the idea of a shift that has earlier been proposed in fiscal federalism. Recent literature on fiscal federalism has focused on the move away from first-generation theories to second-generation theories.3 8 Probably it is time for such a shift from first generation theories that merely describe its forms and impose narrow limits on federalism 3 6 Daniel J. Elazar (1987) has stressed the biblical and Hebrew roots of “ federal” in his book Exploring Federalism (p.5 for example) {Reference: Elazar, Daniel J. (1987): Exploring Federalism, (Tuscaloosa: University of Alabama Press)}. 3 7 Ostrom (1994) also emphasizes the Christian leanings of federalism— arguing that the practice of federalism is grounded in the biblical idea of “do unto others....” 3 8 Reference: Jin, Hehui, Yingyi Qian and Barry Weingast (March 1999): “Regional Decentralization and Fiscal Incentives: Federalism, Chinese Style (http://www-econ.stanford.edu/faculty/workp/swp99013.html) (Last Accessed on June 3, 2002 at 8:34 p.m.). 22 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. to second generation theories that argue for flexibility and pragmatism thereby aiding its successful development. Our research also argues for moving beyond the minimal definitional features of federalism to provide generally applicable features that enable federalism to function smoothly, with efficiency and effectiveness, with minimal conflict (which too is resolved well and quickly), and with provisions for good governance. For this it argues that the actual experience of nations is of great importance. And hence it attempts a consolidation in the field by bringing together both theoretical literature, the lessons from practical experiences of countries implementing federalism as well as those attempting decentralization, and by building-on empirical knowledge through the experience of Delhi. Thus we argue for a flexible, eclectic approach that benefits from both theory and practice. We must also note that while the essential features have been formulated in the context of federalism, they can also be expected to be useful in other systems, which are witnessing complex, evolving inter-governmental relations. Although it lies outside the scope of this study and hence has not been examined, it can be anticipated, for example, that centralized systems aiming to decentralize will find many of these features useful in their exercise. Recent years have seen much exercise across the globe to decentralize governance. Our study also offers some ideas on features that can help in successful accomplishment of decentralization efforts. In this sense even though our focus has been on federal systems the implications of the study are broader—because many countries of the world, including even unitary and highly centralized systems have attempted 23 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. decentralization in recent years.3 9 For decentralization efforts to succeed these systems too must develop partnerships of governments and trust as well as devise structures for sharing of powers and conflict resolution. Thus it is possible to see the Essential Features as “accompanying institutions or features” which must also be developed concurrently with decentralization exercises, to help decentralized systems work smoothly. Thus, if we were to re-cast these ideas as accompanying features for decentralization efforts, we would find, for instance, that decentralization necessitates sharing of powers and is also a necessary first step for it. Also, cooperation is necessitated as well as engendered in decentralized systems due to sharing of powers and decentralized governance. The creation of multiple independent governments is the aim of decentralization. Even though a constitutional guarantee is not strictly a pre-condition for decentralization efforts—yet a constitutional guarantee for the processes has its advantages of ensuring longevity, enhancing predictability, etc. Similarly independent conflict resolution mechanisms built into the system enhance its strength and life. Additionally, competition between different sub-national governments is a healthy outcome of decentralization (though it may not necessarily occur on its own), particularly because multiple, independent governments serve as checks on each other’s excesses. Ultimately lasting decentralization efforts need the development of some amount of trust between the different governments, thus generating synergy. Further research studying the extent, importance, and impact of these features in different systems of government will help in 3 9 References: Ter-Minassian, Teresa (ed.) (1997): Fiscal Federalism in Theory and Practice (Washington, DC: International Monetary Fund); Bird and Vaillancourt (1998): “Fiscal Decentralization in Developing 24 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. determining whether these factors tended to accompany decentralization efforts. Or what the impact of presence or absence of a particular feature has been. Or which other factors were found indispensable or desirable in other systems, etc. 1.5 Road Map for the Dissertation: As would be clear from above, the dissertation is divided into two parts. Broadly, the first part outlines the theoretical model comprising the essential features of federalism. And the second is an empirical examination of the evolution and role of the Essential Features of Federalism in real life cases from Delhi, India. In addition to this introductory chapter, three other chapters comprise the first part. In Chapter 2 we will lay out in depth the form, nature and scope of the empirical cases drawn from Delhi, India. Then in Chapter 3 we conduct an extensive review of the literature to create a clear understanding of the concepts, to review the state of the field, to layout the groundwork for our ideas and to distinguish our work from the existing state as also to demonstrate how we build on it. In Chapter 4 we will identify and justify the essential features of federalism, drawing on available theoretical and experiential knowledge. The second part of the dissertation both explains and examines the essential features in the context of the two empirical cases—of the enabling domain and a chosen functional domain (environmental management)—from Delhi. We start the second part with a brief introduction to it. Then each of the five features will be taken up in a chapter Countries: An Overview” in Bird and Vaillancourt (Eds.) Fiscal Decentralization in Developing Countries (Cambridge University Press). 25 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. of its own (chapters 5 to 9). Each chapter examines one particular feature in each of the domains. This helps us demonstrate the features as well as some of the possible variations in their form. We thus compare the different forms of the features in each of the two domains and also see some of the effects of it. In addition to this, the chapters also show some of the influences of the features on each other and on the evolution of federalism. We will finally bring together these findings in the last chapter of the dissertation. This concluding chapter will also provide an overview of the first part of the dissertation, particularly of our model. We will also present some suggestions for future research in this chapter. 26 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Chapter 2 An Introduction to the Cases 2.1 India, Delhi, and Federalism: Different scholars have studied the federations—both older ones like USA and Canada and relatively newer ones like Australia and India.4 0 The success of Indian federalism lies in the way it has survived the turbulent half-century in a newly independent, federal nation 4 1 Indian Federalism as an evolving system, adapting to the rapidly changing needs of the times, offers a fertile ground for a study of the essential features of federalism. India’s tryst with federalism began even before its independence 4 2 Free India formally and deliberately chose for itself the federal system with the adoption of the Constitution in 1950 4 3 However, the actual realization of a mature federal set-up is an 4 0 Franklin and Baun (1995) edited volume {Ref.: Franklin, D.P. and M.J. Baum (ed.) (1995): Political Culture and Constitutionalism: A Comparative Approach (Armonk, New York: M.E. Sharpe)} provides current perspectives on many of the federations of the world. In recent years, V.Ostrom (1994), Peterson (1995) and Nice and Fredericksen (1995) have provided good discussions of American federalism. Thimmaiah (1976) provides a comparison of the Federal systems of Australia and India. 4 1 Jafa (ed.) 1999 highlights this success and discusses many of the issues in Indian Federalism. 4 2 Federal set-up, especially to allow greater provincial autonomy, was a hotly debated topic even under the British government. Books on economic history typically offer discussions of these issues. For an earlier exposition of this may see: Krishnaswami, A. (1965): The Indian Union and the States: A Study in Autonomy and Integration (Oxford: Pergamon Press). 4 3 The idea of a federation was originally proposed in India as a means for bringing together the Indian Princely states and British India under the Crown. Some proponents, mainly from the Princely States, favored the setting-up of a confederation. A federal set-up was enacted by the Government of India Act of 1935. However, given the historical circumstances (Growth of the Indian Independence movement and World War - II), the act was only partly brought into practice (Provincial Autonomy part being adopted in practice - Provincial Autonomy had originally been introduced by the Montagu-Chelmsford Reforms in 1919 under a system of “dyarchy”). And the idea of a federation was never brought into practice. References here include: 27 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. ongoing process and over the years much has happened in the evolution of federalism in India, hence providing an enriching body of experience for the study of federalism. Federalism in India can be seen to be evolving in many ways. Although fiscal federal relations between the Center and the states had been defined explicitly right at the start of the journey of federalism in India and mechanisms (like the setting-up of Central Finance Commissions every five years) were provided to underpin and safeguard them, the concern with devolution to local governments is fairly recent. A major impact on this process has been that of New Public Management (NPM). With the wave of NPM in the late 1980s and 1990s, like many other nations of the world (for example Germany, Australia, US, UK to name a few4 4 ) India too realized the need for empowering the local governments to have an effectively functioning federal system. And thus began a series of changes in India that provide us with pre and post scenarios for a comparative study. The provision for finance commissions at the state level, in the 73rd and 74th amendments to the Constitution, brought with it the promise for greater financial independence for • Venkatrangaiya, M. (1935): Federalism in Government • Vardachariar, ND (1936): Indian States in the Federation (Calcutta: Oxford University Press) • Santhanam, K. (1960): Union-State Relations in India (New York: Asia Publishing House) • Krishnaswami, A. (1965): The Indian Union and the States: A Study in Autonomy and Integration (Oxford: Pergamon Press) • Ray, Amal (1966): Intergovernmental Relations in India: A Study o f Indian Federalism (New York: Asia Publishing House) • Ray, Bharati (1967): Evolution o f Federalism in India (Calcutta: Progressive Publishers). 4 4 Ter-Minassian, Teresa (ed.) (1997): Fiscal Federalism in Theory and Practice (Washington, DC: International Monetary Fund). Here, Ter-Minassian (in “Intergovernmental Fiscal Relations in A Macroeconomic Perspective: An Overview” discusses recent trends in fiscal devolution in different countries of the developing and developed worlds. The author argues that this reflects the political evolution towards democratic and participatory forms of government, the desire to improve responsiveness and accountability to the people, and the desire for greater connectedness between public provision and preferences of beneficiaries. 28 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. local governments. At the same time, India saw a very important change mandating the creation of Election Commissions at the state level. The Election Commissions are entmsted with the task of ensuring that if any state government supercedes local bodies, re-elections are held within six months, thus safeguarding local democracy. This change mles out the possibility of the local bodies being superceded indefinitely, as had been the case in the past. And thus it ensures that political autonomy prevails at local level as well. There has also been growing realization that although the Center may decide the policies, the actual implementation of these policies by the Center itself is neither desirable nor feasible. Taking administration closer to the people has been an increasingly popular theme of this era. Thus increasing stress has been placed on the actual implementation of the policies by the local governments. This has brought the relations between the different levels of governments into sharper focus. Realizing the undesirability of micromanaging the activity of local government from the Center or even from state capitals or having branches of central or state governments perform these tasks, it was thought desirable to devolve appropriately the tasks or responsibilities to the sub-national governments.4 5 Environmental management in Delhi offers a good example of this evolution. While until recently environmental management in Delhi was the 4 5 Decentralization is generally accepted to be the more desirable alternative as against deconcentration for achieving both efficiency and economy (Cohen and Peterson, 1996; Ter-Minassian, 1997). As a lot o f the literature in recent times shows deconcentration, so that branches of central government perform the task, has had disastrous consequences in experiences across the globe (Wunsch and Oluwu, 1995; Zazueta, 1995; Ostrom, Schroeder and Wynne, 1993); Dubey (IJPA, 1998) provides a discussion of Kenya and Bangladesh’s decentralization efforts to illustrate how lack of decentralization (without adequate delegation o f powers and finances) proves hazardous. 29 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. responsibility of Central Pollution Control Board (CPCB), realizing the dire state of pollution in the city and in the interest of taking the administration closer to the people for securing effective environmental management, the Delhi Pollution Control Committee (DPCC) was created and all the responsibilities of the CPCB were transferred to it. This dissertation proposes to examine cases of federalism in Delhi. Our studies are areas of active concern in India and are areas of key interest for governmental activity. Additionally, Delhi is the target for this study due to its special position. As the capital of India, the territory is a stage for the interplay of power and party politics in the country. As it uniquely houses, in close physical proximity, the central and ‘state’ and local governments, Delhi provides a sharp focus on intergovernmental relations. The political evolution of Delhi to its unique status as the National Capital Territory (NCT) is, by itself, an instructive experience. India comprises 25 states and 7 Union Territories. The Union Territories have the distinguishing characteristic that they are administered directly by the Center. Given its important role as the capital of India, Delhi was accorded the status of a union territory originally. However, with the demand of statehood for Delhi in recent years, the issue of its political status was reconsidered. The demand for statehood was partly conceded and Delhi was accorded the status of a NCT by giving to it a legislature of its own, like the states, with jurisdiction over all but a few selected (reserved) subjects, even while retaining it as a union territory. The local governments of Delhi come with a rich legacy of a long history. Bodies of local government like Municipal Corporation of Delhi and New Delhi Municipal 30 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Corporation have been an important part of the government. With the advent of the state- level government in Delhi, the state-local federal relations have come to acquire meaning and significance in Delhi as well. Although the local bodies come with their own historical legacies of responsibilities, no mechanism has existed to assure either their longevity or availability of commensurate financial resources to them. Recognizing the important role that the Central Finance Commissions have been playing in the fiscal relations of the Center and the states,4 6 the setting-up of State Finance Commissions to determine the transfer of resources to local governments marks a watershed in the evolutionary process. With these important moves to strengthen local bodies has dawned the prospect of a very different future for the federal set-up of India in general and for the federal progress of Delhi, in particular. With its being dubbed as the 4th most polluted city in the world, India as a whole and Delhi in particular have been compelled to accord priority to different environmental concerns. Thus Delhi offers itself as an interesting case for a study of federal evolution. Even a preliminary look at the different systems reveals that federal systems vary greatly. They may, for example, vary in terms of different concentrations of power or of responsibilities etc 4 7 And, thus, it is a question of degree and not just the absolute presence or absence of features of federalism that alone is important for its functioning. 4 6 Sury, M.M. (1998): Fiscal Federalism in India (Delhi, India: Indian Tax Institute) and Sury, M.M.: “Federal Fiscal Relations: Constitutional Provisions” in V.S. Jafa (ed.) (1999) Federal India: Emerging Economic Issues (Delhi, India: Indian Tax Institute), pp. 117-166. 4 7 As noted above Hamilton himself in The Federalist Papers and Nice and Fredericksen (1995) discuss these possibilities in depth. Others, like Wright (1988) and Peterson (1995), also provide informative discussions. 31 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. In fact the issues of size and strength of units, or of the degree of flexibility allowed to the sub-units, or the extent of centralization of power, or the issues of inter-jurisdictional cooperation and competition or “interlocal dilemma”4 8 are constantly debated and thus form the perennial dilemmas of federalism. These perennial dilemmas bear testimony to the variety of possible combinations of features. Our comparative study will bring out this differential impact—this comparison will enable us to determine the role of characteristics in strengthening and smoothening the working of the system. 2.2 Governance in Delhi: A Brief Recapitulation: Delhi is aptly described as a “city-state,” similar to Singapore’s title of a “city- nation.”4 9 As the capital of India it houses the Central Government and has a fairly long legacy of local governments. Having attained the special status of a National Capital Territory within the broad category of a Union Territory, Delhi now has an elected state- level government, similar to the different states of the country. Delhi uniquely houses all three levels of government. Figure 1 below presents a bird’s eye view of the structure of government in the territory. 4 8 Nice, David C. (1987) Federalism: The Politics o f Intergovernmental Relations (New York: St. Martin’s Press), pp. 207-211. 4 9 Reference: Experience Sharing Workshop on Review of Structure and Working of the Municipal Corporation of Delhi (New Delhi, India: 16-17 January, 2001) {Organized by: Times Research Foundation and Government of National Capital Territory of Delhi}. 32 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Government of India Government of National Capital Territory Municipal Corporation of Delhi New Delhi Municipal P fH tn ril Figure 1: Hierarchical Structure of Governments in Delhi This shows the hierarchy of the three levels of governments in Delhi—Government of India at the center is the apex body. Government of National Capital Territory of Delhi (GNCTD) at the state-level follows it with New Delhi Municipal Council (NDMC) and Municipal Corporation of Delhi (MCD) as the municipal bodies in Delhi forming the third tier of government. Structure of government in the National Capital Territory of Delhi is heir to a long and checkered history. It is believed that its origins date back to the era of the Mahabharat when it was founded by the Kauravs as Indraprastha, the capital city of their Empire. Since then, as witnessed by recorded history, it has been obliterated and bom again and again, to come to its present, seventh, incarnation. As the capital city of modem India, its story is rather short. It was only in 1911 that the British shifted the nation’s capital to historic Delhi, in the very heart of the Indian subcontinent, from the city of Calcutta on the Bay of Bengal. 33 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. The structure of government of Delhi, therefore, followed strictly from its status as the national capital in a federal set up, established by the Government of India Act of 1935 enacted by the British Parliament for the good governance of the “jewel in the crown” of the Empire. At Independence in 1947, Delhi was governed as Part C State under the overall superintendence of a Chief Commissioner appointed by the Central Government. It had a state government, with a Council of Ministers headed by a Chief Minister but with limited powers as compared to the Part A and Part B states. As in case of Washington DC, the Government of India considered it necessary to retain control over the governance of the nation’s capital. For almost a century after the abolition of the territorial government of the District, including the non-voting member delegate to Congress in 1874, DC was governed by the Federal Government directly through presidentially appointed commissioners. Not until 1973 did the residents of the district get enfranchised with the Congress approving the District of Columbia Self-government and Governmental Reorganization Act, providing for an elected 13-member District Council to serve as the legislative branch and an elected mayor as the chief executive. The residents of Delhi were luckier—they had a number of municipalities and a state government, though with circumscribed powers and functioning under the thumb of national government, both the state government and municipalities directly elected by them. In both cases, the final word in legislative matters remains with the national legislatures despite territorial level legislative bodies having been brought into existence. The approach basically is that the capital’s elected legislature can pretty well make laws 34 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. to meet local needs and aspirations but it must remain within the parameters acceptable to the national government or legislature. In Delhi, this is secured by providing that legislation passed by the state assembly receive approval of the Lt. Governor (who is appointed by the Central Government) before it becomes law, thereby allowing an opportunity for the Central Government to review it. In executive matters, the approach in the two cases is different. The office of the mayor of DC is a unique institution in that it combines in one office the responsibilities of a city mayor, the county executive and the state governor. In Delhi, executive power at state level is shared between an Administrator, the Lt. Governor of Delhi and the Council of Minister headed by the Chief Minister and accountable to the legislature. This is achieved by the division of subjects between the two, an example of a functioning dyarchy. At the local level again, there is marked divergence between the arrangements in the two capitals. In Delhi, the Central Government exercises abundant caution in retaining direct control over the municipal government of New Delhi, the nerve center of national political activity, housing the Parliament, Central Government ministries, other federal offices, residences of major officials, etc. The New Delhi Municipal Council created by an Act of the Parliament of India, an elected body, functions not under the Government of Delhi but under the national government, through the Lt. Governor. The other, much larger, Municipal Corporation of Delhi, though again established by an Act of the Parliament, is accountable to the GNCTD. It has an elected mayor who presides 35 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. over the elected house but has no executive powers. The executive powers vest in an appointed civil servant, the Commissioner. We now briefly recall the history and present positions of Delhi’s own governments—the state-level Government of National Capital Territory and the local level governments, Municipal Corporation of Delhi and New Delhi Municipal Council: (A) The State-level Government: Government of National Capital Territory (GNCTD): Delhi being the city of India that has the unique distinction of having both the central as well as its own state-level governments, in addition to its own varied municipal bodies, institutions relevant for federalism can be identified at each of the three levels of government here. The Central Government was, until recently, Delhi’s own and only higher-level government. Till 1966 when the Delhi Metropolitan Council Act was introduced, Delhi was directly administered by the Center. At this point dyarchy was introduced in the city government, with only specified “transferred” subjects being placed under the Executive Council (instead of the Council of Ministers in the states); and the “reserved” subjects (viz., law and order, services, land, and NDMC) being retained by the Center under its own control to be administered through the Lt. Governor of Delhi appointed by it. The Act also introduced the Metropolitan Council as a deliberative body, (sans legislative powers). The year 1992 brought the next major milestone for Delhi—it gave Delhi a legislature, thereby making it a union territory (UT) with legislative powers and hence one step closer to full statehood. The 69th Constitutional Amendment Act of 1991 re-christened the UT of Delhi as the National Capital Territory (NCT) of Delhi and provided for a Council of Ministers in place of the erstwhile Executive Council. The new 36 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Government of National Capital Territory of Delhi (GNCTD) is thus like any other state government but with circumscribed jurisdiction. The GNCTD has been entrusted with almost all the functions of a state government with three notable exceptions. Public order, police and land have been retained by the Center and are administered by the Lt. Governor under the superintendence, guidance and direction of the Central Government. (B) Local Bodies in Delhi: The study of local bodies in Delhi is particularly interesting in view of the nascent stages of GNCTD, a new, intermediate level of government in the Capital Territory. The study of local bodies in Delhi must be viewed in the context of the existence of different types and levels of local urban bodies. To begin with, we may take note of the levels of progression of local bodies in India in general, from the lowest to the most advanced municipalities. Local bodies are broadly divided, based on the nature of the area served by them, into two major categories—rural and urban. Rural local bodies fall under the “Panchayati Raj” self-governance mode; “Panchayat” literally means “a body composed of five wise elders” and is believed to represent the ancient Indian form of managing civic affairs and deciding local issues and disputes. Urban local bodies follow the sequence of growth of a settlement from its village origins onto its journey of progressive urbanization. Thus, as villages grow and combine to take urban form, the area is first declared by the state government as “Notified Area” and an elected Committee called the “Notified Area Committee” is created to cater to the elementary civic needs of its population. The next stage of evolution is the Town Area Committee, which signifies that the notified area has assumed the form of a town. Then 37 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. come the municipalities, and depending upon their size and resources, state governments grade them as Class A, B and C municipalities. Finally, the large municipal authorities for large urban centers are called Municipal Corporations and are often created by special enactments to take care of their specific situation, e.g., Municipal Corporation of Bombay (Mumbai) or Municipal Corporation of Delhi. Thus, the municipal bodies in India are classified, based mainly on their size, as follows, in ascending order: 1) Notified Area Committees, 2) Town Area Committees, 3) Municipal Committees/ Councils, Class C, B or A; and, finally, 4) Municipal Corporations for large urban agglomerations. Delhi boasts of both a municipal corporation and a council. In addition, to these two forms Delhi has another peculiar form of local civic governance—the Delhi Cantonment Board (DCB). As the name implies, a Cantonment Board is meant to take care of the management of the civic affairs of army cantonments. The cantonment boards are not subordinate to state governments but function directly under the Ministry of Defense under a separate enactment to govern their functioning. In fact, these bodies are considered to be an anachronism in a democratic set up.5 0 The Delhi Cantonment Board is, thus, not a self-governing territorial government, a municipality, in its concept or being. Hence, given their peculiar status and the fact that it is not a municipal body at all, 5 0 See, for example, The Rural-Urban Relationship Committee, 1963-66. 38 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. the DCB need not be included for the purpose of this study except at the margins where a mention may be necessary in the given context. It must also be noted that a mere 1% of Delhi’s population resides in the area of DCB and time and again urban planners have expressed hope that cantonment boards will be phased out by merging them with the adjoining municipalities. Our study here will, thus, focus on the two municipal bodies of Delhi—Municipal Corporation of Delhi and New Delhi Municipal Council. (i) Municipal Corporation of Delhi (MCD): Origins of Delhi’s modem municipal administration go as far back as 1862 and thus the MCD has a historical legacy of more than 125 years. It is the dominant civic authority of Delhi covering as it does the bulk of the union territory’s area and population. 96% of Delhi’s population and 94% of its area are served by MCD as opposed to 3% and 2.8% respectively by the NDMC. The financial well being of the two bodies depicts a reversal of the positions. MCD has mere Rs. 390 of ‘Per Capita Own Resources’ as opposed to NDMC’s phenomenal Rs. 10,513. MCD is unique being “the largest municipal authority in the world on the basis on population.”5 1 MCD is probably the only municipal body that serves both rural and urban populations simultaneously, thus blurring the distinction of panchayats and municipalities in Delhi—even though almost 10% of MCD’s population is rural according to the 1991 census. At the cost of considerable simplification, masking the complexity inherent in the organization of the Corporation, the structure of MCD can be presented as follows: 5 1 Report of the First Delhi Finance Committee, Ch.5, p.3. 39 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Town Hall Headed by Commissioner 12 Zones H eaded by A dditional Deputy Com m issioner 134 Wards Figure 2: Organizational Structure of the MCD At the top of the administrative hierarchy of the corporation is the Commissioner, an appointed official, in whom, by law, vests the entire executive power of the organization. He is assisted by a number of Additional, Joint and Deputy Commissioners. Municipal Corporation has divided its administrative jurisdiction in 12 zones, each of which is headed by a deputy commissioner or an additional deputy commissioner. This structure has been adopted with the objective of securing decentralized administration of its functional and revenue administration. The 12 zones have further been split into 134 wards, which are the basic units for electing the municipal councilors. Although not 40 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. meant to be an administrative unit, the ward facilitates the residents’ needs and aspirations finding their expression in municipal affairs through the ward councilors.5 2 The DMC Act of 1957 divides the functions of MCD into two categories— obligatory and discretionary. The obligatory functions of MCD relate to the more usual duties of municipal bodies. These include elementary education, health, hygiene and sanitation, and the maintenance of city-infrastructure like roads, bridges, community halls, etc. Provision of amenities like water, electricity and transportation are no more the functions of the MCD as these have been taken over by statutory boards/ corporations under the GNCTD. Discretionary functions of the MCD include the furtherance of C-2 education, culture and civic life in the city. (ii) New Delhi Municipal Council (NDMC): NDMC is the second local body in Delhi. It is a municipal council, created under an Act of the Parliament that provides for a majority of non-elected members—7 out of 10 being nominated to serve as councilors. This manner of constituting the NDMC runs counter to the express provision of Article 243 R of the Constitution that requires that all members of a municipality be elected directly. In many ways, the NDMC presents a 5 2 It must be noted that the zones have democracy. The ward members, who are elected by the people, of a zone constitute Zonal Committee and elect from among them the chairman of the zonal committee. Zonal Committee works with the Additional Deputy Commissioner in charge of the zone, thus providing democratic representation in municipal affairs. 5 3 MCD is responsible for organizing fairs, exhibitions and also holding civic receptions for visiting dignitaries from abroad. This last function is an additional function of MCD unlike NDMC, as we will see later. Traditionally the mayor of the city holds a civic reception for a visiting dignitary and thus MCD has this responsibility. 41 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. sharp contrast to MCD. While the area under the NDMC is a minuscule fraction of that of MCD {= 0.003 = (43/13979)} and the population catered to by NDMC a mere 3%, its resources per capita are several times those of MCD. NDMC is also very well placed in contrast with most other municipal bodies in the country, as it does not face the problem of an increasing burden on municipal services due to rising resident population. The population in NDMC area in 1991 at 0.301million is a little lower than it was in 1971 at 0.302 million. Its share of Delhi’s population has actually declined over the years—from 7.42% in 1971 to 4.39% in 1981 and has remained about the same since then. However, by way of an exceptional similarity, MCD and NDMC have to cater to very large floating population, which is estimated at about 3 times the resident population.5 4 A perusal of the lists of the functions of the NDMC and MCD reveals that both the bodies have the same obligatory and discretionary functions, with one noteworthy exception. NDMC has been entrusted with the additional obligatory duty of provision of electricity and water.5 5 This difference is not immaterial. Rather it is because of this additional function that the local body enjoys a happy financial position as it has an important bearing on the net receipts of NDMC. Additionally, NDMC provides a higher level of free education in NDMC schools (up to secondary education as against only primary education in the case of MCD). However this cannot be interpreted as an additional burden on the resources of NDMC as the grants it receives take this into account. There are also some other minor differences in the functions expected of 5 4 Report of the First Delhi Finance Committee, Ch.5 42 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. NDMC vis-a-vis MCD, e.g., holding civic receptions for eminent persons is on the charter of MCD but not on that of NDMC. But in essence the local governments must serve the same basic principle (which must also guide the other governments if they are to deliver good governance): meeting the social, political and cultural needs of the target populations is the raison d’etre of these institutions of government. 2.3 Our Cases: As is evident from the above, different areas have had different experiences of working under federalism and have evolved in varying forms. So, since federalism materializes differently in different set-ups it is important to focus on specific cases for a meaningful study. We will examine the development of the essential features of federalism in two domains of Delhi: - The Enabling Domain - The Functional Domain of Environmental Management Governmental functioning involves many different activities at each of the levels of government. Thus many functional domains can be focused upon. But as we mentioned above, environmental management in Delhi is an evolutionary area and thus of particular interest to us. Hence we confine our focus to this particular functional domain. While this term is self-explanatory, the concept of the Enabling Domain is somewhat amorphous and needs some explanation. 5 5 Detailed comparative lists of the functions of MCD and NDMC at Appendix A. 43 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. In general, the enabling domain can be defined as being comprised of provisions, structures and institutions—or the basic governance structure—for an activity, like governance. For our purposes it can be more narrowly defined as a set of major background developments in the socio-political, administrative, legislative and /or fiscal institutions or conditions having a bearing on many different aspects of governance in a nation. By the nature of its definition it necessarily includes only major changes in cross cutting fields like finance or constitutional or legislative provisions, etc. which have direct impact on many aspects of government’s functioning or governmental activity like provision of civic facilities, etc. The concept of the enabling domain can be better understood through a comparison with the functional domain. When we speak of a case from the functional domain, we are looking at a particular function of governance and the nature of this function is such that the impact of a change in a functional domain has a direct bearing or major impact for that function itself. In contrast, a change in the enabling domain has a crosscutting impact, a direct bearing, on many different aspects of governmental activity or on many different functional departments. The differing foci of enabling domain and functional domain can be also understood through analogies taken from other disciplines. Our first analogy is borrowed from Management Studies. The difference in focus between enabling domain and functional domain is similar to the distinction drawn in Management between “staff 44 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. function” and “line function.” A staff function is responsible for overseeing many different line functions—it cuts across all line functions and deals with all line departments irrespective of their individual functions. An example of a line function is the production department of a firm. On the other hand a staff function would include the human resources department or the finance department. If we were to seek parallel examples from the enabling domain and functional domain then environmental management, a functional domain, is similar to a line function where as a major legislative change similar to a staff function in its crosscutting impact belongs to the enabling domain. Another analogy that helps explain the distinction of enabling and functional domains is drawn from Economics. The terms from Economics, widely used in everyday parlance, that help in better exploring the contrasting foci of our terms are “macro” and “micro.” The enabling domain is comprised of instances or institutional changes with a relatively macro focus in contrast to those in the functional domain. The instances of functional domain have a more micro focus. Thus environmental management (in a city) is an example of a functional domain. A change in the environmental policy or its implementation affects environmental management, pollution control, etc. but it does not have any effect on the organization of the education department of that government. Or it does not have any influence on the constitution of the country, leaving untouched even those parts of the constitution that deal specifically with environmental management. This is because the change in environmental policy may be within the given provisions of the law and thus does not necessitate any change in the constitution. In contrast a 45 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. constitutional change is likely to affect many different areas of governance. Or a change in the fiscal policy is likely to have far-reaching effects—affecting also environmental management. Suppose the financial relations between the state and local governments change drastically so that the local government is left with finances for some specific municipal functions only. Then all other functions of local government may have to be moved to the level of government that is now the recipient of funds that were being used for other services, here the state government. Thus the instances of change in the enabling domain have greater ramifications for the system as opposed to the instances of change in the functional domain. Clearly by virtue of its definition, the enabling domain can include only broad or basic institutional changes that have the capacity to influence many different aspects of governmental activity. In contrast in functional domain the focus is on a particular governmental activity or function only. In this sense the focus of enabling domain is more macro and of the functional domain is more limited or micro. 2.4 Rationale for Comparing the Enabling and Functional Domains: The comparison of the enabling domain and functional domain is meaningful in the overall context of the dissertation. We have stated earlier that our list of features is neither necessary nor sufficient but that the features are essential. They are essential for the smooth functioning of federal systems so that there is (for example) minimal conflict, or, given that conflict is inevitable in federal systems, its likelihood must be foreseen and ways provided in the system to address the conflict speedily and satisfactorily. It follows from this that it is first important to examine if an individual feature is present in a particular case of not. If the feature is absent from one particular case and present in 46 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. another then what are the ramifications for the respective cases. For example, we may explore whether the absence of Multiple, Independent Governments in (say) the enabling domain leads to poor provision of civic facilities. Or, on the contrary if they exist, then does it influence favorably the provision of basic infrastructure and municipal services through clear delineation of responsibilities between the different levels of governments; or through improved, direct, and not distant, access of the local population to its elected representatives. On the other hand if multiple, independent governments are absent in environmental management then is the state of pollution control deplorable given remote, centralized responsibility for environmental management? Thus the comparison between cases from the enabling domain and the functional domain helps us to obtain some assessment of the impact or bearing of presence or absence of a feature on federal governance. Using these cases the dissertation also aims to show how the essential features of federalism evolve in different cases. Or stated differently: following the differences in the cases how does a particular feature of federalism appear there. The variation of domain has important role to play here. Let us take the example of the presence of constitutional provisions specific to the case or the activity. In Environmental Management much can happen within the broad provisions of the constitution. Thus for example in many nations provisions for environmental management came into existence initially under the umbrella of the Health and Sanitation departments and regulations. In contrast the empowerment of local governments in federal systems may not be secure without specific safeguards in the constitution—given the nature of the enabling domain, 47 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. formal constitutional provisions are of greater import for it. Jefferson reminds us in a parallel context: “The purpose of a written constitution is to bind up the several branches of government by certain laws, which, when they transgress, their acts shall become nullities.”5 6 As the experience of many African countries shows despite pre-colonial traditions of Local Self-governance, empowerment of local governments and recreation c - j of local self-governance after years of colonialism has proved difficult. In order to show how the difference in domain may result in variation in the form or evolution of a particular feature of federalism, we may construct a table—though at the cost of great brevity to the point of being laconic. This table helps us see both presence or absence as well as the different forms the features may take in the two domains58: Features Form and Evolution of Feature in each domain: ‘Enabling D om ain’ ‘Functional D om ain’ (Here Environmental Federalism ) Decentralization Formal Informal Distribution and Separation of Powers Partnership and Cooperation Absent Present Constitution/ Constitutional Provision Specific Provision exists Within the broad provisions of the Constitution Conflict Resolution Mechanism Competition between governments Trust between governments Table 1: Varying Evolution of Essential Features in Different Domains 5 6 Thomas Jefferson: “Notes on Virginia”, 1782, Q.XIII (http://etext.virginia.edu/iefferson/quotations/jeff4.htm') (Last Accessed on June 3, 2002 at 7:44 am). 5 7 Reference: Wunsch, James and Dele Oluwu (ed.) (1995): The Failure o f the Centralized State: Institutions and Self-governance in Africa (SF, California: ICS Press). 5 8 It must be noted that this table is merely illustrative and is not a comprehensive tabulation of expected findings on the essential features of federalism. 48 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Thus we may read from the table, for example, that while decentralization must be done formally in the enabling domain it may occur informally in a functional domain. Or while partnership and cooperation are present in the functional domain of Environmental Federalism, they are absent in the enabling domain. While it seems more natural to compare an example or instance from the functional domain to another from within the same domain, it is at least equally informative and perhaps more interesting to compare an instance of change in the enabling domain with an example from the functional domain. Our preference for comparing the instances from enabling and functional domains arises from the additional gains to be had from choice of cases from two different domains. Thus if we were to examine two different examples from the Functional Domain we would only be able to say: 1) Whether the essential features are present in each of the two examples 2) And whether there is a variance in the extent of evolution of the features in the two cases. So, to take the example of decentralization, in this type of comparison we would look to see if there is decentralization in each of the two cases and if there is some difference in the two cases in terms of how decentralized the systems are. We may say (comparing two types of functional domains) for example that there is more decentralization in the provision of civic services than there is in environmental management. This is the more natural and also the more mundane type of comparison. Our desire to go beyond this routine type of comparison leads us to explore cases from two different domains. The additional advantage in the comparison of cases from enabling domain and functional 49 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. domain is that it also enables us to analyze the effect the domain has on the evolution of federalism or on the evolution of the essential features. Thus it enables us to do another type of comparison—that is whether and how the differing nature of the domain influences our results. If we were to revert to our example of decentralization then at this additional level of comparison we would examine whether the domain causes the form of decentralization to differ. For example, we may find that the decentralization in Enabling Domain must be introduced formally; decentralization in environmental federal set-up may be of an informal nature, that is while no formal decentralization has been done in environmental management, there may be some decentralization in the management of this activity informally. While the comparison of cases within the functional domain may be a more obvious kind of comparison but the comparison of an instance in enabling domain with that in functional domain is hardly counter-intuitive though it may at a first glance appear to be so. A caution that would need to be observed would be to consider the cases on an even keel. If we confine our focus to one particular case within the functional domain then we need to similarly restrict our focus in the enabling domain as well. If we choose one particular function to be the function of concern for our study, then we need to take out specific instances of interest to us from enabling domain too. So for example in the functional domain environmental federalism arouses our interest as a rapidly evolving, cutting-edge function of governance. It would be useful for us to focus on some institutional developments in the enabling domain that can form our case study, i.e., to focus on some major, evolutionary, cutting-edge developments from the socio-political, 50 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. economic, administrative or legislative spheres. Thus at a very general level we could examine in case the political system of a nation undergoes drastic change say from a unitary set-up to a federal set-up or from a two-tier federalism to a three-tier federalism. Or we could look at major modifications in the Constitution or legislation in a nation. Or we could examine the reorganization in governance from which far-reaching effects for federalism may be expected. For example many developing countries have sought to c n decentralize governance through the creation of empowered local governments. In the enabling domain this constitutes a major evolutionary change that is likely to have important ramifications both for a nation and for the study of political systems as a whole, thus warranting attention. Similarly important changes in the fiscal system of a nation go to re-define the enabling domain and thus beget interest. In recent times, especially following from the desire to empower local governments, many developing countries, especially federal systems, have sought to make local governments financially independent. This change along with the others noted above comprises cutting-edge developments and thus they form a part of the enabling domain that may be of interest to us. By definition, the enabling domain enables us to look at a composite of two or three major developments in the wider institutions rather than confining to changes within one field. Thus we are able to focus on some of the cutting-edge, wider-impact developments. 5 9 Ranging from countries of the developed world like Germany and US to many developing countries of Asia (like India) and Africa. 51 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. In the absence of proper selection or abstraction of cases the comparison might become uneven. For example, if we insisted on looking at the evolution within one particular functional domain and compared it to the whole enabling domain (and not to an example arising from some major changes, i.e., not to an instance of a change) or if we sought to compare the given state of affairs in the enabling domain without any regard for evolution, then it would have been the legendary comparison of apples and oranges. However by comparing specific slices from each of the two domains we have placed the cases on an even footing. Our choice of the level of abstraction renders the comparison possible—that is to say, we are doing a comparison of apples and oranges in their capacity as “fruits.” So, for example, we could say that oranges are citrus fruits where as apples are not, or that oranges have more roughage than apples, or that apple is regarded as the most nutritious given the saying “an apple a day keeps the doctor away,” etc., etc. We are taking out an instance from the enabling domain by focusing on some major, specified changes that have occurred in recent times and which are likely to affect the evolution of a federal set-up. Similarly, we pick-out an instance from the functional domain by focusing on a particular function, say environmental federalism, and by studying the effect on federalism of change in this function. Through this pre-specified focus we have a comparison of the two domains at the same level—we are comparing apples and oranges as fruits. We might have made another inappropriate choice in abstracting cases if we had sought to compare environmental management with its own enabling domain, i.e., the enabling domain of environmental management itself. The enabling domain of 52 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. environmental management would be those changes only that are confined narrowly to the institutional set-up of environmental management. There would be a tremendous over-laps between the two cases thus rendering a comparison meaningless. Hence it is important to choose the appropriate level of abstraction—in order to obtain a meaningful comparison. 2.5 Justification for our Choice of the Enabling Domain in Delhi: Federal evolution in Delhi is strongly affected by a set of concurrent changes in the politico-administrative-legislative domains. One major politico-administrative change in Delhi has been the creation of an elected state-level government in Delhi with its consequences for strengthening of democracy and federalism. The creation of a distinct territorial entity for Delhi—the National Capital Territory—is important as a partial concession of demand for statehood in a capital-territory. Nations’ capitals are unique territories. The central governments have an inherent stake in retaining control over capital-territories. Yet effective administration of a capital may render direct administration by a hierarchically remote center undesirable. In addition, often, elected sub-national governments are absent in capitals leaving their populations disenfranchised,6 0 rendering democratic representation weaker there. Delhi’s move away from a Union Territory to a National Capital Territory with an elected state-level government may serve as a lighthouse for organization of governance in capital territories, especially for federal systems. 6 0 Recall the parallel between Washington DC and Delhi drawn earlier (in Chapter 2 ’s Section 2). 53 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. The different levels of government in a constitutionally adopted federal system and their fiscal concerns have been critical issues in Indian federalism for a long time and more so since the adoption of the Constitution in 1950. Fiscal federalism and intergovernmental fiscal relations and issues have seen many changes over the years and the evolution of fiscal federalism in Delhi thus offers the opportunity to explore the effect of nature of federalism on the working of the government. A major development in fiscal federalism in recent years, having particularly important ramifications for Delhi, is the provision of state level Finance Commissions to render local government financially independent. The 73rd and 74th amendments add a new dimension to the study of fiscal federal relations in India. They are expected to make the third tier of government cease to be mere “creatures of the state”6 1 and affect intergovernmental interactions profoundly. This important development acquires a new significance in view of the increasing emphasis on survival of elected local governments following another important change (which we discuss now). Another significant development for federalism in India stems from the promotion of local self-govemance and democracy. This development makes the third tier of federal systems truly meaningful. Original provisions of the Indian Constitution left the promotion of local self-govemance to the state governments through placing it in the Directive Principles of State Policy. Over time this deteriorated into the local bodies 6 1 As per the provisions of the Constitution, local bodies fall in the state list and the states have the power to establish local bodies. Until the new amendments, it was a commonly held belief that the existence of local bodies was considered to be at the whim of the State government and hence the local bodies were often referred to be the “creatures of the state.” 54 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. becoming mere creatures of state governments. The state governments rendered elected local bodies ineffective by using their own powers to supercede the elected local bodies and to indefinitely postpone their re-election. The enabling domain has seen significant changes in Constitution, which deserve an examination for their far-reaching effects on federalism. Recent constitutional amendments prohibited such indefinite “supercession” of the rural and urban local bodies and mandated that re-elections must be done within 6 months. In addition, permanent state Election Commissions have been provided to ensure this. Thus these changes falling into the constitutional, politico-administrative, fiscal arenas together constitute a set of changes with important implication for federal evolution in India and especially for Delhi. A meaningful examination must examine them as a whole. To ignore any such important change would be closing our eyes to important, determining influences and attributing undue influence to some other factor that in isolation may have actually failed to be as influential. For example, given that local bodies were mere “creatures of state,” ensuring that elected local bodies survive and are not swallowed-up by the state governments is an important prerequisite; and per se the provision of state Finance Commissions might have failed to bring about any noteworthy change in intergovernmental relations (in the absence of this major redesigning). Thus, a few new developments in the enabling domain render it of great interest to us. These must be examined as a set because they lend greater meaning to each other. Our preference for a study of enabling domain arises due to the realization that the developments become more meaningful in the context of other changes, which have 55 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. taken place, and in the absence of which any one change might have been only insignificant. 2.6 Justification for our Choice of the Functional Domain of Environmental Management in Delhi: Our interest in the study of environmental management finds its roots in the evolution of federalism in this system. Even though in India (as was also the case across the globe) the interest in environmental management as an area of significant governmental activity is of a rather recent genesis, Indian environmental federalism has important lessons to offer for federal systems. This study is particularly important due to its reiterating the lesson of environmental management that global or nation-wide results for environmental protection require local action. This case also helps fulfill a major aim of the dissertation—to illustrate the form of the essential features of federalism. And, along with our first case study, it shows how certain variation can be expected in the form of the different features as they develop in different settings. Thus (for example) our examination of the cases demonstrates two ways in which decentralization has taken place in two different settings. This comparison also highlights another important lesson—that unlike the formally structured enabling domain, the force of circumstances may, in a functional domain, cause the growth and evolution of the federal system. Thus it documents the unique influences on the system of everyday working in a functional field. Our case study shows that in a functional arena exigencies of day to day working may cause some features of federalism to evolve informally. Anticipating some conclusions from our sub-cases we find that both 56 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Decentralization and Partnership and Cooperation are examples of this informal development. While formally environmental management is the responsibility of the Central Government falling, by default, in the Central List, in actual working environmental management has been decentralized. Similarly environmental management in Delhi reflects cooperation of different levels of governments. While it is difficult—if at all possible—for a constitution to mandate which governments must function as partners in governance for which activities, force of circumstances may easily induce it. Environmental management in Delhi shows how the dire situation of pollution compounded by judicial whip has led agents of central and state governments to join hands in controlling this menace. In contrast, given the nature of issues in the enabling domain, often only formal and legislatively mandated changes occur in that domain. In fact sometimes major constitutional amendments may be required to carryout the will of the people—when vested interest renders ineffective the desire of the founding fathers that is even coded in the constitution. The promotion of local self-govemance is a case in point here. While the Indian Constitution spelled out development of local self- government to be a goal for the states, the states abused their power and this failed to occur. Thus, while environmental federalism is of interest to us as a rapidly evolving system, the comparison of the two cases also helps us examine the variance in the development of the essential features in two cases and to analyze the differing impact of the domain on the development of the features. 57 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 2.7 Conclusion: The enabling domain and the functional domain of environmental management are interesting cases for many reasons. To begin with they are distinct enough to allow variations to show. While the enabling domain covers a wider set of departments and its developments generally have more far-reaching effects, environmental management is more narrowly defined in its scope. The former has a bearing on the different functions of government—for example, finances affect the provision of all municipal services. Financial management affects all sanitation, maintenance of roads, public libraries. Although indirectly the impact of environmental management is likely to be felt far and wide, directly environmental management affects the environmental situation in the area only. Moreover the two domains have very different historical legacies in Delhi. While the enabling domain has, among others, seen the evolution of mechanisms and safeguards for the interests of local governments, federalism in environmental management is still in nascent stages. Most notably, while responsibilities have been transferred to the state- level government for implementation of environmental policy, the resources are yet to be transferred. The situation is indeed dire.6 2 Clearly, this poses a major dilemma for federal relations and strengthens the argument for the presence of constitutional mechanisms, safeguards and institutions to ensure the independence of local bodies, for 6 2 One most often heard of complaint while interviewing officials in Delhi was that though at the time of formation of DPCC the responsibilities were devolved from CPCB to DPCC, the infrastructural resources that were being used for these tasks were never transferred. The officials in Delhi lament that Delhi has been denied its “due share”: so much so that they are weary of making any proposals for grants to CPCB saying that if they have not given Delhi its fair share, why expect them to do any more. 58 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. smooth working of different levels of government and for conflict resolution. In the empirical part of the dissertation, we will analyze the presence or absence of the essential features of federalism in these two domains. But given vast qualitative differences in the domains and given the flexible nature of the features and their ability to exhibit different extents and variations of forms, it is probably more appropriate to say that we will examine the degree and form of presence of the features. 59 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Chapter 3 Examination of Related Literature 3.1 Introduction: A vast body of literature has developed on the forms of government and on federalism. However, for a clear definition of our purpose and to understand better the nature of similar work, this chapter discusses and classifies some of the closely related work. The first section reviews some of the different definitions of federalism. The next section will highlight the important distinction of federation and confederation. The section that follows it reviews different studies of forms of federalism in practice. The subsequent section of this chapter examines the defining or distinguishing features of federalism pointed out by earlier works and, finally, the chapter ends in a brief conclusion. 3.2 Defining Federalism: The concept of federalism has been employed for a wide variety of purposes and so it is hard to express it in terms of any single definition. Several diverse ideas come to mind when one talks of federalism—ranging from political slogans/ conceptions like Nixon- Ford’s New Federalism program or Reagan’s “restoration” New Federalism6 3 or Lyndon Johnson’s Creative Federalism to other, more theory-oriented versions like Corwin’s 6 3 Conlan, Timothy J. (1986): “Federalism and Competing Values in Reagan Administration”, Publius: The Journal O f Federalism, 16 (winter 1986), pp. 29-47. 60 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Cooperative Federalism6 4 or Macmahon’s mature and emergent federalism6 5 or Sundquist’s national federalism.6 6 And as Wright reports in his book: “One persistent researcher, in an exhaustive analysis found ‘497 literal as well as figurative representations’ of various models, metaphors, conceptions, and types of federalism. Clearly, federalism is a much-used and abused term.”6 7 Some of these conceptions of federalism will now be analyzed. K. C. Wheare, who has been regarded as “the most influential student of federalism in the 20th century”6 8 refers to federalism as “the method of dividing powers so that the general and regional governments are each, within a sphere, co-ordinate and independent.”6 9 Sharma offers a simple definition of federalism in saying that: “when two or more states combine to establish a new state retaining at the same time a place and status for themselves inside the new organization, they are said to form a federation.” Although 6 4 Corwin (1950): ‘The Passing of Dual Federalism” in Virginia Law Review, 36 (February 1950), pp. 1-24. 6 5 Macmahon (1955): Federalism: Mature and Emergent. 6 6 Sundquist and Davis (1969): Making Federalism Work. 6 7 Wright (1988): Understanding Intergovernmental Relations (Pacific Grove, California: Brooks/ Cole Publishing Co.) p.39. 6 8 Jennifer Smith (1998): “The Meaning of Provincial Equality in Canadian Federalism,” p.6, (http://qsilver.queensu.ca/iigr/publications/working_paper_series/JSmith.html) (Last Accessed on June 3, 2002 at 7:55am). 6 9 Wheare, K. C. (1953): Federal Government, 3r d edition (London: Oxford University Press), p. 2. 61 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. quantification is not always possible or desirable, especially given subjective variables, Sharma offers a functional equation for federalism.7 0 This can be written as: F = f(x + y + z) + c The notations in this are as follows: F stands for federalism x stands for environment y stands for historical antecedents z stands for present socio-economic conditions c is the constant term Freeman in History o f Federal Government says that: “the name of Federal Government may, in this wider sense, be applied to any union of component members, where the degree of union between the members surpasses that of mere alliance, however intimate, and where the degree of independence possessed by each member surpasses anything which can fairly come under the head of merely municipal freedom.”7 1 He also says that: “two requisites seem necessary to constitute a federal government. On the one hand, each of the members of the union must be wholly independent in those matters that concern each member only. On the other hand, all must be subject to a common power in those matters which concern the whole body of members collectively.”7 2 This definition 7 0 Sharma, B.M. (1953) Federalism in Theory and Practice (Chandausi, India: G.R. Bhargava & Sons), p.86. 7 1 Freeman, Edward A. (1863): History of Federal Government, vol. 1 (Macmillan Co.), p. 3. 7 2 ibid. pp. 2-3. 62 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. brings forth the idea of a “sacred contract” in which bonds are established such that some freedom is lost in exchange for some other gains from such bonding. Herman Finer in his 1932 book also stressed this trade-off7 3 where he defines a federal system in terms of division and sharing of power between central and local governments. He states that: “a federal state is one in which part of the authority and power is vested in the local areas while another part is vested in a central institution.”7 4 A similar definition had already been given by Dicey in 1914 who stated: “federalism means the distribution of force of the state among a number of coordinate bodies each originating in and controlled by the constitution.”7 5 The important addition that this definition makes to our discussion is that it brings out a very important prerequisite for the federal systems—that the coordinate bodies should originate in the constitution. This accords to the bodies legitimacy and permanence that are essential for the system to work smoothly. Diamond in the “Federalist’s View of Federalism” too deals with this concept of division of authority. He says that in federalism there is a division of authority “between member states and a central government, each having the final say regarding matters belonging to its sphere.”7 6 This definition of a federal system brings forward two very important ideas: 7 3 Finer, Herman (1932) The Theory and Practice of Modem Government, vol. 1 (London: Methuen & Co. Ltd.). 7 4 As quoted in Sharma (1953), vol.l, p. 20. 7 5 Dicey (1914): Law o f Constitution (8th edition), p. 153. 7 6 Diamond, Martin (1961) ‘The Federalist’s View o f Federalism” in George S. Benson (ed.) Essays on Federalism, pp. 21-64 (Claremont, California: Institute for Studies in Federalism, Claremont Men’s College), p.22 (: As stated by Vincent Ostrom (1994) in The Meaning o f American Federalism: Constituting A Self-governing Society, p. 72). 63 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. one, that of coexistence of many different governments simultaneously and two, the idea of sharing of powers. This latter idea of sharing of powers is a prelude to some of the much-discussed ideas of current studies in the field—like those of inevitability of conflict, the idea of “scope of conflict” and the necessity for effective mechanisms for conflict resolution, etc. A search for the definition of the term federal in probably the first treatise on the subject—that is The Federalist Papers—reveals the views expressed here of one of the Federalists. To explain the concept of a federal government, which was written as “foederal” government in the times of Hamilton, Jay and Madison, Hamilton says that: The extent, modifications and objects of the Federal authority are mere matters of discretion. So long as the separate organization of the members be not abolished, so long as it exists by a constitutional necessity for local purposes, though it should be in perfect subordination to the general authority of the Union, it would still be, in fact and in theory, an association of States, or a confederacy. The proposed Constitution, so far from implying an abolition of the State Governments, makes them constituent parts of the national sovereignty by allowing them direct representation in the senate, and leaves in their possession certain elusive and very important portions of sovereign power. This fully corresponds, in every rational import of the terms, with the idea of a Federal Government.7 7 This definition of Hamilton too highlights the importance of the division of power and an absence of complete concentration of powers in the hands of a single central government. Another important contribution of this definition is that it distinguishes the concept of a federation from that of a confederacy—a distinction that is not always clear in The Federalist Papers. Thus, here Hamilton says that the states are completely 7 7 Cooke, Jacob E. (ed.) (1961): The Federalist (Middletown, Conn.: Wesleyan University Press), p. 55. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. subordinate to the authority of the Union or the central government in a confederacy, thus, authority and power are usurped by the center in a confederacy, unlike the federal set-up where neither has the absolute power and both share it. But often it is seen in the Federalist Papers that the terms “confederacy” and “federal” are used synonymously and Ostrom notes that: “the authors of The Federalist applied the term “federal” (foederal) to both the government under the Articles of Confederation and to the one proposed in the new Constitution.”7 8 Richard B. Morris (1979) says what the Federalists sought by creating a federal set-up was not merely a nation with special characteristics but a special kind of national character. To quote Morris: Congressional power and prestige precipitously deteriorated in those years, and the decline of the central government’s authority was accompanied by a severe economic depression, by threats to the security of the borders which had been established by the treaty with Great Britain which ended the American Revolution, and by the inability of the central government to achieve a breakthrough in foreign policy—to resolve outstanding differences with England over trade and with Spain over the navigation of the Mississippi. To the nationalists, men like Washington, Jay, Hamilton, and Madison, the solution lay in building a national character, in drastically reducing the power of the separate States and in infusing the central government with energy. This was what they meant when they spoke of ‘federalism’. What men like Madison wanted was a consolidated government, while Hamilton and Jay would have reduced the States to geographical subdivisions of the new nation.7 9 7 8 Ostrom, Vincent (1994): The Meaning o f American Federalism: Constituting A Self-governing Society (Institute for Contemporary Studies, San Francisco, CA), p. 70. 7 9 Morris, Richard B. (1979): “Federalism: USA Style” {Bijdragen en Mededelingen betreffende de Geschiedenis der Nederlanden (Netherlands) 1979, 94 (3), p. 455}. 65 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. That the Founding Fathers sought to create institutions supporting the American national character has also been stressed by Harry N. Scheiber in his note to his piece, “Constitutional Structure and the Protection of Rights: Federalism and Separation of Powers”. He says: “This vision, which also was reflected in Madison’s ‘Federalist’ essays during the ratification period (especially Nos. 47, 51), rested in the last analysis not on blind faith in people’s capacity for self-government and a tolerant protection of the rights of minorities; rather it rested on the hopefulness that republican spirit— ‘the force of opinion and habit’ of a free people— -would be reinforced and given full play by the proper institutional structure.”8 0 3.3 Federation and Confederation: As mentioned above sometimes in literature the terms federation and confederation are used interchangeably. Nice in his above referred book regards confederation as one type of federal system.8 1 Similarly, as Ostrom states in his book The Meaning o f American Federalism, the terms confederacy and federalism are found to have been used interchangeably by the Federalists in The Federalist Papers?2 Wright too makes the same point when he says that: “To the writers of The Federalist Papers, a federal arrangement meant what we now mean by confederation: a league formed by 8 0 Scheiber, Harry N. (1992): “Constitutional Structure and the Protection of Rights: Federalism and the Separation of Powers,” in A. E. Dick Howard (ed.) The United States Constitution: Roots, Rights and Responsibilities (Washington: Smithsonian Institution Press), Footnote 3, p. 200. 8 1 Nice, David C. (1987): Federalism: The Politics o f Intergovernmental Relations (New York: St. Martin’s Press), p. 3. 8 2 Ostrom, Vincent (1994): The Meaning of American Federalism: Constituting A Self-governing Society (Institute for Contemporary Studies, San Francisco, CA), p. 70. 66 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. compact or treaty among sovereign states.”8 3 Hence, particularly with a view to remove any vestiges of confusion, the distinctions between these two terms are now highlighted. The distinction between a federation and a confederacy is best understood using the example of the American polity before and after the years 1789. In this year the United States shifted from a confederacy type of government to a federal (or rather a foederal) type of organization. The very basis of interaction between the center and the states and between the states themselves changed with a shift in emphasis from “free and independent states” (taken from the Declaration of Independence of the United States of America, July 4,1776) to “the existence of the UNION” (: Hamilton in essay number 1 of The Federalist Papers8 4 ). Sharma (1953) recapitulates the basic difference between a confederation and a federation by stating that in a confederate system the power of the central or common body and the time period for which the confederating units have come together are both limited. And that the sovereignty of the units and the extent of freedom to breakaway from the confederation are relatively greater.8 5 8 3 Wright (1988): Understanding Intergovernmental Relations (Pacific Grove, California: Brooks/ Cole Publishing Co.), p. 37. 8 4 In some places The Federalist Papers too a distinction is made between these terms. Thus for example in stating his purpose in the first essay in The Federalist Papers Hamilton says that: “I propose in a series of papers, to discuss the following interesting particulars: —- The utility of the UNION to your political prosperity— The insufficiency of the present Confederation to preserve that Union....” The main views in the literature too distinguish the two from each other. 8 5 Sharma (1953) summarizes the main differences between a confederation and a federation as follows: “(a) A confederation is a loose union over confederating independent states, whereas a federation is a union deriving its authority from the citizens of the union; (b) A confederation is the outcome of an agreement or treaty made generally for a specific period, whereas a federation is the result of a true constitution supreme over all other instruments, from which both governments, national and states, derive their respective powers, and no government is allowed encroachment on the powers of the other; (c) In a confederation the powers of a common body or authority are narrow and extremely limited, whereas in a federation the 67 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Scheiber in “Constitutional Structure and the Protection of Rights” also brings out the distinction between the federal and confederate forms of government and highlights the existence of the states as constitutional entities and not just administrative units. He reiterates the basic principle of federal design in stating that American federalism “retained the states, giving them the right to function as separate constitutional (and not merely administrative) entities, or polities, within the larger system in which national Constitution was supreme.”8 6 This distinction between confederate and federal governments, along with another distinction as against a unitary (national) government is brought-out very well by Diamond (1961) in “The Federalist’s View of Federalism” when he says: A confederacy and a nation are seen as the extremes. The defining characteristic of a confederacy is that the associated states retain all sovereign power, with the central body entirely dependent legally upon their will; the defining characteristic of a nation is that the central body has all the sovereign power, with the localities entirely dependent legally upon the will of the nation. In this view, then, federalism is truly the middle term for its defining characteristic in that it modifies and then combines the defining characteristics of the other two forms. A federal system combines states which confederally retain powers of the general government are wider, largely exclusive, and capable of being exercised through its own agencies; (d) In a confederation the units are free to dissociate themselves from the union, whereas in a federation the units are united with the general government on a cooperative basis- any attempt by any unit or units to secede is a “revolt” against the nation, which can be and has to be suppressed with the full might of the nation; (e) In a confederation the units retain their sovereignty, whereas in a federation the authority of government is shared by them with the general government, and the sovereignty resides in the whole federation; (f) In a confederation the general government is subordinate to the regional governments where as in a federation the general government coexists with the regional governments and is independent of them.” (Vol. 1, pp. 17-18). 8 6 Scheiber, Harry N. (1992): “Constitutional Structure and the Protection of Rights: Federalism and the Separation of Powers,” in A. E. Dick Howard (ed.) The United States Constitution: Roots, Rights and Responsibilities (Washington: Smithsonian Institution Press), p. 184. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. sovereignty within another sphere; the combination creates a new and different 0*7 thing to which is given the name federal. This idea is similar to that of Nice (1987) where he too says that federalism falls at the “mid-point on a continuum of political systems,”8 8 with the two extremes being defined by purely unitary system and no national government: No National Unitary Federal Government Figure 3: Continuum of Political Systems 3.4 Studies of the Forms of Federalism in Practice: Several different studies have proposed their own descriptions for the various forms of federalism observed in real life: Watts (1998),8 9 discussing the idea of “Quebec-Canada” partnership, summarizes the different partnerships that make federal systems, thus covering both federations and 8 7 Diamond, Martin (1961) ‘The Federalist’s View of Federalism” in George S. Benson (ed.) Essays on Federalism, pp.21-64 (Claremont, California: Institute for Studies in Federalism, Claremont Men’s College), p. 22. 8 8 Nice, David C. (1987) Federalism: The Politics o f Intergovernmental Relations (New York: St. Martin’s Press), p. 3. 69 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. confederations (among others). Partnerships of two or more governments using different combinations of “self-rule” and “shared-rule,” according to Watt’s insightful discussion, include: - Constitutionally decentralized unions - Federations Confederations - Federacies Associated states - Leagues Joint functional intergovernmental organizations. Nice9 0 discusses three genres of models of federalism. These are: 1) Competitive Models: These stress the competition among the different levels of government. In these models federalism is regarded as a zero-sum game in which the two levels of government, national and state, compete for power. Three configurations are possible in terms of who dominates in the game and this gives rise to three varieties of competitive federalism: nation-centered federalism, state-centered federalism, and dual federalism. The terms nation-centered federalism and state-centered federalism are self- 8 9 Watts, Ronald L (1998): “International Examples of Political Partnerships” (Policy Options, March 1998, pp.47-49). 70 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. explanatory. Dual federalism is also referred to as layer-cake federalism. This type of federalism defines clear spheres of government activity and holds each level of government—national and state—supreme in its own area of working. Balance and flexibility are critical to this model along with a clear division of responsibilities. Layer cake federalism is contrasted with marble cake federalism, which is a model of cooperative federalism, and in which the tasks of different levels of government are so completely inter-twined that it is not possible to separate them-out. 2) Interdependent Models: Interdependent models emphasize the sharing of responsibilities between the different levels of government. These models differ in terms of the degree of cooperation required for successful functioning of the system. These include: (a) Cooperative federalism according to which cooperation between the different governments may produce better results than any one level working on its own. (b) Creative federalism that expects cooperation not only between the different levels of government but also between the government and private sectors. (c) New federalisms of Nixon-Ford and Reagan eras that stressed the separation of responsibilities of the national and state governments. 9 0 Nice, David C. (1987): Federalism: The Politics o f Intergovernmental Relations (New York: St. Martin’s Press), pp. 4-13. A more updated version of the text is available as Nice, David and Patricia Fredericksen (1995): The Politics o f Intergovernmental Relations (Chicago: Nelson Hall). 71 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. (d) Finally, rowboat federalism according to which all governments are tossed in the same boat and hence depend on each other. The rowboat scenario admits of the possibilities of both cooperation and conflict. 3) Functional Models: According to this model the critical divisions in federal systems are not the horizontal divisions between the national, state, local governments but the vertical divisions among government programs which cut across the different types of governments. Two varieties of the models are included here: (a) Picket fence federalism: in which the horizontal divisions are totally subsumed and the vertical divisions gain prominence. As shown diagrammatically in the figure below: A w e 1 f a r e Figure 4: Picket Fence Federalism 72 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. (b) Bamboo fence federalism: which admits the importance of both horizontal and vertical relationships in the government. Diagrammatically: A B C a b e d e f g h i j k 1 m n A: National Government e: Public health m: Unemployment compensation B: States f: Medicaid n: Aid to families with C: Local Governments g: Health research dependent children h: Training health o: Supplementary security a: Primary and practitioners income secondary education p: Job training b: Higher education i: Air transportation Figure 5: Bamboo Fence Federalism Wright9 1 presents a more complex set of models to describe the relationships between the national, state and local governments in terms of authority relationships (derived from study of American cases). There are three main actors in Wright’s models. These are the national government, the state governments and the local governments and the models are derived from the relationships between these. Wright says that three types 9 1 Wright (1988): Understanding Intergovernmental Relations (Pacific Grove, California: Brooks/ Cole Publishing Co.) p. 39-58. 73 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. of authority sharing result in terms of which the three models can be propounded. These are as follows: 1. Coordinate-Authority Model: While distinct boundaries exist between the national and state governments, local government is subsumed in the state government. Wright cites Dillon's Rule as an example of this. As per this rule, apart from some specified powers all other powers were not centered in the local government and were centered in the state government. Particularly in the case of some conflict, the power would be automatically vested in the state government. Diagrammatically, this type of relationship can be depicted as: National Government State Government Local Government Figure 6: Coordinate Authority Model 2. Overlapping Authority Model: In Wright’s discussion, overlapping authority model falls between the two extremes of the continuum defined by the coordinate authority model and the inclusive authority model (discussed below). In this model, the authorities of the different governments overlap in large parts and the Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. areas of full autonomy are limited. Wright argues that this describes the pattern of the bulk of operations of government in the United States. This pattern is presented diagrammatically as: State National Government N/S Government National State & Local N/L S/L Figure 7: Overlapping Authority Model 3. Inclusive-Authority Model: The inclusive authority model is at the other extreme of the swing of the pendulum. As can be seen in the diagram that follows, this type of authority is represented by circles within circles. The circle representing the national government is the largest, while that for state government is next and that for local governments is the smallest in size. In such a system, the state and local governments depend totally on the decisions of the national government, 75 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. which are applicable nationally. High degree of centralization and hierarchy are characteristic of this model. Diagrammatically, this can be presented as follows: It is an old adage that authority and responsibility go hand in hand. To show an National Government State Government Local Government Figure 8: Inclusive Authority Model appropriate division of responsibility between the central and state governments, Peterson9 2 discusses two theories of federalism. These are the legislative and the functional theories of federalism. The functional theory identifies clear areas of work where each type of government would be most effective. According to this theory, while redistribution should primarily be the national government’s concern, state and local governments have the primary responsibility for development. The other theory is the legislative theory which is the lesser optimistic of the two. The legislative theory 9 2 Peterson, Paul E. (1995): The Price o f Federalism (The Brooking Institution, Washington, DC), pp.16- 49. 76 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. postulates that due to political pressures, national government takes on responsibilities that it should best avoid. “Pork” or “pork-barrel” projects (i.e., projects that are not worth their money) get undertaken due to political reasons. This theory predicts, quite pessimistically, that government is likely to grow indiscriminately and each level of government is likely to grow in the domain where it is least efficient. 3.5 Defining Characteristics/ Features of Federalism: At a recent conference on federalism9 3 B. P. Jeevan Reddy provided a succinct definition of federalism in saying that: “A federation connotes a state where the legislative and executive powers are distributed between a central/ federal authority and several regional/ provincial/ state authorities. There is no such thing as a standard or a model federal state.” A.V. Dicey, a scholar of constitutional law, regarded federalism as a method to reconcile state independence and national unity. For this purpose, he identified three main features of federalism to be: “the supremacy of the constitution—the distribution among bodies with limited and coordinate authority of the different powers of government—the authority of the Courts to act as interpreters of the constitution.”9 4 9 3 B. P. Jeevan Reddy: “Challenges of Diversity and Federalism in an Era of Globalization” (Session 2 A) (http://www.ciff.on.ca/Referenee/doearnents/docb26.html) (Last Accessed on June 3, 2002 at 7:54am). 9 4 Dicey, A.V. (1889): Introduction to the Study o f the Law o f the Constitution, (3r d ed.), pp. 134-135. 77 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Vincent Ostrom in his book The Meaning of American Federalism: Constituting A Self-governing Society9 5 identifies seven characteristics which he regards as the basic elements of federalism. These are discussed as below: (1) A covenantal approach: Concurring with Tocqueville, Ostrom says, “the critical idea at the core of American democracy was associated with the covenantal theology of the Puritans and the way that a covenantal approach could be applied in constituting civil bodies politic. The presuppositions of a covenantal approach are the foundation for the development of a normative inquiry grounded in the fundamental rule, ‘Do unto others as you would have others do unto you’.”(p. 252). (2) Plurality among the institutions of governance: In the presence of the golden rule of the covenantal approach, the working of society becomes smooth as people are motivated to behave well in their self-interest—because they want others to behave well with them. In such a scenario, plurality of bodies (which may be governments) is admitted as an alternative and the Hobbesian principle of unity through a single sovereign is no more required. And, thus, the federal system with plurality of authorities becomes a reality. (3) Constitutional rule: This is an essential element because “there must be both specifiable and commonly understood terms and conditions of governance under which people exercise basic prerogatives in the governance of their own affairs and 9 5 Ostrom, Vincent (1994): The Meaning o f American Federalism: Constituting A Self-governing Society (Institute for Contemporary Studies, San Francisco, CA). 78 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. can hold those who act as agents on their behalf accountable to its limits implied in a proper discharge of tier public trusts”(p. 254). (4) Contestation: This refers to the competition among opposite and rival interests such that they serve as checks and balances on each other. (5) Active citizen participation in public entrepreneurship: Ostrom says that the true test of a well functioning democracy is not so much free and fair voting as it is the spirit of participation the people, their willingness to take initiative and to get something done instead of waiting for others to do it. Joint effort lends true meaning to self- governance and self-organization that exist in the form of municipal institutions, which, in turn are a critical part of the federal system. (6) Reaching out to new communities of relationships: Because “federal societies presume an openness that makes people able to relate to one another and explore latent communities of interest that might be constituted in diverse ways”(p. 257). (7) Reformability: It is said that a society that does not have the room for self-correction is sure to perish. Reformability refers to this characteristic of a political system. Openness in democratic societies makes them flexible thus allowing “Reformability.” Ostrom says “a federal society is an experimenting society where new ideas, including those that alter the structure of institutional arrangements, can be tried out as ways of alleviating problems of institutional weakness and institutional” (p.258). 79 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. The ideas of plurality, participation and reaching-out to new communities of relationships lead us to Ostrom, Tiebout and Warren’s idea of “polycentricity.”9 6 In a polycentric system there exist many decision-making centers that are formally independent of each other. They define a polycentric system as one with numerous autonomous units formally independent of one another which choose to act taking the others into account, thus using the processes of cooperation, competition, conflict, and conflict resolution. This conflict resolution does not have to be done by a strong center. And non-central mechanisms too may serve the purpose. Clearly, federal structures possess this characteristic. In fact, polycentricity or the presence of more than one center reinforces the old idea of coexistence of more than one government. Ostrom argues that polycentricity is essential for liberty, effectiveness in working of government and for competition. Moreover, if it does not exist at any one level, then it really does not exist at any level. It is thus apparent that both order and rivalries, or conflict, go together in federal systems and hence there exists the need for conflict resolution. Riker (1964) highlights briefly the distinguishing features of a federal system in stating that: “A constitution is federal if (1) two levels of government rale the same land and people, (2) each level has at least one area in which it is autonomous, and (3) there is some guarantee (even though merely a statement in a constitution) of the autonomy of each government in its own sphere.”9 7 9 6 Ostrom, Vincent, Charles M. Tiebout and Robert Warren (1961) “The Organization of Government in Metropolitan Areas: A Theoretical Inquiry” American Political Science Review 55 (Dec.), pp. 831-842. 9 7 Riker, William H. (1964) Federalism: Origin, Operation, Significance (Boston: Little, Brown), p. 11. 80 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Sharma9 8 distinguishes three main features of federalism. According to him, these are the basic characters that a system must possess if it is to be truly federal. These can be stated as below: (1) The first essential feature of federalism, according to Sharma, is “the supremacy of the Constitution and its written-rigid character”, so that “a federal constitution is an agreement between a number of states that combine together to establish over themselves a new government to which they, by mutual agreement and of their free will, assign a certain part of their authority. The federal constitution, which thus comes into being by this deliberate resignation of some of their powers by the component states, contains the terms and the conditions of the contract between those states on the one hand and the newly established central government on the other.” (Vol. 1, p. 2). (2) “Coexistence of two governments” is the next prerequisite for federalism. To explain this, Sharma quotes that: “the federal government, in turn, in the exercise of those specific powers acts directly not only on the communities making up the federation, but on each individual citizen...and the citizens of a federation consequently owe a double allegiance, one to the state, and the other to the federal government. They live under two sets of laws, the laws of the state and the laws of the federal government.”9 9 9 8 Sharma, B.M. (1953) Federalism in Theory and Practice (Chandausi, India: G.R. Bhargava & Sons). 9 9 As quoted by Sharma (1953) at page 21 from Encyclopedia Britannica, vol. 10, p.233. 81 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Freeman (1863) too asserts for the coexistence of two governments and the supremacy of each in its sphere: The Federation is as truly sovereign in its own department as the state is in its own department. Resistance to the lawful commands of its Government is as much rebellion as resistance to the lawful commands of a monarch. An injury done by one state to another state or to a citizen of another state is not a matter of international wrongs; it is a mere breach of the peace, to be rectified by the Federal Courts or, if need be, to be chastised by the Federal Army.1 0 0 (3) “Special position of judiciary” is the third and final characteristic highlighted by Sharma. The judiciary acquires its special position as an interpreter of the supreme constitution and as a guardian of the positions of the various governments. Thus, the judiciary is important because “it is necessary that there must be some agency to uphold the constitution and to keep the two governments within proper limits.”(p. 35). Richard B. Morris1 0 1 enumerates briefly the characteristics of the federal system, especially in the context of the United States as follows: “On paper at least the Founding Fathers had in 1787 established a system of limited government, with delegated powers, checks and balances, division of powers, and a coordinate authority shared by the national government and the separate States.” The Federalists were conscious of the threat of corruption that power would bring with it. Madison’s famous words “if men were angels, no government would be necessary” reflect this consciousness and the need 1 0 0 Freeman (1863): History o f Federal Government, vol.l, pp.102-3 (Macmillan Co.). 1 0 1 Morris, Richard B. (1979): “Federalism: USA Style” {Bijdragen en Mededelingen betrejfende de Geschiedenis der Nederlanden (Netherlands) 1979, 94 (3), p. 459}. 82 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. to guard against such threats. Hence, the Founders of the American federalism sought to devise a system that would have certain innate characteristics to support the survival of the new system and of the whole society. Scheiber discusses some of these in “Constitutional Structure and Protection of Rights.”1 0 2 The new system was built with self-correction mechanisms provided through a clear separation of powers and a system of checks and balances. The Upper House (Senate), in addition to the Lower House, was constituted with similar intents to guard against over-centralization and to secure federalism and democracy.1 0 3 The legislature, executive and the judiciary were created as separate arms of the government such that each was expected to check and balance the other in actual working. Madison’s often-quoted words reflect the inherent design principles of a system where “ambition would be made to counteract ambition.”1 0 4 It was feared that in the absence of such a proviso “spirit of encroachment”1 0 5 would take over and a situation might result in which the power of the different units gets concentrated in the hands of a few. President James Wilson’s popular quotation mirrors this desired goal of the Founders that each branch of the government must be “free from the remotest 1 0 2 Scheiber, Harry N. (1992): “Constitutional Structure and the Protection of Rights: Federalism and the Separation of Powers,” in A. E. Dick Howard (ed.) The United States Constitution: Roots, Rights and Responsibilities (Washington: Smithsonian Institution Press). 1 0 3 Finer (1932): Theory and Practice of Modem Governments, vol. 1, builds this point in considerable detail (p.680). 1 0 4 James Madison as quoted in Scheiber, Harry N. (1992): “Constitutional Structure and the Protection of Rights: Federalism and the Separation of Powers,” in A. E. Dick Howard (ed.) The United States Constitution: Roots, Rights and Responsibilities (Washington: Smithsonian Institution Press), p. 188. 1 0 5 As quoted from George Washington’s Farewell Address in Scheiber (ibid.), p. 188. 83 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 1 0 ( \ influence, direct or indirect, of either of the other two powers.” Another feature that Scheiber stresses as an original intent of the framers was the “determination to create a strong central government. They insisted that independence had been won, at cost in blood and treasure, by the American people as a whole and not by independent states.”1 0 7 A diffusion of authority would serve as a defense mechanism for liberty. It would also preserve diversity. It was also hoped that an efficient system would be generated in this system through administrative decentralization and by leaving decisions on matters of local focus and concern on the states. As our discussion above highlights one critical issue of federalism is the distribution of powers between the different levels of government. This issue has been examined in much depth in The Federalist Papers as well. In essay #23, having specified the tasks of the central government (which include for example, common defense of the member states, public peace, and commerce) Hamilton emphasizes that the powers must be commensurate to the magnitude of task entrusted to the central government. And thus: These powers ought to exist without limitation, because it is impossible to foresee or define the extent and variety of national exigencies, or the correspondent extent and variety of the means that may be necessary to satisfy them. The circumstances that endanger the safety of nations are infinite, and for this reason no constitutional shackles can wisely be imposed on the power to which the care of it is committed. This power ought to be coextensive with all the 1 0 6 James Madison as quoted by Scheiber (ibid.) at p. 188. 1 0 7 Scheiber, Harry N. (1992): “Constitutional Structure and the Protection of Rights: Federalism and the Separation of Powers,” in A. E. Dick Howard (ed.) The United States Constitution: Roots, Rights and Responsibilities (Washington: Smithsonian Institution Press), p.191. 84 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. possible combinations of such circumstances; and ought to be under the direction of the same councils which are appointed to preside over the common defense.1 0 8 In this context it is important to talk of the concept of “scope of conflict” discussed by Nice.1 0 9 Given that a number of govemment-actors are involved on the stage of federalism, there is ample room for conflict to arise. Scope of conflict refers to the size and extent of conflict that expands or contracts as the balance of power changes. An early discussion of federalism1 1 0 identifies the forces operating in federalism as the centripetal forces and the centrifugal forces. Centripetal forces are those forces that keep otherwise disjointed elements together i.e. these are the unifying forces. Centrifugal forces are those that encourage separation even in the face of otherwise centralizing tendencies. The ultimate outcome for federalism is the net combination of centripetal or centrifugal forces—clearly, both integrative and disintegrating forces may be at work simultaneously. Two or more states may come together by strengthening their centripetal tendencies and there by strengthening their mutual interests. In case centrifugal tendencies gain undue strength, a threat of a breakaway may be posed1 1 1 as a 1 0 8 Hamilton, Madison and Jay: The Federalist Papers (Clinton Rossiter edition, 1961) (Mentor Books, USA), p.153. 1 0 9 Nice, David C. (1987): Federalism: The Politics o f Intergovernmental Relations (New York: St. Martin’s Press), pp. 22-24. 1 1 0 Reference: Bryce, James (1901): ‘The Action of Centripetal and Centrifugal Forces on Political Constitutions”, Essay IV, in Bryce, J. (ed.): Studies in History and Jurisprudence, Oxford (Claredon Press), vol. 1, reprint Aalen (Scientia Verlag) 1980, pp.225-311. 1 1 1 An eventuality is the actual split of the country - for example, the split of Belgium from Netherlands (References: Bryce, J. (1888), The American Commonwealth, vol. 1 - 3 , New York (Macmillan) and 85 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. result of which local authorities may be empowered thus one of the outcomes may be that the system is made more decentralized and federal in its form. Clearly, the processes of formation of a federal set-up in any particular case will have an important bearing on the type of set-up that results and on the distribution of responsibilities and authority in it. 3.6 Conclusion: A great deal of intellectual resources have been devoted to the task of defining federalism. At one level are the definitions presenting an overall view of federal systems. At another, this form of government has been defined in terms of its underlying components or the defining features. At still another level, very case-specific characterizations of federalism have been done. As far back as in 1863, Freeman1 1 2 laid stress on full independence of each member of the union “in those matters that concern each member only,” while in the others, all of the members were “subject to a common power.” In the early twentieth century, Dicey underlined the role of the constitution—and of the judiciary as its interpreter—in the context of the division of the force of the state among “coordinate bodies.” Another definition by Wheare views federalism as a government by division of powers such that the general and regional governments are coordinate and independent in their own spheres. Blankart, Charles B: “Local Autonomy and Popitz’ Law in Prussia and Germany,” at http://vvww.Dublicchoice.org/files/blankart.htm. (Last Accessed on June 3,2002 at 8:18pm). 1 1 2 Freeman, Edward A. (1863): History o f Federal Government, vol. 1 (Macmillan Co.) pp. 2-3. 86 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Ostrom’s approach of looking at the characteristics of federalism leads to seven basic aspects of (i) Covenantal approach, (ii) Plurality of government institutions, (iii) Constitution rule, (iv) Contestation, (v) Citizen participation, (vi) Reaching out to new community relationships, and (vii) Reformability. Elsewhere, Ostrom, Tiebout and Warren project the idea of “polycentricity” for liberty, effectiveness and competition in governance. Inevitably, multiple centers of power, functioning in competition with each other and relying on their strength and validation on the common mass of people must lead to conflict and necessitate built in conflict resolution mechanisms. Other authors, beginning with the Founding fathers themselves, then Riker, Sharma, Morris, Scheiber, and Nice have elaborated upon these different aspects as also upon the distinction between the federal and the confederate forms of government. Federalism has come a long way since the days of the founders or from those of several of these authors. With the coming-in of a large number of lately independent countries under the federalist fold, much experience has accumulated on the real life evolution of the federal form. There is thus a clear need for much of this literature to be reviewed and consolidated in the light of such experience—to bring out the essential features, those that (a) define modem day federalism in somewhat greater depth than only necessary characteristics and (b) go to make it work smoothly and effectively. 87 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Chapter 4 The Theory: The Essential Features Identified 4.1 Introduction: The federal form of governance has kept in step with onward march of democracy in recent times. Interestingly the former colonies of United Kingdom—the Mecca of the unitary structure of government—viz., USA, Canada and Australia, emerged as federations as they took their place in the comity of free nations and so did India, Pakistan, and numerous other countries that gained independence after the end of the Second World War. Federalism has, indeed, emerged as the most favored political system in a large number of independent nations around the world. Federalism is a key concept, particularly in view of the claim that a substantial j 1 o number of developing countries can be classified as federal. The choice of the federal form as a method for unification by the established nations of the Western world1 1 4 adds another dimension to the possibilities that federalism offers. On the one hand, desire to take advantages of common markets and economies of large scale led to unification of diverse populations.1 1 5 At the same time, decentralization and devolution were the key concepts of the last two decades of the twentieth century—so much so that not only federal countries but even some countries with unitary and centralized governments tried 1 1 3 Elazar, Daniel J. (1987): Exploring Federalism (Tuscaloosa: University of Alabama Press), pp. 34 - 64. 1 1 4 Thimmaiah in Jafa (ed.) (1999) book. 1 1 5 The most prominent example of this is of course the European Economic Community or the European Union. Others include ASEAN and NAFTA. 88 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. their hands at decentralization (Ter-Minassian, 1997). Federalism as a means for accommodating diversity offers much-needed options in such a scenario. More so because—“the message emerging from events in countries as diverse as Chad, Iraq, ... is that their governments need to consider decentralization strategies that might assist in holding together fragmented groups within their borders. Looking at such strategies has led to increased attention to administrative decentralization interventions, particularly federalism and confederalism.”1 1 6 However as much of the recent literature shows the outcomes of these attempts at decentralization have not been entirely satisfactory. The experience of different countries demonstrates that such attempts were often feeble and sometimes turned-out to be merely false starts. A commonly faced problem was that though the intention was to devolve and decentralize most countries ended-up only “deconcentrating” (Wunsch and Oluwu, 1995; Ostrom, Shroeder and Wynne, 1993). In effect the strategy adopted in implementing federalism was itself inadequate and faulty. The problem was further compounded by the fact that often the countries remained oblivious of these mistakes, thereby leaving little scope for correction. A critical issue thrown up by the comparative lack of success encountered by the advocates and practitioners of federalism in real world situation has much to do with the lack of clarity of the concept itself, as also the demands of its practical manifestations. Was the requisite understanding of the ingredients, pre-requisites and institutional framework necessary for success in implementing federalism available to guide those 1 1 6 Cohen and Peterson (1999): Administrative Decentralization: Strategies for Developing Countries (Connecticut, USA: Kumarian Press), p. 7. 89 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. efforts? Is there a right way of going about in adopting the federal form of governance? What are the essential features that must be introduced or promoted in order to implement federalism? There is a crying need to find clear and cogent answers to these questions; the essential features of federalism need to be defined in explicit and precise terms. While many scholars lament these deficiencies, no comprehensive theory is available to provide the underpinnings for the implementation of the federal strategy of governance. In fact, there is much ambiguity over the concept of decentralization itself, which is but one of the chief ingredients of federalism. As Conyers1 1 7 (1986) laments: “the language used in development studies is ... plagued by ambiguities and inconsistencies, which leads to confusion, misunderstanding, and conflict in discourse.” This when decentralization is among the better explored concepts. And, in fact, federalism and decentralization share closer ties. Both are seen to be means for good governance. By enabling response to specific needs of different groups and enhancing local participation, they help reduce strife. Particularly as “increasingly, administrative decentralization reforms are being seen as central to devolving responsibilities to elected regionally-based local government units, thereby facilitating a transition to good governance, ensuring that the public sector responds to the needs and views of rural and urban people, and diffusing tensions created by ethnic, religious or regional movements arguing for secession.”1 1 8 Effective decentralization requires local 1 1 7 Conyers, Diana (1986): “Future Directions in Development Studies: the Case of Decentralization”, World Development, XIV, 4 (1986), p.594. 1 1 8 Cohen and Peterson (1999): Administrative Decentralization: Strategies fo r Developing Countries (Connecticut, USA: Kumarian Press), p. ix. 90 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. empowerment and devices for problem-solving and conflict resolution. Federalism enhances the opportunity for involvement and, at the same time, mechanisms for conflict resolution are important for it. And because of this link, better understanding of ideas of federalism will not only help in achievement of this system by countries attempting federalism but will also help more generally in enabling administrative decentralization by providing a better understanding of it as well. Based on the literature—both dealing with the theory and with the practical experience of the countries implementing federalism—we identify here the essential features of federalism. Though decentralization of power and authority to, and autonomy of, lower levels of government are frequently emphasized in theory, several other features must be recognized as essential in successful adoption of federalism as the ruling political methodology in the organization of governance in a country. Moving ahead from chapter 3 where we summarized the defining features, this chapter aims to identify the features essential for a well functioning federalism and to develop a clear and pragmatic understanding of each. It also offers the justification, based on an analysis of the literature, for why a particular feature is considered integral to the success of an overall strategy of implementing the federal strategy of governance. The dissertation will illustrate and examine the theory laid-out in this chapter using empirical cases of federal evolution from Delhi, India. 91 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 4.2 Essential Features of Federalism: An analysis of the successes and failures of the past, supplemented by the lessons from theory, enables us to identify some essential characteristics of federalism: 1) Multiple and Independent Governments: “ Power that is widely shared in a democratic society must correctively be broadly distributed... Binding authority depends upon concurrence among multiple decision structures. ” (V. Ostrom, 1994, pp.253-4) It is obvious that at least two levels of government—national and sub-national— must exist in federalism. But given the desire to take governance to the lowest level and given the organization of nation-states and the size of modem government, two levels of government cannot fulfill the promise of federalism. Multiple levels of government are desired for this. And much concern in New Public Management1 1 9 has centered on making the third tier of federalism—the local government—meaningful in its existence. Lowry provides support for the multiple levels in arguing that both the vertical and the horizontal dimensions are essential for federalism. The vertical dimension represents the national and sub-national governments and the horizontal dimension expresses interstate competition. The vertical dimension is necessary both for the per se involvement of the federal government and also for the role of the national government in coordinating the 1 1 9 Osborne, David and Ted Gaebler (1992): Reinventing Government: How the Entrepreneurial Spirit is Transforming the Public Sector (Reading, MA: Addison-Wesley Publishing Co., Inc.). 92 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. inter-state efforts. The horizontal dimension has the potential for interstate competition, thus providing “flexibility, innovation and efficiency by allowing policy makers who are close to the scene to tailor policy efforts to local public needs.”1 2 0 Multiple and independent governments share power and authority and provide checks and balances to each other’s actions—-just as the independent legislature, executive and judiciary are designed to be checks on and to balance each other. They set limits to each other’s powers and help prevent the “sovereign state” from deteriorating into the “predatory state.” It is evident that in order to effectively check and balance each other, the governments must not only be autonomous or not dependent on each other but they must also be neither subordinate nor subservient to each other. Naturally a relationship of strong dependence will not let a level of government either balance the other or be able to check its transgressions. Nor will a government dependent on another be in a position to expose its transgressions and the system may decline to become a predatory centralized system in effect. An important aspect of this independence for the working of federalism is the financial independence of the local and state governments from the central government. Independent fiscal regimes, especially budgeting, of the sub-national governments ensure that they are not financially dependent on the central government and that they have predictability of finances. This reduces the pressure of the central government on them. Weingast1 2 1 (1995) stresses that it is important for the 1 2 0 Lowry, William R. (1992): The Dimensions o f Federalism: State Governments and Pollution Control Policies (Durham: Duke University Press), p. 4. 1 2 1 Weingast, BR (1995): “The economic Role of Political Institutions: Market-Preserving Federalism and Economic Development”, Journal o f Law, Economics, and Organization, Vol. 11, # 1, pp. 1-31. 93 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. practice of federalism that the central government should not be permitted to financially bailout the local governments so that it does not hold power over them. Plurality of institutions is also desirable for increased accountability in addition to the checks and balances function above. Cohen and Peterson (1997) praise the pluralist institutional design for this in asserting that: “providing allocative tasks through a ‘ pluralist’ rather than a ‘monopolist’ administrative design promotes accountability” (p.2). Similarly it can be expected that local level action will counter corruption, a major problem in developing countries.1 2 2 Multiple, independent governments can be expected to provide some of the same advantages for governance that Oates envisaged from decentralized public sector1 2 3 — due to increased responsiveness coming from presence of democratically elected governments with people’s representatives at the state and local levels. Oates pointed out that: decentralized public sector possesses several economically desirable characteristics. First, it provides a means by which the levels of consumption of some public sector goods can be tailored to the preferences of subsets of the 1 2 2 Cohen and Peterson (1999) say “ administrative decentralization facilitates the participation of citizen advisory committees that put a brake on corruption. The Berkley Project on Managing Decentralization found that under conditions of corruption and in an environment that is not supportive of the poor, it is best to administratively decentralize to local-level institutions and organizations having little or no linkages to the center.” {Cohen and Peterson (1999): Administrative Decentralization: Strategies for Developing Countries (Connecticut, USA: Kumarian Press), p.81}. Other references for this are: Leonard, David K. “Choosing among Forms of Decentralization and Linkage” in D.K. Leonard and D.R. Marshall (eds.) (1982): Institutions o f Rural Development for the Poor: Decentralization and Linkages (Berkley: Institute for International Studies, University of California), pp. 193-226; Peterson, Stephen B. “Alternative Local Organizations Supporting the Agricultural Development of the Poor” and “Governments, Cooperatives, and the Private Sector in Peasant Agriculture.” in D.K. Leonard and D.R. Marshall (eds.) (1982): Institutions o f Rural Development fo r the Poor: Decentralization and Linkages (Berkley: Institute for International Studies, University of California), pp. 125-150 and 73-124 respectively. 1 2 3 Oates, Wallace E. (1972): Fiscal Federalism (New York: Harcourt Brace and Jovanovich, Inc.) 94 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. society. In this way providing an allocation of resources that is more responsive to the tasks of the consumers enhances economic efficiency. Second, by promoting increased innovation over time and by providing competitive pressures to induce local governments to adopt the most efficient techniques of production, decentralization may increase both static and dynamic efficiency in the production of public goods. Third, a system of local government may provide an institutional setting that promotes better decision-making by compelling a more explicit recognition of the costs of public programs.1 2 4 Multiple, independent institutions of governance are thus desirable. The critical question then is how can the independence of the multiple governments be ensured? According to Ostrom, Bish and Ostrom1 2 5 the equality and independence of different governments is ensured in the American federal system through “foedus” or “covenanting.” The American covenant is an agreement between the people as also between the units of government outlining the principles and rules governing their interaction and defining the limits of authority of the different governments. For many nations of the modem world a constitution provides a practical covenant. It is, then, as a covenant of authority that a constitution is useful for federalism. 2) The Constitution: “Constitutional law can be treated as fundamental law. People can retain prerogatives to enforce limits and alter the terms and conditions of government through positive constitutional law. Federalism ... can be conceptualized as constitutional choice reiterated. ’’ (V. Ostrom, 1994, p.255) 1 2 4 ibid., p. 2. 1 2 5 Ostrom, Bish and Ostrom (1988): Local Government in the US (SF, CA: ICS Press). 95 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. The contract or covenant (a constitution) is the bedrock of the federal system.1 2 6 The importance of a contract, a covenant, usually the constitution in practice, cannot be exaggerated for the federal system. A Constitution is necessary for spelling-out the rules of the game and is in this sense regarded as the foundation stone of federalism. As Thimmaiah notes: “Owing to the need for coexistence and coordinate functioning of two layers of government within the same national boundary, a written constitution dividing the functional powers and sources of revenue between the national and the unit governments is a sine qua non of a federation.”1 2 7 No confusion must exist among the plural powers over their roles, responsibilities, powers, and authority. The constitution serves as a safeguard of equality and independence. It is hardly surprising then that practically all federal systems have written constitutions. As Ostrom, Bish and Ostrom (1988) point-out, the American Constitution has provided America the terms and conditions of government ever since the American Revolution. The constitution also provides a way for managing conflicts, which are inevitable in the federal system especially given the heterogeneity of needs and perceptions of the different players. Given conflict as inalienable, rules as specified in the Constitution provide the primary principles for conflict resolution. James Bryce (1838-1922) had 1 2 6 References: Dicey (1952); Haqqi, S.A.H. (1967) (ed.): Union- State Relations in India. 1 2 7 Thimmaiah (1976), p. 11. 96 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. recommended a good constitution to help maintain the balance between the “centripetal” and “centrifugal” forces1 2 8 —as, he said, the American Constitution had done. The constitution also needs to be receptive to the demands of changing times and to the needs of rapidly growing societies. While certain inalienable characteristics of the constitution must remain untouched, and in that sense it must not be fluid, the constitution must permit flexibility to make corrections and allow for changing conditions. We find support for these ideas in Thomas Jefferson’s writings. We can find support for the idea that amendment is needed to correct for mistakes in the wise words: “It is more honorable to repair a wrong than to persist in it.”1 2 9 And we find support for the need for amendment following changing times in his saying: I am certainly not an advocate for frequent and untried changes in laws and constitutions, I think moderate imperfections had better be bome with; because, when once known, we accommodate ourselves to them and find practical means of correcting their ill effects. But I know, also, that laws and institutions must go hand in hand with the progress of the human mind. As that becomes more developed, more enlightened, as new discoveries are made, new truths disclosed, and manners and opinions change with the change of circumstances, institutions must advance also, and keep pace with the times.1 3 0 1 2 8 References: Bryce, James (1888): The American Commonwealth, vol. I- III, (New York: Macmillan); and Blankart, Charles B: “Local Autonomy and Popitz’ Law in Prussia and Germany,” at http://www.publicchoice.org/files/blankart.htm. (Last Accessed on June 3, 2002 at 8:18pm). 1 2 9 Jefferson, Thomas (1806): “Address to Cherokee Nation” (http://etext.virginia.edu/iefferson/quotations/ieff4.htm) (Last Accessed on June 3, 2002 at 7:44 am). 1 3 0 Jefferson, Thomas (1816): Thomas Jefferson to Samuel Kercheval (1816) (http://etext.virginta.edu/iefferson/qnotations/ieff4.htm) (Last Accessed on June 3 ,2002 at 7 :44 am). 97 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 3) Empowerment: A federal system must strive for an ideal balance of power and responsibility among the federating units. Neither the center nor the sub-national governments should have an inappropriate assignment of functions, nor should either one have a disproportionate share of power and authority. For, in the absence of such balance, the full promise of the federal design would remain unrealized, with the system being left to perform at a sub-optimal level of efficacy. Centralization of power in an all-embracing center has rightly been viewed as the greatest threat to federalism and to democratic foundations of government. But it is not difficult to visualize a situation where federating units may assign major functions, such as defense, transportation and communications, currency and finance, foreign relations and so on, to the center without providing it access to commensurate financial, political and administrative resources to discharge effectively those onerous responsibilities. However, since the boot has almost entirely been on the other leg, the theme of decentralization of role, responsibility, power and authority to governments at lower levels must remain a dominant concern in the study of federalism. Meaningful federalism requires both a strong center and strong sub-national governments. Sub-national governments can be strong only if they have been empowered. And decentralization is only one necessary step in empowerment; sharing of powers is another important step. For lower governments to be truly empowered, powers must be shared between the different levels of government appropriately. As decentralization occurs some power must move away from the center and to the lower 98 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. levels—it must be distributed to the appropriate levels and such a transfer must be codified in the constitution to prevent it from being easily reversible or whimsical. This would generate incentives for cooperation and leave fewer reasons for conflict. It would help a federal system work smoothly—that is, with lesser conflict and greater cooperation between the governments, hence leading to healthy competition and fulfilling the promise of federalism. As has been noted decentralization comes in all shapes and sizes. At the elementary level it takes the form of mere administrative delegation. In its most evolved form, it involves devolution of power and authority through constitutional mandate, thereby placing each level of government at a coordinate—as distinct from a subordinate—level with the other; each one existing and functioning in its own right. The dialectics of centralization and decentralization has led inevitably to the emergence of a synthesis, for, neither one by itself offers a harmoniously balanced theory of good governance. Decentralization alone is insufficient—because of the existence in the continuum of governance of large areas of overlap and shared concern, requiring partnership and cooperation as against constant competition or one-upmanship. Consequently, an emphasis on the importance of harmonious sharing of responsibility, power and authority by the center and the sub-national governments for achieving an optimal level of performance forms an integral part of the empowerment process. Empowerment of governments at different levels must therefore be viewed in the overall theoretical context of both its distinct aspects, viz., (A) Decentralization of 99 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. governance and (B) Sharing of authority and responsibility, in the achievement of a truly federal form. A. Decentralization: “In g rea t cen tralized nations the legislator is oblig ed to give a ch aracter o f uniform ity to the laws, which do es not alw ays su it diversity o f custom s and o f districts; as he takes no cognizance o f special cases, he can only p ro ceed upon general prin ciples; and the population are obliged to conform to the requirem ents o f the law s since legislation cannot ada p t itse lf to the exigencies and the custom s o f the population, which is a grea t cause o f trouble and misery. The disadvantage does not exist in confederations; C ongress regulates the prin cipal m easures o f the national governm ent, and all the details o f the adm inistration are reserved to the provin cial legislators. One can hardly im agine how much this division o f sovereignty contributes to the w ell-being o f the states that com pose the Union. ” (Tocqueville1 3 1 , Alexis de: Democracy in America, p. 169) Tocqueville considered centralization to be a threat to the institution of democracy—for he questioned how could people under a centralized set-up, who had “given up managing their own affairs, be expected to make a correct choice of representatives who could be trusted with their power” (Tocqueville, 1966, pp.694-5). To Tocqueville, democracy prospered with the formation of the right habits—the habits of the heart. It is for this reason that Tocqueville greatly admired local self-governance in America. Decentralization takes governance a step closer to local self-govemance. Years of experience with centralization have exposed its numerous deficiencies— corruption, misuse of sovereignty of state, autocratic governments, growth of regional 1 3 1 Reference: Tocqueville, Alexis de (1835) (1945 reprint): Democracy in America (New York: Random House). 100 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. and ethnic inequalities, concentration of power and wealth, etc. (Wunsch and Oluwu1 3 2 ). At the same time decentralization is credited with enabling better allocation as it enables the “tailoring” of local policy planning and provisions to match the local needs and demands. Clearly the task can only be ill performed by a center that is too distant from a vast majority of the people. Decentralization of authority requires a dispersal of power and the promotion of local self-governance. Vincent Ostrom (1994) provides support for this idea when he discusses the features of American federalism. He favors a “plurality among institutions of governance” which have “diverse units tending to different communities of interest” and “active citizen participation in public entrepreneurship” (pp.253 and 257 respectively). These enhance the self-governing capabilities and provide a decentralized system enabling a better fit of needs and policy provision. Lowry1 3 3 considers this to be the “promise of federal system.” He feels that the “responsiveness of state action” in environmental management in the US has been a great achievement of this federal system in the last couple of decades (p. 2). It is through the medium of decentralization that federalism manages to “tailor” policies appropriately. Decentralization is thus an essential and indispensable characteristic of federalism. 1 3 2 Wunsch, James and Dele Oluwu (ed.) (1995): The Failure o f the Centralized State: Institutions and Self- governance in Africa (SF, California: ICS Press). 1 3 3 Lowry, William R. (1992): The Dimensions o f Federalism: State Governments and Pollution Control Policies (Durham: Duke University Press), p. 2. 101 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Starting with Reagan’s New Federalism, a host of countries have experimented with the elements of New Public Management. The crux of the ideas in US is probably best expressed by quoting Glazer on the strategy of New Federalism: “returning programs to the states and restricting federal control.” 1 3 4 The decades of the 1980s and 1990s witnessed many movements for reinventing government by empowering local governments. A critical and common feature of NPM universally was the decentralization of authority to lower level governments, especially local governments. Decentralization is desirable for accountability, efficiency and economy (Cohen and Peterson, 1997 and Ter-Minassian, 1997). Although this was the desired aim of many nations few succeeded in actually attaining it. What happened in practice was only deconcentration or mere effete delegation. In fact often the terms delegation, devolution, deconcentration and decentralization are, quite mistakenly, used interchangeably, thus 1 creating much ambiguity. As Ostrom, Schroeder and Wynne (1993) complain: “a precise meaning for the term decentralization no longer exists. The political leadership of developing countries has tended to use the word indiscriminately to refer to any kind of institutional change.” Hence, it is necessary and important to define these clearly. Cheema, Nellis, and Rondinelli (1983) provide a widely accepted classification of the forms of decentralization. This is referred to as the Type-Function Framework. According to the authors, each form can be neatly associated with a discipline in which 1 3 4 Glazer, Nathan (1984): “Reagan’s Social Policy—A Review”, Public Interest 75 (spring 1984), p. 91. 1 3 5 Ostrom, Elinor, Larry Schroeder and Susan Wynne (1993): Institutional Incentives and Sustainable Development: Infrastructure Policies in Perspective (Boulder: Westview Press), p. 166. 102 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. lie the origins o f the form. B ased on this classification four form s o f decentralization can be identified: a) Political: This comes from the domain of political scientists. Political decentralization refers to the transfer of decision-making power to local level governmental units or to the citizens or their elected representatives. b) Spatial: Spatial decentralization is accredited to regional planners and geographers aiming to reduce urban concentration. Regional growth poles that have the potential to become centers of manufacturing or agricultural marketing are promoted in spatial decentralization, thus reducing urban concentration. c) Market Forms of Decentralization: These have their origin in economics and include initiatives like economic liberalization, privatization, and demise of command economies, etc. Market forms of decentralization aim at creating conditions for production and provision of goods and services by market mechanisms, which have the attribute of being sensitive to preferences of individuals. d) Administrative Decentralization: This type of decentralization is frequently the concern of public administrators and lawyers. And it usually refers to the hierarchical and functional distribution of powers and functions between the central and non-central governmental units. There are three types of administrative decentralization: (i) Deconcentration: This is the least extensive type of administrative decentralization and refers to the transfer of authority for specific 103 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. functions to different levels under the jurisdictional authority of the central government. (ii) Devolution: In this type authority is transferred by the central government to local-level governmental units with their status granted and ensured by legislation. The two critical elements of this type are that there exists a legal definition of the powers of the different governments and that there is sharing of powers between the different levels of government. (iii) Delegation: Delegation refers to the transfer of authority to institutions and organizations for carefully spelled-out tasks. This is a common type these days, seen to occur, for example, when cities delegate refuse collection to private firms. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. These three types o f administrative decentralization can be depicted in a tabular form as follows: TASK FUNCTIONS TYPES OF ADMINISTRATIVE DECENTRALIZATION Deconcentration Devolution Delegation Planning Fiscal Policy and Revenue Generation Budgeting and Expenditure Management Staffing Program and Project Implementation Information Management Operation and Maintenance Table 2: Standard Matrix-based Framework comparing Types of Decentralization of Major Government Functions {From: Cohen and Peterson (1999): Administrative Decentralization: Strategies for Developing Countries (Connecticut, USA: Kumarian Press), p.32}. Cohen and Peterson (1999) also offer a classification for administrative decentralization. In contrast to the Type-Function Framework, which according to these authors focuses on structures and spatial distance between structures, their framework focuses on roles.1 3 6 Their classification is based on the degree of 1 3 6 Cohen and Peterson (1999): Administrative Decentralization: Strategies fo r Developing Countries (Connecticut, USA: Kumarian Press), p. 73. 105 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. centralization and argues in favor of a pluralist administrative design for allocation as against a monopolist design. According to this classification, the three types of administrative designs, with varying degrees of centralization are: (i) Institutional Monopoly: In an Institutional Monopoly, the roles are concentrated in the spatial center within an organization or institution. Clearly this is centralization. (ii) Distributed Institutional Monopoly: If the roles are distributed spatially but are concentrated in one organization or institution, then it is a distributed institutional monopoly. The authors state that deconcentration, minimal delegation and devolution fall into this category. (iii) Institutional Pluralism: In this type, the roles are shared by two or more organizations or institutions that may be spatially at the center or be spatially distributed or some combination of the two. The authors argue that Institutional Pluralism requires more extreme delegation and devolution than is currently in practice anywhere and it would go onto include the co-optation of NGOs and private sector as well. Cohen and Peterson contend that though institutional pluralism represents the ideal type for administrative decentralization, for most developing and transitional economies it is currently not the most feasible design and at present distributed institutional monopoly 1 T"7 may be the most practical possibility for administrative decentralization. 1 3 7 Cohen and Peterson (1999): Chapter 4 of Administrative Decentralization: Strategies fo r Developing Countries (Connecticut, USA: Kumarian Press) offers a discussion of these issues. 106 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. In some ways Cohen and Peterson’s model can be viewed as further extending the Type-Function Framework by emphasizing the dynamic inclusion of the private sector and the NGOs. And by emphasizing on roles rather than on geographical settings. Recent years have seen some initiatives privatizing the provision of civic services. But concurrently a move to empower local governments and thus away from the center is equally important for decentralization as an accompaniment of federalism. Given the loose use of the term “decentralization,” it is important to delineate it clearly. The various models discussed above help in removing this ambiguity and in defining it clearly for our purposes. It must be re-emphasized here that the desirable form of decentralization for 1 federalism is devolution rather than delegation or deconcentration. As the experiences of different countries show these latter forms are not adequate. Wunsch and Oluwu (1995) as well as Ostrom, Schroeder and Wynne (1993) discuss numerous cases where attempts for a decentralized, federal set-up failed as, in effect, only some deconcentration was done. For federalism authority needs to be devolved to the lower levels of government. Essentially, “significant amounts of independent legislative and fiscal 1 3 8 It is important to note our stress on devolution in view of the loose use of “decentralization.” Many other forms that are in practice called decentralization would fail to serve our purpose— for example, to borrow Manor’s (1999) terminology, “decentralization by default” or “unintended decentralization” or merely “privatization” alone would fail to meet our requirements {Ref.: Manor, James (1999): The Political Economy o f Democratic Decentralization (Washington, DC: The World Bank)}. It needs to be re-iterated that “decentralization” is meaningful as a functional concept and not as a “historical” or “territorial” concept {Reference: Cohen and Peterson (1999) above, p. 21}. Thus, for example, if power does move from capital to hinterland (= territorial decentralization) but local government is not empowered, then decentralization for federalism is not achieved. 107 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. authority” must be transferred to the sub-national governments {Ostrom, Schroeder and Wynne (1993), p.166}. Based on Mawhood and Davey (1980, p. 405), they identify the five essential prerequisites or conditions for “devolution” or “classic decentralization” to occur as follows: a) Local authorities, which should be institutionally separate from central government, should assume responsibility for a significant range of local services, like primary education, clinics and preventive health services, community development, etc. b) Independent fiscal regimes must exist for the local authorities. They “should have their own funds, budgets and should raise a substantial part of their revenue through local direct taxation” (p.165). c) “Local authorities should employ their own qualified staffs” (p. 165). Recognizing the problem of finding suitably qualified manpower in developing countries, the authors suggest that in the initial stages the staff may be transferred from the central civil service temporarily to assist the local authorities. It must be borne in mind that frequently local authorities using central government’s staff find that their allegiance is to the central government and hence the independence of the local authorities is hampered. Thus for independent working of the local governments it is desirable that they have their own independent, competent staff. d) The governance of the local authorities should predominantly be in the hands of popularly elected representatives. e) “Government administrators would withdraw from an executive to an advisory, inspectorial role in relation to the local government” (p. 165). This statement asserts 108 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. an important lesson of decentralization that while the actual execution should be entmsted to the local authorities, the central government should confine itself to inspection and monitoring and providing sound advise to the local government. It has been a hard lesson of decentralization efforts that micro-management by the central government defeats the very purpose of decentralization. B. Sharing of Powers: “ But there is no absolute value in either central direction or local autonomy. Both are important and more or less important at different moments. Both must coexist. ” (Samoff, Joel (1990): “Decentralization: The Politics of Interventionism”, p.521)1 3 9 Decentralization of authority—power to the people—is, no doubt, the idea whose time arrived in the later quarter of the twentieth century. This shift of emphasis in public administration applied the much-needed corrective to the escalating centralization of governance that occurred as much under the compacting force of technology as due to the imperatives of the Second World War. The opposing forces of centralization and decentralization, however, need to be viewed in light of the above insight provided by Samoff. 1 3 9 Reference: Samoff, Joel (1990): “Decentralization: The Politics of Interventionism”, Development and Change, Vol. XXI, # 3, pp. 513-530. 109 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. The necessity of reconciling the conflict between these two opposing concepts arises from the imperatives of shared roles, concerns, and powers as also from the existence of common areas of interest and responsibility. Governance being a continuum rather than a series of activities that can be placed in watertight compartments, once multiple centers of power have been brought into existence, sharing of both responsibility and authority becomes unavoidable. Indeed, the federal design must rely heavily on the sharing of powers, role and responsibility, and on partnership and cooperation among the governments at different levels, if the division and dispersal of power and authority at more than one level of governance is to deliver the full promise of federalism. While recalling the observation of Lowry (1992): “A system of federalism wherein different levels of government share responsibilities can therefore not only provide buffers to dangerous concentrations of power but can also facilitate citizen participation and involvement in important decisions at the sub-national levels,”1 4 0 it should be noted at this point that the sharing of governance responsibility envisaged here has a much wider ambit than summed up in Lowry’s formulation. Sharing of powers is critical for governance also because both centralization and decentralization must go hand in hand. Starting with the Musgravian Public Finance exposition (1959), time and again it has been asserted that while the allocation objective is best achieved in a decentralized manner, distribution and stabilization are best achieved centrally and thus simultaneous centralization and decentralization must exist. What 1 4 0 Lowry, William R. (1992): The Dimensions o f Federalism: State Governments and Pollution Control Policies (Durham: Duke University Press), p.4. 110 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Musgrave said for fiscal federalism (or fiscal decentralization as per Oates1 4 1 ) offers a reasonable guideline for such sharing of powers, functions and resources: “The heart of fiscal federalism thus lies in the proposition that the policies of the Allocation Branch should be permitted to differ between states, depending on the preferences of their citizens. The objectives of the Distribution and Stabilization Branches, however, require primary responsibility at the central level.”1 4 2 That simultaneously a strong center and empowered local governments must exist has been an important lesson of the decentralization decades of the 1980s.1 4 3 As Cohen and Peterson note: “even in task environments where administratively decentralized interventions make sense, strong central governments are required to ensure their success.”1 4 4 This simultaneous centralization and decentralization makes an enlightened sharing of the roles and powers of governance essential, while not diluting in any way the imperative need to delineate clearly the respective power-domains as well as the rules of the game. Sharing of powers articulates meaningfully and reinforces the interdependencies inherent in the federal design. For example, Hays, Esler and Hays (1996) examine 50 cases in environmental policy in the U.S. and among the factors influencing the states’ 1 4 1 Oates (1972): Fiscal Federalism (New York: Harcourt Brace and Jovanovich, Inc.). 1 4 2 Musgrave, Richard A. (1959) The Theory o f Public Finance (New York: McGraw-Hill, 1959), pp.181- 182. 1 4 3 That “a strong center is a precondition for meaningful decentralization initiatives” was also a finding of the Berkley Project on Managing Development (Ref.: Cohen and Peterson (1999): Administrative Decentralization: Strategies fo r Developing Countries (Connecticut, USA: Kumarian Press), p. 62}. 1 4 4 Cohen and Peterson (1999): Administrative Decentralization: Strategies fo r Developing Countries (Connecticut, USA: Kumarian Press), p. xiii. I ll Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. environmental efforts; they identify federal activity to be an important factor. More generally we can visualize an overlap in the activity of the national and sub-national governments: National Sub-national Figure 9: Overlap of Activities Between National and Suh-national Levels Much discussion in the literature has centered on the desired distribution of powers and responsibilities (Congress of US Congressional Budget Office Study, Nov. 1997; Sundquist and Davis, 1969; Lowry, 1992; Tobin, Rivlin, 1992; Scheberle, 1997). Scheberle1 4 5 (1997) identifies this division of responsibilities in the American Congress’s design of the environmental policy. This design, according to Scheberle, aims at capitalizing on the strengths of each level of government. While the national government is the ultimate repository of the authority, in practice its role is confined to setting standards and monitoring the enforcement efforts of the states. The actual responsibility 1 4 5 Scheberle (1997): Federalism and Environmental Policy: Trust and the Policies o f Implementation (Washington, DC: Georgetown University Press). 112 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. for front-line delivery is entrusted to the state and local governments. Rivlin1 4 6 (1992) offers a different agenda of functions for the governments. She argues in favor of collection of revenues by the states in the American federalism and says that not only is it easier done by the states but also that it helps reduce dissatisfaction with government. Public is better reassured if revenue is raised closer home and is for clearly identifiable benefits. In either of the models—of Scheberle as well as Rivlin or in a combination of the two—it lies in the domain of the sub-national governments to take care of the allocation functions. Decentralization in its most evolved form of devolution may then be viewed as providing the groundwork for sharing of power and responsibility of governance by the decentralized governmental entities in an imaginative, cooperative and enlightened manner with the goal of securing an optimum level of performance. The danger of the governments at different levels functioning as stand alone units in constant competition and conflict with one another must be tackled effectively both by institutional design as well as by sincere pursuit of public good on the part of those working the system. This approach to federalism may be summed up in the term “creative power sharing”. Studies on federalism must emphasize not only on the need for decentralization but also for creative sharing of powers to achieve empowerment of sub-national governments. There has been a single focus emphasis on the nature and extent of decentralization in the belief that there can never be too much of it because of the inevitable tendency toward 1 4 6 Rivlin, Alice M. (1992): “A New Vision of American Federalism,” Public Administration Review, July/August 1992, Vol. 52, # 4. 113 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. centralization driven by the forces both of modem sociology as well as technology. There is a definite need to correct this perspective as an analysis of the functional domain of environment management in Delhi vis-a-vis the enabling domain, in the context of empowerment of governments at different levels, shows convincingly later in this study. 4) Conflict Resolution: “ Recognizing and accepting the presence and even the positive possibilities of conflict is a constructive first-step in functioning as an intergovernmental actor. ” (Wright, 1988, p.459) Reliable, impartial adjudication mechanisms must be incorporated in the basic design of federalism given that difference of views, perceptions and even conflict is an inevitable facet of federalism. Understanding conflict is critical to an understanding of federalism—to fully appreciate the complexity of relationships between the actors (in federal systems) one needs a bias or bend of mind that recognizes conflict as both inherent and central to federalism. This must be consciously recognized in federal systems—because often it is sought as a means of governance where diverse populations, conflicting groups, and large, varied peoples and areas are organized together into a nation. Moreover, a variety of methods for arbitration as well as for adjudication must be provided in the system. 114 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Federalism is a method for conflict resolution. Gagnon1 4 7 thinks of federalism as “a unifying device,” as a means for consensus building, for arriving at unity in diversity. In discussing the dynamics of federalism, in the context of Cyprus, Salem et al1 4 8 underline the key role of federalism as a conflict resolution mechanism. V. Ostrom (1994) emphasizes the same aspect when he defines conflict resolution by saying that “conflict resolution occurs when those in conflict search-out ways of securing complimentarity among their diverse interests” (p.258). And a good covenant accepts conflict as an inalienable part of the system and provides the means to conflict resolution. Federalism has itself been viewed as a conflict resolution mechanism—because it is seen as a method to bring conflicting groups together as a nation, for coexistence and for governance as a whole. But this also underscores the need for conflict resolution in federalism. Once different parties have been brought together, their functioning can generate or expose further conflicts. This possibility needs to be foreseen; and safeguards must be provided to handle the conflicts reliably and speedily. Otherwise, the coming together can be jeopardized and the solution will not be viable. Traditionally courts have played a central role in conflict resolution between the different levels of the government. The position of the Supreme Court as an interpreter of the constitution makes the court a natural arbiter. Kearney1 4 9 (1993) discusses the role 1 4 7 Reference: Gagnon, Alain G. (1992): “Approaches to the Study of Comparative Federalism” {in Norman Salem (ed.) Cyprus: A Regional Conflict and Its Resolution}. 1 4 8 Reference: Salem, Norman (ed.) (1992): Cyprus: A Regional Conflict and Its Resolution. 1 4 9 Kearney, Richard C. (1993): “ Low-level Radioactive Waste Management: Environmental Policy, Federalism and ‘New York”’ (Publius: The Journal o f Federalism, 23, Summer 1993). 115 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. the courts have played in environmental management in the US—sometimes strengthening the position of the center and sometimes of the states. Two important lessons that can be gleaned from Kearney’s study are that court-decisions have far- reaching ramifications for intergovernmental relations and federalism and that it is important for the court to conduct itself as a champion of federalism, as a “federal umpire” (p. 57). As champion of federalism, the court must render independent and unbiased judgments that go to strengthen the federal set-up. In addition, institutions like finance commissions, the central bank of the country and other autonomous institutions set-up from time to time to deal with various specific concerns provide the country with mediatory and adjudicatory mechanisms. 5) Partnership and Cooperation: “Our duty is to supply the best possible life to a federal organization, to system within systems; to make town, city, county, state, and federal governments live with a like strength and an equally assured healthfulness, keeping each unquestionably its own master and yet making all interdependent and cooperative, combining independence with mutual helpfulness. The task is great and important enough to attract the best minds. ..Instead of centralization of power, there is to be wide union with tolerated divisions o f prerogative. This is a tendency towards the American type—o f governments joined with governments for the pursuit of common purposes, in honorary equality and honorable subordination. 116 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Like principles o f civil liberty are everywhere fostering like methods of government...” (Woodrow Wilson: The Study of Administration, pp.157-8)1 5 0 Given that powers are shared and activities overlap, it is critical to recognize the interdependencies of different levels of government. In this sense governments at different levels must be understood as partners in governance and the relationship between them should be based on sound principles of partnership. Cohen and Peterson (1999) offer ideas for the partnership of different levels of government. They argue that while decentralization and autonomy of local level governments have received much attention, it can be reasonably expected that central governments will retain the edge in generating financial resources, thus leaving sub-national governments dependent on them. Given such constraint on the local capacity, a partnership of central and local governments offers a feasible solution for achieving accountability, efficiency and effectiveness. It is instructive to note that the idea of partnership of governments has both the ideas of willful action and compulsion inherent in it. The partnership of governments has its genesis in a mutuality of interests and therefore has volition integral to it. It is in the interest of the governments at different levels to recognize the mutuality of their interests and gain from the synergy of action through a partnership. At the same time, there is also 1 5 0 Reference: Wilson, Woodrow (1887): “The Study of Administration” in BS Baker and William E. Dodd (Eds.) (1925): The Public Papers o f Woodrow Wilson, Volume 1: College and State: Educational, Literary and Political Papers (1875-1913) (New York: Harper and Brothers Publishers), pp. 130-158. 117 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. an element of compulsion that it is best to recognize and appreciate as a “given” of the system, as a ceteris paribus condition. Interdependency of action of governments is a built-in state. The partnership can thus be seen as recognition of this interdependency and as the means of making the best of the given situation. Ascher and Healey1 5 1 make a very important point for the partnership of governments. They emphasize on a need for the flow of information and for the existence of incentives to cooperate. Federalism is considered to be a “consensual 1 institution” that encourages cooperative outcomes {Quirk (1989), p. 917}. Given the comparative advantages of the different governments—central for mobilization and local for allocation—and the need for both centralization and decentralization, cooperation is critical for federalism. Cooperation is also critical given “the inevitable presence of some degree of conflict surrounding intergovernmental issues” (Wright, p.459). Thus, cooperation is actually necessary given the pre-conditions of the federal system. Both mutuality of interest and interdependency, which are critical givens of the federal set-up, have a profound bearing on cooperation. Interdependency calls for cooperation and mutuality of interests promotes cooperation. Distribution of power and simultaneous centralization and decentralization reflect heterogeneity and create room for conflict. This makes cooperation, sharing of powers and a partnership in governance even more important. Given the heterogeneity of 1 5 1 Ascher and Healey (1990): Natural Resource Policy-making in Developing Countries (Durham, NC: Duke University Press). 1 5 2 Quirk, Paul J. (1989): “The Cooperative Resolution of Policy Conflict,” American Political Science Review, Vol. 83, # 3, Sept. 1989. 118 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. elements in society, the covenantal approach has provided a way for managing conflict in the American federal system.1 5 3 4.3 Conclusion: Federalism emerges as a viable form of governance (and may be the only one for large democracies) for the diverse societies emerging as nation-states from the wreckage of the colonial system. The existence of multiple, independent governments marked by division of power and authority and exercising checks and balance on the power of each other is integral to the federal form. This prevents the “sovereign” state from degenerating into a “predatory state.” Critical to independence are the financial autonomy and an independent referral system for adjudicating disputes and enforcing the rules of the game as laid down in the “covenant” forming the foundations of the federal system. The constitution embodying the covenant, backed by an independent judiciary to interpret and enforce it in letter and spirit, is an indispensable institution of federalism. It provides a transparent and effective way of obviating and managing conflicts and also serves as an instrument for maintaining a balance between the centripetal and centrifugal forces operating simultaneously in the nation. These forces also underline the importance of foreseeing possibilities of conflicts and providing conflict resolution mechanisms— thus providing for them at the same time as designing a federal system. “Polycenters”— 1 5 3 Reference: This is discussed well as the “covenantal approach” in Vincent Ostrom (1994). 119 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. with each relying on the masses for validation of its deeds, vying for credits and votes and competing for powers—can easily come into conflict. Decentralization of power and authority is of course the key to vibrant federalism—not merely for effective governance but also as a means for fostering unity in diversity. Decentralization in the form of deconcentration and delegation does not go far enough either from the viewpoint of efficiency or of national consolidation. What is needed is effective empowerment of sub-national governments by means of devolution of power, authority and access to resources. Without such a dispensation the independence of multiple governments must remain a lifeless concept. At the same time, lest independence and decentralization result in fragmentation of governance through excessive competition and endemic conflict, the sharing of powers must be creative so as to bring about harmony and maximize the synergy in the system. In the final analysis, the different governments must operate as partners in the mammoth and difficult task of governance (particularly of large territories) and—recognizing their interdependencies— must appreciate the inevitability of cooperation in this endeavor. Following from the above analysis, we thus identify the five essential features of federalism noted below and examine them in the empirical context of the evolving federal design of the governments of the federal capital of India: 1. Multiple, independent governments; 2. Constitution; 3. Empowerment of sub-national governments; 120 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 4. Conflict resolution mechanisms; and 5. Partnership and cooperation. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Part Two: Empirical Study Introduction to Part Two: This dissertation aims not only to cull out from the literature the essential features of federalism but also to observe these in real life context—studying federalism in the enabling domain and functional domain of environmental management in Delhi. Comparison of the two cases will reveal the differential impacts of differing combinations of the features on the nature and strength of the federal form of governance. In this part a one-to-one mapping of the Essential Features of Federalism is done on the two chosen cases from Delhi to assess the impact of the features on the substance of federalism. This exercise is taken up (keeping in view the different governments) both at the level of the center-state and the state-local relations. The stage is now set for undertaking an empirical study of the role and impact of the essential features of federalism in real life, evolving federal set up of the NCT of Delhi in each of the two major domains. In the enabling domain, federalism in Delhi offers an important area of empirical study. In the functional domain, environmental management in the capital territory presents an equally fertile field of inquiry. We start this part first with an examination of two features that have earlier also been emphasized in the literature as being important for federalism. Chapter 5 of this part examines Multiple, Independent Governments in the enabling domain and the functional 122 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. domain of environmental management in Delhi. Chapter 6 looks at the importance of the Constitution and Constitutional Provisions for the two domains. In Chapter 7, the extensive issue of Empowerment—covering Decentralization and Sharing of Powers— will be explored. Then, we will examine the importance of Conflict Resolution and the types of Conflict Resolution Mechanisms in the two domains in Chapter 8 here; finally discussing Partnership and Cooperation for our two cases in Chapter 9. Certain other features, like competition and trust between governments, appear to be important for federalism. They have not sufficiently been explored even in the literature so far. Much further work is needed to construct the theory defining their importance and role and to test them empirically. This is a task that must be left for future research and hence they do not form a part of the empirical analysis here (: we will only discuss them briefly in the conclusion chapter as directions for future work). Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Chapter 5 Multiple, Independent Governments 5.1 Introduction: Federalism, by definition, requires the existence of at least two levels of government. They must also be capable enough to exist independently. The governments of the federating units should not be subservient or subordinate to the Union government, as in a unitary set up but must have a coordinate status, with both or all of them deriving authority from the same source, the constitution of the country. Also, in terms of access to resources and powers necessary to discharge their obligations as well, institutional arrangements must be put in place to make their functioning free from day to day interference of the higher level government, thereby making them autonomous within their own spheres. Clear delineation of functions with appropriate powers and adequate resources is especially important for breaking the “monopoly of the center.” At the same time, in order to have healthy governments at each level, interstate competition and a strong center coordinating interstate activities are necessary. This chapter examines Delhi’s position in terms of some of the above conditions. It presents evidence to show the presence and development of multiple, independent governments at different levels in the enabling and environmental arenas. A number of theoretical constructs—like Cohen and Peterson’s “Institutional Pluralism,” Datta’s “Independent versus Coordinate status,” and Lowry’s idea of “Vertical and Horizontal 124 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. dimensions”—are drawn upon to gauge the development of this feature of federal systems. Whether federal structure in a country has evolved from grassroots upward or has been imposed from top down, the third tier of government at city, town or village level has come to acquire a place of its own. In India, in rural areas, it takes the form of “Panchayats”. The “Panchayat” system of governance has its own hierarchy with the village “Panchayat” at the lowest level, the “Panchayat Samiti” at the Development Block level and the “Zila Parishad” at the District level, all of these being elected bodies with their own jurisdictions and safeguards. Thus in rural areas, given their dispersed nature, there are three sub-state levels of governance. In urban areas, city governments are classified by size and are assigned commensurate roles and resources. The overwhelmingly urban Delhi now has all three tiers of federal structure—union, state and municipal. Both the enabling and functional domains in Delhi have seen the evolution of federalism—though to different levels. While all three levels are well developed in the enabling domain, environmental management has so far been taken down to the level of state government. Useful for study of federalism, further evolution is awaited for the changes it will bring with it. Even more importantly, Delhi’s experience in the development of multiple, independent governments is useful for capital cities in general as they often suffer from the common problem of tight central control. 125 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 5.2 Multiple, Independent Governments in Enabling Domain: On the face of it, the case of existence of multiple, independent governments appears to be deceptively simple: if and once the sub-national governments have been created, they exist. But as experience of many different countries (that we have recalled in theory-part above) shows, even where the lower levels of governments were created by the central government, of its own accord, their existence was often not meaningful. Independent existence of sub-national tiers of government entails much more than mere existence. It also requires some guarantee of existence: as we noted in our discussion of the theory of essential features, the constitution has a very important role to play (and Delhi’s case will help to illustrate the relevance of other institutions that can aid in the process). Moreover, it requires the right to assert authority and function within their own, well-demarcated jurisdictions. The existence becomes meaningless if the sub-national entities must obtain a nod from the center for each action and expense—thus, they must also have access to fair, commensurate and assured resources. In case of a conflict, the opportunity to seek justice from independent adjudicators will assure the lower governments of their meaningful existence and hence help a federal system work better.1 5 4 Delhi’s case not only helps illustrate the various facets of existence of sub national tiers but also enriches theoretical knowledge by showing what works and what does not. The case of Delhi illustrates vividly the evolution of governance from unitary to a multi-layered federal form over a period of four decades or so. At Independence in 1947, 1 5 4 See Chapters 6 and 8 below. 126 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Delhi was a Chief Commissioner’s province, administered directly by the Central Government, through an officer appointed at the head of the Delhi Administration. There was no state level representative government of the kind that was established in the provinces as a consequence of the two Acts of the British Parliament—the Government of India Acts of 1919 and 1935.1 5 5 With the adoption of the Constitution of India in 1950, Delhi emerged as a Part C State of the Indian Union with a State Government headed by a Council of Ministers responsible to an elected legislative assembly but this exalted status remained short-lived. Following the implementation of the recommendations of the States Reorganization Commission in 1956, Delhi became a Union Territory and reverted back to being administered from the Center through a Chief Commissioner. After a quarter of a century of being administered by a popularly elected Executive Council since 1966, not answerable to an elected body,1 5 6 it graduated to its present status of having a Council of Ministers—though with somewhat circumscribed authority—responsible to a popularly elected legislative assembly. The government of NCT is carried on as per the provisions of the GNCTT) Act of 1992. The Indian Parliament enacted this to give effect to the Constitution (69th Amendment) Act of 1991 1 5 5 The first of these—the dyarchy—implemented what are known as the Montague-Chelmsford Reforms, making a modest beginning of popular government. Certain subjects were “transferred” to the domain of elected ministers and others “reserved” under authoritarian dispensation. The Act of 1935 brought in autonomous provincial governments. 1 5 6 The elected body, called Metropolitan Council, was only a deliberative body and hence did not exercise any authority or power over the Executive Council—as a convention four members were chosen out of the Metropolitan Council to form the Executive Council. 127 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. by which were introduced Articles 239AA and 239 AB into “Part VUE—The Union Territories.” All through these years, Delhi had a lower rung of government at the municipal level. In 1958, a number of municipalities and boards serving different areas of the territory were brought under the single Municipal Corporation of Delhi which was viewed as the substitute for the state government which had been abolished on Delhi’s becoming a union territory. Unfortunately, as in the rest of the country, the municipal level of government existed and functioned entirely at the mercy of the state governments who did not allow it to develop into vibrant institutions of self-govemance. Not only was the third tier of governance kept in a permanent state of debility, it was often blown out of existence by resorting to the ultimate weapon of “supercession.” The MCD thus remained superceded first during the Emergency (from 1975 to 1977) and then, again, for a long period of eight years from June 1989 to February 1997. This grave lacunae was rectified by the adoption of the Constitution 73rd and 74th Amendment Acts1 5 7 which accorded constitutional status to the third tier of government in the rural and urban areas, respectively. Basically, the Acts ensured the durability of local self-governing entities as well as due access to financial resources to be able to discharge their obligations. It was made mandatory to hold elections to constitute the body within six months of its “supercession” or end of tenure. State Election 1 5 7 As a consequence of these Acts, two parts were added to the Constitution (Parts IX and IX-A), the former, to provide for the Panchayats (rural local bodies) and the latter, for the municipalities. 128 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Commissions, on the pattern of the Election Commission of India were established to ensure timely and fair elections to local bodies. In the matter of resources, likewise, it was mandated that State Finance Commissions were to be appointed every five years to recommend devolution of finances from the state governments to the local bodies. These were changes of far reaching significance towards infusing fresh life into the moribund institutions of governance at the third tier. Specific provisions in respect of powers, authority and responsibilities of the local bodies on the lines of the State List II of the Seventh Schedule, were however not made. Instead, two schedules (XI and XH)1 5 8 were added giving an indicative list of subjects that the state governments could draw upon in their own discretion to define the jurisdiction and authority of the rural and urban local bodies respectively. Laying down a list of functions was clearly not considered advisable in view of the wide divergence in local circumstances, including the development and maturity of the institutions themselves. Of course, mere existence of multiple governments is not sufficient to deliver the promise of federalism. It is possible for governments at different levels to coexist in constant conflict rendering governance at odds with the main purpose. A meaningful, more in-depth examination, therefore, requires an assessment of not only the extent and quality of independence of the governments but also of how far the advantages envisaged from the federal design actually materialize. 1 5 8 Vide Articles 243G and 243W of the Constitution. 129 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. The recent movements for “Reengineering of Government” in developed and developing countries have aimed to reduce the size of government, separating the production and delivery of public goods, introducing multiple agencies to deliver these, and empowering lower levels of governments to make them equal partners in governance, thus breaking the monopoly of the central government.1 5 9 Like many other countries India too has seen international agency (World Bank and/or IMF) pressure for these reforms, resorting to disinvestment in and shedding of managerial control over public enterprises, as well as for involving the private sector, and for tapping the potential of non-govemmental organizations (NGOs). Advocating Institutional Pluralism, Cohen and Peterson (1999) argue that part- devolution and delegation or even administrative decentralization (which in terms of their categories are strategies for Distributed Institutional Monopoly) is inadequate. It will be recalled1 6 0 that they describe Institutional Pluralism so that two or more institutions share roles—in fact, going beyond widespread current practice in the world, it would require co-optation of the private sector and NGOs into government. In Delhi local governance 1 5 9 Osborne and Gaebler (1992) offer numerous illustrations of the phenomena in the United States. Many UN workshops, working group proceedings and seminars serve as useful documentation of this in developing countries. Some other references are Cohen and Peterson (1999): Administrative Decentralization: Strategies for Developing Countries (Connecticut, USA: Kumarian Press) and Peterson, Stephen B. “Hierarchy versus Networks: Alternative Strategies for Building Public Sector Bureaucracies in Africa.” In Getting Good Government: Capacity Building in the Public Sectors o f Developing Countries, Merilee S. Grindle, ed. Cambridge: Harvard University Press, 1997; Ostrom, Schroeder and Wynne (1993); Wunsch and Oluwu (1995); and Arthur Morris and Stella Lowder, (eds.), Decentralization in Latin America: An Evaluation (New York: Praeger Publishing, 1992). 1 6 0 Refer to Chapter 4 above— specifically to the discussion of Decentralization there. 130 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. does not meet the stringent conditions of Institutional Pluralism1 6 1 in that the private sector and NGOs are yet to be utilized in the day-to-day governance and management of the city.1 6 2 However, administrative decentralization has been introduced with the development of a second tier of the government and with constitutional changes which strengthen the local governments. This is without doubt a good first step in breaking the monopoly of the Central Government—particularly remarkable in the case of a capital- city given its special situation or position and role—for “monopoly, be it public or private, delivers services at high costs, less efficiency, and less accountability.”1 6 3 That administrative decentralization is a necessary first step is evident from their discussion of Kenya and Ethiopia in terms of the existing state of deconcentration or ineffective 1 6 1 Cohen and Peterson’s discussion of Mexico’s 100 Cities program, which they have taken-up as an example of Institutional pluralism, also appears to be only a first step right now. Private sector funds have been partly permitted in low-cost housing construction and are also expected to be used for tasks like road- maintenance (pages 145 and 146 respectively). Private sector firms have been delegated task of environmental protection, once again out of financial imperatives (page 146). These are only very limited acts of participation for private sector. The authors’ construct of Institutional Pluralism requires active participation of private sector in day-to-day governance (: Chapter 4). Being allowed to partly fund some housing projects does not assure private sector of active participation in planning and decision-making. Similarly where tasks are only delegated to it (for environmental protection here) it does not make the private sector a decision-maker or partner in governance. Nor does the NGO- sector seem to have been co opted into governance (pages 138-153) whereas in the construction of their model they consider this to be an essential feature. (Page 108). Thus, in reality, at best, only a limited move towards Institutional Pluralism can be seen. And we must accept, for now, such limited moves as signs of hope, a move in the right direction and a necessary first step by allowing some division of roles between the center, the local government and the private sector in terms of financial role, oversight and planning etc. - “with local funds involved as well as private capital, there is a strong incentive on the part o f local citizens to ensure that the capital is spent appropriately.” (Page 148). {Reference: Cohen and Peterson (1999): Administrative Decentralization: Strategies for Developing Countries (Connecticut, USA: Kumarian Press)}. 1 6 2 As of now no attempt has been made to privatize municipal tasks of garbage collection or road maintenance in Delhi at all nor are there any known plans for it. In some colonies, certain citizen organizations have formed and are taking-up the initiative for partly handling garbage collection themselves (for example, in the ASIAD village - they pick garbage and deliver it to the common dump from where the municipal government handles it). 1 6 3 Cohen and Peterson (1999): Administrative Decentralization: Strategies for Developing Countries (Connecticut, USA: Kumarian Press), p.71. 131 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. devolution, from which they point to the need for achieving administrative decentralization or meaningful devolution.1 6 4 The empowerment of the lower levels of government helps in improving the quality of governance by increasing accountability and transparency in the system.1 6 5 With the establishment of democratically elected governments at sub-national levels, the accountability of bureaucracy to the local political leaders and, through them, to the public increases1 6 6 —even the All-India service (Indian Administrative Service) officials, having protection of the Central Government, feel the pressure with the Delhi government using the indirect levers of transfers and postings to ensure compliance.1 6 7 While the advantages of competition and tailored delivery provide strong reasons for multiple, independent sub-national governments, it is also evident that central 1 6 4 See Cohen and Peterson (1999) Administrative Decentralization: Strategies fo r Developing Countries (Connecticut, USA: Kumarian Press), especially pp. 127-129 and 135-137. 1 6 5 “It is assumed that the principal task in improving the bureaucratic model is to improve accountability which is achieved by monitoring from above by progressive political elites and monitoring from below by clients that demand efficient and equitable services.” {Cohen and Peterson (1999): Administrative Decentralization: Strategies for Developing Countries (Connecticut, USA: Kumarian Press) p. 57}. USAID funded Decentralization: Finance and Management Project (at Syracuse and Indiana Universities between 1988-94) also stressed on transparency, accountability, local self-governance and indigenous social capital to be important aspects of administrative decentralization. {Based on footnote 1 at pp.64 of chapter 3 of Cohen and Peterson (1999): Administrative Decentralization: Strategies fo r Developing Countries (Connecticut, USA: Kumarian Press)}. 1 6 6 With the establishment of popular government at state-level in Delhi and the transfer of Electricity and Water to the state government, electricity shortage in the city has become a major political issue. In the recent elections it figured as an important election issue, second only to price-rise or inflation. 1 6 7 As we detail elsewhere, the State governments have indirect levers over the All India Service officers, thus rendering the situation somewhat different from the textbook case. 132 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 1 f iS government institutions are equally essential. To recall from Cohen and Peterson (1999) “The comparative advantage of central institutions in mobilizing finance will continue and local-level governmental units will still remain dependent on them”. What is needed is “a partnership with central institutions. Without this partnership there is little capacity at the local level.”1 6 9 Fiscal scenario in Delhi provides an illustration of this. An examination of MCD’s finances shows that 58% of its resources came from external sources in 1995-96. Grants, both from the Center and GNCTD, stood at 44%.1 7 0 Thus, a large municipal body like the MCD, which has a budget equal to a third of the state budget, depends on transfers from higher governments and notably on the Center’s grants for planned development works and for the centrally sponsored schemes for provision of health and education in its areas. The situation of NDMC is, happily, more akin to the usual situation of the other urban municipalities as shown by Bahl and Linn1 7 1 (1992) with bulk of resources being self-financed. A dominant part of its resources is raised by NDMC by itself (coming, as we discuss later,1 7 2 largely from its trading activity in 17^ electricity and water), at 75 to 90% in different years. 1 6 8 Cohen and Peterson (1999): Administrative Decentralization: Strategies for Developing Countries (Connecticut, USA: Kumarian Press), pp. 62 and 63 respectively. 1 6 9 In contrast Bahl and Linn have argued that municipal governments in developing countries are relatively self-financed. A bulk of the revenue of these local governments (on an average about 70%) is raised locally. They point out also that investment activity depends on the remaining 30%, most of which comes from the Center {Roy Bahl and Johannes Linn (1992): Urban Public Finance in Developing Countries (Oxford: Oxford University Press), pp.32-41}. 1 7 0 Reference: Appendix B 1 7 1 Reference: Roy Bahl and Johannes Linn (1992): Urban Public Finance in Developing Countries (Oxford: Oxford University Press) 1 7 2 See Chapter 7: Sharing of Powers in the Enabling Domain below. 133 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Yet even in an under-developed system—with multiple governments having only limited independence—certain advantages expected of the feature can be seen to be accruing to the system. Theory hints at various possibilities that the case of Delhi helps to illustrate.1 7 4 Decentralization in Delhi clearly helps counter the “leviathan effect” of a large, unitary central government. Donald Davidson posited the leviathan effect as the outcome of “a single, complex, but strong and highly centralized national government.”1 7 5 Kirk describes it as “swelling omnipotent nation-state” and argues that leviathan effect results in what Tocqueville described as “democratic despotism.”1 7 6 Very simply, the leviathan effect can be understood as the concentration of functions and power in a large, central government with “virtually unlimited scope of government power.”1 7 7 DeBow draws a contrast between the leviathan and limited government. This is particularly significant for us as one main aim of federal systems is to ensure limited government. Delhi appears to be moving towards securing this aim. With the introduction of democratically elected state level government in Delhi and hence with the 1 7 3 Reference: Table M - based on Ann 6.3. 1 7 4 For example, as discussed by Cohen and Peterson (1999): Administrative Decentralization: Strategies for Developing Countries (Connecticut, USA: Kumarian Press), pp. 80-81. 1 7 5 Reference: Davidson, Donald (1938): The Attack on Leviathan as discussed in Russell Kirk: “The Attack on Leviathan: Donald Davidson and the South’s Conservatism” {The Heritage Foundation, Lecture Number Two Hundred and Six, July 11th , 1989} (www.townhall.com/hall-of-fame/kirk/kirk206.html) (Last Accessed on 13th May 2002). 1 7 6 Kirk, Russell: “The Attack on Leviathan: Donald Davidson and the South’s Conservatism” {The Heritage Foundation, Lecture Number Two Hundred and Six, July 11th , 1989} (www.townhalLcom/hall-of- fame/kirk/kirk206.html) (Last Accessed on 13th May 2002). 134 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. breaking of central government’s monopoly, as also with the transfer of administration of Delhi directly to a smaller government elected by the people, the leviathan effect of the huge, Central Government directly governing Delhi has been countered. Moreover, with each level of government functioning independently, exercising check on the other and balancing each other (as we discuss below with the help of examples), limited government has been strengthened. Additionally, it is possible to visualize the development of the federal system in a way that addresses another problem, that of the “flypaper effect.” Similar to the sticky “flypaper,” the “flypaper effect” describes the tendency of govemment-money to get stuck to the level it first lands at rather than making it fully to its destined end. For example, in Delhi, the recent withholding of the central assistance intended for MCD by the state-level GNCTD (via which it was channeled) can be seen as a reflection of the flypaper effect.1 7 8 Central allocation going to MCD was withheld by GNCTD in lieu of repayment of old loans owed by MCD to GNCTD. Thus the money stuck where it landed first—that is with the GNCTD which was on its route, its “first port of call”— even though it was not intended for that level. Possibly, fiscal federal relations need to be restructured to prevent such appropriation of plan grant (which is directed towards a specific purpose) and to make sure that it serves the purpose it was intended for. One 1 7 7 DeBow, Michael: “Reforming Politics in the Age of Leviathan: A Skeptical View” (www.libertvhaven.com/theoreticalorphiIosophicalissues/skepticism/leviathan.html) (Last Accessed on 13th May 2002). 1 7 8 Reference: “State Government, Civic Body Funding Tussle Widespread” in The Times of India, Cities, Wednesday 1s t December 1999. Posted at 0130 hours 1ST (http:// www.timesofindia.com/ today). 135 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. solution could be that funds for particular purposes and major projects are directly transferred to the appropriate level. In Delhi, the different governments are setting limits to each other’s transgressions, serving as checks and balances on each other.1 7 9 A recent example of this is available in Delhi on setting-up of toll-checkpoints by MCD along the Delhi-UP border. UP’s state government did not want this, which is in keeping with the general mood in the country to minimize barriers to interstate movement of goods. As per protocol, GNCTD had to be involved1 8 0 (which the MCD had not done) and thus the state-level’s intervention and presence helped prevent a possible transgression by the local government. The check and balance function is likely to be served particularly well if different parties are in power at different levels. The newly enhanced system, even with limited sharing of power and authority, has helped enhance accountability. That accountability issues are yet to be resolved is clear from the examples of various conflicts that are rampant between the state and local level governments of Delhi. MCD is waging war against GNCTD for taking over the control of TB centers.1 8 1 Furthermore, the two governments are fighting to bag credit for 1 7 9 Reference: “Government Forced to Rescue MCD on Land Dispute with UP” in The Times of India, Cities, 31s t January 2000 (http:// www.timesofindia.com/ today). 1 8 0 Moreover, the Delhi state government has had to participate proactively given the continued dispute between the UP state government and MCD over ownership of borderlands. 1 8 1 Reference: “Govt., MCD Lock Horns Over Power to Monitor Facilities for TB Patients” (The Times of India, Cities, December 18th , 1999) (http://www.timesofindia.com/today). 136 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 1 positive outcomes—for example, in disease prevention and children’s health. Conflict between the two is also apparent in the financial domain— asserting its higher position, the GNCTD retained a part of central allocation of funds meant for the MCD.1 8 3 Thus as these cases show, the presence of state-level government provides a check on MCD, increases its answerability and stimulates competition (albeit for credit). As is evident from the on-going struggle in Delhi, MCD is yet to come to terms with its accountability to the intermediate level of government. Nevertheless, a fortified institutional design— forged through resolution of conflicts over time—can be expected to aid the process of greater accountability of action and improved governance. That of course remains the hope. The independence of governments requires explicit safeguards. A constitutional provision serves as a pre-requisite. It must also be bolstered by practices encouraging independent functional governments. Weingast (1995) argues that financial bailout by the higher governments adversely affects the independence of the lower governments. That is why institutions like the Finance Commissions are a more positive way of securing the financial independence of the governments. More broadly, provisions brought in by the 1992 amendments (that we have discussed above)—like the creation of the independent institutions of the Finance and Election Commissions—are important steps in ensuring independent functional governments. These institutions are important 1 8 2 Reference: “One-upmanship Goes on Between MCD, Govt.” (The Times of India, Cities, Thursday, December 9th , 1999 (http://www.timesofindia.com/todav). 1 8 3 Reference: “State Govt., Civic Body Funding Tussle Widespread” (The Times of India, cities, Wednesday, 1st December, 1999) (http://www.timesofindia.com/todav). 137 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. for providing effective mechanisms to safeguard not only the political independence of the elected governments but also to secure for them access to and control over requisite finances. Clear delineation of functions for each level is also necessary for independent working of governments. It is on this count that the above-mentioned amendments are criticized as being inadequate. While the constitution guards against the encroachment by the Center into a state’s functional domain (and vice-versa) by providing detailed separate lists for the functions, the same is yet to be achieved at the sub-state levels. A separate listing of powers of the local level governments as distinct from the state-level government would, it has been argued, result in greater safeguard for the independence of the local governments. In some sense, the local governments are basking in the reflected glory of the state’s powers. They must depend on the state government’s discretion in the matter of functions assigned to them instead of claiming their functional role as a matter of right. The provision for an explicit division of powers will go a long way in helping accord 184 more equal status to the different governments. To use Datta’s terminology, while “independent status” has been accorded, “coordinate status” is yet to be secured. “Independent status” has been given to the local governments given the constitutionally guaranteed existence of the elected local governments with their distinct responsibilities and matching resources. But they derive their power at the sole discretion of the state 1 8 4 Reference: Datta, A. (1996): “Constitutional Strengthening of Local Government in a Third World Federation”, Indian Journal o f Public Administration, April-June 1996, Vol. XLII, #2, pp.144-152. 138 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. government that has jurisdiction over subjects enumerated in the “State List”. In the absence of formal division of “subjects” or powers between state and local governments, “coordinate status” has not been achieved. Additionally, Delhi’s state level government has been endowed with only limited autonomy thus far.1 8 5 It is not an equal power- holder given the retention of the critical law and order arm (among other subjects)1 8 6 by the Center. For example, the Lt. Governor is an appointee of the Central Government. Moreover, the appointment of the Municipal Commissioner by the Center also serves as a means of Central control. Other factors exist at the level of MCD (Municipal Corporation of Delhi) and NDMC (New Delhi Municipal Council) to render them, in many ways, instruments of central functioning.1 8 7 In sum, thus, while Delhi has made significant progress towards acquiring multiple, independent governments at three levels, there is yet much to be accomplished before these governments come fully into their own. 1 8 5 Even this transfer o f powers to the state-level government falls short as discussed in Sharing of Powers above. 1 8 6 As we discuss in Decentralization in Chapter 7 below, the evolution of administration in Delhi overtime has created a schism between police power and municipal access to it. Similarly unlike other gubernatorial positions, the Lt. Governor of Delhi retains unusual executive and interventionist powers. 1 8 7 For example, in the case of MCD, the Commissioner has been created as a powerful authority in his own right, besides being an appointee of the Center. 139 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 5.3 Multiple, Independent Governments in the Functional Domain of Environmental Management: Environmental management has residually fallen into the Central Government’s list of responsibilities.1 8 8 In actual working environmental management responsibilities for the states are handled by the respective State Pollution Control Boards (SPCBs) and for the Union Territories by Central Pollution Control Board (CPCB). Delhi recently got its own pollution control agency for environmental management—Delhi Pollution Control Committee (DPCC) as distinct from a board, being a union territory and not a state. The DPCC is a state-level body and pollution control responsibilities have thus been moved out of the ambit of a central body and into the state arena. Though nowhere near Cohen and Peterson’s construct of “Institutional Pluralism,” “plurality of institutions” is occurring gradually in environmental management in Delhi. First, the creation of DPCC and transfer of environmental management to state-level government have broken the monopoly of the center. Additionally the DPCC is not financially dependent on the center—though it does receive some project-based subsidies from the Central Government. It relies primarily on its own resources, especially the water cess. And ever since environmental management has been moved down to the level of state government, money is readily available for it from the state budget. Further, with the anticipated passing of the proposal to split up MCD, Delhi 189 will move to the next stage in having a “pluralist” design. The proposal envisages 1 8 8 See Chapter 6 on Constitution. 1 8 9 Reference: Report of the Committee to Review the Structure and Working of the Municipal Corporation of Delhi. 140 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. breaking municipal administration into smaller units through additional corporations and councils rather than just MCD and NDMC. It also proposes transfer of environmental management responsibilities to the local bodies. Thus environmental federalism is gradually but surely becoming a reality in the city-state. However it is important to note Delhi’s unique position in terms of devolution of environmental management functions to local governments as per the current scenario. As DPCC is itself a delegatee, it does not have the power or right to further delegate or create a body at the level of the local government for environmental management. But, unlike other states where the SPCB located at the state capital may be physically too far removed from some locations that it manages, in Delhi such physical distance does not come in way of discharging the responsibility (although physical proximity may not be sufficient and direct administration is also important). Also given the current modes of functioning of DPCC, local government has already been involved in environmental management in Delhi to the extent required to invoke municipal laws. In part such cooperative working on part of the different levels of governments in Delhi may also be a reflection of the gravity of the problem and the focal attention on environmental action. DPCC has access to and it utilizes the agencies of the local government for pollution control efforts. It issues directions to the MCD for implementation of specific programs for pollution control—as for example we will find in our discussion of pollution control of Yamuna River through the setting-up of Sewage Treatment Plants.1 9 0 1 9 0 We detail this example further in our discussion of Partnership and Cooperation (chapter 9 below). 141 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Following Lowry we can examine the development of environmental federalism in Delhi in terms of the vertical and horizontal dimensions. Lowry’s vertical dimension requires the involvement of federal government and its role in coordinating interstate efforts. In India the Central Government has been the leading actor in environmental activities. It sets the Minimum National Standards (MINAS) for pollution control that are implemented by the states and must be adhered to. The Central Government is also involved through the CPCB in providing technical assistance to the pollution control boards. Thus the vertical dimension is apparent in the Indian context to the extent of involvement of both the center and the state governments. The position in Delhi closely approximates the national position as the presence of DPCC takes Delhi closer to the states rather than the Union Territories without legislatures. The negative factor as of now if the limited involvement of sub-national governments—as environmental management is not a regular local government activity in Delhi. Lowry’s horizontal dimension provides for interstate competition. As we discuss here no “race to the bottom”—to have more industries and development thus sacrificing environmental concerns—can be seen in Delhi. The city-state has a vivid concern with environment. In fact, this can be seen to be leading to a redefinition of its developmental goals. In the 1960s Delhi aimed to adopt the “Japanese model” of having a small industry in every household. Thus it became the largest exporter of garments in India1 9 1 . Now with its experience of pollution and health hazards from industries in residential 1 9 1 Reference: Experience Sharing Workshop on Review of Structure and Working of the Municipal Corporation of Delhi (New Delhi, India: 16-17 January 2001) (Organized by: Times Research Foundation and Government of National Capital Territory o f Delhi}. 142 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. areas, Delhi has undertaken a major endeavor to relocate industries to specially designated areas. Also, Delhi has adopted stricter standards than those mandated nationally and followed by other areas. For example, MINAS (Minimum National Standards) allows power plants to have suspended solids of lOOmg but Delhi has confined it to only 30mg. Or while MINAS restricted pollution from coal-fired boilers by stipulating an upper limit of 80Q-16Q0mg of Particulate Matter, Delhi had restricted this to 450mg with the intention of finally banning them altogether. Given the strong concern over environmental issues in today’s Delhi, it is setting for itself difficult targets even in the absence of interstate competition. How this situation changes with the transfer of environmental management to multiple local governments offers interesting possibilities to watch. Depending on the nature and resources of areas clear schisms may develop and development-environment trade-off might become more prominent. Localities may then work to guard their images of industrial areas versus elite, residential areas, and so on. Naturally administrators in the latter, answerable to the residents concerned with quality of life issues, will need to cultivate a more “Clean Delhi, Green Delhi”1 9 2 image. Areas with industries and housing for their workers might have to toe a finer line of having both industrial growth and acceptable environmental standards. Once environmental management surfaces as an election-issue on local parties’ agendas, the answerability of political leaders to their constituents could translate into stiff inter-locality competition. Thus the horizontal 1 9 2 A popular slogan coined for Delhi in Rajiv Gandhi’s premiership. 143 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. dimension even within Delhi should be a matter of considerable interest in the coming years. 5.4 Conclusion: Meaningful existence of multiple, independent governments requires more than mere presence of sub-national governments. In fact, a set of conditions must be met. Guarantee to exist through explicit safeguards by way of constitutionally secured status and access to independent adjudicating bodies are also important. The governments in a federal set-up must have a coordinate status. The sub-national governments must be autonomous in their own spheres. Clear delineation of functions, powers and resources is also a must, particularly in ending the monopoly of the Center. At the same time, a strong center, coordinating interstate efforts, and interstate competition, makes for healthy institutions. This chapter has brought together evidence for the crumbling of the “monopoly of center” through growth and development of independent sub-national levels in Delhi. The last decade has been particularly eventful for the development of federalism in terms of multiple (three), independent levels of governance in Delhi. Both the enabling and functional domains have experienced the creation of independent governments at the sub national levels. This is important for democratic, decentralized governance—taking governance closer to the governed. It is particularly useful for the lessons for development of federal/ non-centralized structures in capital cities. Delhi’s evolving situation will, from this point of view, continue to be an interesting study in the years to come, with ideas for capital cities in general, not just for federalism. 144 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. In the enabling domain, the important step towards “institutional pluralism” and decentralization has been taken with recent constitutional provisions and parliamentary acts assuring existence of state and local governments. Elected governments at all three levels are protected by constitutional or legal safeguards. The state government’s existence is secured by an act of the Parliament—the GNCTD Act. By virtue of the 74th Amendment, municipal governments’ right to exist is guaranteed by the provision making it obligatory to hold fresh elections to reconstitute the MCD within six months of its supplanting or at the expiration of normal term, combined with the creation of an independent state election commission to ensure compliance with the above provision. While Delhi has a rich history with different traditions of governance from pre independence era, the last forty years have been both fluctuating and momentous for the development of multiple, independent governments in the enabling domain in Delhi. These years have been marked by vicissitudes between being directly administered by the center and having elected state government along with powerful municipal entities. Capital cities often live with disenfranchisement, lacking their own sub-national governments. Delhi has certainly been luckier than that. Even though local governments possess long history in Delhi, the last decade has been particularly noteworthy. This is so not only because the municipal body finds itself answerable to the state level government and is yet to resolve many issues with it. It is also eventful because of the nationwide development to make local governments independent and secure. 145 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Still more is desired to assure “coordinate status” of local governments and to provide un-circumscribed authority to its state government. Thus federalism in Delhi bears observing in the coming years—this is all the more valid for environmental federalism, given its present nascent state. In the functional domain of environmental federalism, the desire to tailor provision to local needs has led to the involvement of sub-national government, gradually moving away from centralized provision in Delhi. The Delhi Pollution Control Committee has been made responsible for environmental management in Delhi. But since it is a delegatee, it can not delegate these functions further to the local governments. Proposals are underway for making environmental management a local government function. In the meanwhile (as we will elaborately illustrate in the coming chapters) the local governments have had to be involved in different projects of pollution control in Delhi, following its peculiar circumstances and developments. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Chapter 6 The Constitution 6.1 Introduction: That a written constitution is indispensable for federalism is indisputable. It must be detailed and unambiguous enough to leave no doubt about the functions, resources, 1QT powers and prerogatives of different governments. ~ At the same time, it must also be flexible enough to keep pace with the changing times and yet rigid enough to retain the basic structure unaltered and to prevent, especially in case of federal set-ups, one government from usurping the rights of another. Theoretical discussions1 9 4 stress different aspects in asserting the importance of a constitution for a federal system. For some, the constitution is the bedrock for grounding of federal institutions.1 9 5 For others, it codifies the contract1 9 6 between governments, a contract of states. As we noted above Bryce1 9 7 regarded it to be essential for maintaining the balance of centralizing and divisive forces in federal systems. 1 9 3 Ethiopia’s recent attempts at establishing a federal system illustrate how the absence of a well-defined constitution can create problems, undermining the efforts for federalism and development. Cohen and Peterson (1999) discuss how the absence of clear guidance in its constitution on “managing federal- regional powers and tasks” has dealt a severe blow to Ethiopia’s attempts at decentralization. {Reference: Cohen and Peterson (1999): Administrative Decentralization: Strategies fo r Developing Countries (Connecticut, USA: KumarianPress), p. 134}. 1 9 4 See Chapter 4 above. 1 9 5 References Dicey (1952); Haqqi (1967). 1 9 6 Thimmaiah (1976); Ostrom, Bish, Ostrom (1988). 1 9 7 Reference: Bryce (1888); Blankart, Charles B: “Local Autonomy and Popitz’ Law in Prussia and Germany,” at http://wwvv.publicchoice.org/files/blankart.htm. (Last Accessed on June 3,2002 at 8:18pm). 147 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. India’s large Constitution with over 400 articles and 12 schedules,1 9 8 reflecting in essence the great diversity of the nation, is eloquent witness to this realization on the part of the founding fathers. The sustained, enormous effort that went into the drafting of this document is evident from the fact that it bears the mark of the study of different constitutions of the world, both written and unwritten, by the experts and leaders assisting the Constituent Assembly. Numerous volumes of the Constituent Assembly Debates and a deliberative process lasting over two years bear ample testimony to this fact. And yet the framers were neither vain nor were they impervious to the demands of changing times. As the first Prime Minister of the country, Jawaharlal Nehru, argued in the Constituent Assembly in November of 1948: “In any event, we could not make this Constitution so rigid that it can not be adapted to changing conditions. When the world is in turmoil and we are passing through a very swift period of transition, what may be good today may not be applicable tomorrow.”1 9 9 The Constitution has adapted itself to the rapidly changing scenarios—social, economic and political—and to the exacting requirements of governing a nation as large and multi-splendored as India. Steered by an aware and informed judiciary at the higher echelons, it has remarkably moved in step with the evolving demands of leading to progress and modernity an ancient society held tightly in the grip of age-old divisions and conflicts, illiteracy and superstition, and poverty and deprivation. 1 9 8 While the original document of the Indian Constitution contained 395 articles and 8 schedules, after many changes, it contains now 444 articles and 12 schedules (as of 1996). 1 9 9 As quoted in Sarkar, Subrata (1972): The Center and the States (Calcutta: Academic Publishers), p.4. 148 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Theory also builds on the necessity for amendments to the constitution. Different proponents stress different aspects. As noted above the demands of changing times are an important consideration. Thomas Jefferson, one of the founding fathers of American federalism, recalls some of these ideas in stating: “Nothing is more likely than that enumeration of powers is defective. This is the ordinary case of all human works. Let us then go on perfecting it by adding by way of amendment to the Constitution those powers which time and trial show are still wanting.”2 0 0 As if in affirmation of this view, India’s large and detailed constitution has seen numerous amendments even though the process is far from simple.2 0 1 In India as many as 79 amendments have been made in about 50 years which contrasts with a mere 27 amendments in 213 years2 0 2 in the American Constitution.2 0 3 There have, on an average, been two amendments to the Indian Constitution per annum. Yet, this flexibility should not be mistaken for fluidity. Indeed, there is an overwhelming consensus in the country, based on a Supreme Court judgment,2 0 4 that the basic structure of the constitution can be altered not by the 2 0 0 Thomas Jefferson to Wilson Nicholas (1803) (http://etext.virgima.edu/iefferson/quotations/ieff4.htm) (Last Accessed on June 3, 2002 at 7:44 am). 2 0 1 The Constitution may be amended by the passage of a bill in both the houses of Parliament, with the assent of the president, — on being “passed in each house by a majority of the total membership of that house and by a majority of not less than two-thirds of the members of that house present and voting” (Article 368 of the Indian Constitution). However, an amendment having a bearing on the rights of the states requires ratification by not less than half the states’ legislatures as well. 20 2 The American Constitution was officially adopted on June 21st 1787(passing into law in 1789) (Another discussion says adopted on September 17th 1787). 2 0 3 http://www.bigduck.com/AMMENPM.html. (Last Accessed on June 3,2002 at 8:13am). 2 0 4 Minerva Mills v. the Union of India, A 1980 S.C. 1789. Clauses (4) and (5) inserted into Article 368 by the Constitution (42n d Amendment) Act, 1976 have been declared invalid by the Supreme Court 149 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. amendment process but only through the adoption of appropriate legislation by a new constituent assembly. Even though it has been criticized as the outcome of a top-down process, India’s constitution has adapted to the needs of changing times and to the needs of the Indian federation. It has proved to be an important instrument for deepening federalism by extending its reach to lower levels of government and in its evolution in multiple dimensions. An important landmark in constitutional evolution towards a strengthened federal design was the wholesale reorganization of the states in 1956 to give reality to the peoples’ aspirations of being grouped on the basis of language instead of the administrative convenience of the colonial power. The States Reorganization Act provided for the creation of linguistic states in 1956. And as recently as 1992, the 73rd and 74th amendments2 0 5 infused fresh life into local governance in the country—rural (panchayats) and urban (municipalities)—thus refining and deepening federalism. Constitution Bench. These clauses removed all limitations on the power of Parliament to amend the Constitution and precluded judicial review of a constitutional amendment act on any ground. These have been declared invalid on the ground that they sought to destroy an essential feature or “basic structure” of the constitution {based on: Introduction to the Constitution of India by Durga Das Basu (18th edition, Reprint 2000) p.158, footnote 7}. Two earlier cases had also advanced the idea of “basic features” of the constitution. Initially Golak Nath v. State of Punjab, A 1967 had put forward the idea of unchangeable “basic features” of the constitution. In this case Fundamental Rights were placed beyond the amendment process, holding that a new Constituent Assembly must be convened to make a new constitution or to change it radically and that any change to Fundamental Rights required the same. Later in Keshavanand v. State of Kerala, A 1973 S.C. 1461 (F.B.) the judgment on the fundamental rights part of the previous case was reversed. Fundamental rights were held to be amenable to amendment by the Parliament. However, this case also maintained that there are certain “basic features” of the constitution that cannot be altered in exercising the power under article 368 to amend it. The word “amend” in article 368, it was clarified, means only changes other than those altering the very structure of the constitution since altering the basic structure was tantamount to making a new constitution. Thus, if a constitution amendment act sought to amend the basic structure or framework o f the constitution then the court was entitled to annul it on the grounds of being “ultra vires.” 2 0 5 As we detailed in the previous chapter (Chapter5) and as we discuss below as well, these amendments guarantee the existence of local bodies and assure lifeblood of finances for them. 150 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. The Indian case presents an impressive case study of the signal contribution that a written, detailed constitution can make to the evolution of federal institutions. The studies from Delhi examined here demonstrate the ways in which constitution can aid in the evolution of federal institutions. Both the strength of societal forces and the magnitude of the desired change are important determinants of this evolution. Examination of federal evolution in the overall enabling domain and the functional domain of environmental federalism in Delhi offers an interesting comparison of the role of constitutional provisions. The strengthening of federalism in the enabling domain needed specific provisions through constitutional amendments of such magnitude as to be considered landmark developments in contemporary history of the Indian Republic. But significant deepening has taken place in recent past in the realm of environmental federalism in Delhi without the aid of any similar development in constitutional law—in response to the sheer force of circumstances. Given the strong societal forces—marked by growing awareness of the tremendous deterioration of Delhi’s environment in a conscious public, the government and an active judiciary—environmental management is being taken to lower levels of government in Delhi without a constitutional change at this point within the existing provisions of the constitution. In contrast, in the absence of the 73rd and 74th amendments, local governments across the country lacked meaningful existence. The provisions made through these amendments on flow of finance and for regular elections to these institutions together obviate the possibility of frustrating the functioning of, or altogether doing away with, elected local bodies. These amendments 151 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. assure life and life-blood for the local governments. They lay down that local governments cannot remain suspended indefinitely. The creation of permanent state election commissions aims to ensure that re-elections must be held within six months of dismissal, thus ending a loophole that state governments frequently resorted to, thereby putting an end to their extreme tyranny. 6.2 The Constitution and Constitutional Provisions in the Enabling Domain: In the enabling domain, specific constitutional provisions and amendments often form a pre-requisite for smooth functioning of federal units. A constitution enunciating the powers and responsibilities of the plural power-holders forms the bedrock of federal evolution. The constitution and its development have helped in the evolution of federalism in India. Often these changes in the constitution have had far-reaching implications for the institutional set-up in Delhi. As a capital territory, Delhi’s territorial form affecting its governance structure has been an important concern. Over the years, to accommodate demands of changing times, Delhi’s status has changed from a Part C state to a Union Territory to the National Capital Territory with important ramifications for its governance. The States Reorganization Act abolished the Part A, B and C states into which India’s territory was then organized and instead provided for States and Union Territories. A direct fallout of this historic development for the national capital, Delhi, was the loss of its status as Part C State of the Union, bringing it directly under Central rule as a Union Territory. It also led to the creation of a unique and powerful Municipal Corporation of Delhi that sought to combine the roles, responsibilities and powers of a 152 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. municipality and the state government excepting the ones like law and order that the Center chose to reserve to itself. More recently Delhi has uniquely been classified as a National Capital Territory with its own elected legislature, addressing popular demand for elected state-level government. The Constitution (Sixty-ninth Amendment) Act, 1991 provided for a directly elected Legislative Assembly and Council of Ministers headed by a Chief Minister for National Capital Territory of Delhi to legislate on matters in the State List and in the Concurrent List. Naturally this has had profound impact on the inter-governmental relations and administration of the territory and has set in motion a new process of evolution of federal relations in the capital-city.2 0 6 Democratic and federal evolution of Delhi in recent years may have useful lessons for capital cities of other federations plagued by problems of disenfranchisement and over-centralization. Delhi’s experience provides ideas for how and what changes may be introduced and also what pitfalls must be avoided. Not only has Delhi acquired a democratically elected state-level government; it has also obtained meaningful existence for its local bodies with nationwide developments to infuse life into the third tier of federal organization. The 73rd and 74th amendments referred to above, accord constitutional status to local governments. The amendments provide safeguards to their existence and seek to empower them for effective functioning. In addition to de- 2 0 6 As detailed elsewhere, creation of the state-level government has initiated a process of transfer of power and functions both from below and above, leading to a re-definition of roles of governments at different levels, changing the reporting structures and channels (sometimes not with adequate clarity)— thus leading to ambiguity, and unrolling new interactions fraught with conflict at times. 153 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. politicizing local governance by laying-out rational criteria,2 0 7 the amendments also aim at fiscal autonomy for the local bodies by mandating the setting-up of State Finance Commissions at every five-year interval. The amendments also require the establishment of permanent State Election Commissions which will ensure the holding of regular and fair elections based on uniform criteria. The existence of the local bodies has been guaranteed in exactly the same manner as that of the state governments, viz., by providing that elections to constitute them must be held within six months of their ceasing to exist, for any reason whatsoever. These provisions, enforceable through the country’s robust judicial process, go a long way in making the democratic local governance rooted in Indian soil. Along with other provisions, these amendments aim to introduce transparent, accountable and efficient local governance, thus improving the management of urban and rural settlements by duly empowering the otherwise anemic local bodies. In the financial sphere, the constitution must lay down in specific terms the respective fiscal jurisdictions of each level of government, the requirement or authority for the creation of, and withdrawal from, various public funds/ accounts, modalities of levying taxes, duties and fees, and of collecting and sharing of revenues accruing from different sources between different governments, powers to borrow within and without the country/ state, or other jurisdictions, grants, and so on. While the provisions made in 2 0 7 For example, the 74th amendment provides predefined criteria for definition of areas as municipalities of different kinds rather than leaving it to political considerations and whim. Even though no cut and dried formulae in terms of size of population or area have been provided, some rationalization in terms of “big” and “small” has been done. Article 243 Q provides for (a) “Nagar Panchayat” for transitional area; (b) 154 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. these important respects should not only be explicit and definite, leaving as little scope as possible for controversy or conflict, there should be adequate scope for them to be modified in response to changing situations and circumstances. India’s constitution measures well up to this requirement. Chapter I of Part XII of the constitution titled “FINANCE” (Articles 264 to 290A) and Chapter II titled “BORROWING” (Articles 292 and 293) deal with these aspects of the federal system. As the Indian federal design envisaged only two constitutionally recognized tiers of government, the financial arrangements cater only to those two levels—the union and the state—leaving the third tier at the local level entirely at the discretion of the state governments, which has proved to be inimical to their growth and development. With the grant of constitutional recognition to the third tier at panchayat /municipal level, the need to extend these financial arrangements to the lower level was felt. Though the constitutional amendments have not made as definitive and elaborate provisions in this regard as the ones for central-state fiscal relations and have left the financial requirements of local bodies to be duly provided for by the state government and the state finance commission, yet the provision mandating the setting up of state finance commissions, with specific terms of reference is an innovation of far reaching significance in the evolution of federal financial relations towards the grassroots level. The Finance Commissions in the states are charged with the responsibility to review the financial position of the municipalities and make recommendations to the Municipal Council for smaller urban area; and (c) Municipal Corporation for larger urban area. It also exempts industrial townships from setting-up municipalities. 155 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Governor as to “the principles which should govern the distribution/ assignment of the net proceeds of the taxes, duties, tolls and fees levied by the State, Panchayats and the Municipalities; and inter-se between the Municipalities/ Panchayats at all levels.”2 0 8 In terms of fiscal significance the institution of finance commissions must truly be interpreted as a lifesaver for local governance. There has been growing realization that insufficiency of resources has hindered local governments in effective provision of civic services, especially in face of increasing burden of population in urban areas. Local governance was in this sense at the mercy of discretionary “grants-in-aid” from the state governments. Lack of rational criteria in allocation of funds reduced local governments to the status of poor relatives at state government’s door. Enhanced pressures on services and rapidly escalating costs worsened their positions further. A case in point is that of the NCT of Delhi. For Delhi the setting-up of the First Finance Commission has had major ramifications. The First Delhi Finance Commission submitted its report to government on 31st December 1997. In pursuance of the directive in Article 243Y(2) of the constitution the report along with the Action Taken Report (ATR) was placed on the table of the NCT legislature on 30th September 1998. In addition to providing a comprehensive analysis of state and local government finances for Delhi, which is a much-lamented lacuna not only for lower level governments of Delhi but for other states in India as well, it has addressed long-standing problems. With its newly acquired state-level government—Government of National Capital Territory of Delhi (GNCTD)—conflicts between local government, specifically MCD, and GNCTD 2 0 8 First Delhi Finance Commission Report (1997): Chapter 1, p.3. 156 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. are already rampant. Finance too might have become a sore point, possibly even resulting in a deadlock situation, in the absence of any such mechanism. The “assigned taxes” offer one such example where the recommendations of a Finance Commission can help resolve long-standing problems. Pursuant to Delhi being made a Union Territory in 1956,2 0 9 the dominant local body MCD was seen to be the means of providing democratic governance for Delhi. At this time, four taxes—entertainment tax, betting tax, motor vehicle tax and terminal tax—were assigned to local governments of Delhi by the Parliament. GNCTD, like its predecessors,2 1 0 had been entrusted with the task of collecting these and transferring their proceeds to the local governments. The potential of these taxes was not being fully tapped; the state government had little incentive to enhance its collection efforts in this direction. A similar situation was faced in the collection of shared taxes between the Center and the states. The 10th Central Finance Commission sought to overcome such disincentives to the higher government in the collection of the tax by recommending global-sharing of taxes. The First Finance Commission (of Delhi) too recommended similar global sharing in lieu of assigned taxes for state and local level governments in Delhi and it has, thus, sought the removal of “adverse incentives” in the collection of assigned taxes. Even with the limited experience of just one Finance Commission, the local government of Delhi is already aware of the promise this provision holds. It has had a 2 0 9 Following the State’s Reorganization Act, 1956 as also discussed at p. 2 above. 2 1 0 GNCTD was preceded by Executive Council and that was preceded by Delhi Administration headed by Chief Commissioner. 157 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. first taste of its possibilities. Local bodies in Delhi have been pressing the state-level government to set-up the second finance commission.2 1 1 An important milestone, especially for local governance and democracy, has been created in federalism with the 73rd and 74th amendments to the constitution. Even so, these amendments have come under fire for doing too little—for example, for their lack of depth in not earmarking the functions to be discharged by local governments2 1 2 as has been done for the states by providing specific listing of functions vide Schedule VII which lie in their jurisdiction and cannot therefore be usurped by the Union. The 74th amendment (pertaining to urban governance) has come under severe criticism for failing to address some of the major concerns in democratization of governance of the cities.2 1 3 Thus, for example, it has been pointed out that no note has been taken in the amendments of the over-dominance of states2 1 4 or of the existing “official-centered” nature of 2 1 1 Reference: “MCD seeks L-G’s aid on Revenue Muddle” in The Times of India, Cities, Delhi, 9 November 2000 (httD://www.timesofindia.coro/todavl. 2 1 2 While schedules 11 and 12 respectively provide indicative lists of functions appropriate to be performed by rural and urban local bodies, the actual devolution of functions remains the prerogative of state governments. See, for example, Datta, A. (1996): “Constitutional Strengthening of Local Government in a Third World Federation”, Indian Journal o f Public Administration, April-June 1996, Vol. XLII, #2, pp. 144-152. 2 1 3 References: Jafa, V.S. (ed.) (1999): Federal India: Emerging Economic Issues', Datta, A. (1996): Constitutional Strengthening of Local Government in a Third World Federation (Indian Journal o f Public Administration, April-June 1996, pp.144-152); Datta, A. (1994): Institutional Aspects of Urban Governance in India (Indian Journal o f Public Administration, October- December 1994, pp. 616-632); Singh, Nirvikar “Issues in Local Governance Reform in India (: Working Papers, November 1997), “On Federalism and Reform in India (:Working Papers, Novenmerl997) and, “Governance and Reform in India” (Working Papers, July 1996) (http://econ.ucsc.edu/~boxjenk) (Last Accessed on 29th May 2002). 2 1 4 Jones, Rodney W. (1974) accused in his book that most decisions for the governance of the city in India were made by the state governments. {Reference: Jones, Rodney W. (1974): Urban Politics in India: Area, Power and Polity in a Penetrated System (New Delhi: Vikas Publishers)}. 158 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. municipal management (in contrast to elected-representative centered). Similarly, for Delhi, little has been done to correct the fact that two out of the three bodies discharging civic responsibilities in their respective areas of the city are largely nominated (and not elected).2 1 5 While the criticism has rational basis, policy makers appear to have opted in favor of treading with caution and steadiness. All the same, given the adapting and resilient nature of the Indian Constitution, it can be expected that these weaknesses will get addressed in due course through experiential learning. 6.3 Constitution and Constitutional Provisions in the Functional Domain of Environmental Management: For a parallel study in the realm of environmental federalism, it is necessary to take note of the provisions in the constitution delineating the functional domains between the Center and the states. Schedule VII of the constitution sets out three lists of functions earmarked respectively for the Union, the states and those over which both the states and the Union have concurrent jurisdiction. Environmental management does not find a place in any of the three lists—indicative, no doubt, of the lack of attention this subject commanded in the fifties. As a result of a provision calculated to strengthen the constitution’s centralist bias, viz., the residuary powers vest in the Union and not in the states as is the case in the USA, hence, this unlisted subject lies in the domain of the Central Government. 2 1 5 However it is imperative to add the caveat here that 96% of Delhi’s population and 94% of its area are served by the elected MCD. 159 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. It is noteworthy that in reaffirmation of the constantly evolving nature of the Constitution, the nation took note of the serious international concern with the deteriorating environment on the planet, the only one that mankind has, and the government of the day legislated into it the following two amendments: - By the 42n d Amendment to the Constitution, Article 48A was inserted in Part IV which houses the Directive Principles of State Policy, casting a responsibility on the state to protect the environment and forests. Thus, in 1976 India became one of the first few nations to add environmental concerns to its Constitution.2 1 6 - This same amendment also added another provision Article 51A in Part IVA which lists Duties of the Citizens laying, down that: “It shall be the duty of every citizen of India ... to protect and improve the natural environment including forests, lakes, rivers and wildlife, and to have compassion for living creatures.” The Center, by exercising its residuary legislative powers, has created a Central Pollution Control Board (CPCB) that is responsible for technical supervision of all pollution control efforts in the country. The CPCB is also directly responsible for environmental management in the Union Territories being the principal instrument of the Center for protecting and improving the environment. In the states, State Pollution Control Boards (SPCBs) have, likewise, been created and are responsible for environmental management in the respective state. Two provisions come into play in environmental management by SPCBs in states: 2 1 6 Reference: Heptullah, Najma (ed.) (1993) Environmental Protection in Developing Countries. (Delhi: Oxford and IBH Publishing Co.). 160 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. The Constitution empowers the Center to delegate any of its powers or functions to another authority.2 1 7 It can also create a body to perform any of its tasks. And State Pollution Control Boards have been created under this provision. However (and this is another noteworthy aspect of the exercise) the SPCBs have been placed under the administrative control of the respective state governments. Though all the legislation on environment is central, the states have been entrusted with the right to enforce stricter standards than those prescribed by the Center. And the adoption of stricter standards by a state, keeping in mind its special circumstances, is not an uncommon practice.2 1 8 Thus even with central legislation at least one-way freedom is allowed to the states to modify (though only to make stricter) the design of environmental policies as they enforce them. The institutional set up for Delhi in this respect is almost the same as of the states even though Delhi is not a state but a union territory renamed “National Capital Territory” to indicate its special status. This difference is underscored by the fact that while the states have “boards” Delhi has a “committee.” Until recently when the situation of Delhi changed and it acquired its own pollution control committee, Delhi’s environmental management was the responsibility of CPCB. But given the critical state of pollution in Delhi, it was considered inescapable to take governance closer to the people and create a body specifically charged with the responsibility for environmental 2 1 7 Vide Article 258 of the constitution (for delegation from Center to states). 2 1 8 In fact, as the states in India are seen to, of their own free will, sometimes enforce more strict standards than the Central legislation demands of them, it in its own small measure belies the “race to the bottom” argument. 161 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. management in Delhi. That is how the Delhi Pollution Control Committee (DPCC) came into existence. DPCC is a “delegatee” of the Central Government. But the important point once again is that it is under the administrative control of the state level government in Delhi, GNCTD. This gives GNCTD an “ownership” role over this function. Funds from the budget of Delhi government are released more willingly, especially given the live concern over environmental issues in Delhi. As an elected government, GNCTD sees this issue as being capable of affecting its popularity and hence accords particular attention to this function. Thus even in the absence of specific legislation providing for bodies at the level of the state government (for our purposes for Delhi specifically) to handle environmental management, things have worked out well under the general provisions of the constitution. The absence of a constitutional provision mandating the creation of such a body and the existence of DPCC as a “delegatee” has its own ramifications. To begin with the right to exist for such a body is not guaranteed by the constitution, leaving its existence at the mercy of the center that has created it. However effective barriers may be faced by the Center if it desires to undo the process it has now set into motion simply because of the fact that in Delhi there exists an informed and environmentally conscious public and a very active concern of the judiciary over environment. Additionally GNCTD too may intervene to hinder any such action on the Center’s part. There exist also certain implications in terms of further decentralization and separation of powers. As matters stand right now (in the constitution) further creation of a local body by DPCC 162 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. for environmental management is not possible. Being a mere “delegatee” the Committee cannot further delegate its powers and functions except as specifically provided by the constitution and the law. But this can, in no way be, construed as indicative of an absence of local government’s involvement in environmental management in Delhi.2 1 9 Though important changes had to be made for improvements in environmental management in Delhi to take place, a constitutional amendment was not required. It was possible to make major changes within the extant provisions of the constitution. A significant change was required in the organization of the government. Decentralization and taking governance closer to people were deemed critical to addressing the intensifying pollution menace in Delhi. However the Central Government was able to achieve the aims of decentralization and of creation of DPCC by taking advantage of the authority for delegation of powers and functions available to it under the original design of the Constitution created in 1951. The provision for delegation discussed above comes from the original design. It goes to the credit of the constitution that it was futuristic enough to foresee and provide for some changes to be brought in without necessitating constitutional amendments. The constitutional changes of the 1970s under Articles 48A and 51A marked nation’s concern for environment. Though environmental management fell in central domain of functions as a “residuary” item,2 2 0 the function was taken to a more appropriate level of operations through the creation of SPCBs and very recently 2 1 9 As detailed elsewhere District Magistrates and their SDMs serve as critical instruments for enforcement of environmental laws. 163 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. through that of DPCC. Evolution of federalism and decentralization in environmental management has grown out of administrative execution and experience. As has often happened in several cases in different countries,2 2 1 the whole exercise of decentralization may have turned out to be a false-step if DPCC had been placed under the Central Government directly. The direct control of GNCTD over the day-to-day working of DPCC and the funding of DPCC from the budget of GNCTD increase the answerability of DPCC to GNCTD and to Delhi’s people and their elected representatives. It can be reasonably speculated that if DPCC was not under GNCTD and had been directly placed under the Central Government, the situation might well have continued to be the same as it had earlier been under CPCB. 6.4 Conclusion: A constitution clearly spelling out the terms and conditions of governance is indispensable for federalism. The constitution must delineate clearly the roles, responsibilities, power and authority of the plural power-holders in federal systems. A constitution must not only serve as an anchor for the basic principles chosen by a nation but it must also allow room for adjustments. India has an extensive constitution constantly in the process of evolution. It has shown buoyancy with regard to development of federal relations. The Constitution has 2 2 0 Two specific provisions exist in Indian Constitution with respect to “residuary power of legislation.” Article 248 and Entry 97 of List I (Union List) of VII schedule under Article 246 make explicit provisions for “residuary power of legislation.” 2 2 1 Ostrom, Schroeder and Wynne (1993): Institutional Incentives and Sustainable Development: Infrastructure Policies in Perspective (Boulder: Westview Press). 164 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. fared well in strengthening, refining and deepening India’s federalism. Though criticism has arisen that it has not gone far enough in addressing concerns of local governance, it has been adapting and there is ample flexibility in the Constitution to enable modification in light of experience. The constitution has served as the foundation stone for federalism in India— providing at the same time stability as well as flexibility; flexibility to enable change so as to strengthen the different elements of federal relations and to smoothen the working of Indian federalism. Change through the medium of the constitution may take different forms. Some times changes may be instituted within the given provisions of the constitution. At other times the constitution itself may need to be amended. A good design would allow room for both stability and flexibility. A constitutional provision may specifically be required to bring about certain changes in the system; the case of local governance in India, in general, and in Delhi, in particular, bears testimony to this. Here, the requisite change could only be brought about through constitutional amendment probably because the institutional set-up and provisions of the enabling domain are too sacrosanct to be tinkered with thorough executive dispensation. The 73rd and 74th amendments were required to ameliorate the emaciated state of local governments and to empower them adequately to make them effective instmments of self-governance. These address the legislative, political, administrative and fiscal aspects. As many of the developments over the past decades show, in the absence of such constitutional provisions, local governments had been, were 165 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. continuing to be and would have continued to be mere “creatures of states” surviving at constant peril of being extinguished out of existence by an executive order. The contrast in evolution of federalism between the enabling and functional (specifically environmental federalism) domains is sharp as the studies from Delhi show. Change in the former needed constitutional amendment. This is hardly surprising as institutional set-up and provisions lie at the very heart of real power. That is why the Constitution has had to make very pointed and explicit provisions in this behalf and the same could, therefore, be altered or modified only by explicit amendments. The provisions of the permanent state election commissions and the five-yearly state finance commissions have paved the way for democracy, fiscal autonomy and political and economic independence of local governments, thus making their existence realistically possible. In contrast in environmental federalism no specific constitutional provision had to be brought in to strengthen the hands of state and local governments—yet environmental management in Delhi has been taken to lower levels and closer to people. In part the fact of a dire environmental situation in Delhi may have aided in the smooth transfer of this function to the lower level of government. Thus not a constitutional mandate but a strong popular sentiment (reinforced by judicial whip) has helped provide an impetus to the working of DPCC. It is, of course, futile to hazard a guess on how things may have shaped-up in environmental federalism in Delhi if, in addition to the constitutional mandate, the strong public sentiment in Delhi in favor of environment too had been absent. Social Science does not allow much room for such controlled experiments. 166 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Chapter 7 Empowerment 7.1 Introduction: Empowerment of each of the multiple governments constituting the federal system is a matter of critical importance. The nature and extent of devolution of roles, responsibilities, powers and authority to sub-national levels provides the basic measure of empowerment. But that is not where ideal federal design can stop. It must simultaneously ensure that the sharing of powers in the system is so devised as to lay down the foundations of good governance in that the responsibilities assigned to each of the players are discharged at an optimum level of performance. This calls for a creativity of approach that goes beyond the formal, rigid structures in order to engender and promote flexible, positive and mutually supportive response by the governments at different levels. Only then can the potential of interdependencies in the system be fully tapped. At a higher level, it is, then, essential that sharing of power and responsibility within the system must be generated, with purposive persistence, to ensure a harmonious balance between the responsibilities assigned to, and the powers devolved on, each level. The latter, it must be stressed, holds the key to the final goal of securing good governance—one that performs at an optimum level. Sharing of powers is integral to federal design—because each level has its own role and place. In federal systems, even as decentralization of roles, responsibilities, powers and authority occurs, both centralized and decentralized actions must continue. 167 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Also, mere delegation or deconcentration falling short of actual transfer or devolution of power to lower levels does not go far enough by the way of the decentralization necessary for federalism. Creative sharing of powers is also required because of the overlaps and interconnectedness in the functioning of different levels of governments. It is evident that empowerment requires both decentralization and sharing of powers. A major lacuna of decentralization exercises has been the half-hearted attempt of nations at decentralization. But even as they decentralize, it is important for nations, especially the Center, to realize the indispensability of sharing of powers done in a creative manner, allowing for recognition of interdependencies, flexibility of approach, supportive responses, and cooperative rather than competitive attitudes by governments at different levels. This chapter focuses on how Delhi has faired in the empowerment of sub-national governments. We examine first the nature and extent of decentralization in Delhi—in the enabling domain and in the functional domain of environmental management. Then we study the situation of sharing of powers in both these domains. A study of empowerment through decentralization in the city-state of Delhi reveals the marked differences in the level of empowerment achieved in the enabling and the functional domains. In the functional domain, the divergence between institutionalized decentralization and actual transfer of role, responsibility and authority is the noteworthy feature. In the enabling domain, far-reaching advances have been registered in the evolution of federalism with the establishment of a democratically elected state level government through a Parliamentary enactment brought in under specific provisions of 168 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. the Constitution of India. However, in several significant ways, it stops short of transferring all of the powers reserved for the full-fledged states of the Union. This is no doubt due to Delhi’s special status as a territory of the Union, being the seat of the Central Government. Decentralization in Delhi must be viewed in the special context of a “Capital territory.” Moreover, as the powers have been bestowed by an act of the Parliament, they can also be withdrawn in a like manner. Thus, Delhi’s evolution to the next rung of the federal ladder is not underwritten by a constitutional mandate as is the case of the states but is subject to the will of the union government/ parliament. In so far as the functional domain of environmental management is concerned, the decentralization process has not made much headway beyond the elementary stage of administrative delegation. Yet, the force of circumstances has led to the delegation of all the powers of the center thereby making the government of Delhi as responsible for environment management as any of the state governments. However, a major lacuna remains in as much as the idea of involving the local government in environment management has barely been floated at this point of time. Thus while environmental federalism lags behind, decentralization of environmental management has informally taken large strides out of sheer demands of the ground situation. As for sharing of power in the enabling domain, Delhi’s scenario appears to be rather bleak. Not only is the availability of commensurate powers to discharge the assigned responsibilities at the intermediate level lacking in a serious way, the system is riddled with potential for inter-governmental conflicts to an alarming extent. This renders the far-reaching decentralization achieved in the government structure a great 169 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. deal infructuous. It is not surprising therefore that governmental performance in the National Capital Territory has, in its very essentials, fallen to unacceptable levels. The federal structure without doubt needs to be redesigned in a way that brings about the kind of creative sharing of powers that holds the key to successful federal design in real world circumstances. Study of environmental management demonstrates both the need for and gains from sharing of powers between the different levels. Exigencies of the situation and the spur of Court’s whip have led to such creative sharing of some environmental management responsibilities that Scheberle’s model, which discusses the division of responsibilities in American environmental policy,2 2 2 is being realized in Delhi. As we will see below this is in sharp contrast to the situation in the enabling domain. In light of the above, the complex subject of Empowerment may broadly be discussed in two parts: A. Decentralization, and B. Sharing of powers. Each of these is then taken up for each of the two domains, viz.— 1. Enabling Domain, and 2. Functional Domain of Environmental Management. The scheme of this chapter will, thus, be as follows: A. Decentralization: 1. Introduction 2 2 2 Reference: Scheberle (1997): Federalism and Environmental Policy: Trust and the Policies o f Implementation (Washington, DC: Georgetown University Press). 170 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 2. In the Enabling Domain (a) Legislative; (b) Political; (b) Administrative; and (d) Fiscal 3. In the Functional Domain of Environmental Management 4. Conclusion B. Sharing of Powers: 1. Introduction 2. In the Enabling Domain 3. In the Functional Domain of Environment Management 4. Conclusion A. DECENTRALIZATION: Federal evolution of the capital city, Delhi, offers an interesting study in the realm of empowerment of governmental entities at the state and municipal levels. Not only the marked differences in the extent of empowerment attained in the two domains—enabling and functional (environment management)—are worthy of note, the variations within the enabling domain are significant in themselves. It also presents a case of decentralization from the center to the state level alongside upward movement of certain responsibilities from the municipal to the state level. Thus it is at once a case of devolution from center, and withdrawal of functions and authority from the local level and its transfer, to the intermediate level of governance. 171 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. The functional domain for the “city-state” shows that even as proposals for decentralization of environmental management are being framed, imperatives of effective implementation and interdependencies of working have led to decentralization of responsibility as well as authority. It has been duly recognized that Delhi’s pollution menace cannot be tackled from the Center but requires constant and persistent executive action at the local level and hence the delegation to the state level. A useful lesson of our studies for countries aiming to decentralize is that as federal nations decentralize, the form of decentralization may vary from domain to domain—due to the pressure of informal adjustments of day-to-day working, due to the urging and emerging issues peculiar to governance in that domain. Day-to-day governance in a particular domain may generate imperatives so that adjustments occur beyond the strict provisions of formal institutional set-up. The examination of the functional domain of environmental management in Delhi demonstrates that urgency of the situation has led to decentralized working even though it has not been done formally. 1. Decentralization in the Enabling Domain: Decentralization is the desired aim of many nations for the promotion of both local self-govemance and democracy. It has the virtues of accountability, efficiency, economy and allowing adaptation of policies to meet the needs of local population. Initially decentralization may be hard to adopt due, among other things, to the deficiency of clear delineation of the concept—as we noted before different formulations use this 172 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. same label for vastly different things, thus creating confusion. Subsequently after a nation has commenced its march towards decentralization, it may face additional hurdles in decentralizing fully. Problems of decentralizing are accentuated given that in actual practice both the central and lower level governments tend to regard it as a process of confrontation to maximize their individual power gains rather than one of joint governance. In addition, rivalries and inter-party conflict among the political parties in power at different levels of government render a smooth transition even more difficult. Delhi’s experiences of decentralization in both the domains reflect these problems. Delhi’s march towards decentralization of power and authority to state and local levels is punctuated with experiences of both conflict and cooperation. Decentralization of power has gone ahead a long way in the enabling domain. At the state level, it has occurred in the form of the creation of an elected, empowered legislature and Council of Ministers responsible and accountable to such legislature. The implementation of nation wide changes for the empowerment of local governments—both rural and urban—have had their impact in the capital city as well, marking the march of decentralization in the ') '} A. political, legislative, administrative, and fiscal realms. 2 2 3 References: Ostrom, Schroeder and Wynne (1993): Institutional Incentives and Sustainable Development: Infrastructure Policies in Perspective (Boulder: Westview Press). 2 2 4 As Joel Samoff has argued the general tendency in development literature has been to pit administrative decentralization against political decentralization by arguing that the former (administrative decentralization) has state-centered perspective with the central authority being its major concern. Whereas the latter (political decentralization) is concerned with local (rather than central) authority; according to this view “Administrative decentralization is regarded as a facade for maintaining or reinforcing central authority, and thus from this perspective is not decentralization at all” (p.517). Samoff himself argues for an appropriate mix of both central and local roles, insisting that “the debate about decentralization has to do with the appropriate balance between centralized authority and local initiative” (p.519) and that “there is no absolute value in either central direction or local autonomy. Both are important at different moments. Both must coexist” (p.521). This is the perspective of this dissertation as well and hence it proposes the 173 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. The peculiar position of a capital territory even in a federal design must be borne in mind in this examination of the federal evolution in Delhi. Following theoretical discussion earlier,2 2 5 the discussion of decentralization in the enabling domain in Delhi can be analyzed in terms of four categories: (a) Legislative (b) Political (c) Administrative (d) Fiscal The experience of federal evolution in Delhi in terms of the above categories presents a mixed picture. Recent years have seen changes aiding the evolution of federal form in the capital—at the same time there remain areas that need greater attention for true empowerment of lower governments and for decentralization. However what can unmistakably be asserted is that Delhi is moving in the right direction for achievement of a true federal set-up with decentralization of power and authority. (a) Legislative Decentralization: With the passage of the Constitution (69th Amendment) Act, 1991, the process of decentralization was carried forward to an appreciable extent. A special territorial examination of different facets of decentralization (like administrative, political, legislative, and fiscal) rather than any one. It would indeed be a mistake to aim to simplify complex social processes like decentralization by ignoring some of their different facets because (as Samoff notes): “Whatever forms it ^decentralization) takes are likely to change over time” (p.523). Thus a comprehensive picture is also important for providing a clear and correct understanding over time. (Reference: Samoff, Joel (1990): “Decentralization: The Politics of Interventionism”, Development and Change, Vol. XXI, # 3, pp. 513- 530.) 2 2 5 See Chapter 4 above. 174 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. jurisdiction—the National Capital Territory of Delhi—was created as a distinctive entity under the overall category of Union Territory.2 2 6 Alongside, the Parliament enacted the GNCTD Act2 2 7 that gave Delhi an independent governmental identity in contrast to being merely an “administration” functioning directly under the suprintendence and control of the Central Government. The Act replaced the Metropolitan Council, a deliberative body, by a popularly elected Legislative Assembly with authority to legislate over all but three of the subjects included in the “state” and “concurrent” lists in the Constitution. The three subjects excluded from the legislative jurisdiction of the Delhi Legislative Assembly are: (a) public order and police, (b) land and (c) New Delhi Municipal Committee, having been retained by the Center under its own direct control. Another major limitation on the power of the Assembly was imposed by the special provision retaining the overall power of the Union Parliament to legislate on any matter in respect of the NCT including those in the state list. These limitations not withstanding, when it is considered that wide legislative powers over a very diverse range of subjects have been granted by a constitutional amendment act to the newly created NCT, it is easy to appreciate what major strides Delhi has taken toward statehood in the Indian union. Though it has not got full-scale devolution of legislative authority but only a supervised version of it, yet the importance of the progressive steps taken by the Union Government in respect of its capital territory must be considered impressive even in terms of 2 2 6 The Constitution (69th Amendment) Act, 1991, Article 239AA renames UT of Delhi National Capital Territory of Delhi. 2 2 7 The Constitution (69th Amendment) Act (1991), forming the basis of the GNCTD Act of 1992, introduced Articles 239 AA and 239 AB into the constitution’s “Part VIII— The Union Territories.” 175 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. international comparisons. The reserved subjects, though important in themselves, leave a vast area of governance under the sub-national entity. And, it must be stressed that, the legislative authority of the Parliament is an exceptional power to intervene only to remedy any grave acts of omissions causing discomfort to or defiance of national authority by the NCT legislature.2 2 8 In view of these extenuating conditions, legislative decentralization and specific delineation of functional jurisdiction have occurred to a gratifying extent in Delhi’s evolution to a genuine sub-national entity in the country's federal set up. What is more, it may have opened the door wider for the territory moving to full statehood, a proposal that continues to make rounds of the corridors of power in the Central Government as well as the GNCTD. The people of Delhi have, thus, gained the right to have their own elected representatives make laws for them on almost all subjects and be directly responsible and accountable to them for their performance in all the areas of governance, except security, land management and the municipal governance for the comparatively small area housing all the major Central Government offices and residences. Major areas of life, viz., education, health, welfare, industry and commerce, civic services (i.e. electricity, water supply, sanitation and waste management), agriculture, urbanization, anti-poverty 2 2 8 The above-mentioned amendment also provides that the legislative assembly of NCT of Delhi shall legislate on all matters of the State and Concurrent lists with certain exceptions (: Clause (3) (a) of Article 239AA). However it also adds that nothing in this provision “shall derogate from the powers of the Parliament” thus granting overriding powers to the Parliament even on the State and Concurrent lists and making the powers of Delhi’s government tantamount to mere delegation. (Reference for the quotation: Akalank Publications (1999): The New Delhi Municipal Council Act, 1994 and The Government of National Capital Territory of Delhi Act, 1991 alongwith Constitution (69t h Amendment) Act, 1991, pp. 19 of the second part). 176 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. programs—the whole panoply of activities—are now under direct democratic control hierarchically) Central Government. (b) Political Decentralization: The establishment of an elected state-level government in Delhi represents a major leap forward for local democracy and decentralization of power in a capital territory. Further, the creation of institutions like state-level permanent Election Commission and the five-yearly Finance Commissions accords greater depth to the existence of local governance. These constitute major steps for meaningful political decentralization in the metropolis of the country by ensuring durability and fiscal independence of local government entities. Plurality of institutions, another essential aspect of decentralization, is important for its role in enabling the provision of services to be tailored to the specific needs of different populations and regions. Decentralization breaks the monopoly of power of a distant center, helps in taking decision-making closer to the governed and in allowing the decentralized authorities at lower levels to create a number of institutions, designed suitably to cater to varied requirements of different segments of the population. Indeed, the first and foremost manifestation of plurality is the very establishment of distinct governments at the three levels. Among the institutions affected beneficially are the political parties at the local levels, which got infused with new life as it became possible for different parties to compete for, and gain, power at different levels by ending the instead of being managed by a mammoth and remote geographically but 177 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. monopoly of the party that is in power at the Center. Thus, currently Delhi has the Union Government formed by the National Democratic Alliance, a grouping of some two dozen parties from all over India led by the Bhartiya Janta Party (BJP), the Congress Party government holding the reins of power at the state level while the BJP, in its own right, prevails in the Municipal Corporation of Delhi. A lot of competition, at times fierce and even unhealthy, is thus generated in the system. In addition to improving governance by introducing competition, plurality of institutions has also helped in enabling specialization. Soon after coming into being, the GNCTD (Government of National Capital Territory of Delhi) took steps to set up specialized statutory bodies to handle the provision of basic amenities, like electricity, fire-services, water supply and sewage disposal, etc. This is clearly a welcome development as the responsibility to extend these basic services has come to this level of government—where it appropriately belongs—thereby introducing greater accountability to the people. The people of Delhi are now better placed to demand performance from the leaders whom they have elected precisely to attend to these basic tasks and who are available at hand and answerable to none other than them. On the negative side, competition among rival political parties results in a lot of conflict and frittering away of valuable energy in mutual recriminations, evasion of responsibility and sub-optimal performance. This would perhaps need to be taken as the price to be paid for bringing government closer to the people, though there is need as well as scope to devise systems 178 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. and institutions2 2 9 that will minimize such costs. Be that as it may, the overall picture is one of real progress having been achieved in decentralization of power from the Center to GNCTD. At the municipal level the two bodies—Municipal Corporation of Delhi (MCD) and the New Delhi Municipal Council (NDMC)—exhibit marked divergence in the extent of decentralization achieved by each. Though both the municipalities share the privilege of having been created by respective Acts of the Parliament—unlike other local government bodies across the country that are the creation of the acts of state legislatures—the mode of their constitution and autonomy of action granted to them are materially different. The MCD is a popularly elected body. The NDMC, on the other hand, is constituted by the Central Government by nominating as many as 7 of its 10 members. The chairperson who is the eleventh member is also an appointee of the Center, though the appointment is required to be made in consultation with the Chief Minister of Delhi. Indeed, the situation is so extra-ordinary that the mode of constitution of the Council has been challenged on the ground of its being repugnant to the express provisions of Article 243R of the Constitution, which require that “all the seats in a Municipality will be filled by persons chosen by direct election from the territorial constituencies in the Municipal area,” the only exception having been made in respect of a few specified categories of representatives, including “persons having special 2 2 9 Such systems and institutions would, for example, include conflict resolution mechanisms that the dissertation argues are essential for smooth functioning of federal set-ups. An example of such an institution specific to the case of Delhi is the Committee to Review the Structure and Working of the Municipal Corporation of Delhi. This is desirable not only given the major changes in the structure of 179 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. knowledge or experience in Municipal administration” who however shall not have the right to vote in the meetings of the Municipality. However in terms of their functions the two municipal bodies have a lot of similarity. The functional jurisdiction of both the civic bodies is firmly secured by the governing enactments that explicitly delineate their “obligatory” and “discretionary” functions. These charge them with unambiguous responsibility for a wide range of civic activities and also grant them a clear mandate secure from the encroachments of the higher level governments. (c) Administrative Decentralization: In the administrative domain, with the replacement of the Executive Council by Council of Ministers, the NCT has the benefit of being ruled by a chief minister and other ministers responsible to the legislative assembly as in the other states. But this progress in administrative devolution has been hampered by the fact that the GNCTD does not have full control over the civil service at the intermediate level. While the states have their own state-level services2 3 0 —both the generalist (managerial) as well as specialist— governance in Delhi with the introduction of the state-level government and redefinition of the functions of MCD but also in view of the pitiable condition of provision of municipal services in Delhi. 2 3 0 It has been observed in the literature that the manning of lower level offices by the personnel of the central government hampers decentralization from being affected as the personnel remains under and owes its allegiance to the central government {E.g., Wunsch and Oluwu (1995); Ostrom, Schroeder and Wynne (1993)}. In the case of the All-India services (notably the Indian Administration Service and Indian Police Service) these All-India services are sufficiently under the control of the state government. The state governments control the promotions, transfers and postings of the officers and that serves as a valuable tool of control for the state government. Awarding of major punishments to the All-India Service officers must be processed through Union Public Service Commission, a Central Government institution, but this is a relatively rare event and the states use the leverage of transfers and postings in lieu. Additionally, while in the initial years the state governments did protest against the All-India services, in recent times they find these adequately suited to their purpose and these protests have vanished. 180 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. recruited and managed by them, the authority of the NCT Government is limited to the subordinate services only. For Delhi, even the provincial civil service (called Delhi and Andaman and Nicobar Islands Civil Service or DANICS) and senior doctors and engineers (who then belong to the Central Government Health Service and Indian Engineering Service) are recruited through the Union Public Service Commission (the UPSC) with the President of India as their appointing authority. This is unlike the states which recruit their own intermediate level services. So, in addition to the central services (Indian Administrative Service or Indian Police Service, etc.), Delhi does not recruit its own intermediate services also (unlike the states), thus finding its recruiting authority limited largely to clerical services. Another factor responsible for keeping the Center’s finger firmly in NCTD’s administrative pie is the office of the Lieutenant Governor who unlike the Governors in the states is more of an Administrator than a mere constitutional head. He has the authority to refer any matter on which he differs from the Executive Council to the Center for its decision, which then is binding on the GNCTD. He is also the Center’s instrument for the administration of the three reserved subjects thus allowing the Central Government considerable scope for interference in administering the affairs of Delhi. Consequently, there remains a major gap in the decentralization and devolution of administrative powers to the NCT Government. Another aspect of administrative decentralization pertains to the role assigned to the national government in the federal design. While the routine control of the national government over the affairs of the territory has diminished drastically, it is certainly not 181 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. confined to one of mere inspection and monitoring. In the three reserved subjects, it remains one of direct, total control. Moreover, these elements of dual control or diarchy also go to make the governance of the NCTD a complex task riddled with confusion, inter-govemmental conflicts and buck-passing.2 3 1 In so far as devolution of executive authority and its consequences for the growth of smooth federal relations is concerned, Delhi’s local bodies present an interesting study. For a decade, until the creation of the elected Metropolitan Council and the Executive Council appointed from among its members, the MCD functioned quite independently, under the remote supervision and monitoring of the national government. Its functional jurisdiction and executive authority, including control over its subordinate, cutting-edge staff, was pretty much secured by provisions made in the parliamentary enactment governing it. Besides, it had no rival at the local level; the only other elected representatives were the seven Members of Parliament who had little direct say in local matters. In point of fact, they depended greatly on the municipal bosses—the powerful Chairman, Standing Committee, the Mayor, chairmen of other committees, the councilors and so on—to get things done to impress, and curry favor with, their own constituents. This unusually exalted position of the MCD started changing with the coming into being 2 3 1 Despite the existence of a clear delineation of tasks, Delhi has seen much conflict between the state government, GNCTD, and the local government, MCD, in recent times. Whereas the actual delivery is the responsibility of one, the monitoring and coordination fall in the domain of the other, thus creating ample scope for conflict. In the domain of health care where GNCTD coordinates and MCD delivers services, the two have been engaged in a struggle to claim credit for control of childrens’ diseases (“One-upmanship goes on between MCD, Govt” in The Times of India, Cities, Thursday, December 9th 1999). And as is detailed below (footnote 227), struggle is rife for the control of TB centers. (Reference: “Govt, MCD lock horns over power to monitor facilities for TB patients” in The Times o f India, Cities, Thursday, December 9th 1999, Posted at 0130 hours 1ST) (http:// www.timesofmdia.com/ today). 182 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. of the Executive Council for Delhi,2 3 2 even though it was a weak one, simply because local government was a “transferred subject” and the Metropolitan authorities, therefore, had more or less the same status vis-a-vis the MCD as the state government authorities. The wheel has turned a full circle now, with the MCD getting deprived, one by one, of functions like city transport, fire fighting services, electricity, and water supply; as noted, these are now under the sway of the GNCTD. These historical ups and downs of the MCD have not been without conflicts and rancor. Indeed, Delhi’s case demonstrates that a clear delineation of tasks for different levels of government may not be a guarantee of smooth inter-govemmental relations in a federal system. For, a lot of ill will between the two has been in evidence in recent times. Much of this, no doubt, is due to inter-party conflicts arising from the attempt to gamer credit and pass on blame. For example, Delhi has performed well over the last year on the control of children’s diseases in the city. A keen tussle raged on who deserved credit for the achievement—the MCD or the GNCTD authorities. The former claim credit as implementers of the program, public health being a function assigned to and carried out by the MCD; the latter’s claim to fame rests on the fact that the Ministry of Health of the Delhi government played its role as the overall authority planning, financing and coordinating the entire effort.2 3 3 In the context of the evolutionary stage of federalism in Delhi, conflicts also arose between the two, when, spurred by the heightened rivalry and cut-throat competition, the MCD 2 3 2 The Executive Council was formed in 1967 under Delhi Administration Act. The seeds for a redefined, reduced role of MCD were sown when transportation was moved from MCD to the Executive Council in 1971. 183 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. laid its claim to certain activities falling under its domain but being carried out historically by institutions under the control of GNCTD or the Center.2 3 4 Yet another area breeding intense and far more intractable conflict between the two concerns the overall responsibility for cutting down delays and malfeasance, ensuring efficient delivery of services and redress of citizen grievances. The Corporation has a large organizational set-up and is a heavily over-staffed organization, employing a personnel of over a hundred thousand. A noteworthy aspect of the organization’s set-up is that the MCD has divided its administrative jurisdiction into 12 zones in the interest of securing decentralized administration. Although the zone is the smallest administrative unit, the Corporation’s zones are further sub-divided into 134 “territorial constituencies” called “wards.” These wards are the units for election of municipal councilors and help in better expression of the residents’ needs and aspirations through their elected councilor, thereby helping in strengthening citizen participation and local self- governance. While the elected municipal councilors do not have any executive responsibilities individually, over the years, they have managed to become the chief go- between the people, particularly of their ward and the executive personnel of all 2 3 3 “One-upmanship foes on between MCD, Govt” in The Times of India, Cities, Thursday, December 9th 1999, Posted at 0130 hours 1ST (http:// www.timesofmdia.com/ today). 2 3 4 For example MCD is now asserting for the taking-over the monitoring of the 33 treatment centers for Tuberculosis, which are run in MCD dispensaries. In all there are 104 such centers out of which 54 are in GNCTD-run hospitals and 17 are under the Center, including NDMC, or NGOs. (“Govt, MCD lock horns over power to monitor facilities for TB patients” in The Times of India, Cities, Saturday, December 18th 1999, Posted at 0130 hours 1ST) (http:// www.timesofindia.com/ today). 184 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. departments of the MCD. This is a position that they protect as fiercely as it is getting challenged by the NCT Government authorities. Not long back, a serious conflict arose from the decision of the GNCTD to give to the Deputy Commissioners2 3 6 of the districts the task to redress citizen’s grievances in respect of all matters, regardless of whether they pertained to a department of GNCTD or any other agency. This, incidentally, was the brainchild of the BJP Chief Minister of Delhi even as the same party also led the MCD. As it happened, soon thereafter, a Congress Chief Minister succeeded him. When the district scheme was put into gear, the MCD, controlled by the BJP, refused to let their officers cooperate with the Deputy Commissioners as they maintained they had their own decentralized set up and mechanism for redressing citizen’s grievances, which included the elected councilors. Such conflicts notwithstanding, the fact remains that because of MCD’s zonal offices and its councilors there exists a dispersed administrative system capable of enabling active citizen participation. The limiting feature, though, is that each of the 12 zones has to cater to the needs of an average population of 1.2 million.2 3 7 Had the scheme of ward committees as envisaged under the 74th Constitutional Amendment been 2 3 5 Even as early as in 1981 when the-then Municipal Commissioner established a system of redressal of public grievances by utilizing the almost idle manpower of the Community Services Department and as its de-motivated personnel, looking for avenues of job satisfaction, swung into action and started achieving results by way of redressing several long standing grievances, the councilors started viewing even those municipal officials as rivals and demanded that they do not deal directly with their colleagues in other departments but only through them, the area councilors “who being the elected representatives, regarded themselves as the sole dispensers of the services (read “favors”) of the MCD.” 2 3 6 It must be borne in mind that Deputy Commissioners (DCs) are state-level officials. There are 9 DCs in Delhi, each in charge of a revenue district. 2 3 7 India’s population now stands at 1.2 billion (approximately) whereas Delhi’s is 14 million (approximately), thus leaving each of the twelve zones to look after almost 1.2 million people. 185 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. implemented in letter and spirit, decentralization would have acquired the requisite depth with each one of the ward committees, on an average, covering a hundred thousand people.2 3 8 Another noteworthy aspect of administrative decentralization in municipal governance in Delhi is that each municipal councilor receives “Constituency Fund” for taking care of small development and miscellaneous works in their constituencies, the actual execution being done by the municipal staff. This too gears the municipal level organization to promote democratic participation and accommodate the diverse interests of different areas of the city. In case of NDMC, however, even though on closer examination, it turns out to be more a case of de-concentration and delegation rather than one of real devolution, the system does allow room for catering to the civic requirements of its population from close, more accessible quarters. The three Members of the Legislative Assembly elected by the residents of the NDMC area, who are the only people’s representatives on the body, do serve as the link between citizens and the bureaucracy. To that significant extent, citizen participation in local governance has been augmented. The existence of this municipal body (NDMC) has also helped obviate the need to rely on the ministries 2 3 8 The Report of the Committee to Review the Working and Structure of the Municipal Corporation of Delhi appointed by the GNCTD has sought to remedy this crucial deficiency in recommending (vide section 8.31): “The Committee recommends that each ward may have a Wards Committee presided over by each of its three members elected as chairperson by rotation. The State legislature in exercise of its powers may provide for the nomination of a) urban management experts, b) representatives of resident welfare associations, c) representatives o f market associations, d) representatives of other civil society organizations connected with civic affairs, etc. The Committee should also, as in Gujarat, be charged with an activist role of getting paid functionaries of the wards to perform their functions effectively, by being empowered to hear public grievances and have remedial action taken.” 186 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. and departments of the Center for the day to day working and avoid lags associated with decision-making by a power-center physically or administratively far-removed. (d) Fiscal Decentralization: In addition to the functional and legislative coming of age, access to and command over resources is another equally important requirement in the creation of a successful federal entity. Delhi scores well in the critical sphere of having an independent fiscal regime of its own. It has at its disposal all the same sources of revenue as any other state. The NCT has its own budget with tax and non-tax sources of revenue, taxation and borrowing powers, consolidated fund, right to fiscal devolution from the Center through the mechanism of the five-yearly Central Finance Commissions—in one word, full charge of her own fiscal and financial destiny. As for Delhi’s local bodies, along with the wide functional mandate, both the bodies have been provided with specific sources of revenue—taxes they can levy, non tax sources they can tap, grants they are entitled to, borrowing powers, etc. Assigned taxes,2 3 9 which are levied and collected by the GNCTD but are to be divided among the local bodies is another secure source of revenue for them.2 4 0 The taxes that they can levy 2 3 9 When the “Part C” states were abolished under the States’ reorganization Act, 1956 Delhi was converted into a Union Territory. In particular, a powerful MCD and in general the local bodies were visualized as a means of carrying forward the democracy in Delhi. A parliamentary provision was made to assign revenues from 4 taxes to the local bodies of Delhi. These “assigned taxes” include the motor vehicles tax, the entertainment tax, the betting tax and the terminal tax. The last of these was abolished in recent past and a grant in lieu of this now flows to the local bodies from the Center. 2 4 0 However as assigned taxes are levied and collected by GNCTD on behalf of the municipal bodies for administrative convenience, the latter are not fully in control of this major source of revenue and it is often 187 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. are also, like the functions, classified as “obligatory” and “discretionary.” The purpose of making certain taxes “obligatory” by law clearly is to preclude the possibility of the local bodies avoiding, for populist reasons, levying certain taxes considered the mainstay of municipal finance.2 4 1 Fiscal transfers, most important of which are grants from the center and the state- level governments, are another important source of income for the two bodies, particularly for the MCD, thus underlining its financial dependence on the higher-level governments. The NDMC is a rare exception in that fiscal transfers make a minor contribution to its income.2 4 2 In general, however, dependence on higher-level ')A 'X governments is seen as an inalienable aspect of inter-govemmental fiscal relations. They suggest that rather than attempting to do away with it, a desirable and viable option is to streamline the system in a way that rescues the local bodies from remaining at the whims and fancies of the higher-level governments. The institution of five-yearly Central Finance Commissions put in place by the founders of the Indian Republic in the Constitution of India had ensured this in the sphere of center-state fiscal relations right lamented that GNCTD has little incentive in exerting to the fullest extent to enhance the collection o f these taxes. But recently the Delhi Finance Commission, which recommended a global sharing of revenues, addressed this limitation. A similar situation was faced in Center-States fiscal relations for shared taxes (for example, income tax). Recently Central Finance Commission (10th Finance Commission) introduced global sharing to overcome this dilemma. 2 4 1 For example, the municipality of the Union Territory of Chandigarh, basking under the patronage of the Center did not levy Property Tax until recently and its introduction now has turned out to be an uphill task. 2 4 2 In the different years from 1984 to 1996, NDMC depended primarily on its internal sources of revenue, which contributed from 75% to 90% in the different years (DFC, Vol.2 in Appendix 6.3). 2 4 3 Cohen and Peterson (1999): Administrative Decentralization: Strategies fo r Developing Countries (Connecticut, USA: Kumarian Press), p.37. 188 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. from the beginning.2 4 4 Recent constitutional amendments already referred to, have carried forward the process to state-local level by mandating the setting up of State Finance Commissions, at five-yearly intervals, for recommending devolution of finances from the states to the local bodies in order to strengthen the financial position of the latter. This is undoubtedly a great leap in decentralization of fiscal power in favor of the local bodies as it goes a long way towards increasing the reliability, impartiality and predictability of fiscal transfers, thereby helping to place state-local fiscal relations on a sound, rational and transparent footing. 2. Decentralization in the Functional Domain of Environment Management: If one were to evaluate environmental federalism in purely textbook terms, the verdict would be easy—but it would not be an accurate or realistic assessment of the situation. One would conclude that Delhi is lagging way behind in decentralizing environmental management. For one thing, environmental federalism is yet to evolve to the lowest level of governance in that the local bodies have not formally been entrusted the responsibility for environmental management in Delhi. Even at the middle, state level, mere delegation has been done. In strictly formal terms, thus, the impression that decentralization of environmental management is yet to be achieved is correct. However looking beyond the formal provisions and examining the actual working of the system is more instructive. It reveals that decentralized working has become a reality of the 2 4 4 Nayak in Jafa (ed.) (1999) praises the “equalizing tendency” of the devolutions via the CFCs (p.17); see also Thimmaiah in there. 189 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. environmental situation in Delhi. Centralization failed to deliver the goods; consequently, decentralization is being resorted to in response to the ground realities. Decentralization is occurring by way of Delhi’s environmental management being entrusted to a state-level agency—having been moved out of the ambit of the union government’s Central Pollution Control Board (CPCB) and decentralized to Delhi Pollution Control Committee (DPCC). In fact an avowed aim of the creation of DPCC was to take governance in this crucial area of the citizens’ well being closer to the people. But more importantly decentralization has come about as the center has not tried to remote control the DPCC but has instead placed it squarely under the administrative control of the state-level Government of National Capital Territory of Delhi (GNCTD). Not only has the function been moved to a level of governance closer to the people, the lower level government has been charged with full responsibility and armed with commensurate authority for accomplishing the task. This not only increases the answerability of the implementers to people’s representatives; it also increases the involvement and commitment of the state-level government as a consequence of the task coming directly in their control. This greater commitment is reflected in the allocation of finances from the state budget for the DPCC even as the Central Government continues to bear the cost of salaries of the employees of DPCC amounting to about Rs. 15 Lac (or Rs. 1.5 million) per annum. But by far the much larger chunk of the finance comes to the DPCC through an annual grant of about Rs 2 crores (or Rs. 20 million) from the state budget for defraying the expenses on implementing various schemes and projects of environmental protection and improvement. This truly reflects the sea change brought 190 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. about by decentralization in practice, bearing witness to the commitment of the GNCTD to its new responsibility in the crucial area of environmental management. Decentralized working is also manifest in the cooperation of different levels of government in pollution control. A case in point is the current exercise of closure of polluting industries in Delhi and their relocation. Following Supreme Court’s specific directions, the Union Urban Development Ministry was appointed as the “nodal” agency and its Minister charged with coordinating the efforts for closure of industries. In actual practice the Minster has to rely on the state-level officials for the grass-roots enforcement. The physical implementation of the orders to actually seal or close-down the offending industries is being carried out by the Additional District Magistrates (ADMs) of Delhi government working under the Deputy Commissioners (DCs). The involvement of DCs for pollution control at this stage is partly a need of the hour in tackling a particularly troublesome problem and partly out of a mandate of the Supreme Court of India. But for the long run too a proposal is underway for decentralization of environmental management to the level of DCs. The DCs would then be armed with powers under the Air and Water Acts and would work under the directions of the DPCC and GNCTD’s Secretary, Environment and Forests. As noted above local governments in Delhi are not responsible for environmental management at present. Though the local bodies have the authority to impose suitable conditions on their setting up and operation in order to safeguard public health while granting industrial licenses, they had been rather insensitive to these aspects. But the idea of decentralization of enforcement of environmental regulations to the municipalities is 191 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. also being floated as part of a larger proposal.2 4 5 If implemented, it would no doubt make them directly accountable to the people along with the GNCTD. In sum it can be said that while constitutionally environment is in the “Central” list of responsibilities, environmental management of Delhi is evolving as a shared responsibility of government agencies at different levels. Conclusion: The evolving governmental set-up at the state and local levels in Delhi leaves little doubt that Delhi is moving in the right direction for decentralization of governance though not without undergoing birth pangs and teething troubles of its own. Its in-depth study provides lessons that are useful for decentralization efforts in other settings. It underscores the fact that though different levels of governments are created and possess the safeguard of their independent regimes, gains from decentralization may fail to materialize to the fullest extent due to inter-govemmental and inter-party competition, rivalries and conflicts. A monitoring role of the state government may itself degenerate into an excuse for micro-management. Hence specific mechanisms for coordination, conflict resolution, and incentives for cooperation must exist. A comparison of the decentralization scenarios in the two domains—enabling and functional—reveals different facets of decentralization. In the former, federalism has been deepened through Constitutional and legislative provisions to provide meaningful 2 4 5 The GNCTD-established Committee on Restructuring MCD (referred to above) has recommended that the smaller municipalities to replace the present mammoth MCD could be involved in this task. 192 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. existence to the lower levels of government. Decentralization is occurring here both at the levels of state and local governments. The creation of state-level, elected government in Delhi with its independent functions and finances provides an effective and much- needed second tier of federalism to Delhi. Even though they have been a part of the historical legacy of the city, the local governments in Delhi like others in the country acquire a more vibrant existence by virtue of the provisions of the 1992 Constitutional amendments. They promise local bodies an existence free of “indefinite supercession” through the medium of permanent, state-level Election Commissions. And they aim to secure the financial future of the local bodies through the 5-yearly State Finance Commissions. Thus federalism in Delhi has been achieved in the enabling domain through formal decentralization. Environmental federalism in Delhi, on the other hand, recounts a story more of informal rather than formal decentralization. The transfer of environmental management to the NCT government and the coordinated working of the different levels of government for pollution control underscores the point that even though decentralized environmental federalism is yet to be attained, environmental management in Delhi is being implemented through decentralized instruments of the sub national government. It is evident also from Delhi’s experience that though real decentralization in terms of devolution of power and authority as distinct from de-concentration and delegation is, a priori, desirable, yet other factors specific to the area may come in the way of achieving the full extent of decentralization. For example, the size and the spread of the area may have an important bearing on the number of levels chosen for 193 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. decentralized governance. The conflicts between different levels of government in Delhi have raised the question of whether Delhi is large enough to have all three levels of government competing for political and administrative space. It is likely that many of these are essentially teething-troubles, given the nascent stages of GNCTD, and will sort themselves out with time. Thus the evolution of federalism in the system must not only be allowed to take place but must be helped along the way in an innovative, imaginative and creative manner. And though increased popular representation is desirable yet Delhi’s case study also highlights the multiparty political dilemma—that different parties in power in an area, particularly, in a sensitive territory housing the Central Government itself, may generate persistent, even vicious, conflicts. All the same, in overall terms, it must be regarded as a welcome development since the promotion of democracy and increased responsiveness of state action help increase accountability with different political parties struggling to expose each other’s weaknesses as well as competing to return a better performance than their rivals. B. SHARING OF POWERS: As noted earlier, decentralization brings in its trail the need for different governments to share power and responsibility in a creative manner. Governance being a continuum rather than an activity that can be placed in watertight compartments, once multiple centers of power are brought into existence sharing of both responsibility and authority often becomes unavoidable. 194 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. The aim of sharing of powers in a federal set up is to secure adequate empowerment of each level of government. For, sharing of powers is meaningful only when powers commensurate with responsibilities are made over to each level. The lower level governments must also have full freedom of action in their respective spheres, which is not to say that the need for inspection, monitoring, and even strategic support from the center can be dispensed with. But such a role of the center should not sap the local initiative nor create crippling dependency at the sub-national level. It is this fine- tuning of relationship that creative sharing seeks to bring about. The key objective to be focused on must be to help generate the requisite synergy among the national and sub national governments. This approach thus rules out any over-awing of the lower by the higher order government while doing away with deficiencies of central provisioning and promoting citizen participation. Sharing of powers acquires a creative dimension when it goes beyond mere decentralization and concerns itself with the issue of matching the nature and quantum of powers and resources available to each player with the responsibility to be discharged by him so as to achieve an optimum level of performance. It is obvious that the concept is far from easy to define tangibly but it is equally clear that without aiming at such optimum power sharing the full potential of federalism must remain largely untapped. The difficulty of translating the concept into a practical idea notwithstanding, it is possible to spell out certain qualifying conditions that need to be taken note of. For one thing, while the formal devolution of powers may work out well for most of the responsibilities to be discharged, it may fail the test of optimality in several others. 195 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Consequently, the system design as well as its actual working must provide for enough flexibility to take care of such specific situations. Secondly, even the most far-reaching devolution of powers and functions cannot do away with the imperatives of shared concerns and the necessity of collaborative action in several areas. In either case, it won’ t do for each of the players—the center, the states and the civic bodies—simply to hold fast to their own realms; they must, of necessity, bring what each one of them has to the table, pool and share their resources and responsibilities and make common cause in the interest of good governance. In its simplest form, therefore, it needs to be examined in the case of Delhi whether powers commensurate with responsibilities have, indeed, been made available at each level. At a more complex level it would need to be assessed as to how far the issues of overlaps and mismatches between the two are addressed satisfactorily in actual practice through creative power sharing. In the enabling domain, Delhi’s example offers a good study of the difference that the lack of real creative sharing of power makes. There is widespread citizen dissatisfaction with the steady decline of quality of life in the capital over the four decades despite its coming under the direct rule of the Union Government. Given the inadequacies and failures on all fronts it is clear that the goal of effective governance is not being realized in Delhi. A study of the enabling domain from this point of view shows that major areas of state government’s activity are still not with the state-level government of Delhi. Moreover, the center retains with itself the means for interfering in the administration of Delhi. On the other hand, the study of environmental federalism in 196 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Delhi helps demonstrate how creative sharing of powers helps in better attainment of governance goals. 1. Sharing of Power in the Enabling Domain: Unique in some ways for a capital-city, the recent moves towards decentralization in Delhi are undoubtedly commendable. With the creation of the “state government,” it has seen an interesting evolution of both centralizing and decentralizing forces. If we look from below, the creation of GNCTD and the transfer of provision of water and electricity from MCD and the accountability of MCD to GNCTD may appear to be centralizing forces. But if we look from the top, the creation of GNCTD and the transfer of provision of transportation and Delhi Milk Scheme to it as well as the delegation of legislative powers from the Parliament to Delhi’s legislature are major measures of decentralization. Thus, Delhi reveals simultaneous centralization and decentralization. Whether this important development contributes to improved governance is not easy to judge as yet but its impact in terms of bringing government closer to the governed is beyond dispute. The unfortunate fact remains that despite a series of changes in the governance structure of Delhi since Independence, a great deal of dysfunctionality of the system is revealed. The sub-national governments, be they at the local or the state level, are not able to provide even the bare minimum requirements of civic facilities. MCD areas (94% of Delhi) and population (96% of Delhi’s population) are acutely deprived of basic education, health and sanitation facilities. Similarly, GNCTD is not able to 197 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. provide even a fraction of Delhi’s needs of water, sewage treatment, electricity and transportation. As the figures below show the actual provision falls far short of the need: Category Need Provision Shortfall Clearing of Solid Waste 5774 MTD 3730 MTD 35%2 4 6 Sewage Treatment 8203 MTD 4885 MTD 40% Water 4765 mlt 2645 mlt 45% Power 2600 MW 2335 MW 9 %24/ Transport NA NA Acute2 4* Pollution Control NA NA Acute2 4 9 Table 3: Shortages in Delhi Such glaring shortages have given rise to serious concern about livability in Capital City. GNCTD repeatedly offers to its frustrated citizens the lack of requisite power and 2 4 6 Interim Report of First Finance Commission for NCT of Delhi (Sep. 1996) states that: “About 4600 MTD (metric tons daily) of garbage is generated within MCD areas. Of this, MCD is, however, able to collect hardly 3450 MTD (75%), thus leaving about one-fourth of garbage uncollected. If the 774 MTD of garbage generated in the unauthorized colonies, where MCD is not discharging the sanitation functions, is also taken into account, the collection efficiency drops to 64%. NDMC is also able to collect only about 70% of the generation of 350-400 tons of garbage.” (p. 17). 2 4 7 For these last three categories (sewage treatment, water and power), the shortfall has been computed based on the report (by Chandrika Mago) “Capital Punishment: Life without the Basics” in The Times of India, Tuesday 14th December 1999Posted at 0130 hours 1ST. (http:// www.timesofindia.com/ today). 2 4 8 Absence of a metro-type mass transit system leaves commuters in Delhi with little choice other than the crowded buses, which are the only means of mass-transportation available. Crammed buses leaning to one side under the excess weight of the riders hanging by the merest hold to the ledge of the bus is a common sight in Delhi. 2 4 9 Delhi’s ranking as the Fourth most polluted city in the world bears testimony to the uncontrolled menace of the pollution problem there. 198 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. authority as the reason for its inability to fulfill their civic requirements to a satisfactory level. Thus, at the moment all levels of the executive branch of the government have failed to rise up to citizens’ minimal expectations of getting their primary civic needs met satisfactorily. Consequently, they are left with no alternative but to knock at the doors of the judiciary, seeking its directive to the government to fulfill its basic mandate of providing livable conditions in the city.2 5 0 Such failures in the capital city, in whose livability the entire political, bureaucratic and military establishment of the country has deep stakes, must lie in the structure of governance that has fallen short of providing the creative power sharing capable of anchoring effective governance. Unavailability of adequate powers at the sub-national level is also a major contributory cause of this palpable failure of governance at the municipal and state level. The retention of three major state-level functions by the center—police, public order and land—is evidence of the fact that transfer of functions to the state level and hence a distribution and sharing of powers to the extent necessary for good governance is yet to be achieved. Security of life, liberty and property which is the primary responsibility of the state government remains beyond its purview because a basic instmment like police, which is typically a state level function in India, has not been placed at its disposal. The absence of control over the coercive arm of state power hampers the performance of several other key functions by the state and municipal governments in Delhi.2 5 1 While 2 5 0 Reference: PIL in 1996 in the court of Justice Kuldeep Singh (of the Supreme Court). 2 5 1 It is an unfortunate fact of Delhi’s development that colonies after colonies have come up against zoning restrictions, defying city planning norms, and building by-laws thereby reducing to naught all efforts to 199 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. security of national leaders and Central Government functionaries and establishments in the nation’s capital is a legitimate concern of Center even matters like peace-keeping, crowd control, traffic regulation, utilization of police force for removal of encroachments, prevention and abatement of unauthorized construction, etc. remain outside the purview of the state and municipal governments. The accountability of police to the people via their local representatives is conspicuous by its absence, leading to a lot of citizen dissatisfaction, even outright frustration.2 5 2 Likewise, remote control of center over land management has led to public lands being encroached and built upon by unscrupulous colonizers by the exercise of their corrupting skills and muscle power.2 5 3 Apart from such undesirable consequences of the retention of the three state level functions by the Central Government, the Center also has the means to interfere in the day to day working of GNCTD through the Lt. Governor of Delhi who is an appointee of the center.2 5 4 At secure a planned development of the city. The developers and builders achieve this by employing a clever mix of bribery and coercion. Lack of control over police has been an important factor in facilitating their strategy to succeed— since apart from genuine failures to get police assistance at critical time there is also an alibi available to ill intentioned officials for their connivance in illegal activities, of course, for a price. Even keeping the streets clear of encroachment of hawkers and squatters has been a victim to this serious lacuna. 2 5 2 A recent report (in The Times of India, 24th Feb. 2000) according Delhi the dubious distinction of having become the “crime capital of India” may well reflect the hazards of remote control of a basically local function, (http:// www.timesofindia.com/ today). {Also, see: “Delhi— ‘Crime Capital’ of India” in “Newsnotes,” Ganashakti’s “Nation” (http://www.ganashakti.com/old/1999/990315/nation.htm) (Last Accessed on May 29,2002)}. 2 5 3 The Committee on Restructuring MCD has strongly recommended {vide Section 8.28 (e)}: “raising and upkeep of municipal police for the limited purpose of removal of encroachment from public streets and other public places, traffic regulation and control, prevention and demolition of unauthorized construction and illegal colonization, should be added as an obligatory function of the successor Municipalities.” 2 5 4 The office of Lt. Governor, though lower in stature to that of a Governor of a state, carries with it far greater executive authority and responsibility than the latter. In a state, all executive power vests in the Council of Ministers headed by the Chief Minster. The Governor has little discretionary powers of his own and is required to act on the advice of his ministers. The Lt. Governor of a union territory with a legislature 200 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. the municipal level too, vesting the entire executive authority of the Corporation in the Commissioner,2 5 5 who is appointed by the Central Government2 5 6 and is typically an officer of the Indian Administrative Service and not an employee of the MCD, has circumscribed the autonomy of the MCD. What is more, the MCD Act makes the Commissioner an “authority” of the Corporation in his own right like the Standing Committee.2 5 7 He is thus not a subordinate of, or accountable to, the Corporation or the Mayor except through the extreme and never yet resorted to process of impeachment which requires for its passage a three-fifths majority of the total number of municipal councilors 2 5 8 The commissioner, thus, also becomes an instrument of the center and its agent the Lt. Governor.2 5 9 The fact that legislative powers of Delhi are not autonomous and council of ministers, as we have seen, retains a large measure of executive power in reserved subjects. Even otherwise, he has a major supervisory role as the agent of the Center to ensure that the government of the territory does not over-reach itself and undermine the ultimate authority of the Center in any way. 2 5 5 Section 59 (The Delhi Municipal Corporation Act, 1957). 2 5 6 Section 54 (The Delhi Municipal Corporation Act, 1957). 2 5 7 Section 44 (The Delhi Municipal Corporation Act, 1957): This section enumerates three authorities of the Corporation as the Standing Committee, the Wards Committee and the Commissioner. 2 5 8 Section 54 (The Delhi Municipal Corporation Act, 1957), sub-sections (3) and (4). 2 5 9 In India, the federal evolution has had a top down origin. The country was divided into the provinces that were mere administrative units, not political autonomous entities. Though a few municipal bodies have had an early origin, the concept had not taken roots across the country until the colonial British Government adopted it as a measure of “training” Indian leadership in the art of self-governance. The Montagu-Chelmsford Reforms of 1919 laid down the foundations of local self-government but in an environment marked by great distrust in the ability of the “natives” to work the system properly. As a consequence, the nascent civic authorities were placed under close supervision of District authorities appointed by, and under the control of, the colonial government. These bodies were not, therefore, entrusted with any police powers, in marked contrast with the civic authorities in the USA. Another noteworthy aspect of municipal administration in India is that the Mayor of a Corporation or Chairman of a municipality is not directly elected and does not consequently carry autonomous authority or stature. They are elected by the councilors from amongst themselves and often for a tenure shorter then that of the councilors. The real power and authority, therefore, vests in the corporation or the council as a whole or in standing or function-wise committees composed of the councilors. 201 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. but are subject to the dominance of Parliament further limits the operational freedom of sub-national governments, in important respects, such as making municipal governments accountable to the GNCTD. Direct control of the center over NDMC has already been taken note of. NDMC is, on the face of it, illustrative of decentralization—but actually it serves as an instrument for central control, given its unique situation. Typically when we examine the issue of whether functions have been devolved commensurately, our fear is of greater centralization. But in the case of NDMC we find that, unlike MCD, the provision of electricity and water to its residents have not been moved up to the state-level. This trading activity—buying from the respective boards under GNCTD (instead of from MCD) and selling to consumers in its area—is a significant source of income for NDMC and has been left untouched. The activity is hardly at the appropriate level. Thus, while granting highly restricted autonomy to NDMC, the center has taken care to safeguard its special status and interests vis-a-vis the other two sub-national entities. As our examination earlier of the parallel with Washington DC shows, this is not an unusual design for cities housing federal capitals.2 6 0 There are certain positive aspects to it even 2 6 0 To recapitulate the parallel with DC: “As in case of Washington DC, the Government of India considered it necessary to retain control over the governance of the nation’s capital. For almost a century after the abolition of the territorial government of the District, including the non-voting member delegate to Congress in 1874, DC was governed by the Federal Government directly through presidentially appointed commissioners. Not until 1973 did the residents of the district get enfranchised with the Congress approving the District of Columbia Self-government and Governmental Reorganization Act, providing for an elected 13-member District Council to serve as the legislative branch and an elected mayor as the chief executive. The residents of Delhi were luckier— they had a number of municipalities and a state government, though with circumscribed powers and functioning under the thumb of national government, both elected by them to cater to their civic needs. In both cases, the final word in legislative matters remains with the national legislatures despite territorial level legislative bodies having been brought into 202 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. though it may be far from the ideal situation when viewed from standpoint of sharing and distribution of power. Much of the conflict we saw in the case of MCD does not arise in the case of NDMC. The body is in a sounder financial state2 6 1 and the level of provision of services is distinctly more satisfactory in its jurisdiction than in the rest of the metropolis.2 6 2 At the same time it fails to achieve such advantages of sharing of powers like empowerment of lower levels of government, popular participation, obviating the scope of predatory encroachment by higher level government and so on. Delhi leaves much to be desired in the matter of appropriate sharing of power in order to establish an efficient governance structure. The Central Government is yet to transfer to GNCTD all the functions that rightfully belong to the state level. Besides, the existence. The approach basically is that the capital’s elected legislature can pretty well make laws to meet local needs and aspirations but it must remain within the parameters acceptable to the national government/ legislature. In Delhi, this is secured by providing that legislation passed by the state assembly receive approval of the Lt. Governor before it becomes law, allowing thereby an opportunity to the Central Government to review it. In executive matters, the approach in the two cases is different. The office of the mayor of DC is a unique institution in that it combines in one office the responsibilities of a city mayor, the county executive and the state governor. In Delhi, executive power at state level is shared between an administrator, the Lt. Governor of Delhi, appointed by the Central Government, and the Council of Minister headed by the Chief Minister and accountable to the legislature. This is achieved by the division of subjects between the two, an example of a functioning diarchy.” 2 6 1 Per capita aggregate receipts of NDMC are much higher than of MCD, the figures being Rs 11832 for NDMC as against Rs 927 for MCD in 1995-96. NDMC depends on internal resources to a major extent and unlike other sub-national governments has almost no dependence on external sources. Internal sources provided NDMC anywhere between 75% and 90% o f its resources in different years of the 1970s-1990s decades (Table 6.3 of DFC report). And whereas external sources accounted for 58% of MCD’s receipts in 1995-95, they contributed only 11% in the case of NDMC for the same period Tables Appendix C and D respectively). Also NDMC’s receipts in contrast to MCD’s are income-buoyant— while serving an almost constant 3% of the population, NDMC’s share in the state’s income has risen from 1.47% in 1984-85 to 1.61% in 1995-96. 2 6 2 Per capita expenditure of NDMC, which is used as an estimate of the level of provision of municipal services, is believed to be the highest in the country— at Rs 2156 in 1984-85 and Rs 12666 in 1995-96. Aggregate expenditure of NDMC saw a comparatively high growth rate of 7.8% between 1984-85 and 1995-96. 203 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. decentralization (though on a wide scale) has been done in such a ham-handed manner as to generate endless conflicts in the system. Apart from the fact that the functions falling in the state list of the Constitution of India have been retained by the center, there is also a clear deviation from the Musgravian ideal.2 6 3 The center has not confined itself to the distributive and stabilization functions but has taken upon itself direct responsibility for such tasks as crowd and crime control, traffic management, land use control (through the Delhi Development Authority) directly reporting to it, control over civil service except at the lowest levels, and so on. Delhi’s case provides certain pointers to fine-tuning Scheberle’s model of sharing and distribution of power to a more generalized context. Scheberle (1997) has argued that in the American case an ideal division of responsibilities has been arrived at with the national government confining itself to monitoring and setting standards and the sub-national governments being responsible for front-line delivery.2 6 4 In contrast, despite clear division of functions and far reaching decentralization of powers in Delhi, sub-national governments have been unable to provide even the bare minimum levels of civic services because of the absence of appropriate, creative sharing of power within the system. There is a clear need for the Center to get out of its historically set frame of mind while looking at the critical issue of Delhi’s governance. It must instead seek to adopt an approach marked by originality of 2 6 3 We discussed above in theory (Chapter 4) under Sharing of Powers that Musgrave’s idea for Fiscal Federalism can provide a reasonable guideline for sharing of powers too, so that sub-national governments perform allocation function and the center performs distribution and stabilization functions. {Reference: Musgrave, Richard A. (1959) The Theory o f Public Finance (New York: McGraw-Hill, 1959), pp.181- 182}. 2 6 4 Reference: Scheberle (1997): Federalism and Environmental Policy: Trust and the Policies of Implementation (Washington, DC: Georgetown University Press). 204 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. thinking, exhibit the capability and the will to break new ground and play an imaginative and active role in developing an effective system of power and resource sharing, coupled with a potent structure of incentives and disincentives that enables, rather goads, the sub national governments to work in tandem at least to provide the basic civic amenities of day to day life. 2. Sharing of Powers in the Functional Domain of Environmental Management: In contrast to the case of sharing of power in the enabling domain in the NCT of Delhi, executive action in the area of environment management has been more effective. This is so despite all the handicaps that the GNCTD is subject to, owing mainly to certain critical areas of governance not having been transferred to it. Indeed, even such transfer of responsibility and authority as has been made to the government of the city-state in this functional domain, has remained far short of the kind of devolution achieved in the enabling domain. For one thing, the GNCTD has not been allowed any legislative authority on the subject of environment management, as this item does not figure in the Second Schedule to the Constitution of India listing the subjects placed within the purview of the sate governments. The entire authority of the NCT government is drawn from a pure and simple delegation made by the Center to the NCT. Earlier, Delhi used to be treated like any other union territory in that its environmental management was handled by the union government’s Central Pollution Control Board (CPCB). That approach failed miserably, 205 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. leading ultimately to strong interventions by the judiciary.2 6 5 In the circumstances, the Center found it advisable to transfer the responsibility for combating pollution along with corresponding authority to the government of the city-state. This was achieved by the creation of a Delhi Pollution Control Committee (DPCC) answerable to the state level government on the same pattern as in the states, followed by the delegation of all the powers of the CPCB to the DPCC. This resulted in some progress but not enough, particularly in the area of pollution from the thousands of industrial units hazardous to public health. Judicial activism persisted leading, as shall be seen below, to the coming into existence of a unique sharing of powers between the Center and the sub-national government, the GNCTD. Following an injunction of the Supreme Court, the Urban Development Minister of Government of India assumed the mantle of the “nodal” authority for all action aimed at ridding the territory of the menace of industrial pollution 2 6 6 The GNCTD under the 2 6 5 The problem of pollution assumed such alarming proportions that public-spirited NGOs and individuals sought the intervention of the Delhi High Court and the Supreme Court of India to coax the unresponsive or ineffective government into purposive action. Two of the areas of major focus were pollution due to automobiles and industries. In regard to industrial pollution, the Supreme Court, in 1996, directed the removal of industries from non-conforming areas, i.e., areas where setting up/ running of industries was not permitted under the restrictions imposed in the Master Plan from Delhi’s (MPD) development. The MPD was drawn up and enforced under the Delhi Development Act and thus had statutory basis. However, industries were allowed to come up, under political patronage coupled with connivance of the bureaucracy, in flagrant violation of the law, thereby giving to the adversely effected citizens a cause of action to invoke the writ jurisdiction of the higher judiciary. The Courts took a serious view of the matter and started issuing stem directives. Non-compliance with judicial directives brought with it the hazard of severe penalties to the extent o f imprisonment being inflicted under contempt of court proceedings. 2 6 6 A report in The Hindustan Times datelined New Delhi, September 20,2000 titled “Cell created to oversee moving industries from residential areas” says “Acting according to orders from the Supreme Court, Urban Development Minister Jagmohan today constituted a cell to oversee the task of shifting industries from the residential areas in Delhi according to the provisions o f the Master Plan. The cell, which will function under the direction of the Urban Development Minister, has 10 members, including Delhi Government’s Urban Development Minister A K Walia and Industries Minister Narendra Nath. Among the other members are Delhi Government's Chief Secretary, a Joint Secretary of the Ministry of 206 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. leadership of its top bureaucrat, the Chief Secretary, was charged with the responsibility of ensuring the closure or shifting of offending units within the strict time frame laid down by the court. This had two salutary effects. First, a real sharing of powers between the Center and the state level government was engendered a la Scheberle—the Center came to be the guiding and monitoring authority with the state being left to take care of front line delivery of anti-pollution measures. Secondly, the usual bane of frustrating interference of the politicians, directly or through their political appointees, in plain and simple executive action was effectively forestalled on pain of the penal consequences of contempt of the Supreme Court. Politicians, who were clearly on the side of the industrialists rather than that of the long-suffering citizens, did not of course give up without a fight. As it happened all seven Members of Parliament from Delhi (the Lok Sabha, i.e., the House of Representatives) including the Urban Development Minister belonged to the BJP, the ruling party at the Center. Since the GNCTD was in the control of the rival Congress Party, six of the MPs, leaving out the Minister, approached the higher level of the Central Government on the plea of policy review, going right up to the level of the Prime Minister of India in order to frustrate the ongoing executive action— but to no avail.2 6 7 The Prime Minister, heeding his own better judgment and also perhaps 'J f.Q the advice of his Urban Development Minister, simply refused to oblige. Environment and Forests, the Managing Director of Delhi State Industrial Development Corporation (DSIDC), the Chairman o f Delhi Pollution Control Committee, a senior representative of Central Pollution Control Board, the MCD Commissioner and the Engineer Member of Delhi Development Authority (DDA). The Joint Secretary in charge of Delhi affairs in the Urban Development Ministry will be its member-convenor.” (http://www.hindustantimes.com). 2 6 7 According to a report filed by The Hindustan Times Correspondent datelined New Delhi, November 20, 2000, “Six of the seven Bhartiya Janta Party Lok Sabha MPs from Delhi today met Prime Minister Atal 207 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. As the implementation of the directives of the Supreme Court had to take the form of a campaign, the newly established District Administration of Delhi headed by the Deputy Commissioners came into its own as the implementing arm of GNCTD for identifying and sealing-off the polluting industrial units. The Industries Department of the GNCTD and the public undertaking under it, the Delhi State Industrial Development Corporation (DSIDC), were rescued from the stifling restrictions placed on them by the political bosses, formally and informally, in order to protect the industries that had been allowed, in the first place, to come up with their blessings in violation of the laws. Their plans for developing vast stretches of land at the periphery of the NCT for shifting the offending units in a planned way had been shelved or their implementation retarded due to such motivated interference.2 6 9 Behari Vajpayee and sought his intervention in the ongoing industrial unrest. They reportedly blamed Mr. Jagmohan for the situation and urged the Prime Minister to take immediate steps to resolve the problem...” {Reference: “Successive Govts to blame: Jagmohan” in The Hindustan Times, Tuesday, November 21, 2000, New Delhi, (http://www.hindustantimes.com)}. 2 6 8 Thereafter, as late as January 18, 2001, another report (“Industries Issue: Adamant Khurana to go on fast”) in the same newspaper (The Hindustan Times) highlights the helplessness of these politicians in the following terms: “Mr. M.L.Khurana, former Chief Minister of Delhi and now national vice-president of the Bhartiya Janta Party in power in the center, told news-persons that in the last two months he had met both Prime Minister Atal Behari Vajpayee and Home Minister L.K. Advani separately several times to highlight the plight of the owners and workers of the industrial units in the non-conforming areas in the Capital. The BJP leader said that he had clearly pointed out to them the need for a change in the Master Plan and relocation of industries to developed site. Sealing of units apart from affecting their owners would leave their workforce jobless. Mr. Khurana said that Mr. Advani had told him that he (Union Urban Development Minister Jagmohan) did not listen to him. ‘I have also written to Mr. Vajpayee several times, the last letter dated Jan 4. In it I have told him that he is the court of last resort to me and how deeply anguished I feel about the industries issue.’ When asked about Mr. Vajpayee’s response, Mr. Khurana said that he would speak on the matter after a few days.” (http://www.hindustantimes.com). 2 6 9 The following report (“Jagmohan lashes out at Delhi Govt, MCD”) in The Hindustan Times of September 20, 2000 is noteworthy in this regard: “At a Press conference held here today, Mr. Jagmohan said that the Supreme Court judgment dated September 12 had clearly indicted the Delhi Government and the Municipal Corporation of Delhi for making no effort to implement the court's orders and maintaining rule of law. The court had, in fact, observed that there had been a systematic effort to see to it that the court’s orders were not implemented 208 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Along with a creative sharing of role and responsibility between the Center and NCT government, the unique authority acquired by the Chief Secretary enabled him to involve the municipal bureaucracy into the implementation process, through the MCD Commissioner, who was also (along with the Chief Secretary) at the receiving end of the Supreme Court’s notice for initiation of contempt action, thereby ruling out any effective interference from the political executive of the MCD. Though legally under the MCD Act the entire executive power vests in the Commissioner yet in practice it is bent to the 9 7 0 political will in diverse ways. But in this case that too was checkmated. Thus, a unique sharing of powers effectively came into operation involving all three layers of government, enabling each one to play their role and discharge their responsibility in a very purposeful manner. The impact of the judicially enforced working relationship of shared concern and coordinated, joint action was remarkable in its accomplishment that was widely welcomed by the adversely affected citizenry as the sealing of polluting industries went apace comprehensively. The cause for concern, of course, is that it did not come about as an outcome of the normal functioning of a well- designed and faithfully implemented system but only as a consequence of very special and somehow in situ regularization of polluting industries was effected and wrong doers not punished, the Minister said.” (http://www.hindustantimes.com). 2 7 0 All that the deliberative wing (the elected house) could do was to call an emergency meeting of the Municipal Corporation of Delhi to discuss the issue of shifting of polluting industries from the non- conforming and residential areas to the conforming areas and to blame “the Municipal Commissioner for taking hasty decision to seal the industrial units.” (Note that the blame is for acting hastily and no direction is given to act to withdraw or frustrate the ongoing action.) “Later a resolution passed by the leader of the House said that non-polluting industrial units would not be sealed till alternative site for relocation was allotted to the owners of such units. It was also resolved that the definition of small-scale industries as suggested by the Jagdish Sagar Committee be accepted and enforced.” (Thus action against polluting units was excluded from the ambit of the resolution.) {Vide “Commissioner blamed for hasty decision” in The Hindustan Times report dated November 21, 2000 (http://www.hindustantimes.com)}. 209 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. circumstances brought about by inescapable judicial directions. The case does, all the same, illustrate the indispensable role that purposeful power sharing can play in fulfillment of the promise of federal governance and presents a convincing argument for incorporating into a successful federal design the structures and conditions that would make it happen in routine. Conclusion: The criticality of achieving sharing of powers above and beyond formal decentralization is thus revealed by the study of Delhi’s experience in empowerment of sub-national governments. An important lesson to be drawn from the comparison between the effectiveness of empowerment in the enabling and functional domains is that even far reaching decentralization may remain unproductive in providing good governance in the absence of purposive and enlightened sharing of powers among all three levels of government. Rather, even major deficiencies in the matter of due transfer of powers can be overcome through sharing of powers as has been demonstrated by the advances being made in the capital city in the functional domain of environmental management. It is important, of course, that such creative sharing of powers is not an externally imposed, one-time occurrence but is built into the system itself, with the aid of well designed institutional mechanism and appropriate incentives. Sharing of powers may, indeed, be viewed as the soul of empowerment and decentralization, its form. 210 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Chapter 8 Conflict Resolution 8.1 Introduction: Admitting that conflict is inherent in federalism is of primary importance in devising conflict resolution mechanisms for it. It is also important that this understanding be reflected in the contract or covenant of governments, that is, in the constitution. Federal systems must explicitly devise and define institutions for conflict resolution. Given the vast variety of conflicts and given basic differences in the kinds of conflicts, a number of different mechanisms need to be relied upon for its resolution. Thus a good design would not depend on just one conflict resolution mechanism but would provide several different avenues or modalities—like mediation, adjudication, arbitration, etc. What do the empirical studies from Delhi suggest to us on these lessons of theory? Probably institutions like Australia’s Grants Commission and the Indian Finance Commissions reflect this understanding. Delhi offers significant experience illustrative both of the necessity and the ways of resolving such endemic, if not inescapable, conflicts. Our examination shows that there is a much clearer recognition of the problem and definite provision for it in the enabling domain as against the functional domain of environmental management. A wide array of institutions serve to resolve conflict in the different areas of the enabling domain, as the examples we take-up below show. While the need for conflict resolution is obvious in the functional domain of environmental management as well, neither pre-planned nor mid-course conflict 211 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. resolution mechanisms are found to exist or found to come into play. Possibly this reflects the extent of evolution of the two arenas examined. Consequently, the only institution at work as a conflict resolution mechanism in environmental management is the portal of last resort, the Supreme Court of India. There has been much conflict between the different levels of government over pollution, particularly over issues that have grown to become important public concerns. Given the dire situations, one commonly adopted method for escaping responsibility and blame was buck-passing. As we will see below the intervention of the Supreme Court sometimes resolved issues. Sometimes questions have been raised over the appropriateness of this intervention, thus pointing to the need for establishing other conflict resolution mechanisms. We also see that the Supreme Court’s own ability to intervene has been founded largely on and supported by the innovative instrumentality of “Public Interest Litigation.” Nevertheless as the examination below will establish, our cases from Delhi help substantiate the lessons of theory. 8.2 Conflict Resolution in the Enabling Domain: That conflict is inevitable and that reliable conflict resolution mechanisms are indispensable is evident both in theory and from the observation of real-life cases. The likelihood of certain conflicts is so well anticipated that methodologies for their obviation or resolution are provided ab initio. For example the Commonwealth Grants Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Commission2 7 1 of Australia and the Indian Finance Commissions both recognize the need for independent bodies to address issues of distribution of finances among different levels of government. Several other institutions in the Indian Constitution also help forestall conflicts and resolve them as they arise. Particular note must be made of the major ones along with the roles discharged by them. The Election Commission of India (Article 324) underpins the very foundations of democracy in the country by plating an impartial role in conducting free and fair polls to the Parliament and the state assemblies. (As noted already, similar responsibility is cast on the state election commissions established under the 73rd and 74th Amendments in respect of the local bodies, both rural and urban.) The Commission deals with a multitude of political parties—scores of them—in the states and at the national level, granting them recognition as national or state level parties (from which follow important electoral advantages). It lays down and enforces the code of conduct and also performs the crucial task of settling inter-party disputes, including those arising out of frequent splitting of parties, allegations of mal-practices against rival parties, and so on. The five-yearly Union Finance Commissions and the state finance commissions (Articles 280 and 2431 & 243Y) lay down the principles for the sharing of revenues on current account and make precise recommendations in this regard. The Planning Commission—not provided for in the Constitution but created by a resolution of the Union Government—is responsible for allocation of developmental 2 7 1 Established in 1933, this is an advisory board for assessing (based on the principle o f fiscal equalization) the financial assistance claims made to the “Commonwealth” by the states. {Reference: http://www.cgc.gov.au/CGCGeneralPage/historv of cec.htm (Last Accessed on 29th May 2002)}. 213 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. resources in a transparently fair manner between the center and the states and among the states themselves. The Public Service Commissions, at the Center and in the states (Articles 315, 320 and 323) are non-political, professional bodies responsible for the management of the public services of the union and the All-India Services that are shared between the union and the states. They resolves various issues of these services relating to the structure, recruitment, discipline, morale, deputation of officers from central cadres to states and vice versa, etc. The Comptroller and Auditor General of India (CAG) (Article 149) is the sole authority vested with ensuring that government financial activity conforms to budget appropriations and established norms and procedures. Through the Accountant Generals in the states, functioning under his direct control, he exercises similar control over state finances. He works closely with the union and state legislatures and his views are accorded full consideration by both the governments and the legislatures. The Inter State Council (Article 263) Council is specifically meant for “inquiring into and advising upon disputes” and for “investigating and discussing” and “making recommendations” on subjects of common interest to union and all or some of the states 272 or to two or more states. 2 7 2 Additionally, Chief Ministers’ conferences provide a venue for discussion of inter-state disputes. {Reference: B. P. Jeevan Reddy: “Challenges of Diversity and Federalism in an Era of Globalization” (Session 2 A) (http://www.ciff.on.ca/Reference/documenLs/docb26.html) (Last Accessed on June 3, 2002 at 7:54am)}. 214 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Speaker of the Lok Sabha (the House of the People) (Article 93) is a key authority in conducting the sessions of the Lok Sabha, the pivotal institution of parliamentary democracy. He provides a transparently impartial stewardship of the house and helps lay down healthy conventions which are as important national legislative process as the letter of the law. Time and again, conventions and precedents of the British Parliament, the mother of parliaments, are cited and followed. The election of Speaker is sought to be concluded on consensus, the deputy speaker is taken from the foremost opposition party and both of them are expected to conduct themselves with exemplary objectivity and impartiality. Only then are they able to manage the proceedings in the house, despite the highly politically charged and often acrimonious atmosphere. A lot of backstage mediation and management of conflicts among political parties by the speaker are also routinely involved. The rulings of the Speaker are received with respect and accepted with grace, as he is the final umpire, the proceedings of the house being privileged and its jurisdiction fully autonomous. Furthermore, the Vice-President of India holds the position of the Chairman of the Rajya Sabha (or the Council of the States) (Article 89). Being detached from the day-to- day politics of governance, he is well placed to discharge a role (in the Rajya Sabha) similar to that of the Speaker of the Lok Sabha. The Governors of the states are expected to be above and beyond party politics even though they are political appointees of the ruling party at the center. They can help remove misunderstandings so easy to arise when the ruling parties at the center and in a state are in opposition to one-another. Governors of standing and moral rectitude are an 215 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. asset in this regard even as the institution has, unfortunately, come under a cloud owing to uneven performance of a number of governors, particularly over the last three (or so) decades. The Reserve Bank of India, the nation’s central bank, being the custodian of sound monetary policy of the country, in particular, and an independent authority to advice on economic policies, in general, plays an important balancing role in the matter of access to credit by the center and the states. Certain other measures to address conflicts as they arise are also provided for in the Indian federal design. For example, the Constitution vide article 262 authorizes Parliament by law to provide for the adjudication of any dispute or complaint with respect to the use, distribution or control of the waters of, or in, any inter-state river or river valley. And Parliament can also bar the jurisdiction of the Supreme Court or of any other court in that dispute. The resolution of the dispute over the waters of Cauvery River is a case in point—a tribunal was set-up to mediate this long-standing inter-state dispute and give its award. Especially in evolving systems, the institutional design itself may need to be fine- tuned from time to time, for example through streamlining of procedures, in keeping with new developments and in light of actual experience to minimize conflict. For example, in the case of Delhi where conflict has arisen over the flow of central assistance to local government,2 7 3 there is a glaring need to re-define some of the procedures keeping in 2 7 3 Reference: It is seen from a recent report that as the Central allocation was channeled through it, the GNCTD deducted for repayment of old loans (that the MCD had failed to do) from the plan allocation coming from the Center to MCD. [“State govt, civic body funding tussle widespread” in The Times of 216 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. mind the newly created government at the intermediate, state level. Basic questions on fiscal federalism have arisen in this conflict. Is the GNCTD within its rights in withholding a part of demarcated central grant to municipal government to set-off the debts of MCD? Or, more precisely, to what extent is it within rights? Or, what limitations, if any, must exist on the action of the state government? If the loan or grant is intended for particular purposes (as plan allocation is), then would it be more desirable for the central assistance to flow directly from Center to municipal governments? However, even with institutional safeguards some amount of conflict is inevitable in day to day working and hence specific mechanisms for conflict resolution are essential. Many different institutions have come handy for conflict resolution in Indian federalism for adjudication as well as arbitration. For example, while the Narmada Water Tribunal was the original arbiter of the interstate dispute, the Supreme Court had to later step-in to adjudicate on the differences that had arisen over the implementation of the award. Thus the Supreme Court has played an important role (even aside from its assigned role of interpreter on the Constitution) in making the awards more meaningful and in controlling conflict. In different federal systems, courts have played a critical role in intergovernmental conflict resolution.2 7 4 The Supreme Court is of course the final destination to seek conflict resolution between any two or more entities, whether private India, Cities, Wednesday Is t December 1999. Posted at 0130 hours 1ST (http:// www.timesofindia.com/ today)]. 2 7 4 Kearney (1993) highlights the important role that courts have played in environmental federalism in USA {Reference: Kearney, Richard C. (1993): “ Low-level Radioactive Waste Management: Environmental Policy, Federalism and ‘New York’” (Publius: The Journal o f Federalism, 23, Summer 1993)}. 217 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. or governmental. High Court and other judicial bodies play their own roles as per the law at different levels. Thus, in case of the Cauvery waters award given by the tribunal, the Supreme Court had come in to resolve issues arising out of its implementation. This is a natural form of intervention given the design of law and an independent judiciary enhances the viability of this option. The Indian central bank has also played its part in smooth working of federalism. It was found that the states were resorting to over-draft facility indiscriminately, using it as a means for deficit financing. This was affecting the management of the money supply adversely. The Reserve Bank of India intervened to put a stop to this practice, thus correcting a distortion of the monetary system. On the side of fiscal federalism, both the Planning Commission and the Finance Commissions have been critical to the functioning of the Indian federal system. These are mechanisms for fiscal sharing that dynamically assess the situation by undertaking periodic reviews. The critical difference in the domain of the two bodies is that while the Planning Commission is responsible for transfers for planned development projects to the states and the union territories, the Finance Commissions handle the sharing of the other tax revenues between the different governments. Planning Commission is credited with enabling rapid development process in India.2 7 5 Amal Ray (1966) summarizes the 2 7 5 References: Santhanam, K. (1960); Grewal, BS (1974). In the 1960s and ‘70s many subscribed to the idea of planning being necessary for rapid economic growth and development, including: Myrdal, Gunnar (1970): An Approach to the Asian Drama: Methodological and Theoretical (New York: Vintage); Agarwala, AN and SP Singh (eds.) (1970): The Economics o f Underdevelopment (London: Oxford University Press); and Novack, DE and R Lekachman (eds.) (1964): Development and Society (New York: St. Martin’s Press). 218 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. continuing effect of planning on fiscal federalism2 7 6 in India in stating: “union-state financial relations under the constitution are increasingly being reoriented through the operation of the planning mechanism.”2 7 7 The eleven Central Finance Commissions (CFCs) have provided an effective institutional mechanism for distribution of financial resources between the Center and the states; and the State Finance Commissions (SFCs) are now doing the same for state-local levels.2 7 8 These thus address the root causes of fiscal conflicts. The CFCs have served a useful role in fiscal federalism2 7 9 and similar high expectations exist for the state finance commissions.2 8 0 Even though several structural issues need to be addressed before SFCs acquire the necessary character 2 8 1 2 7 6 In a summary fashion, we may note that the planning process has aimed at promoting rapid development in India through providing transfers for development projects from the center to the states and the union territories. Allocating developmental resources between the center and the states as also the states themselves, the planning process has had a significant impact on India’s federalism in general and fiscal federalism in particular. 2 7 7 Ray, Amal (1966): Inter-governmental relations in India: A Study in Indian Federalism (New York: Asia Publishing House) p. 90. 2 7 8 The setting-up of State Finance Commissions is a desirable development for strengthening local autonomy by institutionalizing flow of funds on a rational basis thus relieving the third tier of government of their precarious financial situations. To quote: “in a way, the financial position of local government and its relationship with the government shape the decentralized and deconcentrated pattern of the governments themselves. The inadequate local revenue and increasing local expenditure attract government interference, resulting in erosion of local autonomy.” {Reference: Muttalib, M.A. and Mohammed Akbar Ali Khan (1983), Theory of Local Government (New Delhi: Sterling), pp. 180-81}. 2 7 9 Reference: See, for example, Nayak and Thimmaiah in Jafa (ed.) (1999). Grewal, B.S. (1974) describes the CFCs to be the “custodian of the constitutional arrangements relating to center-state financial relationships” (p. 25). 2 8 0 References: Srivastava, D.K. in Jafa (ed.) (1999); Singh, Nirvikar: “Miracles and Reform: Policy Reflections for India,” SMU India Symposium, March 27, 1998; Joshi, B.M.: “State Finance Commissions in India: Organization and Emerging Issues,” Indian Journal o f Public Administration, April-June, 1996, Vol. XLII, #2, pp.178-184; Gulati, I.S.: “Financial Devolution to Local Bodies: Role of Finance Commission”, Economic and Political Weekly, October 1, 1994. 2 8 1 Reference: Many State Finance Commissions, for example those of West Bengal, Karnataka and Delhi, have noted in their reports their inability to or difficulties in securing data and information and problems 219 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. with their initial reports the SFCs are already on their way to making a mark. The different SFCs have not confined themselves to merely recommending the relative shares of the state and local governments in divisible taxes. But they additionally conducted an in-depth analysis of the existing financial situations of the state and local bodies, thus producing detailed reports that will serve, hopefully to improve fiscal management in the state and local bodies, besides serving as historical records of the state of affairs.2 8 2 Moreover, while the 73rd and 74th amendments suffered from the glaring deficiency of not enumerating the functions of the local bodies,2 8 3 which would crucially affect fiscal federalism, SFCs found such tabulation to be a pre-requisite to assessing the fiscal position and hence compiled this list as well.2 8 4 They also provided for representation of needs by inviting the involved governments to present their memoranda. Thus, similar to the Australian Grants Commission,2 8 5 even though they were not intended to be so, the SFCs have also introduced an element of bargaining—since typically the demanding due to lack of personnel, infrastructure etc. that hampered their working. Joshi, BM (1996) (detailed reference above) argues that many issues need to be addressed still. The criteria for membership as well as the qualifications of members, the working time-periods of the Commissions, the expected date of implementation of the report, etc. must be specified to make the working o f the system more meaningful. 2 8 2 Report of the Delhi Finance Commission serves as a good illustration of this. 2 8 3 Reference: Dutta, A: “Constitutional Strengthening o f Local Government in a Third World Federation”, Indian Journal o f Public Administration, April-June 1996, Vol. XLII, #2, pp.144-152. 2 8 4 See for example the reports of the First Finance Commissions of Delhi or West Bengal. 2 8 5 See Thimmaiah (1976): Federal Fiscal Systems o f Australia and India: A Study in Comparative Relevance (Associated publishing House, New Delhi); Grewal, B.S. (1974): “Fiscal Federalism in India” (The Australian National University, Canberra, Research Monograph # 3); Ray, Amal (1966) referred to above (specifically chapter 5) for a comparative exposition. Thimmaiah (1976) considers Australian system of loan transfer, where transfers are made only to those governments that place their demands for them to be a better system. 220 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. governments offer some assessment of their needs as well as resources, including potential for raising additional finances. Even apart from some established mechanisms that address conflict either before or after it has arisen, certain other factors may help resolve conflicts; however, their role cannot be taken for granted. Much is reported these days on the on-going conflicts of GNCTD and MCD.2 8 6 An interesting case of conflict-resolution recently occurred in Delhi through the medium of the office of the L-G (Lieutenant Governor), illustrating arbitration and give-and-take bargaining. As we have noted before, a struggle for control has been going on between GNCTD and MCD. MCD has been asserting to take over the control of the seven “colony” hospitals. With the intervention of the L-G, an exchange of responsibilities was affected between the GNCTD and MCD over sewer maintenance and hospitals. The control of the hospitals as well as the central assistance was split between the two governments. Life or viability of such an agreement is contingent, among other things, on the extent to which different parties, in the long-run, feel content with the decision as also on their perceptions about the impartiality of the adjudicating body. In general, established, impartial, independent institutions for arbitration or adjudication are better likely to provide long-term solutions. With the L-G as the broker, there is a dependence on that individual’s persona or ethos, willingness, ability and acceptability as an arbiter. In particular since the L-G is the representative of the Center,2 8 7 politics may 2 8 6 These conflicts have been detailed earlier, especially in Chapter 7 in Separation of Powers (footnotes) above. 2 8 7 The special position of the Lt. Governor of Delhi has been brought into limelight via an earlier footnote above—especially that: “Even otherwise, he has a major supervisory role as the agent of the Center to 221 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. come into play with different parties in power at the different levels. As a newspaper report brings out, in the present settlement there is a sense of helpless acceptance (that does not bode too well for it) rather than willful exuberance of reaching an impartial, balanced and well-deigned agreement. To quote: “Senior BJP leaders, forced to take back their words on not accepting anything less than all seven hospitals, say they had no option but to accept the L-G’s verdict.”2 8 8 Additionally, one of the terms of the recent agreement bars any further review.2 8 9 In general, however, further options for appeal may be necessary. And till the deal actually comes into effect, its success cannot be vouched for.2 9 0 Like the relative position, independence and autonomy of state governments vis- a-vis the Center have been critical issues and often the bone of contention in Center-state federal relations, similar issues are arising in federalism at the state-local level. A case in point is the struggle of MCD against its newly established state-level government (GNCTD) for control, independence and autonomy. Useful lessons must be derived from ensure that the government of the territory does not over-reach itself and undermine the ultimate authority of the Center in any way.” 2 8 8 It is interesting to look at this comment of senior BJP leaders in light of the fact that the same party is in power at the center. And the Central Government, typically, appoints its own people to important posts as the L-G too is of the same party. Naturally a different political opponent may fail to even get this far. [Reference: Times of India, 3 March 2000, Cities, Delhi, “MCD to Control 4 out of 7 ‘Colony’ hospitals” (http:// www.timesofmdia.com/ today)]. 2 8 9 To quote once again from the same report: “An important part of the deal is the provision for no future review of the hospitals’ ownership. ‘Neither MCD nor Delhi government can demand control over each other’s colony hospitals at a later stage’ said a Raj Niwas source”. (Note: Raj Niwas, housing the L-G’s office and residence, is the lingo for L-G’s office.) {Reference: ibid.}. 2 9 0 As the same report notes, the handing-over, which was to be affected immediately, has already been postponed once. {Reference: ibid.}. 222 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. the experiences in center-state federalism to foresee and plan ahead for conflict and conflict resolution in state-local federal relations. 8.3 Conflict Resolution in the Functional Domain of Environmental Federalism: The study of cases from environmental federalism highlights with greater gravity the need for conflict resolution mechanisms. Not only are the conflicts more pronounced and hence the need more evident but this need is also stressed by the scarcity of conflict resolution mechanisms at work in environmental federalism as against the wider variety of recourses at work in the enabling domain. Probably both these (the conflicts and the scarcity) are indicative of the evolutionary situation in this functional domain as against the more developed enabling domain. In Delhi, environmental federalism is currently witnessing conflict between different levels of government and—unusually—even between the branches of governments. However, the only institution visible for adjudication or for mediation is the Supreme Court—and as questions are raised about its decisions, the need for establishing other conflict resolution mechanisms is highlighted. At the very least, the viability2 9 1 of the Supreme Court decisions is being questioned and at other levels, the competence 2 9 2 of the Court in certain issues is being doubted. We 2 9 1 For example, in the recent CNG debate (which we discuss in detail below), the state government has accused the Supreme Court of being blind to the ground level realities and to implementation problems in pronouncing its judgments. {Reference: “Executive versus Judiciary: Fueling Contempt” (India Today on the Net, April 16,2001 Issue, Home, Environment: Clean Delhi)}. 2 9 2 The Court’s technical competence is being questioned for deciding to convert all public transport from diesel to CNG. {Reference: “Executive versus Judiciary: Fueling Contempt” (India Today on the Net, April 16, 2001 Issue, Home, Environment: Clean Delhi)}. 223 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. discuss now some cases of conflict in environmental management in Delhi to substantiate this need for and paucity of conflict resolution mechanisms. The case of “Maili Yamuna” (that we have discussed in greater depth elsewhere2 9 3 ) illustrates amply the scope for intergovernmental conflict in federalism. The path of river Yamuna falls in three states—Delhi, Haryana and UP. Not only was the issue of handling pollution of the river buried under buck-passing between these three governments but also between the agencies of different governments in Delhi. Commenting on this sad state of affairs, the concerned Supreme Court bench noted “It appears to us that with the existence of numerous agencies in Delhi, no single entity can be held responsible for cleaning-up the river.”2 9 4 In this case the Court was able to resolve the matters. It held the government of NCT of Delhi responsible for cleaning the river, setting a 2003 deadline for the task. Additionally, it directed the other two state governments (UP and Haryana) to ensure that effluents discharged conform to prescribed formula and to control pollution of the river.2 9 5 It is interesting to note that the instrument of Public Interest Litigation was useful for the Supreme Court here as it was 2 9 3 Reference: This case has been examined above in the chapter on Partnership and Cooperation (in empirical part). 2 9 4 As quoted from the judgment of the Supreme Court bench (comprised o f Justices B.N. Kirpal, Ruma Pal and Brijesh Kumar) in “SC gives Delhi two years to clean up Yamuna” in The Hindustan Times, Wednesday, April 11,2001, New Delhi ((http://www.hindustantimes.com). 2 9 5 Reference: “SC gives Delhi two years to clean up Yamuna” in The Hindustan Times, Wednesday, April 11, 2001, New Delhi ((http://www.hindustantimes.com). 224 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. able to initiate proceedings of its own accord (“suo motu”) based on a newspaper 296 report. Another major challenge of environmental management that became a hotly debated public issue was vehicular pollution, especially from buses, three-wheeler scooters, old vehicles, etc. Particularly, the debate on converting diesel buses to Compressed Natural Gas (CNG) has raised several relevant questions for federalism, highlighting the importance of conflict resolution. An examination of the CNG debate shows both conflicts between the different levels of government as well as between its different branches. The enormity of the vehicular pollution problem can be understood from the fact that around two-thirds of air pollution in the city arises from this single source. To address this problem, the measures applicable to petrol-driven vehicles, like use of lead-free petrol, retiring of old vehicles and enforcement of stringent emission control standards could be introduced with relative ease. However diesel vehicles posed a serious challenge. This is both due to the high sulfur content in diesel as well as due to their important role in public transport in Delhi, forming as they do the backbone of public mass transportation especially in the absence of rail-based commuter transit. Based upon the report of an expert committee set up by the court, it was ordered that diesel be replaced by CNG in all three-wheeler auto-rickshaws (all privately owned) and in buses, both privately operated and those run by the GNCTD’s Delhi Transport Undertaking. The entire issue has been fraught with controversy and complaints— 2 9 6 Reference: “SC gives Delhi two years to clean up Yamuna” in The Hindustan Times, Wednesday, April 11,2001, New Delhi (http://www.hindustantimes.com). 225 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. probably due to the complete breakdown of goodwill and cooperation between the different governments. While the Center blames the inability to implement Supreme Court orders on the state level government’s lack of will, the NCT government of Delhi has blamed the Center for the CNG supply crises, accusing it of not providing the requisite infrastructural support. In September 2001, which was the new deadline set by the Court, the parties in power at the Center and state levels (BJP and Congress) were still busy trading charges.2 9 7 At the very least, the current CNG crisis represents an unmitigated failure of governmental functioning due to the triumph of conflict over cooperation. It thus clearly underscores the need for effective conflict resolution mechanisms. In this case the Supreme Court has played a decisive role, imposing mandates for tackling the issue. But a need for other established mechanisms is felt as questions are raised over the ability2 9 8 and practicability2 9 9 of its decisions. The CNG debate points to the need for institutionalized mechanisms to address conflicts in governance. The Delhi government (i.e., NCT government of Delhi) and the Supreme Court of India—two unlikely rivals given their very different positions, functions and roles in the nation—came into direct conflict over the CNG issue. While the NCT 2 9 7 Reporting the highlights of the second day of the Monsoon Session of the Delhi Assembly on 25t h September 2001the Times of India story titled “BJP, Congress trade charges on CNG issue” pointed-out a senior Congress leader blaming the Union Petroleum Ministry for the CNG crisis (Reference The Times of India, Wednesday, September 26,2001, Cities: Delhi) (http:// www.timesofindia.com/ today). 2 9 8 As we detail in an earlier footnote in this chapter, the ability of the Supreme Court to assess administrative ground-realities accurately has been questioned. {Reference: “Executive versus Judiciary: Fueling Contempt” (India Today on the Net, April 16,2001 Issue, Home, Environment: Clean Delhi)}. 2 9 9 As we noted in a footnote above, it has been questioned how competent the Court is technically to decide the CNG versus diesel question. {Reference: “Executive versus Judiciary: Fueling Contempt” (India Today on the Net, April 16,2001 Issue, Home, Environment: Clean Delhi)}. 226 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. government accused the Court of being insensitive to the needs of the people of Delhi and of ignoring the ground realities, the Supreme Court labeled the Delhi government’s deviation from its instmctions as “an attack on the judiciary.”3 0 0 To begin with the Delhi government failed to adhere to the March 31st, 2001 deadline set by the Court for conversion of diesel buses to CNG (as directed in 1998 CNG verdict). On its own side the Court was unrelenting and did not extend the deadline causing the public transportation system of Delhi to come to a halt in the beginning of April. In response to the severe effect of this on the lives of Delhiites, the Delhi government permitted buses with conversion bookings—without having been converted yet though—on the roads, thus in some measure defying the Court.3 0 1 While matters between the state-level government and the Court were finally resolved3 0 2 (the Delhi government tendered an apology for its unintentional contempt of court), the case exposes another dimension of conflict in governance, thus highlighting the importance of visualizing the need for, the types of and the design of conflict resolution mechanisms. 3 0 0 Chief Justice A.S. Anand as quoted in “Executive versus Judiciary: Fuelling Contempt” (India Today on the Net, April 16, 2001 Issue, Home, Environment: Clean Delhi). 3 0 1 Reference: “Executive versus Judiciary: Fuelling Contempt” (India Today on the Net, April 16, 2001 Issue, Home, Environment: Clean Delhi). 3 0 2 The Supreme Court then extended the deadline till 30th September 2001. (Reference: “Green and Bear It” in India Today on the Net, April 16,2001 Issue, Home, Environment: Clean Delhi). 227 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 8.4 Conclusion: Wright3 0 3 advises us of the importance of recognizing the possibility of conflict among different government entities. The cases examined from both the enabling and functional domains in Delhi strongly underline the need for conflict resolution mechanisms. However the two differ from each other in the extent of development of conflict resolution mechanisms. The enabling domain demonstrates a conscious recognition as well as anticipation of the possibility of conflict. As we saw above, a number of institutions have been developed to address contentious issues or possible conflicts. On the other hand environmental federalism does not display the use of such varied avenues for conflict resolution. Probably this is a reflection of the newness of the field and its comparatively less evolved state. Environmental management became an issue in the politics of the nation in recent decades only. The main body for conflict resolution in environmental federalism so far has been the Supreme Court of India aided in particular by the instrument of Public Interest Litigation. 3 0 3 Reference: Wright (1988): Understanding Intergovernmental Relations (Pacific Grove, California: Brooks/ Cole Publishing Co.) p.459. 228 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Chapter 9 Partnership and Cooperation 9.1 Introduction: Partnership and Cooperation are indispensable in a federal system because of the shared and overlapping activities, the interdependencies and the mutuality of interests, and the relative advantages of different governments in different spheres of state responsibility. In both the enabling and functional domains of the governance in Delhi, the importance of partnership and cooperation is readily observed. The role of volition arising out of enlightened self-interest as also that of compulsion enforced by higher echelons of government is also vividly brought out. In the enabling domain in Delhi the desire for partnership and cooperation in the interest of smooth governance has occasionally overcome the divisive force of party- politics (otherwise, there have been occasions when the ends have been defeated by petty party political antagonisms3 0 4 ) as our scrutiny below of cases of partnership and cooperation between Center, GNCTD, MCD and NDMC shows. Occasionally, when the state and municipal level governments have failed to rise to the occasion by themselves, the Center invokes its decisive, higher authority to compel them to cooperate actively in order to serve the larger public interest. 3 0 4 Instances of this are discussed throughout the discussion on Delhi and particularly in Chapter 8 on Conflict Resolution. 229 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Our examination of environmental management in Delhi, apart from yielding similar scenarios, provides important leads for the evolution of federalism as it attains maturity. As governments realize the inevitability of working in partnership and discover the invaluable synergies flowing from partnership and cooperation, it can be expected that rather than requiring to be imposed from outside, partnership and cooperation will arise naturally in the system. Finally, the analysis of the cases from the two domains of governance of Delhi will permit us to identify some questions for further research in the area of partnership and cooperation among different levels of government in an evolving federal set up. 9.2 Partnership and Cooperation in the Enabling Domain in Delhi: In an increasingly interdependent world partnership and cooperation is sine qua non for successful functioning of institutions. More so where a single major endeavor— governance, that too of a small area—is undertaken as a shared responsibility between three tiers of government, each composed of several institutions. While there is, as noted already, much that engenders conflict, there are also compulsions as well as positive incentives and conditions pushing them into a relationship of partnership and cooperation. The different governments of Delhi thus exhibit diverse instances of cooperation with each other. Fire fighting service is one example. Not long ago, the service was with the MCD, which catered to the NDMC area as well. Similarly, MCD’s Delhi Electric Supply Undertaking (DESU) was the sole institution responsible for generation and bulk purchase of power for the entire territory and supplied it to NDMC who then distributed it in its own area. So also was the case in respect of water supply 230 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. and sewage disposal. With the creation of autonomous boards under GNCTD for water and power, NDMC continues to benefit from the cooperation of the successor boards. Solid waste dumping sites were also maintained by the MCD and are still its responsibility. It is easy to see how the overall supremacy of Center in the affairs of Delhi contributes decisively in bringing about such cooperation. For, in case of the GNCTD or MCD refusing to play ball, the Center can bring them in line by getting a simple legislation passed by the Parliament; such an action would most likely have the long-term effect of circumscribing their areas of power and authority. However, it is also true that neither of them have ever had any reason not to assist the small but important civic body of the metropolis, the NDMC. On the other hand, often they have found such close linkage with NDMC useful in securing the cooperation of the Center for augmenting the supply of water and power for the NCT from other states or central organizations like the National Thermal Power Corporation. Thus, in times of acute shortage of power, for example, the GNCTD would be in its rights to impose proportional cuts on supply of bulk power to NDMC. Not only that—when during the sweltering summer of Delhi, the people reel under maddening heat, such an action would also be an equitable and therefore, popular measure. But both the MCD in its own time and the GNCTD now have refrained from doing so in consideration of the fact that it would affect one of the basic needs of the high and mighty of the country, apart from all the foreign diplomatic missions. These considerations are duly reciprocated by the Center by assisting the NCT authorities to secure supplies from other sources despite party political rivalries, even as 231 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. serious controversy and conflict keep raging about who is responsible for inflicting all the pain and misery on the people of Delhi. Force of circumstances is another factor responsible for compelling these bodies to work with mutual understanding and cooperation. A case in point is MCD’s trying to establish toll checkpoints along the Delhi-UP (i.e., Uttar Pradesh, the neighboring state) border recently by-passing GNCTD completely. UP’s state government was opposed to it and when it wished to voice its opposition to the move, it had to do so at the state government level, i.e., to the GNCTD and not directly to the MCD,3 0 5 because of the proprieties of protocol. The GNCTD was thus brought into the picture much against the designs of the MCD. A great deal of potential for partnership and cooperation still remains to be tapped. As more and more of infrastructure development in the future is expected to come not from the Center’s budget by way of assistance from Plan funds but from joint ventures between governments along with private sector companies, the governing entities need to be partners together in making it happen. Indeed, there is already in operation the first of such projects in the transportation sector. The long overdue underground metro-rail system is currently under construction by Delhi Metro Rail 3 0 5 Reference: “Government Forced to Rescue MCD on Land Dispute with UP” in The Times of India, Cities, 31s t January 2000 (http:// www.timesofindia.com/ today). 3 0 6 Clear evidence of this can be found in the pattern of flow of Plan funds to Delhi (Appendix E, Report of Delhi Finance Commission, Vol. 2,Dec. 1997). Plan funds to MCD, which take the form of borrowings, have declined from about Rs.30 crores in 1984-5 to Rs. 9 crores in 1995-6. In keeping with the current global thinking that meager government savings should be utilized in the social sector—health, education, welfare etc.—there has been a sharp decline in financial support to infrastructure projects in power, transport, communications, water etc. (Also, see next footnote below). 232 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Corporation, a joint venture between the Government of India (Ministry of Surface Transport) and GNCTD.3 0 7 Similar joint action may also be necessitated in future in meeting the escalating, often highly exacting, demands of an exploding metropolis, for power, water supply and sewage disposal, and so on. 9.3 Partnership and Cooperation in the Functional Domain of Environmental Management: Environmental Management of densely populated Delhi illustrates well the need for cooperation between the different layers of governments as also the part played by both volition and compulsion. As environmental pollution respects no geographical— much less man-made—boundaries, problems of environmental management require policies and actions having ramifications across municipal, state and national borders. Delhi’s small, compact area houses not only a large population and the offices of the national government and its multifarious agencies; it is also the most important center of small industry and distributive trade for the whole of northern India. The resources of nature available to the city-state therefore need to be tapped, augmented and preserved by coordinated actions of each of the three governments functioning to a common purpose in harmony with each other. Water supply to the population of Delhi, along with the associated problem of disposal of wastewater, is a case in point. 3 0 7 This project is reflective of the change in thinking on the financing of such projects. In sharp contrast an earlier metro project in the country, the Calcutta metro, a venture of the 1970s-80s (as the project that took over 20 years to complete the first phase of a few miles) was financed completely by funds from Central budget. 233 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. The management of the scarce water resources poses a particularly daunting challenge both in procuring raw water supply, its treatment and distribution as well as in respect of the associated problem of disposal of wastewater. There are heavy demands of the upstream populations, both for human consumption and irrigation of croplands, on the water supply in the river Yamuna. So much so that it became necessary to procure raw water supply from other, far away sources—from the Ganga at a point almost a hundred miles away, in Uttar Pradesh and from a reservoir in the Himalayan foothills in Himachal Pradesh. To get the two autonomous states to part with a precious resource like water was way beyond the capability of the Delhi Water Supply and Sewage Disposal Undertaking of the MCD, the authority charged with the responsibility of tapping, treating and supplying water in bulk to, and disposing of wastewater in, the entire NCT. First, it needed the stature and authority of the Central Government to secure the raw water supply. Then, it had to draw upon the Plan Funds of the state government as also on assistance from the Center to finance the costly infrastructure development projects of water conveyance from long distances and its treatment, before the MCD could discharge this mandatory responsibility. This three-way partnership came about mainly because the lack of raw water for the city was an unthinkable outcome, thus illustrating how partnership and cooperation arises out of volition. The governments cooperated of their own accord because a parched capital-city was simply inconceivable. Likewise, the problem of pollution of river Yamuna arises as about 80% of the water supplied (plus the rainwater) flows back into the river carrying all the muck and the filth. Concerted action across a broad front by all three governments is required to tackle 234 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. this menace. When the three failed to rise to the occasion, the Supreme Court of India had to act by issuing pointed directives to them to put their act together. The well known Public Interest Litigation (PIL) case, popularly referred to as the “Maili (dirty) Yamuna” case, saw the highest court directing the installation of effluent treatment plants in industrial estates, necessitating cooperative action by the Center and the state governments, and the setting up of adequate sewage treatment capacity by the MCD, which again had to take recourse to financial assistance from the Plan Funds of the NCT government. (The water supply and sewage disposal activity has also since come under the NCT government). In the matter of combating pollution generated by industrial units again, the crucial need for partnership and cooperation was underlined by the fact that the Supreme Court had to issue directions to the agencies of all three levels of governments for effective, concerted action.3 0 8 The Delhi Development Authority responsible to the Ministry of Urban Development of the Government of India was charged with enforcing the provisions of Delhi’s Master Plan bearing on the location of industries only in designated (“conforming”) areas. The responsibility for creating requisite infrastructure for shifting of industries functioning in “non-conforming areas” to appropriate sites was to be discharged by GNCTD through its Department of Industries and the associated public undertakings, the Delhi State Industrial Development Corporation and the Delhi Finance Corporation. So also was the drive to shut down the recalcitrant polluting 3 0 8 Reference: “SC gives four weeks to shut Delhi polluting units” in The Times of India, Friday, 8 December 2000 (http:// www.timesofindia.com/ today). 235 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. industrial units. As safeguarding of public health is the responsibility of the municipal government and hence granting of industrial licenses falls within its purview, MCD was also involved—it was directed to cancel licenses issued in disregard of zoning provisions of the Master Plan and to cooperate in sealing/ closure of the offending units. While action in the first case (of water supply), the governments chose to cooperate of their own will, in the latter two cases (Maili Yamuna and Industrial Pollution) the governments had to cooperate out of compulsion, given the mandate of the Supreme Court. This examination leads us on to other ideas on federalism. Apart from highlighting the obstacles to good governance due to lack of partnership and cooperation between the governments at different levels, it provides pointers to the probable evolutionary development of federalism. As federalism in the city-state evolves to maturity, it is to be expected that such active partnership and cooperation will become a natural attribute of the system rather than requiring to be imposed from the outside. 9.4 Conclusion: Woodrow Wilson advises us to apply our minds to helping the “system within systems” of federalism in “combining independence with mutual helpfulness.”3 0 9 An analysis of the literature reveals varying reasons for why mutual helpfulness is so important as to form an essential element of federal design. Our studies of Delhi have 3 0 9 Reference: Wilson, Woodrow (1887): “The Study of Administration” in BS Baker and William E. Dodd (Eds.) (1925): The Public Papers o f Woodrow Wilson, Volume 1: College and State: Educational, Literary and Political Papers (1875-1913), pp.130-158 (New York: Harper and Brothers Publishers), p. 157. 236 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. furnished compelling evidence of this as well as how it can arise either out of volition or under compulsion. Given the importance of partnership and cooperation for federal systems, the creation of suitable incentives and disincentives for its growth must form an important part of public policy. Incentives must be provided to encourage otherwise independent governments to come together and cooperate for effective governance as, when and where required. Disincentives must be generated to discourage governments from withholding purposeful cooperation or adopting a non-participatory stance or indulging in bickering and obstructionism in disregard of the larger interest of populations under their charge. Further research must examine the form, kinds, etc. of incentive structures. It is also required to assess if the different domains or sub-fields have some inherent differences from case to case so that while in one it will arise easily out of volition, in the other outside forces, particularly superior organs of government, may have to employ persuasion, or compulsion, to break the inertia or antagonism on the part of the recalcitrant governments to get them to function together purposefully. To draw on our cases above, environmental management in Delhi shows that at times the demands of the situation may encourage cooperation so that partnership—at least for a purpose— develops. But in the enabling domain, particularly where, for example, finance is involved (given its very nature), is Partnership and Cooperation less likely to develop on its own? And, hence, would legal provisions or constitutional requirements be required for it? Because of this does the role of superior organs of government (like the Center 237 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. and the higher judiciary) assume some particular importance? Designing and employing suitable incentives and disincentives, enactment of appropriate legal and constitutional provisions, and activist interventions of higher judiciary on behalf of the suffering citizenry seem called for to help the partnership and cooperation grow along the way, offering a great scope for further work. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Chapter 10 Conclusion and Looking Beyond: Suggestions for Future Research 10.1 Scope of the Study and its Theoretical Backdrop: Scholars have long struggled to find an ideal way of organizing government—be it for achieving efficiency in governance or for securing equity in society. As the choice of a system has important implications for the development of the system, the society and the nation, the form of government becomes all the more critical. In the broadest sense this study can be placed in the same genre. As a system for organization of government federalism holds great promise. On the one hand, it offers a method for division of power to prevent the bane of monopoly of a unitary government, for devising a system of limited government with each level and branch serving to check and balance the other, for taking governance activities closer to the governed, and for enhancing the opportunities for democratic participation, in one word, for good governance. On the other hand, federalism offers the opportunity for accommodation of diverse interests and for conflicting groups (say, communities or tribes) to come together for a common purpose—the governance of a diverse nation— at the same time safeguarding their peculiar/ individual interests.3 1 0 Support for this can 3 1 0 Cohen and Peterson (1999) suggest administrative decentralization as a possible form for conflict-ridden countries like Chad or Iraq. Federalism offers itself as a method for administrative decentralization and as a viable method for governance o f such areas. Krishna, S. (1995): “Constitutionalism, Democracy and Political Culture in India” (in Franklin and Baun (eds.): Political Culture and Constitutionalism: A 239 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. also be found in Livingston’s quote that: “The varying degrees of federalism are produced by societies in which the patterns of diversity vary and in which the demands for the protection and articulation of diversities have been urged with more or less strength.”3 1 1 Many different definitions of federalism have been proposed. From relatively complex mathematical formulations {as Sharma (1953)’s equation proposes} to simpler ones, like Manor’s (1999), characterizing federalism as the presence of full-blown governments at the regional levels. Different scholars emphasize different characteristics of federalism. For some,3 1 2 the important aspect is the conjunction of two or more states where the states continue to retain independence. For others,3 1 3 it is the division of authority and power between local and central institutions that is critical for federalism. Some3 1 4 also emphasize federalism as a contractual form. Much recent research on federalism has concentrated on the unique features of each federal system, identifying features typical to a particular scenario. Thus numerous variants of federalism have been identified. While per se these characterizations are both Comparative Approach} credits federalism with having aided in maintaining democracy— and unity (we may add)— in a large and diverse country like India. 3 1 1 Livingston, William S. (1952): “A Note on the Nature of Federalism” (Political Science Quarterly, Vol. 67) {as quoted in Ray, Amal (1966): Intergovernmental Relations in India: A Study o f Indian Federalism, p. 9 (New York: Asia Publishing House)}. 3 1 2 Freeman (1863), Sharma (1953), A. Ray (1966), and B. Ray (1967). 3 1 3 Hamilton in The Federalist Papers, Dicey (1914), Finer (1932), Wheare (1953), Diamond (1961), Ostrom (1994). 3 1 4 Dicey (1914), Sharma (1953), A. Ray (1966), B. Ray (1967), and Ostrom (1994). 240 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. informative and useful, they have introduced vast conceptual diversity. In some ways, this marks, as an influential student of federalism laments,3 1 5 even an abuse of the term. Additionally such conceptual diversity does little to help nations practicing or adopting this form of government in their efforts. This study has attempted to use both the theoretical and empirical knowledge available to define certain important features of federalism that can help nations in the practice of this form for good governance and for smooth functioning—with minimal conflict, with speedy and efficient conflict resolution, with each level of governance realizing its potential. Many studies of the federal system in recent years have emphasized very peculiar characteristics for the development of federalism.3 1 6 However given the large numbers ■ 2 1-7 and great diversity of nations toying with the idea of a “federation,” a practical approach to defining federalism—in a way to aid its adoption in real life—is required. Thus a more open examination emphasizing the generally applicable features (rather than peculiarities) is desirable. Some of the early students of federalism provided the bare distinguishing features of federalism. Freeman (1863) identified two characteristics in saying that while a common power must prevail in issues of concern to all, the constituting units of the union 3 1 5 Wright (1988), p.39. 3 1 6 Notable examples here would be of Vincent Ostrom’s (1994) argument that the basic covenant of Christianity of “Do unto others as you would have others do unto you” formed the foundation of the first modern Federal nation state, i.e. USA. Or Daniel J. Elazar’s (1994) exploration of “federal” in its Judao (=Hebrew)-Christian roots. Though the federal form may suit many other nations, these underpinnings may not be a part of their socio-cultural milieu nor would they be able to recreate these. 3 1 7 For example, at the time o f their independence from the British Raj, India, a secular state, and Pakistan, an Islamic state, adopted federalism. 241 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. must be “wholly independent” in those relating to the individual unit.3 1 8 Somehow the digit three seems to have been magical in the identification of defining features of federalism. Dicey (1889) identified three important characteristics of federalism as: the supremacy of the constitution, the distribution of powers among bodies with limited and coordinate authority and the authority of courts to act as interpreters of the constitution. Sharma (1953) also identified three basic characteristics: the supremacy of the constitution and its rigid, written character, the coexistence of two governments, and the special position of the judiciary. Riker (1964) highlights the following as the distinguishing features: two levels of government ruling the same people, each level having at least one area of autonomous action, and a constitution existing to guarantee autonomy. Thus many early works exhibit near unanimity in identifying the following three (if we were to confine ourselves to their limit) basic/ distinguishing feature of federalism: - The coexistence of at least two governments - A clear distribution of powers among them allowing for autonomous action - The constitution guaranteeing the powers of each and the judiciary as its 319 interpreter. 3 1 8 Reference: Freeman (1863), pp.2-3. 3 1 9 While we have the benefit of hindsight so that the courts have emerged as very valuable in safeguarding the intent of the constitution in practice, it is important to note on Hamilton’s foresight in remarking that: “The interpretation of the law is the proper and peculiar province of the courts. A constitution is, in fact, and must be regarded by the judges, as the fundamental law. It therefore belongs to them to ascertain its meaning, as well as the meaning of any particular act proceeding from the legislative body” (The Federalist Papers, # 78, p. 398). Ray, Bharati (1967): Evolution o f Federalism in India (Calcutta: Progressive 242 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Naturally these are useful practical definitions of the system, identifying the minimal pre-requisites. This dissertation has reviewed these early studies in some depth with a view to developing an in-depth understanding of the mechanics of federalism in order to facilitate its adoption in real life situations. But much water has passed under the bridge in the intervening years. The practical experience of nations has useful contributions to make to the understanding of federalism and it must be used to enhance the knowledge (for example, while many early definitions talk of two levels of federalism only, that would be the very least now and most modem states, given the size and complexity of governance, require three levels). Additionally, we need to go beyond the minimal defining features; we must also define those that will help in the smooth working of the system. Thus, standing on the shoulders of these giants (Hamilton, Jay, Madison, Bryce, Finer, Riker, Freeman, Sharma, Ostrom, et al) this dissertation has attempted to adopt a practice-oriented approach—to provide some essential features of federalism that will aid the practice of federalism (a few other pertinent ones are suggested in the future research section and, hopefully, additional knowledge will develop overtime). Publishers) underscores the unusually important role of the judiciary for a federal system in saying: “The independence of the judiciary which should be the maxim of all forms of constitutionalism should be more so in a federal state; for here the judiciary not only protects the rights of the individuals from encroachment by the government and private individuals, but also the rights of the state government from encroachment by the center and vice versa.” (p. 15). 243 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 10.2 The Essential Features of Federalism Defined in Theory and Examined and Developed Empirically: This study attempts to present a distinctive viewpoint in the scholarship on the federal form of government. As more and more countries have found themselves drawn to this decentralized system of exercising the political power of the state, it has become imperative to study the multiple ramifications of federalism in ever-greater depth and with increasing perspicacity. The dissertation attempts to draw lessons, both from theory and practice, on how to make federal systems efficient and effective, and help them work smoothly. It seeks to go beyond the minimalist approach of either laying down the three inalienable characteristics3 2 0 of federalism or focusing on the features that go to narrowly distinguish a particular federal system. Instead, the objective here is to present a more generalized and pragmatic theory focusing on the characteristics important for smooth operation of federal systems and thus making an indispensable contribution to their effective functioning in real life. It does not, therefore, restrict itself to the basic, defining features of federalism but strives to delineate some of those deemed essential to the success of federalism as a functioning system of governance worldwide. Since human affairs do not lend themselves to mathematical formulations, no effort is made here to encapsulate the federal design into a rigid framework defined in terms of “necessary and sufficient conditions” for its successful adoption or implementation. As all of our features are not the distinguishing characteristics of 244 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. federalism hence they must not be confused with the necessary conditions for federalism. Many of the early formulations have laid down the bare structure of federalism.3 2 1 They have done so without including many of our features and clearly, then, in this sense, our formulation does not attempt to provide the necessary features of federalism. Given the vast variations in the objective conditions, governance traditions, resources and requirements, etc., of different countries, the sufficient conditions must depend upon the specific context of the particular federal system. Depending on the domain some features may or may not exist: a typical example from our cases being the textbook style decentralization in environmental management in Delhi. Depending on the extent of evolution they may be only partly developed: a typical example being of conflict resolution mechanisms in environmental management. Also, the features can vary with the phase of intergovernmental relations in a nation: for example the division of powers has tended to vary overtime in the US (as is also likely in other systems) so much so that distinct phases of the upper-hand of the federal government or the states have been identified; another example here could be of Nice and Fredricksen’s (1995) idea of “scope of conflict” that argues that as balance of powers changes, the size and extent of conflict changes, and thus we can say the requirement on conflict resolution mechanisms would change as well. We must, therefore, be prepared to accept very wide variations from country to country in this regard. Given these caveats, based on a study of the vast 3 2 0 It may be sheer coincidence but many o f the early formulations on distinguishing characteristics of federalism identified three characteristics - for example, Dicey (1889) or Sharma (1953) or Riker (1964). 3 2 1 For example, The Federalist Papers or Dicey (1889) or Sharma (1953) or Wheare (1953) or Riker (1964) to name only a few of the early ones. 245 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. literature on the subject and keeping in mind the experience of major federations like USA, India, Canada, and others, this dissertation identifies five essential features of federalism: - Multiple, Independent Governments Constitution (written and accepted by all the participating entities) - Empowerment of governments at all levels, especially the sub-national governments Conflict Resolution Mechanisms - Partnership and cooperation We now consider each of these, both in the theoretical as well as empirical contexts. Multiple, Independent Governments One common feature stressed in diverse literature on federalism is that multiple and independent governments are necessary for federalism. Though to start with, the focus was generally on two levels, viz., the national and the state, that is no longer considered adequate in the context of the size and complexity of governmental undertaking in modem nation-states. The inclusion of local government and the importance being accorded to it in the studies of federalism underscores this realization. Not only this. There is realization that the private sector as well institutions of the civil society can also serve useful purpose and be partners in the governmental endeavor. 3 2 2 References: Sundquist, James L. and David W. Davis (1969): Making Federalism Work: A Study of Program Coordination at the Community Level (Washington, DC: The Brookings Institution) and 246 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Development of multiple, independent governments for effective federalism requires more than just the existence of sub-national governments. These governments must not only have guaranteed life but also coordinate authority, with each one of them deriving it from the same source—the constitution. It is also important that they be capable of independent functioning and autonomous action within their own clearly delineated functional domains and they must be armed with appropriate powers and be allowed access to adequate resources. Then only can the advantages of decentralization—of responsibility and powers, of bringing governance closer to the people, of exercising checks and balance over each other, of ensuring a system of “limited government” and of assuring responsive and accountable governance—be reaped. In the empirical context India’s National Capital, Delhi has seen the development of this feature and the crumbling of “monopoly of the center” in both the enabling and functional domains, even as its evolution has taken different forms or growth trajectories in the two domains. In the enabling domain, the three tiers of federal system in Delhi have been created with the establishment of the state-level government and the transfer of powers to it from the other two existing levels, the one above it (the Center) and the other below it (the MCD). In the functional domain of environmental management, the desire to take governance closer to the people has led to the breaking up of the “monopoly of the center”—through the creation of the DPCC and the transfer to it of powers and Wildavsky, Aaron (1998): Federalism and Political Culture (Eds. Schleicher and Swedlow) [New Brunswick (NJ): Transaction Publishers]. 247 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. functions from the CPCB. Thus evolution of federalism in Delhi is occurring in both the enabling domain and in environmental management through the development of multiple, independent governments. Delhi’s experience is, in general, useful for large cities that serve as national capitals as they are often placed directly under the Center. As Delhi’s experience shows distant, direct control of the Center may need to be replaced by sub-national governments for effective, efficient and good governance. In the enabling domain, the somewhat disenfranchised Delhi has repeatedly demanded its own state government. The introduction of state-level government has at least helped counter the leviathan effect of the huge, unitary central government governing a large and populous Delhi directly: with an intermediate level of government having been brought closer to the governed. In environmental management, in fact, this (taking governance closer to the governed) was even the avowed aim of transfer of environmental management responsibilities from CPCB to DPCC. In the live context of federal evolution in the capital of India, it now remains to be watched with interest whether institutions of civic society, such as NGOs, also emerge as active partners in governance thereby providing yet another—the fourth—layer of multiple governments. Constitution As the organic law of a nation, the Constitution is important in itself. But for federal systems, it has an indispensable role of serving as an anchor of the basic 248 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. principles governing inter-governmental relations and of specifying explicit terms the roles and responsibilities of different institutions of governance, delineating clearly the division of power and responsibility at each level and guarding against transgressions. It also lays down the mandate that the governments jointly and severally are charged to fulfill, thereby providing the citizens with a reference point to challenge successfully in superior courts of law the failure of the government to serve the larger public purpose. As seen in the realm of environment management in Delhi, this has proved to be a major source of people’s power over government in the event of its negligence and incompetence. The existence of a constitution—in black and white—is indispensable for federalism. And it must be adaptive to the needs of changing times. It must therefore provide a mechanism for its own amendment. At the same time deliberate caution must be exercised to see that the underlying principles of the constitution remain untouched; the basic structure of the constitution must not be altered without a reference to the will of the ultimate makers and masters of the constitution—the people—through a broad- based assembly of their representatives, the Constituent Assembly. Thus, a balance must be struck. On the one hand, amendment to the Constitution must be realistically possible, and not impossibly arduous; and on the other, it must be above and beyond the routine amending powers of the legislature, thus preventing every new party-in-power from modifying the constitution to suit its individual interests. Experience of different nations (illustrations of this can be found in both the American and Indian cases) show that historically the courts have played an important role as the final interpreters of the 249 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. constitution—in upholding it and in safeguarding its basic structure. In the Indian case, the adoption of the 73rd and 74th Amendments has shown how this feature has been instrumental in deepening the roots of federalism in the country. In the empirical context, the constitutional provisions can be seen to have a determining influence on the introduction and development/evolution of federalism. The experience of Delhi helps fine-tune these ideas further. It shows that in the enabling domain formal provisions in the constitution are imperative for bringing about change— probably given the far-reaching, pervasive nature of any change in that overarching domain. In contrast, in any single functional domain, for example of environmental management studied here, change has occurred within existing provisions. This is hardly unique or counterintuitive given that in many countries environmental laws were first framed within the broad provisions of the existing laws on health and sanitation. Empowerment of sub-national governments Empowerment of sub-national governments is an important concern of many different systems today; it is also of critical significance for success of federalism. Though it is conceivable that the constituent governments in their covenant to form a federation may leave the center with inadequate powers, yet in real life the problem has been too much centralization of power (in the union) and, consequently, weak sub national governments. Hence, the almost singular concern with decentralization and empowerment of sub-national governments. 250 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Empowerment requires not only decentralization and separation of powers but a sharing of powers as well. The nature and extent of devolution of roles, responsibilities, powers and authority to sub-national levels provides a basic measure of empowerment— it is important here to strike a balance between power and responsibilities. But decentralization alone is not adequate for empowerment. Given that both centralized and decentralized action must continue in a federal system, sharing of powers (and finally partnership and cooperation) is essential for empowerment. Sharing of powers must allow for the recognition of interdependencies, for flexibility of approach, and for supportive responses and cooperative attitude between the different levels of governments, thus demanding a creative approach. The experience of many a nation has shown that exercises in federalism and decentralization can fail miserably without a continuing, conscious attempt to empower sub-national governments in keeping with the requirements of emerging scenarios, emerging from time to time as a consequence of the unfolding forces of social consciousness, economic realities and technological advancement. In studies of empowerment the emphasis has been on decentralization, division and separation of powers to an extent that has neglected the crucial aspects of interdependencies and synergy of the different levels of governments working together, often to achieve similar or overlapping objectives. The danger of fragmentation and uncoordinated functioning of government, in pursuit of safeguarding the respective turfs and egos, has not received the necessary attention. Based on the empirical study of evolving federalism in Delhi, this 251 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. study formulates the concept of sharing of powers among different governments— National, State and Local. The study of decentralization offers useful lessons. It underscores the importance of mechanisms for coordination and conflict resolution. It highlights the necessity of building in the incentives to cooperate in federal systems—because unhealthy competition and conflict, between different governments or between different political parties in power at different levels (as in the case of Delhi), can hamper decentralization efforts. Also, while research has now established that decentralization can mean very different things in the context of different countries,3 2 3 the experience of Delhi shows that the form and evolution of decentralization can vary from domain to domain as well. This variation can be due to the varying natures and current levels of evolution of the domains, or due to the urgent and emerging issue peculiar to that domain, or due to the pressures of informal, day to day adjustments. As the case of environmental management in Delhi shows these may even cause decentralization to go beyond the formal provisions. The force of circumstances in Delhi led to decentralized working in the Relocation of Industries case, to the point of active involvement of the municipal machinery as well— even though pollution control has been formally decentralized only up to the level of the state government (and that too only recently). In this sense environmental management in Delhi belies textbook conceptualization that the extent of decentralized working and 3 2 3 Reference: Manor, James (1999): The Political Economy o f Democratic Decentralization (Washington, DC: The World Bank). 252 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. institutionalized decentralization are one and the same. Here, the operation of projects is occurring with greater decentralization than institutionalized decentralization currently suggests (over time as this becomes a usual practice and its importance in working is understood, the institutionalized design itself may undergo modifications). Even though simply delegation has been done and that too to the state level only, in actual practice decentralized working is a ground reality of environmental management in Delhi. It has been moved out of the Center’s ambit. In response to the extremely adverse pollution situation in Delhi, environmental management responsibilities were transferred from the Central Pollution Control Board to the Delhi Pollution Control Committee. Effective decentralization has also occurred because the Center is not trying to remote-control environmental management in Delhi—because the DPCC has been placed squarely under the administrative control of GNCTD, hence marking the transfer of both responsibility and authority to state-level. In addition to taking governance closer to the governed, this elicits greater commitment and resources from GNCTD. While proposals for decentralization of environmental management to District level (i.e. to levels below the state government) are still being discussed, officials of the municipal government and, below them, at district level are actively involved in environmental management. In the enabling domain in Delhi, constitutional and legislative processes have been at work for decentralization. The creation of the state-level government with independent functions and finances and the strength imparted to it from the nationwide amendments guaranteeing life to local governments have formally introduced decentralization in this domain. Delhi’s experience in the enabling domain shows that it 253 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. is moving in the right direction for decentralization but not without some problems. This experience is rife with both cooperation and conflict. The examination of legislative, political, administration, and fiscal decentralization reveals large strides as well as large gaps, calling for further work to enhance the level of empowerment achieved through the creation of important institutions like elected GNCTD, the state-local level election commission and the five-yearly, state finance commissions. This case also underlines the importance of sharing of powers for federalism. Sub-national governments can be empowered productively only when the fragmentation inherent in decentralization is transformed into a symbiotic relationships inspired by enlightened self-interest and unwavering commitment to serving the larger public interest through team work. This would call for a positive approach to interdependencies—with pooling and sharing of resources (for example, information, equipment, etc.) and by providing for supportive, flexible and cooperative responses to each other. Environmental management in Delhi shows how important this is for achieving greater results. Spurred by Supreme Court’s whip, agents at different levels of governments found it inevitable to cooperate for controlling and combating the pollution caused by unregulated growth of industries in residential and commercial areas of the metropolis. Of course in the long ran, such sharing of powers should not have to be imposed from outside but should become an endemic or inherent attribute of the federal system. Indeed, the enabling domain in Delhi can both benefit from and help institutionalize “creativity” across a wider swath of governmental activity as shown by the experience of environmental management. The dire state of civic amenities in Delhi can be bettered 254 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. drastically by making teamwork among the sub-national levels of governance an explicit condition for devolution of resources and other assistance, or through the creation of other incentives that encourage cooperation. Recognizing the importance of both decentralization of power and authority and sharing of powers, federal systems need to incorporate consciously and imaginatively designed institutions and incentives for the promotion of synergy and symbiosis in the system. Therein lies the key to successful adoption/ implementation of federalism by the nations struggling to find their way through the maze of governance of their complex, diversity-plagued societies. Our analysis holds useful lessons, in general, for decentralization exercises (even beyond the federal setting)—other systems (even a centralized one) attempting to decentralize may find some of these features useful accompanying factors. For example, with decentralization as the desired end, multiple governments working with some independence will be required to break out of the mold of centralization; hence some sharing of functions and powers will be necessary. Sharing of powers, maximizing synergy, can be expected to help decentralizing systems attain better results. As experiences of different nations show, decentralization requires some cooperation between the independent levels of a decentralized system, whether voluntarily or even involuntarily (as Delhi’s experience would indicate). Thus partnership and cooperation can be foreseen as an important accompaniment. A memorandum of understanding, some kind of covenant would be desirable to define the roles and limits of each level. Similarly in the eventuality of conflict between the national and sub-national 255 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. governments (a common experience), existence of reliable conflict resolution mechanisms will be useful. Conflict Resolution The inevitability of grave disagreements, genuine divergences of interests, big or petty rivalries and conflicts between the multiple governments need to be recognized right from the word go. Hence conflict resolution mechanisms must be ab initio built into the system. Also, given the diversity of issues in governance and given the wide variety of conflicts that may and do indeed arise, many different types of conflict resolution mechanisms must be provided. Some areas of conflict can be anticipated and provided against in the covenant, the constitution, itself. Others need to be catered to through umbrella provisions and yet others may have to be taken care of as they arise. The Constitution of India and the case study of Delhi present good examples of all these three kinds of conflict resolution mechanisms. Foreseeing the potential for controversy and conflict in the key area of access to financial resources, the constitution provided for the five-yearly finance commissions, followed by the healthy parliamentary convention established by the long, initial dispensation under Nehru’s successive Central Governments of accepting fully the recommendations of these commissions. Likewise the Planning Commission, an institution created soon after Independence by executive fiat of the union government, has played the key role in the devolution of plan assistance to the states on the basis of equitable formulae adopted with the approval of the National Development Council (which is composed of all the state chief ministers under the Prime 256 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Minister of India). Possibility of conflict on the sharing of river waters by the riparian states was also anticipated and provided for. Finally, of course, the higher judiciary functions as the ultimate arbiter of inter-govemmental conflicts. The role played by the Supreme Court in getting the governments to act effectively in environment management in Delhi and in the settlement of Narmada waters dispute are cases in point. Recently, learning from the disappointing experience of the shabby manner in which the local governments had been treated by the state governments ever since independence, the constitution was amended by the 73rd and 74tb Amendments to rule out arbitrary action and to bring into being constitutional institutions to ensure local governments’ life and access to requisite financial resources to enable them to function as vibrant institutions of self-governance. Thus, with the Indian Constitution providing a wide array of conflict resolution mechanisms, the experience of enabling domain in the case of Delhi exhibits the use of different conflict resolution mechanisms. In contrast, the functional domain of environmental management betrays great reliance on the judicial system for conflict resolution. Overall both the domains reiterate the importance of recognizing the possibility of conflict as well as anticipating its likelihood in different areas and devising right from the start an array of suitable conflict resolution mechanisms. Partnership and cooperation Over a hundred years ago, Woodrow Wilson advised governments in federalism to work with “mutual helpfulness”. Interdependencies, mutuality of interests, shared or 257 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. overlapping activities, coordinate jurisdictions, along with the relative advantages of different governments in different spheres of activities and hence the importance of simultaneous centralization and decentralization all point to the need for partnership and cooperation. For the same reasons, partnership and cooperation may sometimes arise out of compulsion and sometimes out of volition. The experience of the enabling domain in Delhi has interesting (though rarer) illustrations where partnership and cooperation occurred for smooth governance even overcoming the divisive forces of petty party- politics. The functional domain of environmental management in Delhi makes a case for partnership and cooperation in federal governance even more forcefully—because problems like pollution cannot be contained by geographical or jurisdictional boundaries. Delhi offers cases of both types—where partnership and cooperation has arisen out of volition and where it has arisen out of compulsion. Voluntary cooperation between the municipal governments (MCD and NDMC) was apparent in fire fighting, electricity and water supply, and sewage disposal. With water and power moving to boards under GNCTD, the latter (GNCTD) and NDMC now continue this tradition of cooperation. Force of circumstances—in the form of established rules or directives of higher authorities—also elicit partnership and cooperation. In environmental management, the force of circumstances has come under the guise of judicial directions and the compulsion of an unacceptably poor situation demanding action and leading to cooperation on the part of the governments. For example, between GNCTD and MCD in 258 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. the “Maili Yamuna” case or between all three levels of governments in the Relocation of Industries case. With experience in both the enabling and functional domains underlining the fact that working in federalism demands partnership and cooperation between all levels of government, interesting research questions come to the fore. Are some domains more likely to see the development of partnership and cooperation as a natural attribute? How does the nature of the domain affect policy responses given that different factors differ in their importance/influence between domains? What institutions and incentives can help in healthy development of this feature? In fact, given the importance of partnership and cooperation, the creation of a suitable structure of incentives to encourage “mutual helpfulness” is not only desirable but probably also necessary. 10.3 Directions for Future Research: Some ideas: During the course of this study many ideas worth pursuing further have presented themselves. Even as they appear interesting and promising, it was neither within the scope of this study nor feasible or even desirable to examine each such idea in depth. Nevertheless, they provide good leads for further research. Thus, for example, as noted above the creation of a suitable structure of incentives for different levels of governments to cooperate is desirable. Similarly, as we mentioned in the discussion of decentralization (above), many of these features that have been developed in the context of federalism would be relevant to the attempts at achieving sound decentralization in other systems though not necessarily federal. These are rich areas, significant enough to demand independent in-depth examination of their own. 259 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Our study also underlines a fundamental issue relating to the study of federalism. This is the theoretical question of the approach to studying federations. Federalism is growing as an increasingly popular form3 2 4 and a wide variety of systems are seen to be experimenting with this idea—be it as a means of political union or as a means for economic union solely without any attempt at a political integration of the nations involved.3 2 6 Given such variation, it is not desirable to adopt a very narrow approach to the study of federal countries. A straight-jacketed approach will not only lead us to wrongly condemn many federal systems as non-federal but also lead us to offer incorrect prescriptions for federal evolution in a nation by remaining oblivious of its special circumstances.3 2 7 And as we have reiterated above the sufficient conditions for a smoothly working federal system must be prescribed with a good view of the conditions prevailing in the system. 3 2 4 It is worthwhile recalling Elazar’s statistics that nearly 80% of world’s population lives in federal or near-federal polities. {Reference: Elazar, Daniel J. (1994): Federal Systems o f the World: A Handbook of Federal, Confederal and Autonomy Arrangements, 2n d ed., p. xv (New York: Stockton Press)}. 3 2 5 Various nations of the different continents with varied social-political-cultural-administrative legacies and the nations of both developed and developing worlds adopting this form provide useful examples here. 3 2 6 The most recent example here is of the European union that is seen as a federation developed for taking advantages of larger markets and lower barriers to movement of labor and goods. 3 2 7 We must take account of the particular circumstances of a nation which can influence significantly the development of federalism in that system and which may brings about some variation in its form (though it is still a federal form given that the distinguishing features are present). For example, the relatively higher degree of centralization, a position which is sometimes described as the “paramount center”, in Indian federalism has been explained to be an outcome of India’s experience of Partition of the country which was alleged to be a direct result of the Provincial Autonomy experiment of the British Raj {References: Ray, Bharati (1967): Evolution o f Federalism in India (Calcutta: Progressive Publishers); Bombwall, KR (1967): The Foundations o f Indian Federalism (London: Asia House Publishers); and Chandra, Asok (1965): Federalism in India: A Study o f Union-State Relations (London: George Allen and Unwin Ltd.) as also of its linguistic and cultural diversity and its size. However, we cannot conclude from this that it is not a federation. A more correct understanding would be that the country has adopted a version of the system (which permits enormous flexibility of design) better suited to its peculiar needs. 260 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. It is important for the nations developing federalism to ensure that minimal basic characteristics of a federal system (as established by the early scholars genetically for federalism and as reviewed above) exist in their structure. These are indispensable because they are the defining features, they are the minimum necessary conditions, they are the distinguishing features and without them an attempt at establishing federalism would be nothing but a farce. But beyond that, replication of another country’s federal system is not appropriate (and often not even possible). On the one hand such narrow definition of the concept (so that, for example, if it is not exactly like the American federal system, then it is not federalism) will hamper and hamstrung the practice of federalism. On the other hand, as a theoretical stance, it will lead us to wrongly reproach nations for not developing their system exactly like the model: when really it is inappropriate to argue for one as an ideal or the perfect prototype. This has repeatedly been the experience of the Indian federation. Various scholars have time and again rejected the Indian federalism as not being federalism at all.3 2 8 It has 3 2 8 Reference: Santhanam, K. (1960): Union-State Relations in India (New Delhi: Asia Publishing House) quotes that India has been labeled a “pseudo-federation” (p.B). Wheare, KC (1950): “India’s New Constitution Analyzed” used the labels “quasi-federal” and “a unitary state with subsidiary federal features” {in Allahabad Law Journal, February 1950, Volume XLVIII #6, p.22}. Bombwall, KR (1967): The Foundations o f Indian Federalism (London: Asia House Publishers) recalls that “some founders of the (Indian) constitution felt that the document ‘brutally butchered’ the federal principle” (p. 2). In this context, two noteworthy quotes from the Constituent Assembly Debates are: Gupte, BM: labeled India as “not a federal state but a decentralized unitary state” (Constituent Assembly Debates, XI, 9, p. 844). Chako, PT: summarized the system as being “in form a federation .. .in substance a unitary constitution” (Constituent Assembly Debates, XI, 7, p. 745). Several other discussions exist of this debate, see particularly: Ray, Amal (1966) at page 2 and Ray, Bharati (1967) at page 213. 261 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. been labeled a “quasi-federal”3 2 9 system or “a fedro-unitary system”3 3 0 or even a “unitary”3 3 1 system. Probably at the time of its setting-up the Indian federation was very baffling to scholars. Over time much work has been done to clarify these ideas3 3 2 and different characterizations have been offered to describe the Indian federation more clearly. For example, the Indian federation has been variously called “modified federation”, “paramount federation”, “federation with a strong center”. In a measure these names reflect some of the issues that different students of federalism might have had with the Indian federation. At the same time, they help characterize and describe succinctly the nature of this particular system better. Ray in those baffling times examined this question in depth in his book and established that “ India is a federation in both constitutional theory and practice,” arguing at the same time for a flexibility in study of federalism to admit societal characteristics into the analysis. However the confusion persists. For example, even very recently, it was again asserted that: “India is not a federation but a union state, with a higher degree of 3 2 9 Reference: Wheare, KC (1950): “India’s New Constitution Analyzed” (Allahabad Law Journal, February 1950, Volume XLVIII #6, p. 22). 3 3 0 Reference: Sahay, Shyamanandan: Constituent Assembly Debates, XI, 8, p. 788. 3 3 1 Reference: Wheare, KC (1950): “India’s New Constitution Analyzed” (Allahabad Law Journal, February 1950, Volume XLVIII #6, p. 22). 3 3 2 In-depth discussions are available in Santhanam (1960), A. Ray (1966), B. Ray (1967), and Sharma (1953). 3 3 3 Reference: Ray, Amal (1966) Intergovernmental Relations in India: A Study o f Indian Federalism, p. 146. 262 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. centralization than found in most federations.”3 3 4 The Indian federalism is very different from the American one. And comparing the two systems with one as the prototype can cause confusion and hence condemnation. This confusion may also partly originate in a superficial reading of the Indian constitution, which states that: “India, that is Bharat, shall be a Union of States” (Article 1 of the Indian Constitution). But the Constitution also establishes India as a federal system3 3 5 and a reading of the Constituent Assembly Debates would readily clear any doubts about this.3 3 6 Krishnamachari said in the Debates: “The concept of this constitution is undoubtedly federal.”3 3 7 And as Santhanam, another participant, argued: “we have got a constitution which is federal in character and the federalism of it is so well protected by the judiciary that it cannot be broken except by a change of the constitution.”3 3 8 Dr. B.R. Ambedkar, heading the Constituent Assembly, also established this unequivocally.3 3 9 Bharati Ray recalls this in stating that Dr. Ambedkar “has emphasized that the chief mark of a federation—the partition of the legislative and executive authority between the Center and the Units by the Constitution 3 3 4 Reference: Hemming, Richard, Neven Mates and Barry Potter: “India” at p. 528 in Ter-Minassian, Teresa (ed.) (1997): Fiscal Federalism in Theory and Practice (Washington, DC: International Monetary Fund), Chapter 21, pp. 527-539. 3 3 5 Supreme Court has explicitly established this as the interpreter of the constitution and particular mention must be made of the judgments: 1956, AIR 1965 SC 745,762. 3 3 6 Many books reconstruct this debate and present arguments establishing India as a federation. These include Santhanam, K. (1960), Ray, A. (1966), Bombwall, K.R. (1967) and Ray, B. (1967). 3 3 7 Krishnamachari, TT: Constituent Assembly Debates, VII, p. 1132. 3 3 8 Santhanam, K.: Constituent Assembly Debates, XI, 6, p. 718. 3 3 9 Reference: Constituent Assembly Debates (25th November 1949), Volume XI, p. 976. 263 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. itself—has been unmistakably incorporated in the body of the Indian Constitution.”3 4 0 Additionally India demonstrates the existence of all the basic characteristics like, the existence of the central and state level governments autonomously, the supremacy of the written constitution, the existence of an independent judiciary as the interpreter of the constitution, the guarantee of the existence of these levels of governments in the constitution as well as a clear definition of their jurisdictions in it. Finally, it must also be admitted that this (that India is not a federation but a union) is, in fact, a deceptive juxtaposition and a false dichotomy. A federal system can easily come about as “a union of states”—the case-in-point being that of the United States of America. Hamilton has, indeed, used the word “union” to talk of the American Federal System and to contrast it from Confederacy (in essay # 1 of The Federalist Papers). For India, one scholar of the Indian constitutional framework (Santhanam, 1960, pp. 1-2) states that: Where you want the benefits of a government over large areas populated by several communities which have got their own histories, languages and traditions, then only a federal system is a practicable system of government. It should be, however, remarked that even unitary democracies require complicated machinery and elaborate processes compared to authoritarian rule. In the federal system there are still more complications. But, as has been remarked, it is the only system suitable to a country like India. It is no wonder, therefore, that the Indian Constituent Assembly chose the federal system for India. Thus the natural question to ask is not whether India is a federation or not but how far (and how well) has it evolved as a federal system. 3 4 0 Ray, Bharati (1967): Evolution o f Federalism in India, p.213. 264 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. At a more general platform, the more critical concerns would be: - To what degree has the federal system been developed in a country? - What form has this evolution taken? - How far have the essential features of federalism permeated in a system? - How do the features aid the working of the system? - What are the experiences of the nation in decentralization (or it is also possible in centralization)? Such examination will not only be more reflective of the truth but it will also provide a wealth of knowledge that other nations may benefit from. Thus a greater flexibility of approach and adaptability, rather than a straightjacketed approach, is required on the part of the students of federalism.3 4 1 Elazar has aptly stated “the essence of federalism is not to be found in a particular kind of structure but a particular set of relationships among the participants in a political system.”3 4 2 A flexibility of approach is critical to the understanding of federalism because the evolution of federal systems can differ vastly: - From nation to nation (as is seen from the experiences of evolution of federalism in different countries, which also share the common historical experience of having been British colonies, like Australia, Canada, India, Pakistan, USA). - From domain to domain (as is seen in our examination of the cases from Delhi). 3 4 1 It is worthwhile quoting Musgrave in this context: “Federalism means different things to different people, and so do its fiscal implications.” {Musgrave, R.A. (1969): “Theories of Fiscal Federalism” in Public Finance, #4, p.522}. 265 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. - From time to time (as shown, for example, by the variation in extent of centralization and decentralization over time in many different federations). - And from program to program (as shown by Nice and Fredricksen, for example, for division of responsibilities between the center and states in the US even at any one time). While caution must be exercised not to subsume any and every system under the federal form and to ensure that the basic features are present, it must also be appreciated that this form allows for immense flexibility in its adoption and in the extent of evolution of its features. Only if a pragmatic, as opposed to dogmatic, approach is adopted can the richness of shades of federalism in actual practice be appreciated. The theory of federalism will be enriched by the study of actual experience and its examination realistically. The fallacy of a very rigid definition has been realized for features like decentralization. Manor (1999) has argued that decentralization can mean two very different things in two different countries. And, probably, what was said for decentralization can, here, directly be applied to federalism: “Decentralization is more an art than a science that follows its own aesthetic principles (described in manuals by organization theorists who do not have to administer it) but in practice, reality keeps 3 4 2 Reference: Elazar, Daniel J. (1994): “Introduction”, Federal Systems o f the World: A Handbook of Federal, Confederal and Autonomous Arrangements (2n d ed.), p. xv (New York: Stockton Press). 266 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. interfering with its logic.”3 4 3 Further work must examine the varying shades in respect of other features in the developments of the different federal forms. The thrust of this dissertation has been on identifying some characteristics essential for the working of federal systems and to illustrate how their evolution can vary and what different forms these features can take. The dissertation also reviewed the basic defining characteristics of federalism and clarified that the essential features are not identical to the distinguishing, defining characteristics nor must they be understood as the necessary or sufficient conditions. They are important as features that help federal systems work more smoothly, with greater efficiency and effectiveness (in that sense the dissertation can be understood as being concerned with organizational issues of functioning federalism). The list of features presented was neither intended to be nor is not exhaustive. Over time the experience of nations will enrich this understanding further. We also anticipate certain other features (listed below) as being important for the smooth working of federal systems. They were not included in our analysis as they are either not well developed in practice (in our chosen cases) and hence could not be adequately studied or because they are not adequately developed even in theory. These would include for example: (1) The idea of trust as a lubricant for the governance machinery: 3 4 3 Reference: Montgomery, John D. (1983): “Decentralizing Integrated Rural Development Activities” in Cheema and Rondinelli (eds.) Decentralization and Development: Policy Implementation in Developing Countries (California: Sage publications). 267 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. “Trust is like a kind o f lubricant that permits transactions and information- sharing both outside and inside. Moreover, trust underlies the rules o f self organization. ” (Fukuyama: ‘Trust or Die?” March, 19,1996, ’96 PC Forum) Although trust between governments has not been the direct focus of much work, in addition to well defined rules, some measure of trust and understanding is indispensable if multiple, heterogeneous bodies are at work. New Institutional Economics has made trust its explicit focus and has shown trust to be indispensable for institutions—with clear economic benefits like lowered transaction costs, mutual acceptance of one another’s difficulties and limits, thereby fostering synergy and cooperative action, etc. It is easy to imagine that as for other institutions, these advantages would accrue in the case of government agencies too and thus trust is critical for the different levels of government to work in partnership. Tobin3 4 4 offers an example from American environmental federalism of how lack of trust between the agencies of government at the different levels adversely affects the partnership of governments in federalism. He feels that the New Federalism initiatives of Reagan and Bush in environmental management were rendered to naught, as there was lack of trust between the federal EPA and the states’ agents. The directors at the state level found, to their great dismay and against all expectations of environmental federalism, that it had not made much of a difference to the situation with the “heavy 3 4 4 Tobin, Richard J. (1992): “Environmental Protection and the New Federalism: A Longitudinal Analysis of State Perceptions” (Publius/ Winter 1992). 268 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. handedness” of EPA continuing as before. It must be noted here that both a behavioral or attitudinal change to create trust and efforts to improve the perception of the behavior are essential for creating trust. The absence of trust between the different levels of government would render the partnership of governments meaningless. In the absence of trust the different levels would be reluctant to share their initiatives with each other beyond probably the dictates of law or exigencies of the situation. They would be suspicious of each other and would hence behave more like opponents rather than partners. This idea is still underdeveloped in theory and is yet to be explored for the levels of governments in federal systems even theoretically. It is easy to argue that some amount of trust is essential for partnership and cooperation to grow between the different levels of government. At the same time, it is also easy to see that absolute trust between the different levels of governments poses the danger of the check and balance function being diluted/ defeated. Thus the critical question that needs examination is not just whether trust should exist between different levels of government but also to what extent. (2) The idea of competition between the different levels of governments: “ Recognition o f potential and real competition over the resources between the states actually predates the constitution... The constitution created a framework fo r influencing competitive state behavior but retained considerable state autonomy and thus the potential to compete. ” (Lowry, 1992, p. 11) 269 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Osborne and Gaebler (1992) cite numerous examples of the U.S. system where introduction of competition into the government resulted in increased efficiency—in schools, in municipal management, etc. Contrary to the traditional ideas, that competition is to be found in and is good for only the private sector, competition is good for governments too. In the case of federalism, however, there is room for additional competition— from within the government. The federal set-up allows room for competition between the sub-national governments. The presence of multiple governments introduces scope for choice and competition, thus leading the sub-national governments to try to outperform each other, achieving more than the minimum stipulated: “the potential for horizontal competition within a policy significantly determines the willingness of state policy makers to exceed federal guidelines.” (Lowry, 1992, p. 12) Lowry (1992) demonstrates interstate competition, what he refers to as the “horizontal dimension”, by examining the four cases of stationary source and mobile source air pollution controls and point and non-point source water pollution controls in the U.S. He argues that the two dimensions of federalism—vertical dimension of federal involvement and horizontal dimension of interstate competition—will motivate efforts for narrowing the gap between strong and weak states. The horizontal dimension may also help improve the quality of policy provision by motivating other lobbies like environmentalists, business at the local level to seek resources from other levels against excess aggression as also strengthen weak programs (pp. 127-128). 270 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Interstate competition may help balance what Madison feared of the system over two centuries back: a parochial approach by states, leading to partiality, incompliance and enhanced inequality.3 4 5 Competition from other states and fear of losing ground and people to them may lead states to restrain their approach of partiality. Weingast (1995) also considers competition to be essential for federalism to exist in effect (or “de facto” federalism). In constructing a theory of “market preserving federalism” he asserts that, in addition to decentralization, competition among sub national governments is essential: “ the beneficial economic consequences of federalism result from the potential decentralization of economic authority that induces competition among the lower political units. Increased competition among the local government units boosts economic activity and fosters development.” Lowry’s discussion of the US systems is most informative to illustrate the importance of competition between different (local) governments and the forms it takes. At a preliminary glance, it can be said that in the Indian case the vertical and horizontal dimensions (as Lowry describes) do not exist in the same form at all. The idea of competition between local governments to improve their performance or be voted out by the movement of people out of their jurisdictions is completely lacking. And probably it 3 4 5 As Madison cautions: “It is no longer doubted that a unanimous and punctual obedience of 13 independent bodies, to the acts of the federal Government ought not to be calculated on ... How indeed could it be otherwise? In the first place, every general act o f the Union must necessarily bear unequally hard on some particular member or members of it, secondly the partiality of the members to their own interests and rights, a partiality which will be fostered by the courtiers of popularity, will naturally exaggerate the inequality where it exists, and even suspect it where it has no existence, thirdly a distrust of the voluntary compliance of each other may prevent the compliance of all.. .”(p. 364). {Reference: Madison, James (1787) (1901 reprint): “Vices o f the political System of the U. States” in Gaillard Hunt (ed.) The Writings o f James Madison, Vol. 2, 1783-1787, pp. 361-69 (New York: GP Putnam’s Sons)}. 271 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. is not unjust to conclude that the only visible form of competition is the unhealthy competition between different governments in transferring blame for failures and in their scheming for power or resources. (3) The idea of communities/ civil society as the fourth level of federalism: “ What kind of federal cake would that be? For mature men and women that would be ‘birthday cake federalism’ , for they would be allowed to choose how many candles and calories would fit their self-image. Birthday cakes are individualized. Each person chooses the one they want. If they overeat, they pay the penalty. They do not eat other people’s cakes and others do not eat theirs. Birthdays come at different times and are celebrated in different ways. I always thought that was what federalism was supposed to be about — diversity, variety, and not a little competition. ” (Wildavsky, 1998, p.57)3 4 6 In discussing the problem of coordination of and the confusion in federal programs, Sundquist and Davis assign an important role to communities, arguing “The critical premise is that the effectiveness of the execution of federal programs depends crucially upon the competence of community institutions to plan, initiate, and coordinate.”3 4 7 Much stress has been placed in recent times on citizen participation in governance activities. Vincent Ostrom defines “active citizen participation” as one of the seven 3 4 6 Reference: Wildavsky, Aaron (1998): “Fruitcake Federalism or Birthday Cake Federalism” {in Wildavsky: Federalism and Political Culture (Eds. Schleicher, David and Brendon Swedlow) [New Brunswick (NJ): Transaction Publishers], pp.55-64}. 272 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. important features. Shore has shown that community involvement in metropolitan transportation planning and land-use control, which in the US is sometimes a mandatory requirement, has generated good outcomes (for example, in Little Rock).3 4 8 Wildavsky assigns a key role to citizens—for exercising choice—and to the private sector—for competitive delivery of publicly demanded goods—in federalism. He says that: “When the fruitcake (which he essentially defines as a mishmash in governmental functioning) gives way to birthday cake designed for individual expression, when citizen choice characterizes federalism, the taste will differ state by state, which is as it should be if we want government to adjust to individual taste rather than adjusting people to their government.”3 4 9 In this sense it is possible to foresee communities/ civil society as the fourth tier of federalism. The question of involving communities in a federal system as its fourth level— whether formally through provisions in the law or informally—must be examined in the future studies. Some important questions the study would seek to examine are: - What role can be assigned to this fourth tier? {Sundquist and Davis (1969), Ostrom (1994) and Wildavsky (1998) offer indications for this} 3 4 7 References: Sundquist, James L. and David W. Davis (1969): Making Federalism Work: A Study o f Program Coordination at the Community Level (Washington, DC: The Brookings Institution), p. 243. 3 4 8 Shore, William B.: “Public Participation: Where It Stands; Where It Should Be Going” (From the website of Institute of Public Administration, New York at http://www.theipa.org/publications/ipareport.html) (Last Accessed on June 3, 2002 at 8:22am). 3 4 9 Reference: Wildavsky, Aaron (1998): “Fruitcake Federalism or Birthday Cake Federalism” {in Wildavsky: Federalism and Political Culture (Eds. Schleicher, David and Brendon Swedlow), pp. 55-64 [New Brunswick (NJ): Transaction Publishers]}, p. 59. 273 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. - What structures (physical or administrative or of incentives) must be created to enable this section to perform its role and enhance the working of federalism? It can be expected that this involvement will yield gains particularly as it will enhance citizen participation and involvement, increase accountability, enhance resource availability and induce greater transparency in government actions. In discussing the Orange County bankruptcy, Baldassare identifies voter disenchantment or disengagement with governments to be a major cause.3 5 0 Communities or civic society as the fourth level allowing greater avenues for citizen participation could help provide an antidote to or a safety valve against such problems. They can serve, on the one hand, as countervailing forces against excessive government and, on the other mediate between individuals and government. The advantages that decentralization will bring with it will be enhanced in a federal system, as the following quotation argues35 1 : Current decentralization reforms offer an unprecedented opportunity to promote increased popular participation in public decision making and improved management of public resources. Decentralization reforms open the way for multi-level planning systems and new, non-hierarchical forms of intergovernmental coordination as well as accountability of local governments both to the national governments and local constituents. With new authority and resources to plan and deliver services comes the opportunity for local authorities to adopt participatory approaches to local-level strategic planning, budgeting and capital programs. Decentralization reforms can, therefore, actually lead to improved local governance with a focus on partnerships between the local community and the private sector. 3 5 0 Baldassare, Mark (1998): When Government Fails: The Orange County Bankruptcy (University of California Press and Public Policy Institute of California). 3 5 1 Romeo, Leonardo: “Decentralization Reforms and Participatory Planning” (IPA Report), p.l (http://www.theipa.org/publications/ipareport.html) (Last Accessed on June 3, 2002 at 8:22am). Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 10.4 Conclusion: Federalism presents itself as a rich field of inquiry; particularly due to its extensive practice and due to the promise it holds for large, diverse, often strife-torn nations, for democracy and for governance. It is time for a qualitative shift in the studies of federalism from those that merely describe it or note its unreplicable features to those that aid its development and practice more generally. This dissertation is an attempt in that direction. Based on an intensive examination of the literature and keeping in view the experiences in governance and intergovernmental relations of different countries, it identifies five Essential Features of Federalism. It argues that the real life manifestations of the features can vary—from domain to domain and from time to time, depending on the stage of evolution of federalism. To demonstrate and justify this, it examines cases from the “enabling domain” and the “functional domain of environmental management” in India’s capital territory. From an analysis of the cases it explains the features and illustrates some of the shades that they might take in real life, alongside examining the influence of varied development of the features on each other and on the system as a whole. The experience has lessons to offer for capital cities in particular and for countries practicing and adopting federalism in general. Future research can also establish the utility of these institutions for systems other than federal ones—especially, for those attempting to decentralize. It must also continue to draw on available experiences to expand this list of essential features (we suggest three others also). It would be desirable 275 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. if future studies heeded our suggestion of adopting a pragmatic—rather than a dogmatic—and eclectic approach because practical experience of nations can enrich the field greatly and because with a vast variety of nations practicing this system the declaration of one model as the ideal type is rendered inappropriate. 276 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Bibliography Agarwala, A. N. and S. P. Singh (eds.) (1970): The Economics of Underdevelopment (London: Oxford University Press).Akalank Publications (1999): The New Delhi Municipal Council Act, 1994 and The Government of National Capital Territory of Delhi Act, 1991 alongwith Constitution (69th Amendment) Act, 1991, pp. 19 of the second part. Appleby, Joyce Oldham (1978): Economic Thought and Ideology in Seventeenth Century England (Princeton: Princeton University Press). 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DeBow, Michael: “Reforming Politics in the Age of Leviathan: A Skeptical View” (www.libertyhaven.com/theoreticalorphilosonhicalissues/skepticism/leviathan.htmr) (Last Accessed on 13th May 2002). Diamond, Martin (1961) “The Federalist’s View of Federalism” in George S. Benson (ed.) Essays on Federalism, pp. 21-64 (Claremont, California: Institute for Studies in Federalism, Claremont Men’s College), p.22 (: As stated by Vincent Ostrom (1994) in The Meaning of American Federalism: Constituting A Self-governing Society, p. 72). Dicey, A. V. (1914): Law of Constitution (8th edition), p. 153. Dicey, A.V. (1889): Introduction to the Study o f the Law of the Constitution, (3ld ed.), pp. 134-135. Dicey (1952); Haqqi, S.A.H. (1967) (ed.): Union- State Relations in India. Elazar, Daniel J. (1994): Federal Systems of the World: A Handbook of Federal, Confederal and Autonomy Arrangements, 2n d ed., p. xv (New York: Stockton Press). Elazar, Daniel J. 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(1995): The Failure of the Centralized State: Institutions and Self-governance in Africa (SF, California: ICS Press). “BJP, Congress trade charges on CNG issue” The Times of India, Wednesday, September 26, 2001, Cities: Delhi) (http:// www.timesofindia.com/ today). “Cell created to oversee moving industries from residential areas” in The Hindustan Times of September 20, 2000 (http://www.hindustantimes.com). “Commissioner blamed for hasty decision” in The Hindustan Times report dated November 21, 2000 (http://www.hindustantimes.com). “Delhi—‘Crime Capital’ of India” in “Newsnotes,” Ganashakti’s “Nation” fhttp://www.ganashakti.com/old/1999/990315/nation.htm) (Last Accessed on May 29, 2002)}. “Green and Bear It” in India Today on the Net, April 16, 2001 Issue, Home, Environment: Clean Delhi. 287 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. “Government Forced to Rescue MCD on Land Dispute with UP” in The Times of India, Cities, 31st January 2000 (http:// www.timesofindia.com/ today). “Govt, MCD lock horns over power to monitor facilities for TB patients” in The Times of India, Cities, Thursday, December 9th 1999, Posted at 0130 hours 1ST) (http ://www.timesofindia. com/today). “Government Forced to Rescue MCD on Land Dispute with UP” in The Times of India, Cities, 31st January 2000 (http:// www.timesofindia.com/ today). “Industries Issue: Adamant Khurana to go on fast” in The Hindustan Times of January 18, 2001 (http://www.hindustantimes.com). “Jagmohan lashes out at Delhi Govt, MCD” in The Hindustan Times of September 20, 2000 (http://www.hindustantimes.com). “MCD to Control 4 out of 7 ‘Colony’ hospitals” in Times of India, 3 March 2000, Cities, Delhi, (http:// www.timesofindia.com/). “MCD seeks L-G’s aid on Revenue Muddle” in The Times of India, Cities, Delhi, 9 November 2000 (http://www.timesofindia.com/). “One-upmanship Goes on Between MCD, Govt.” (The Times of India, Cities, Thursday, December 9l , 1999 (http://www.timesofindia.com/). “SC gives Delhi two years to clean up Yamuna” in The Hindustan Times, Wednesday, April 11, 2001, New Delhi (http://www.hindustantimes.com). “SC gives four weeks to shut Delhi polluting units” in The Times of India, Friday, 8 December 2000 (http:// www.timesofindia.com/ today). “State Government, Civic Body Funding Tussle Widespread” in The Times of India, Cities, Wednesday 1s t December 1999. Posted at 0130 hours 1ST (http:// www.timesofindia.com/ today). “Successive Govts to blame: Jagmohan” in The Hindustan Times, Tuesday, November 21, 2000, New Delhi, (http://www.hindustantimes.com). http://www.cgc.gov.au/CGCGeneralPage/historv of cgc.htm (Last Accessed on 29th May 2002)}. http://www.bigduck.com/AMMENDM.html. (Last Accessed on June 3, 2002 at 8:13am). Experience Sharing Workshop on Review of Structure and Working of the Municipal Corporation of Delhi (New Delhi, India: 16-17 January, 2001) {Organized by: Times Research Foundation and Government of National Capital Territory of Delhi}. 288 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Report of the Committee to Review the Structure and Working of the Municipal Corporation of Delhi. Report of the First Delhi Finance Commission on Municipalities, Vol. II 1996-2001. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Appendix A Functions ofM C, ( D €C JFDMC Vnder (DMC Act, 1957 & NDMC A ct, 1994 (Source: Report of the First Delhi Finance Commission on Municipalities, Vol. II, December 1997) Obligatory Functions u/s 42 of the DMC Act, and u/s 11 of the NDMC Act: [Subject to the provisions of this Act and any other law for the time being in force, it shall be incumbent] on the Corporation/Council to make adequate provision by any means or measures which is may lawfully use or take, for each of the following matters, namely: - a. the construction, maintenance and cleaning of drains and drainage works and of public latrines, urinals and similar conveniences; b. the construction and maintenance of works and means for providing supply of water for public and private purposes; c. the scavenging, removal and disposal of fdth, mbbish and other obnoxious or pollution matters; d. Only in case of NDMC the construction or purchase, maintenance, extension management for - i. supply and distribution of electricity to the public; and ii. providing a sufficient supply of pure and wholesome water. 290 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. e. the reclamation of unhealthy localities, the removal of noxious vegetation and generally the abatement of all nuisances; f. the regulation of places for the disposal of the land and the provision and maintenance of places for the said purpose; g. the registration of births and deaths; h. public vaccination and inoculation; i. measures for preventing and checking the spread of dangerous diseases; j. the establishment and maintenance of hospitals, dispensaries and maternity and child welfare centres and the carrying out of other measures necessary for public Medical relief; jj. the maintenance including the expansion and upgradation of facilities of the hospitals existing on the date of the commencement of the Delhi Municipal Corporation (Amendment) Act, 1993. For NDMC hospitals are not included, k. the construction and maintenance of municipal markets and regulation of all markets and slaughter houses (provision of Slaughter house is not in the NDMC Act) 1 . the regulation and abatement of offensive or dangerous trade or practices; m. the securing or removal of dangerous buildings and places; n. the construction, maintenance, alteration and improvements of public streets, bridges, culverts, causeways and the like; o. the lighting, watering and cleaning of public streets and other public places; p. the removal of obstructions and projections in or upon streets, bridges and other public places; q. the naming and numbering of streets and premises; r. the establishment, maintenance of, and aid to, schools for primary education subject to such grants as may be detennined by the Central Government from time to time; s. the maintenance of municipal offices; t. the laying out or the maintenance of public parks, gardens or recreation grounds; u. the maintenance of fire-bridge and the protection of like and property in the case of fire; 291 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. v. the maintenance of monuments and memorials vested in any local authority in Delhi immediately before the commencement of this Act or which may be vested in the Corporation after such commencement; w. the maintenance and development of the value of all properties vested in or entrusted to the management of the Corporation; and wa. the preparation of plans for economic development and social justice. x. the fulfilment of any other obligation imposed by or under this Act or any other law for the time being in force. Discretionary Functions u/s 43 of the DMC Act, and u/s 12 of the NDMC Act: [Subject to any general or special order of the Government from time to time,] the Corporation may [in its discretion] provide either wholly or in part for all or any of the following matters, namely; a. the furtherance of education including cultural and physical education, by measures other than the establishment and maintenance of, and aid to, schools for primary education; b. the establishment and maintenance of, and aid to libraries, museums, art galleries, botanical and zoological collections; c. the establishment and maintenance of, and aid to stadia, gymnasia, akharas and places for sports and games; d. the planting and care of trees on road sides and elsewhere; e. the surveys of buildings and lands; f. the registration of marriage; g. the taking of a census of population; h. the civic reception to persons of distinction; i. the providing of music or other entertainment in public places or place of public resort and the establishment of theatres and cinemas; j . the organisation and management of fairs and exhibitions; k. the acquisition of movable or immovable property for any of the purposes before mentioned, including payment of the cost of investigation, surveys or examinations in relation to thereto for the construction or adoption of buildings necessary for such purposes; 292 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. 1 . the construction and maintenance of - i. rest-houses, ii. poor-houses, iii. infirmaries, iv. children's homes, v. houses for the deaf and dumb and for disabled and handicapped children, vi. shelters for destitute and disabled persons, vii. asylums for persons of unsound minds; m. the construction or purchase and maintenance of dwelling houses for municipal officers and other municipal employees; n. the construction and maintenance of cattle pounds; o. any measures for the welfare of the municipal officers and other municipal employees or any class of them including the sanctioning of loans to such officers and employees or any class of them for construction of houses and purchase of vehicles; p. the organisation or management of chemical or bacteriological laboratories for the examination or analysis of water, food and drugs for the detection of diseases or research connected with the public health or medical relief; q. the provision for relief to destitute and disabled persons; r. the establishment and maintenance of veterinary hospitals; s. the organisation, construction, maintenance and management of swimming pools, public wash houses, bathing places and other institutions designed for the improvement of public health; t. the organisation and management of fanns and dairies within or without Delhi/New Delhi for the supply, distribution and processing of milk and milk products for the benefit of the residents of Delhi/New Delhi; u. the organisation and management of cottage industries, handicrafts centres, and sales emporia; v. the construction and maintenance of warehouses and godowns; w. the construction and maintenance of garages, sheds and stands for vehicles and cattle biers; x. the provision for unfiltered water supply; y. the improvement of Delhi in accordance with improvement schemes approved by the Corporation; 293 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. z. the provision of housing accommodation for the inhabitants of any area or for any class of inhabitants; and za. any measure not herein before specifically mentioned, likely to promote public safety, health, convenience or general welfare. 294 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Appendix B (Source: Report o f the First Delhi Finance Commission on Municipalities, Vol. II, December 1997, Annexure 5.3). £ 1 * 1 P 1 I P P I S s . fc O C5 s. s s a C3 O O IB « ? < ? = > ' S J S 8 : S 8 ■» 8 3 $ W « SB 5 is ? 5 s-s fc s *s_ ,r>4 > b w in p « ' > . « D 0 4 c m ■ % ® . ■ W » C M < o : J 8 S y si te s 3 8 I S S s sg < 7> <0 I 8 ST - m 8 8 8 SI s£ I S § I st.» o o fs 8 8 S > M { < 1 N ■ O W* ~*t <J h w; oo. 5 S S ? 8 S ? m s a a zzstnio a S I “ I I S fc a c j S S . J C J 5 c j o a s a s g n p o < o ’ w r s; ® o j •«■ «> « i'8 8 5 t— co \ ~ ' i J3 - :g» s s i 8 S S O <7* $ k ' « ¥ ■ r - 4 c m m . y y vs c m c m § ft« ! « S i <» -* -» 8 s q o. « • » 8 5 8 C M 8 8 3 5 5 8 C-4 V* e?i cm CM S ? 3 S * & o v ■ < k> ■ «~ r-a J f c f it os t n O (N N ; & > ^ §§ - < x » co > - - - a S I fe S | O W « S 3 5 S a 5 5 s? 3 f e S 5 S t 3 3 < E > a “ *ss < S $ « * I 1 i l i 295 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Appendix C (Source: Report o f the First Delhi Finance Commission on Municipalities, Vol. II, December 1997, Annexure 13.2). Anncsure 13.2: Losn Profile of Municipal CorporationafDclili Induction Its Inherited Liabilities of Erstwhile Local Bodies: 1949-50 10 20111-11 {Rs in Owes) Year Ouulanriioe Interest Total Balance of Principal Interest Opening 1-Apr received the Year Total Instalments fnr payment during the current years Closing balance 31-Mar Interest Due for Payment Due Paid Due* Paid Balance (1+2) (4-5) (3-5) (8-9) (7+10) 10 11 Erstwhile Local Bodies 1949-5(1 0.18) 3.50 3.50 0.00 0.00 0.00 3.50 0.00 0.00 0.00 3.50 1950-51 3.50 0.00 3.5(1 0.12 0.00 0.12 3.50 0.12 0.0(1 (M2 3.62 1951-52 3.5(1 0.00 3.50 0.12 0.00 0.12 3.50 (1.12 0.00 0.12 3.62 1952-53 3-5(1 0.00 3.S O 0.12 0.00 0.12 3.50 0.11 o.ou 0.1! 3.61 1953-54 3.50 30.00 33.50 0.12 0.00 0.12 33.30 0.11 0.0(1 0.11 33.61 1954-55 33.50 58.05 91.55 1.12 0.00 1.12 91.55 1.61 0.00 93.16 1955-56 91.55 37.28 128.83 3.05 0.00 3.05 128.83 4.30 0.00 4.30 133.13 1956-57 128.83 41.55 17(1.38 4.29 0.00 4.29 170.38 6.02 0.00 6.02 176.40 1957-58 170.38 116.36 286.74 5.68 0.00 5.68 286.74 7.89 (1.00 294.63 TOTAL 286.74 286.74 14.62 (i.oe 14.62 286.74 20.28 0.00 21.28 307.02 Munition! Corporation of Delhi 1958-59 180.59 82.00 262.59 9.56 (1.00 9.56 262.59 13.43 0.0(1 13.43 19.19 1959-60 262.59 9D .IK ) 352.59 15.29 0.00 15.29 352.59 21.11 o.ou 21.11 25.48 1960-61 352.59 0.00 352.59 15.29 24.13 -8.84 328.46 20.37 0.00 20.37 31.86 1961-62 328.46 140.00 468.46 24.12 24.17 -0.05 444.29 26.00 0.0(1 26.00 31.18 1962-63 444.29 200.00 644.29 31.12 22.65 8.47 621.64 29.81 38.25 .*.44 45.31 1963-64 621.64 10.00 631.64 31.12 25.23 5.89 28.35 44.56 -16.21 55.87 1964-65 606.41 32.00 37.47 30.94 6.53 31.92 58.29 -20.37 65.53 1965-66 607.47 50.00 657.47 39.38 10.84 28.54 31.76 30.88 0.88 67.26 1966-67 646.63 0.00 42.71 13.53 29.18 633.10 32.59 24.16 *.43 70.18 1967-68 633.10 U1.70 744.80 46.71 7.18 39.53 737.62 33.84 17.21 16.63 75.31 1968-69 737.62 10.00 747.62 49.88 57.63 -7.75 689.99 34.41 17.08 17.33 78.28 1969-70 689.99 0.00 689.99 S O .55 24.60 25.95 665.39 32,52 43.48 -10.96 77.13 1970-71 665.39 51.0(1 716.39 53.95 87.06 -33.11 629.33 32.71 S7.93 -55.22 74.77 1971-72 629.33 26.00 655.33 53.95 150.27 -96.32 505.06 30.06 45.60 -15.54 78.30 1972-73 505.06 146.(81 651.06 56.12 41.9! 14.21 609.15 28.89 21.82 7.07 79.30 1973-74 609.15 0.00 609.15 97.85 85.64 1 2221 34.50 36.85 -2.35 123.56 1974-75 523.51 0.00 523.51 97.85 12.40 85.45 511.11 29.32 7.67 21.65 118.89 1975-76 511.11 3.00 514.11 97.85 0.00 97.85 24.13 0,00 24.13 114.22 1976-77 514.11 256.54 98.05 300.00 -201.95 47(1.65 19.17 40.50 -21.33 71.36 1977-78 470.65 195.13 665.78 66.82 125.00 -58.18 540.78 36.01 5.73 30.28 92.38 1978-79 540.78 314-30 855.08 72.13 128.00 -55.87 727.08 47.33 8.13 39.2<] 111.60 1979-80 727.08 30.00 757.08 177.80 125.52 52.28 631.56 65.43 0.00 65.43 221.06 1980-81 631.56 34.25 6G5.81 173.80 1.90 171.90 663.91 56.44 0.00 56.44 212.58 1991-82 663.91 108.00 174.30 0.00 174.30 47.76 0.00 47.76 111.90 1982-83 771.91 168.10 940.01 78.16 1.11 77.05 938.90 51.79 0.00 51.79 118.86 1983-84 93B.90 831.6(1 1,770.50 85.10 3.36 81.74 1,767.14 61.41 3.19 5*,22 138.72 1984-85 1,767.14 3020.62 137.68 136.00 1.68 4,651.76 128.39 105.63 21.76 252.79 1985-86 4,651.76 1496.26 6,148.02 335.22 297.46 37.76 5,85(1.56 407.77 17S.35 232.42 712.4! 1986-87 5,851156 1930.75 7,781.31 429.63 245.22 184.41 7,536.09 S31.28 265.73 265.55 920.94 1987-88 7,536.09 2824.00 10,360.09 S57.ll 269.49 287.62 10,090.60 689.56 97.47 592.09 1,193.62 1988-89 10,090.60 2575.50 12,666.10 743.99 100.00 643.99 12,566.1(1 926.28 114.00 811.28 1,592.49 1989-90 12,566.10 4714.72 17,280.82 910.08 136.57 773.51 17,144.25 1118.52 69.67 1,043.85 1,938.92 1990-91 17,144.25 2964.67 2 1458.66 461.07 997.59 19,647.85 1512.70 275.00 1,237.70 2,612.05 1991-92 19,647.85 5U29.00 2 1656.30 491.39 1,164.91 24,185.46 167(1.69 436.96 1,233.73 2,971.92 1992-93 24,185.46 4029.32 2 2160.74 714.80 1,445.94 27,499.98 2035.28 318.77 1,716.51 3,631.55 1993-94 27,499.98 3835.80 3 2411.92 714.80 1,697.12 30,620.98 2304.79 245.52 2,059.27 4,171.01 1994-95 30,620.98 3X98.66 3 2656.74 914.80 1,741.94 33,604.84 2534.10 468.04 2,066.06 3,962.35 1995-96 33,604.84 4375.25 3 2913.90 642.7S 2,271.15 37,337.34 2739.51 100.74 2,638.77 4,468.76 1996-97 37,337.34 2843.33 3009.(1* 5,029.63 1997-98 2841.05 2695.45 4,748.24 1998-99 2579.05 2409.80 4,463.06 1999-00 2568.35 2125.08 4,139.10 2000-01 2512.91 1845.21 3,350.03 2001-02 2311.54 1584.66 2,994.60 2002-03 2211.79 1334.31 2,598.70 2003-04 2083.07 1097.15 2,235.77 2004-05 1893.25 879.42 1,765.27 2005-06 1718.63 679.51 1,431.76 2006-07 1524-3! 499.53 994.98 2007-08 1326.67 339.80 657.01 2008-09 1076.34 206.32 588.06 2009-10 807.31 105.41 291.68 2010-11 551-69 36.46 2011-12 291.68 0.00 Converted Into grant 10.00 TOTAL 1958-59 to 43,881 253,851 18,164 6,427 11,736 147,423 37420 3,204 14,316 31,046 1995-96 Note: 1 . Figurest) outstanding as shown in this statement may not tally with budget figures as in the latter ease loans nbUiincd oiler the finmuaal ycitr, Lc. after M.eich 31 uf the year are also inchided. 2. For the Erstwhile LBs, repayment figures arc not available. However, tota principal paid isgjv m which amiranls to «R s 106.14 lakhs and the uttamiding taken over by MCD is Rs 180.59 cr at its ovation. 3. For the years 1960-61 & 19962-63 no break-up of debt payments into payment of principal installment and interest liability was given. Ilhns been estimated by using ratio of 1963-64. 4. For the years 1963-64, Die Corporation has intimnted vide letter No. CA/B&A/97/28/254.1997, that the total loan was Sts 104 lakhs instead of Rs 1 1 8 1 L akh as shown in the statement. Similarly variations have been noted lor tlte following years: 19GS-66 - Rs 44 lakhs, 1967-68 - its 43 lakhs nndfor 1976-77 Rs 256.54 lakhs. S. For the yiars from 1958-59 to 1973-74, the figures provided by tbs Corporation differ from the figures shown in Statistical Abstract of India published by Centnd Statistical Orgunisilitn (CSO). ' Estimated bv using figures as shown in Appendix of Loan Statement tn th Budget Pnpersfnrthe period 1949-50 to 1995-96.. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. * * * * * * * a * * ju < * * * * e • * Appendix D (Source: Report o f the First Delhi Finance Comm ission on Municipalities, V ol. II, December 1997, Annexure 6.3). — ~*T r r fFSr’ > ~ ^ T jT * 1 7^ “ “ V — iyj’ - '- f : * 5 • • 1 1 . 3 ■ » . ir 'jtfsh ’ ’ * * ♦ * '* i ' f * * 7 I . ^ * « * ^ « / * » ' ^3 r! ; f-W r a * ' l - J K : n i ' ' * * * J f a II ■ * «V*:r •, - ? * 5 ? i * * ^ ' * r~ -f# 7 v ^ # * ^ ', V " % * X »i & ' t ? j s • > A *. i% ■ v5 " .* * : * 5 i { - : §j ♦ J £ ( £ , jiiti'i - i ;V. v; '3# ' j’4* ~ 11 r t * ~ * : ' r ' 1 > ’ i Jf' 'Sti a t ( » , "'Vs5 1 * 1 i'Vs j E 3 \ * • A - s - j V . i i f v t4 4 J ■ * r; -ill! * r‘ * ‘ C V '^ > « i ~ • ’ V s'"' 7d # f - - •» • ‘ i n \ i * Pfllijlfli ■ v : t , J | t * A * 1 f * A s ? rr * - * - -Civ- * * * T - ‘ ' I s 1 llllf: / ? • » * * . f 5'jK - f * -’ -'% r- * r < w ^ - \P ; ' ;s ;^ X r|s;n; -. w - v * S V ^4 : H r - v f , + . * > * * > 1 i % f V s : , - ' . 1 3 r--v*V~* ' ••I*;; **■: * > ^ - * i -.siis-;- • , / V • ; ~ * 2 1 , 1 * • $ 1 v /^ -sr - ^ T £ < 3 V * ’ .if' t " " i « ! \ “ s n 's C < * «S * 4 g * £ * '• * « * ' >V ? i s : : * *;Y r.» ' .< 2 * d 3 S 1 H * * • " 'd ’ O - X 1 t I I I ; > ♦ ' j * • / • . r'-c * i % « • # * " * * * ‘ ’ ■ ; j • 3 ; ; ! i i rfirriTfife^ » A Y * 2 U * -f * * i | r ? j . < i r ! - t f s J* r~'ls ■ I * rE If • :i! f j-/,; h L’ i i s i . - T - r i t j 297 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Appendix E (Source: Report o f the First Delhi Finance Commission on M unicipalities, Vol. II, December 1997, Annexure 5.2) r « t M W E ^ jv c q ■ « » ; 6 ■ O € £ ? O O O < \* in c j * * * to S> t#.fe l l ss « s & * u „ o o o o m d >o o d o cst < S » « S » €» -:0 s s | | I S sS'^l *? ' * 1 | l ? | <« w - <n v> 3 S i S 5 2 ft S f g S i g S S g SB & 3 9 < & ■ ^ ^';<S § s? s? K S ? i ? : 9 i ^ ^ O ^ in «» f i S f . S S S S fe S r fS lS S m t-~ o» -* » • «g « N * W | » J f> 0 > V tt» t 2 wa ' «n I ■ e s s Q « T 5 > < © - > • * - O '* «5, ci f | « w 4 D « « f r e» 8 ? - ? S3 5 ;m : < S E > f .* n i 'C ,< * * « » rN fiir 3 .j« 3 ij^ - - x < * 5 « s » * n * e4 < * * # * * & & &; - & n w s i te s ? S s ? § S ?g Jf?3 |& a© £- « -» * - * - < o 0 4 ;.■ * - * ! • fe t4 a s : ? n a is * *- *n <n © » 4© « 0 > g l g ^ S S ? * SJQ :i ■ 'S t * i-O' N , d S © Q £M lNf.:«B~; Wj t 4S$ X B j * «» 'sr:v-j f x > » ' <0!ie"- 5 2 S 2 S S S fe-S! 2 3? Sf cn <n ^ -«r ?•) n to m * < * > v> to * * ? c* O* -s r~ V5 «» S 8 , S 8 5 2 5 S S cs f-- «ys S? ^ fiC * - x g f t < 3 C » < « f * • ■ ? t* » * ; . • ’ s r : < « # • or;*’ **;-*-: 1 «* « o > o f> ««k %ti' - - v~ •'Kf'<2h S * 1 ® < " * * * * '* ■ fflJ C | © «3 W » s s r 2 » i i S F 2 2 « 3 S < s» m t 3 > a> s g s 8 S 5 8 ? ^ R S ? ? ! f S t S 5 2 S S ^ ^ ® ® l;5 s m S 8 ^ & S t g 2 Si S? 35 § 8. Sg » a; si S3 a * > * . tj© tn n «» SS2.fr © «r> v - * ! » ■ s ^ a s s t g a» f** «* S S f 3 S 5 5 » O ^ <N *J» « s> v» ^ ^ S j * t ^ * * - - * . 1 ^ * - . «» t* i ad***- 4f» fO -r- g £ i p : « 5 V ' - . x s jl ^ oS | •» ^ > w ’ ** « x s S 5 I S 5 m wt « ' S £ ' s 1 * 1 s 3 ^.-£3 ii a i a p to * 2 ; t S F K io i^ iw 8F!»fe: 5 8 ^ ’*.' 3 £ r s 3 i i !QSSsl SS iS ^ § 5 S fc iSi « " 3 e o .'st- < Sfet: ^ • 8f?Rw' sgssg; O Jffli© ! « £ 3 ^ 5?:s: g f S 3 fe -“ 1 . o ^ tv i «a- o j 298 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission.

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Creator Prakash, Vandana (author)

Core Title Essential features of federalism: A study of federal evolution in India's Capital Territory

School Graduate School

Degree Doctor of Philosophy

Degree Program Public Administration

Publisher University of Southern California (original), University of Southern California. Libraries (digital)

Tag OAI-PMH Harvest,Political Science, public administration

Language English

Contributor Digitized by ProQuest (provenance)

Advisor Tang, Shui-Yan (committee chair), Biller, Robert (committee member), Cooper, Terry L. (committee member), Hubbard, John R. (committee member)

Permanent Link (DOI) https://doi.org/10.25549/usctheses-c16-258205

Unique identifier UC11339452

Identifier 3093806.pdf (filename),usctheses-c16-258205 (legacy record id)

Legacy Identifier 3093806.pdf

Dmrecord 258205

Document Type Dissertation

Rights Prakash, Vandana

Type texts

Source University of Southern California (contributing entity), University of Southern California Dissertations and Theses (collection)

Access Conditions The author retains rights to his/her dissertation, thesis or other graduate work according to U.S. copyright law. Electronic access is being provided by the USC Libraries in agreement with the au...

Repository Name University of Southern California Digital Library

Repository Location USC Digital Library, University of Southern California, University Park Campus, Los Angeles, California 90089, USA