COVID-19 in India: Examining the Structural Enablers of Over-Centralisation (I)

Anindita Mukherjee

NALSAR University of Law, Hyderabad

Editors’ note: this is part I of a two-part post on COVID-19 in India. Part II can be found here.

The Indian state’s response to the COVID-19 crisis has been breath-taking in its callousness. It has unleashed a humanitarian disaster of mammoth proportions, described by some as the worst that we have witnessed since achieving independence. It has also exposed, in ways that are now impossible to ignore, the perils of an over-centralized state. In this two-part essay I sketch out the state response, focusing on the dynamic between the Union and the States. The first part looks at the constitutional and statutory structures that enable consolidation of power at the Union level. The second examines existing systems of accountability and their response to state action during this emergency. In the process, I also attempt to reflect on the relevance of conversations about the constitution and social rights at a moment when state functionaries seem to have abandoned any pretence of upholding constitutional values.

Legislative Powers

The federal system in India distributes legislative powers through three lists of subjects: Union, State and Concurrent. Public health is a State subject in this classification. Thus, as cases of the virus began being recorded, individual States swung into action. The southern state of Kerala saw the first case, on January 30, and its well-oiled public health system, freshly prepared to deal with epidemics courtesy the Nipah virus outbreak in 2018, kicked in. They quickly established contact-tracing, requested senior citizens and vulnerable individuals to reduce social contact, and announced a partial lockdown. Simultaneously, the State undertook to provide free rations for all households with ration cards, home-deliver mid-day meals for school-going children and suspend the collection of electricity bill dues for couple of months, amongst other ameliorative measures. In several other States too, partial lockdowns were imposed, requiring educational institutions, cinema halls, gyms, shopping malls, etc. to remain shut; several states announced relief measures alongside, though none as comprehensive as Kerala’s. These executive orders were issued under the Epidemic Diseases Act of 1897. The Act was enacted to curb the spread of the bubonic plague during the Bombay Presidency and was subsequently extended to various states over the years. It is technically a Central statute but, on account of its peculiar piecemeal history (it originally envisaged the Governor-General in Council empowering local authorities), is designed to empower State governments to take steps towards the containment of contagious diseases.

While states were responding to the crisis, between January 30 and March 18, the Union government insisted that the threat posed by the virus was not real, going as far as to object against Members of Parliament wearing masks in the House. It held a rally with upwards of a hundred thousand people to welcome Donald Trump to India and toppled a state government in Madhya Pradesh, in the meantime. On March 19, the Prime Minister finally addressed the nation on the pandemic, extolling the need to observe social distancing norms and requesting all residents of the country to observe a people’s curfew on March 22.

Reports indicate that the plan of action, thereafter, was that States would lockdown districts with a high incidence of COVID-19 cases, while keeping others functioning with requisite safeguards. This would balance livelihood needs against the immediate requirement to contain the spread of the virus, and ensure that control remained in the hands of State governments that have a more granular understanding of the situation as it plays out. Inexplicably, however, on March 24, the Prime Minister announced a three week-long, nation-wide lockdown. The announcement was made without any consultation with Chief Ministers of the States. The speech was delivered at 8:00 pm and the lockdown was to begin at the stroke of midnight, giving States exactly 4 hours to prepare for a near complete cessation of economic activity.

India, thus, managed to precipitate a humanitarian crisis of a mind-boggling magnitude, even before the virus had made substantial inroads into most States. For the millions of daily-wage workers across India, life without work was simply not sustainable; for farmers harvesting perishable crops, a sudden disruption in the supply chain meant, well, that their harvest perished; those in abusive familial settings had no time to escape, leading to dramatic spikes in helpline calls relating to child abuse and spousal abuse. The government ought to have, at the very least, addressed the concerns of those who were most obviously going to be rendered vulnerable by the lockdown while announcing it, but it chose not to. The lockdown has been extended four times since, with each iteration reducing its severity, ironically as cases continue to mount (see graph below). The Union government has announced two relief packages, neither of which provided any substantial immediate relief to the millions rendered vulnerable, choosing instead to engage in a game of smoke and mirrors. The State governments have been left holding the baby.

1. A Graph of Daily Cases against Time

The Union government’s one-size-fits-all intervention came, ostensibly, from its powers under the Disaster Management Act of 2005, a central statute enacted under the Union’s residuary powers, since disaster management is not a subject expressly listed in any of the Union/State/Concurrent lists. In April, it also amended the Epidemic Diseases Act, through an ordinance, to increase the Centre’s powers under the statute. Given that the threat posed by the virus is not time-bound, and we have no means of determining when it will become manageable, when vaccines will become available and accessible fairly, the situation begs the question: till when will the Centre be permitted to make incursions into States’ functioning, under the guise of disaster management?

To exacerbate an already grim situation, the Prime Minister created an emergency fund named PM Cares, ignoring the existing PM National Relief Fund (which is audited), and then promulgated an Ordinance to grant contributors to this Fund income tax benefits and permitted foreign donations into the Fund. It also issued a memorandum under the Companies Act, 2013, clarifying that contributions to the PM Cares Fund would be considered valid CSR contributions. It, however, refused to amend the CSR spending list to include Chief Ministers’ Emergency Relief Funds, thereby channelling all foreign and corporate donations into an opaque, non-governmental fund, while obstructing States’ access to the same.

The distribution of legislative powers clearly tilts in the favour of the Union. The Union list has a larger number of subjects; in cases of conflicts between the Union and the States on subjects in the Concurrent list, the Union trumps; residuary powers rest with the Union. Consequently, States can find themselves held at ransom by Union decisions that impact their functioning, but about which they have no say.

Fiscal Structure

The fiscal relationship between the Union and the States has always been a sore point for State governments. The Union collects a vast majority of taxes in the country, and states are dependent upon the Union for its disbursement. The two major independent sources of revenue for States are the sale of liquor and petroleum. The lockdown saw liquor shops being shut indefinitely. With vehicular traffic being disallowed, the sale of petrol and diesel too fell dramatically. The recent replacement of state and central indirect taxes with a centralized Goods and Services Tax has meant that States are dependent on the Union’s release of State shares in GST too. The Centre on the other hand continued to have other sources of revenue open, including income tax. A Union government decision, therefore, has had the consequence of nearly emptying state coffers, with states having to sell government bonds at high interest rates to meet their welfare commitments. The likely fallout of such a situation is a dramatic reduction in social sector spending in the future.

Planning Practices

Independent India adopted a centralized planning model, with a national Planning Commission chalking out Five-Year Plans, till 2014, when the newly formed National Democratic Alliance government disbanded the Planning Commission, ironically, promising greater federal practice. This planning mechanism combined with Article 282 of the Constitution which allows both the Union and States to fund activities that lie outside their legislative competence, has meant that the Union has always meddled in State subjects through policy and finance. For instance, it is estimated that 75 percent of the first Five-Year Plan and 65 percent of the Second Plan dealt with matters in the State List. While States usually fund a substantial portion of the Centrally Sponsored Schemes that form a cornerstone of the Planning Commission’s forays into the social sector, they rarely plan for them, and the planning apparatus is moribund in most States. The sudden disbanding of the Planning Commission, instead of leading to greater decentralisation, has in fact created a planning vacuum and concentrated power in the Prime Minister’s Office. In the vast disparities in State responses to the COVID-19 crisis and the disparities in recovery rates, for example, the consequences of such a planning vacuum are evident.

In terms of legislative jurisdictions, money power and the planning apparatus, thus, the Indian federal structure is demonstrably lopsided. This poses a problem for localised decision-making at the best of times, but has proved to be lethal in a time of crisis.

Anindita Mukherjee is Doctoral Fellow at NALSAR University of Law, Hyderabad and the author of The Legal Right to Housing in India (New Delhi: Cambridge University Press, 2019).

Suggested Citation: Anindita Mukherjee ‘COVID-19 in India: Examining the Structural Enablers of Over-Centralisation’ IACL-AIDC Blog (4 June 2020) https://blog-iacl-aidc.org/social-rights/2020/6/4/covid-19-in-india-examining-the-structural-enablers-of-over-centralisation-i