Union and States: Federal Structure and Devolution

The 73rd and 74th Amendments made panchayats and municipalities constitutional bodies. Three decades on, the tier exists everywhere and governs little.

What has worked

Representation: 3.1 million elected representatives, nearly half of them women.

Delivery where devolution was real: Kerala's People's Plan and Kudumbashree show what panchayats with funds and functions deliver.

Why it has not

Functions: the Schedule subjects are illustrative; parastatals such as development authorities and water boards do the real work.

Funds: municipal own revenue is near 1 per cent of GDP, and most receipts arrive as tied grants.

Functionaries: staff belong to state cadres, so a sarpanch cannot direct the implementer.

Cities fare worst: the mayor of Bengaluru gets a one year term while power rests with a commissioner appointed by the state.

What would improve it

Statutory activity mapping: as the Second ARC urged, with staff and budget attached to each subject.

Own revenue before transfers: the Sixteenth Finance Commission grant of ₹7.91 lakh crore cannot replace a property tax base.

The third tier was created by the Constitution but is still funded and staffed at the pleasure of the states.

Decode

Critically examine plus suggest. Do not accept the statement wholesale, since a critical examination weighs both sides before recommending.

Implicit demand

The failure is of devolution, not of the institution. Separate what the Constitution created from what the states permitted.

Architecture

The mandate → what has worked → why it underperforms → the fix → verdict.

Articulation

Anchor: the 73rd and 74th amendments, the eleventh and twelfth schedules, the three Fs, state finance commissions, the Sixteenth Finance Commission grant of ₹7.91 lakh crore. Money line: the third tier was created by the Constitution but is still funded and staffed at the pleasure of the states.

What has worked

Kerala's People's Plan Campaign, 1996 moved a large share of plan funds to local bodies; Kudumbashree now has over four million members and carried relief work through the pandemic.

PESA, 1996 gives gram sabhas in Fifth Schedule areas control over minor forest produce and a consent role in land acquisition, the strongest statutory devolution anywhere in the system.

Panchayats ran quarantine centres, ration distribution and migrant registers during the pandemic, when no other tier had the reach.

eGramSwaraj and the Ministry of Panchayati Raj's Devolution Index made devolution measurable state by state, so the failure is now documented rather than merely alleged.

Why it has not

The RBI Report on Municipal Finances puts municipal own revenue at roughly 1 per cent of GDP; property tax realisation is a small fraction of assessed potential.

District Planning Committees and Metropolitan Planning Committees, mandated by Articles 243ZD and 243ZE, exist on paper in most states and plan nothing.

Ward committees and area sabhas, required in cities above three lakh, are largely absent, so the citizen has no forum below the councillor.

Rotation of reserved seats each term prevents any incumbent from building a base or accumulating experience.

Parallel bodies such as the DDA in Delhi, state water boards and urban development authorities hold precisely the functions the Twelfth Schedule lists.

The Second ARC sixth report on Local Governance, 2007 remains substantially unimplemented after nearly two decades.

What would improve it

A framework law on devolution, as the Second ARC proposed, so that activity mapping is statutory rather than administrative.

Directly elected mayors with five year terms, and a dedicated municipal cadre answerable to them.

Separate municipal accounts, national municipal accounting standards, and a mandatory annual audit published online.

Land value capture, betterment levy and rationalised user charges as own revenue instruments that do not need state permission.

Devolution linked transfers: the Fifteenth Finance Commission tied grants to publishing accounts and meeting service level benchmarks, a lever worth extending.

KILA in Kerala as a template for a permanent local government training institution in every state.

Delhi is a union territory with a legislative assembly under Article 239AA. Its elected government's competence excludes police, public order and land, and the Lieutenant Governor is not a titular head. The design itself contains the conflict.

What the 2018 judgment held

Aid and advice binds: the Lieutenant Governor is bound on every matter within the assembly's competence.

No general discretion: he has no independent decision making power and cannot require his concurrence for every file.

The reference power is exceptional: the proviso permitting a reference to the President is for substantial issues, not routine use.

The principles invoked: collective responsibility, federal balance and constitutional morality. Delhi was held to be sui generis.

Why it could not settle the tussle

It left services undecided: precisely where the daily conflict lives.

The proviso survived: and what counts as substantial cannot be fixed in advance.

Article 239AA was untouched: so Delhi still lacks instruments a state possesses.

Enforcement is slow: each fresh dispute needs fresh litigation, so a victory in principle becomes delay in practice.

What followed proves the point

2019: a two judge bench split on services, leaving the central question open four more years.

2023: a Constitution Bench held the elected government controls services other than the excluded entries, grounding it in the triple chain of accountability.

Within days: Parliament enacted the GNCTD Amendment Act creating the National Capital Civil Service Authority, in which the Lieutenant Governor's view prevails. That law is itself under challenge.

A court can interpret an ambiguous provision. Only Parliament can remove the ambiguity, and Parliament has chosen instead to use it. The 2018 judgment settled the principle and left the machinery untouched, which is why the tussle continued.

Decode

A question shaped as yes or no. The honest answer is that it could not, and the events since 2018 supply the proof.

Implicit demand

The dispute is structural and arises from Article 239AA itself. A judgment interpreting an ambiguous provision cannot remove the ambiguity.

Architecture

The constitutional position → what the judgment held → why it could not settle matters → what has happened since → verdict.

Articulation

Anchor: Article 239AA and the excluded entries, the 2018 Constitution Bench, the 2019 split verdict, the 2023 Constitution Bench on services, the subsequent amendment to the GNCTD Act. Money line: a court can interpret an ambiguous provision, but only Parliament can remove the ambiguity, and Parliament has chosen instead to use it.

What the judgment held

The bench led by Chief Justice Dipak Misra held Delhi to be neither a full state nor an ordinary union territory, a status it called sui generis.

Constitutional morality, collaborative federalism and pragmatic federalism entered the working vocabulary of centre and state disputes from this judgment.

The operative clause is the proviso to Article 239AA(4): the Lieutenant Governor must communicate a difference of opinion, not manufacture one.

The Court expressly rejected the argument that the Lieutenant Governor is an administrator in the ordinary union territory sense.

Why it could not settle the tussle

The 2023 Constitution Bench under Chief Justice Chandrachud grounded control over services in the triple chain: civil servants answer to ministers, ministers to the legislature, the legislature to the people.

Article 239AA(7) permits Parliament to legislate for Delhi, and the 2023 amendment used exactly that route, which is why a judgment could not close the question.

The recurring flashpoints are narrow and operational: transfer and posting of officers, jurisdiction of the anti corruption branch, and the power to constitute commissions of inquiry.

Puducherry produced a parallel dispute; the Madras High Court in 2019 held that the Lieutenant Governor cannot interfere in day to day administration.

What would improve it

Full statehood is one route, but a clear statutory division of functions would resolve most of the friction without it.

A time limit and a written reasons requirement for any reference under the proviso, which would stop the exception becoming the routine.

The Sarkaria and Punchhi Commission principles on administrative relations, applied to the centre and union territory relationship.

A standing consultative mechanism between the Lieutenant Governor and the Chief Minister, so that differences are recorded and resolved before they reach a court.

The Sixteenth Finance Commission has recommended ₹4.35 lakh crore for rural local bodies. Yet panchayats raise under 5 per cent of their own revenue, according to the Reserve Bank of India (RBI).

Importance of panchayats

Democratic depth: The 73rd Amendment of 1992 created over 2.5 lakh panchayats with about 31 lakh elected representatives.

Voice for the excluded: Reservation for women, raised to half in over twenty states, has brought about 14 lakh women into office.

Local planning: Gram Panchayat Development Plans let villages set priorities, and the gram sabha anchors social audit.

Delivery: Panchayats implement rural employment, water supply under the Jal Jeevan Mission and sanitation.

The limit: States have devolved few of the 29 subjects in the Eleventh Schedule, so grants make panchayats answerable upward rather than to voters.

Sources beyond grants

Own taxes: Property tax is permitted in most states but rarely collected, and SVAMITVA property cards can now provide the assessment base.

Non tax revenue: Fees from markets, fairs, water supply, ponds and common land, and a share of royalty on minor minerals, can be charged.

Income yielding assets: Shops, cold storage units and small solar plants give steady income that grants cannot.

Institutional finance: Pooled borrowing and loans against assured grants can fund larger works.

Community and corporate funds: Corporate social responsibility funds and voluntary labour, as in Hiware Bazar, add resources.

Panchayats bring government to the village, but dependence on grants keeps them agents of the state. Own revenue is the condition for real self government.

Decode

Two parts: assess importance, then list sources of finance other than grants. Assess allows a limitation to be noted.

Implicit demand

The second part is where marks are won, and it must go beyond grants in every point. Data on the share of own revenue shows why the question matters.

Architecture

A data hook from the Finance Commission and RBI → importance with one limitation → five sources beyond grants → verdict linking finance to autonomy.

Articulation

Anchor: ₹4.35 lakh crore for rural bodies, under 5 per cent own revenue, the 73rd Amendment, 14 lakh women, SVAMITVA, Hiware Bazar. Money line: own revenue is the condition for real self government.

The finance picture

The RBI found that own tax revenue formed about 1.1 per cent and non tax revenue about 3.3 per cent of panchayat revenue, with grants making up the rest.

Average revenue per panchayat was about ₹21 lakh, ranging from under ₹3 lakh in Andhra Pradesh to about ₹64 lakh in West Bengal.

The Sixteenth Finance Commission recommended ₹7.91 lakh crore for all local bodies, of which ₹4.35 lakh crore is for rural bodies.

Its grants are split 80 per cent basic and 20 per cent performance based, and half of the basic grant is untied.

Entry conditions include timely constitution of State Finance Commissions and publication of audited accounts.

Importance beyond the answer

Article 243G empowers states to endow panchayats with powers for economic development and social justice.

The PESA Act, 1996 gives gram sabhas in Fifth Schedule areas control over minor forest produce and consent over land acquisition.

Panchayats played a key role in the pandemic response, running quarantine centres and tracking migrants.

Kerala's People's Plan Campaign of 1996 devolved about a third of the state plan to local bodies.

The eGramSwaraj portal and audit online bring panchayat accounts into public view.

More ways to raise resources

Profession tax, entertainment tax and tax on advertisements where state laws permit.

User charges for services such as solid waste management, with exemptions for the poor.

Leasing of fisheries in village ponds and auctions of produce from common land.

Carbon credits and payments for ecosystem services from community forests and restored wetlands.

Convergence with schemes such as the Members of Parliament Local Area Development Scheme and state rural development funds.

Stronger State Finance Commissions and capacity building for tax assessment and collection.

When Parliament banned online money games in 2025, states argued that betting belongs to them. Two judicial principles settle such overlaps.

Harmonious construction

The rule: Courts first read both entries so that each survives, since no entry should be left meaningless.

How it works: Each entry is read broadly but not so as to swallow another, and the law is judged by pith and substance.

The case: In Calcutta Gas Company (1962), the court reconciled entries on gas and industries, and the state law stood.

Federal supremacy

The rule: Where conflict cannot be reconciled, the Union prevails under Article 246.

Repugnancy: On a Concurrent subject, a repugnant state law is void under Article 254, unless the President assents.

The case: In Hoechst Pharmaceuticals (1983), the court read the laws together first and gave the Union primacy only where they clashed.

Harmonious construction is the courts' first instinct and federal supremacy the last resort. Together they keep the division of powers workable.

Decode

Explain two principles and show that both emerged from judicial resolution of disputes over legislative powers.

Implicit demand

The order matters. Harmonious construction is tried first, and federal supremacy applies only when reconciliation fails, which most answers reverse.

Architecture

A current hook of an overlap → harmonious construction with rule, method and case → federal supremacy with rule, repugnancy and case → verdict.

Articulation

Anchor: Articles 246 and 254, pith and substance, Calcutta Gas Company 1962, Hoechst Pharmaceuticals 1983. Money line: harmonious construction is the first instinct of the courts and federal supremacy the last resort.

The constitutional scheme

Article 246 distributes powers through the Union, State and Concurrent Lists of the Seventh Schedule.

The Union List has primacy, then the Concurrent List, and the State List yields to both in case of conflict.

Article 248 and Entry 97 of the Union List give residuary powers to Parliament.

Article 254(2) allows a state law repugnant to a Union law to prevail in that state if the President assents, though Parliament may still override it.

Articles 249, 250, 252 and 253 let Parliament legislate on State List subjects in specified situations, including to implement treaties.

Doctrines the courts use

Pith and substance: the true character of a law decides its validity, and incidental encroachment is allowed, as in Prafulla Kumar Mukherjee (1947).

Colourable legislation: what cannot be done directly cannot be done indirectly, as in K.C. Gajapati Narayan Deo (1953).

Doctrine of occupied field: where Parliament has covered a field on a Concurrent subject, the state cannot legislate inconsistently.

Severability and reading down keep the valid part of a law alive.

State of West Bengal v. Union of India (1963) held that Indian federalism does not rest on a compact of sovereign states.

Live illustrations

Goods and services tax: the court in Mohit Minerals (2022) held that the Council's recommendations are persuasive, not binding on legislatures.

Online gaming: the Union law of 2025 on online money games sits against state entries on betting and gambling.

Agriculture: the farm laws of 2020 were challenged partly on the ground that agriculture and markets are state subjects.

Education and health, being concurrent, see repeated tension over national frameworks and state autonomy.

Cooperative societies: the ninety seventh amendment was struck down in part in 2021 because it touched a state subject without ratification.

Article 243D reserves a third of seats and chairperson posts for women, and more than half the states have raised the share to fifty per cent. Over a million women hold local office. The question is what that presence has changed.

Where the impact is limited

The proxy: the sarpanch pati is common enough to have acquired a name.

Confinement to the reserved seat: women rarely win unreserved seats, and rotation prevents a personal base from forming.

Exclusion from the real business: standing committees, contracts and dealings with block officials often remain male.

No upward transmission: women remain a small minority in assemblies and Parliament, and the national reservation law is deferred until a census and delimitation.

Social cost: Dalit women sarpanches face caste hostility layered on gender.

Where the impact is real

Changed priorities: Chattopadhyay and Duflo found that reserved panchayats in West Bengal and Rajasthan invested more in the goods women themselves named as priorities, drinking water above all.

Reduced prejudice: repeated exposure to a woman leader has been found to lower voter bias and to raise adolescent girls' aspirations and schooling.

A training ground: many who began as proxies exercised the office themselves in a second term.

Reservation plus organisation: Kudumbashree shows what happens when political presence is paired with economic strength.

Why the gap persists

The seat is not the power: reservation changed who occupies the chair, not who controls land, money and party nomination.

Patriarchy sits elsewhere: in the household and in the party. Article 243D reached neither.

Reservation put women in the chair; patriarchy moved the power out of the chair. The impact has been slow, real and generational, and it will remain limited until parties and households change alongside the law.

Decode

Comment on a claim. Evidence exists on both sides and the answer must weigh it rather than pick one.

Implicit demand

Separate descriptive representation from substantive representation. Presence is not the same as power, but presence is not nothing either.

Architecture

The scale of the change → evidence the impact is limited → evidence it is real → why the gap persists → verdict.

Articulation

Anchor: Article 243D, states reserving fifty per cent, the sarpanch pati, research on drinking water and adolescent aspiration, the deferred national reservation law. Money line: reservation put women in the chair, and patriarchy responded by moving the power out of the chair.

Where the impact is limited

No confidence motions are used disproportionately against women chairpersons, and several states have had to raise the threshold or bar such motions in the first years of a term.

Educational and other qualifications for candidature, as in the Haryana law upheld in Rajbala v. State of Haryana, 2015, fall hardest on rural women.

The two child norm in some state panchayat laws has been shown to disqualify women more often than men.

The 106th Amendment of 2023 reserves a third of seats in the Lok Sabha and assemblies but takes effect only after a census and delimitation, so it remains prospective.

Women are still well under a fifth of the Lok Sabha, which is the clearest evidence that local reservation has not travelled upward on its own.

Where the impact is real

Chattopadhyay and Duflo, 2004 is the foundational study: randomised reservation of pradhan posts changed the pattern of public goods provision.

Beaman and co authors found that two terms of exposure to a woman leader eliminated the gender gap in adolescent aspirations and narrowed it in educational attainment.

Reported crimes against women rose in panchayats led by women, which researchers read as greater willingness to report rather than more crime, a useful example of reading data carefully.

Bihar's move to fifty per cent in 2006 was followed by a visible rise in women contesting unreserved seats.

Mission Shakti in Odisha and Kudumbashree in Kerala both pair political presence with economic organisation, which is what converts a seat into standing.

Why the gap persists

Party nomination is the real bottleneck: no major party has an internal quota for women in candidate selection.

The household division of labour limits the time a woman representative can give to an office that demands constant availability.

Descriptive representation is being confused with substantive representation. Presence is necessary; tenure, capacity and networks are what make it count.

Reservation is a supply side fix in a system where the demand side, meaning parties, contractors and the bureaucracy, was never touched.

The Constitution creates a union of states with a strong centre. Within that frame the relationship has been worked out through three modes operating at once.

Cooperation

Pooled sovereignty: the GST Council, where union and states share authority over indirect taxation and decide by weighted majority.

Crisis coordination: disaster response and public health emergencies run on consultation, not command.

Competition

For investment: states compete on land, power tariffs and incentives.

By design: NITI Aayog indices on health, education and water rank states publicly, turning performance into a political fact.

By transfer formula: the Sixteenth Finance Commission award for 2026 to 2031 leans further on criteria based on performance.

Confrontation

Fiscal grievance: southern states argue that devolution based on population penalises demographic transition, an argument sharpened by delimitation.

Agencies: more than ten states have withdrawn general consent to the CBI.

The Governor: delay in assenting to state bills produced litigation, and in November 2025 the Supreme Court held that courts cannot fix timelines for assent.

Indian federalism is not a settled arrangement but a continuous negotiation. Cooperation builds the institutions, competition improves performance, confrontation marks the boundary. A federation showing only one of the three would be either unitary or failing.

Decode

Three named modes and a demand for recent examples. Structure by the three and give each a current instance.

Implicit demand

All three coexist and each is functional. An answer that turns this into a complaint about centralisation misses the question.

Architecture

The constitutional frame → cooperation → competition → confrontation → verdict.

Articulation

Anchor: the GST Council, NITI Aayog indices, the Sixteenth Finance Commission, delimitation, withdrawal of general consent to the CBI, the 2025 advisory opinion on assent. Money line: Indian federalism is not a settled arrangement but a continuous negotiation, and all three modes are how the negotiation is conducted.

Cooperation

The institutional architecture: Inter State Council under Article 263, the five Zonal Councils, and the GST Council under Article 279A.

Articles 252 and 253 allow the union to legislate on State List subjects by consent or for treaty obligations, so cooperation is written into the text.

Programme level cooperation: Aspirational Districts, the National Health Mission, PM Gati Shakti, and shared digital public infrastructure.

The GST Council has decided almost everything by consensus rather than by vote, which is the stronger fact about it.

Competition

NITI Aayog's stated design is competitive federalism: the SDG India Index, School Education Quality Index, Composite Water Management Index and Export Preparedness Index all rank states.

The Business Reform Action Plan ranks states on ease of doing business, and states now campaign on the result.

The risk side: competition for investment can become a race to the bottom in tax concessions and land pricing, with the fiscal cost borne by the same state.

Competitive populism in welfare announcements is the other face of the same dynamic.

Confrontation

Governor's assent: the Punjab and Tamil Nadu cases of 2023, and the November 2025 opinion on the Presidential Reference.

Cess and surcharge sit outside the divisible pool, so the states' effective share has run below the 41 per cent the Finance Commission recommended, the sharpest fiscal grievance.

The NIA Act operates without the consent requirement that constrains the CBI, which is why states object to the expansion of its remit.

Delimitation after 2026 is the confrontation now forming: the southern states argue that success in population control should not cost them parliamentary seats.

Article 356 and the discretionary powers of the Governor remain the historical backdrop to every one of these disputes.

The Union amended the disaster law in 2025 and repealed the farm laws in 2021. The epidemic law of 1897 still stands, and all three show a constitution that tilts centreward in a crisis.

The design

A strong Union by intent: Article 1 calls India a Union of States, and Article 3 lets Parliament redraw state boundaries.

Legislative tilt: The Union List is longest, residuary power lies with Parliament, and Article 254 gives Union law primacy.

The three laws

Epidemic Diseases Act, 1897: A four section colonial law still governs outbreaks, and it lets the Union act at ports and borders.

Disaster Management Act, 2005: Health is a state subject, yet the pandemic was run through this Union law's national guidelines.

Its amendment of 2025: In force from April 2025, it gives statutory status to national plans and enables urban disaster authorities.

The farm laws: Parliament legislated on trade in produce although agriculture and markets sit in the State List.

The case and the cost

Why the tilt exists: Epidemics and disasters cross state lines, so a common standard stops one state exporting risk.

What it costs: States implement what the centre decides, and the Inter State Council is convened too rarely.

When it fails: The farm laws were repealed after a year of protest, which is what centralisation without consultation buys.

The Constitution permits this tilt because emergencies respect no boundary. It is legitimate only while it stays temporary and consultative, which the farm laws were not.

Decode

Elucidate a statement through three named laws. Each law must be discussed, and the link to centralising tendencies made explicit.

Implicit demand

The examiner wants the constitutional basis of the tilt first, then the three illustrations, and finally a judgement on when centralisation is justified.

Architecture

A hook noting what has happened to each law → the design of the Constitution → the three laws with the 2025 amendment → the case for and the strain → verdict.

Articulation

Anchor: Articles 1, 3, 248 and 254, section 2A of the 1897 Act, section 6 of the 2005 Act, the repeal of 2021, the amendment of 2025. Money line: legitimate only when it is temporary and consultative.

Features that centralise

Single citizenship, a single integrated judiciary and all India services under Article 312.

Emergency provisions under Articles 352, 356 and 360, which can convert the federal structure into a unitary one.

The Governor is appointed by the Union and holds office during the pleasure of the President.

Article 249 lets the Rajya Sabha authorise Parliament to legislate on a State List subject in the national interest.

Article 253 allows Parliament to legislate on any subject to implement an international treaty.

The Union controls the divisible pool, and cesses outside it, which gives it fiscal power over states.

The three laws in more detail

The Epidemic Diseases Act has four sections, gives no definition of an epidemic and no rights framework, and was amended in 2020 only to protect health workers.

A comprehensive public health law has been drafted several times since 2017 but has not been enacted.

The Disaster Management Act created the National Disaster Management Authority, the National Executive Committee and the response force, with the Union setting policy.

The amendment of 2025 also provides for state level response forces and clearer roles for existing bodies.

The three farm laws of 2020 covered trade areas outside market yards, contract farming and stock limits, and were repealed by an Act of Parliament in November 2021.

The Supreme Court had stayed their implementation in January 2021 and appointed a committee, whose report was made public later.

The federal counterweights

S.R. Bommai (1994) limited the misuse of Article 356 and made federalism part of the basic structure.

The Goods and Services Tax Council is a forum of shared decision making, though Mohit Minerals (2022) held its recommendations persuasive rather than binding.

The Inter State Council under Article 263 and zonal councils exist for consultation but meet rarely.

The Sarkaria and Punchhi Commissions both recommended consultation before legislating on concurrent subjects.

Cooperative federalism works best where money and authority move together, as in the pandemic vaccination drive after states were consulted.

The early argument after 1992 was about transfer: which functions, which staff, how much money. Most states have now transferred something on paper, rural grants have risen to ₹4.4 lakh crore, and 96 per cent of gram panchayats file plans online. The question now is whether the institution works.

The challenges of functionality

Revenue without effort: Own revenue is about one per cent of panchayat income, so the tier administers grants rather than raising money locally.

Functions on paper: The devolution score stands at 43.9 per cent, and line departments and parallel bodies continue to run health, education and water in most states.

Staff that belong elsewhere: Panchayats have no cadre of their own, a secretary often serves several villages, and deputed staff answer to their parent department.

Plans without planning: Development plans are uploaded on time, yet many are lists of works rather than choices made in the gram sabha.

Accountability that does not bite: Social audit crosses half the panchayats in only six states, and District Planning Committees under Article 243ZD rarely produce an integrated plan.

Representation without authority: Proxy rule by relatives, seat rotation that breaks continuity, and delayed elections in several states weaken the elected voice.

The urban tier is weaker: Mayors have short terms and little executive power, and metropolitan planning committees exist in very few cities.

Functionality is not a softer problem than devolution, it is the harder half of it. A local institution becomes real when it raises some of its own money, commands its own staff and answers to a gram sabha that meets.

Decode

The statement supplies the framework, so the answer must accept the shift and then list challenges of functionality, not of devolution.

Implicit demand

Each challenge should be one that survives even after functions, funds and functionaries have formally been transferred.

Architecture

A paragraph that establishes the shift with current data, then eight challenges as points, then a verdict. Written as a hybrid because the framing needs prose and the challenges need separation.

Articulation

Anchor: ₹4.4 lakh crore of grants, 96 per cent of plans uploaded, own revenue at one per cent, devolution score of 43.9 per cent, Article 243ZD. Money line: functionality is the harder half of devolution.

The data

The devolution index prepared for the Ministry of Panchayati Raj rose from 39.9 per cent in 2013 to 43.9 per cent in 2022, led by Karnataka, Kerala and Tamil Nadu.

The Reserve Bank found own revenue at about one per cent of panchayat revenue, with roughly 80 per cent from central grants.

About 2.55 lakh gram panchayats uploaded development plans for the last financial year, and ₹38,491 crore moved through the linked payment system.

Block panchayat plan uploads fell from 90 to 83 per cent over a year, which shows the intermediate tier lagging.

The Sixteenth Finance Commission grants require duly held elections, published audited accounts and a timely State Finance Commission.

Why functionality lags

Elections are postponed in several states, and courts have had to order them.

State Finance Commissions are constituted late and their reports are often not acted upon.

Property tax, the natural local tax, is levied but rarely revised or collected.

Centrally sponsored schemes come with detailed conditions that leave little local discretion.

Capacity building through the Rashtriya Gram Swaraj Abhiyan reaches representatives late in their term.

Women representatives face proxy rule, and the two child norm in some states disqualifies many otherwise eligible candidates.

What would restore functionality

Untied funds large enough to matter, which the new award partly provides.

A panchayat cadre, or at least secretaries who report to the council rather than the block.

Mandatory and audited gram sabha meetings, with quorum and published minutes.

Activity mapping that assigns each of the 29 subjects to a specific tier with funds and staff attached.

Functioning District Planning Committees, as Kerala and West Bengal have shown is possible.

Property tax reform using the SVAMITVA survey as the assessment base.

The CBI has no statute of its own. It functions under the Delhi Special Police Establishment Act, 1946. Police and public order are State List subjects, so the Act requires state consent for the agency to operate within a state.

The legal basis

The scheme of the Act: section 5 allows the union to extend the agency's powers to a state; section 6 makes that extension inoperative without the state's consent.

Two forms of consent: general, given once for a class of cases, or specific, granted case by case.

Why states object

Constitutional: policing is a state subject, and unrestricted central investigation erodes a field assigned exclusively to the states.

Political: alleging selective deployment against opposition governments, more than ten states, among them West Bengal, Kerala, Tamil Nadu, Punjab, Telangana and Karnataka, have withdrawn general consent.

Institutional: the Supreme Court itself once described the agency as a caged parrot, which weakens the presumption that consent is safe to give.

Why the power is not absolute

Constitutional courts stand outside consent: the Supreme Court under Article 32 and a High Court under Article 226 may direct a CBI investigation anywhere, and this flows from judicial review, part of the basic structure.

Withdrawal is prospective: cases registered while consent subsisted survive it.

Union employees cannot be insulated: merely because their office lies in a state that has withdrawn consent.

Matters of union concern: offences in union territories and railway areas, and cases with interstate or international reach, lie outside one state's control.

Post facto consent: has been held sufficient to validate an investigation already begun.

The federal reading

Consent is a genuine safeguard: described by the Court as being in tune with the federal character of the Constitution.

But absolute consent would be a shield: a state could immunise its own officials, which no federal principle requires.

Consent protects the state's police power. It cannot be allowed to become immunity from investigation. The remedy is not to abolish consent but to give the agency a dedicated statute with defined jurisdiction and transparent selection, so that withdrawing consent stops being politically profitable.

Decode

Two limbs given in the stem. The states' objection, and why their power is nevertheless not absolute. The federal frame joins them.

Implicit demand

The answer turns on the structure of the DSPE Act and on the writ jurisdiction of constitutional courts, which sits entirely outside the consent requirement.

Architecture

The legal basis → why states object → why consent is not absolute → the federal reading → the way forward → verdict.

Articulation

Anchor: sections 5 and 6 of the DSPE Act, police as entry 2 of the State List, over ten states withdrawing consent, judicial direction under Articles 32 and 226, post facto consent. Money line: consent protects the state's police power, but it cannot be allowed to become immunity from investigation.

The legal basis

Entry 2 of the State List covers police; Entry 80 of the Union List permits extension of a state police force's jurisdiction into another state only with that state's consent. The consent requirement is therefore structural, not a concession.

Vineet Narain, 1997 gave the agency its supervisory architecture: CVC oversight and a fixed two year tenure for the Director.

Selection of the Director now runs through a committee of the Prime Minister, the Leader of the Opposition and the Chief Justice, under the Lokpal Act, 2013.

The Gauhati High Court in Navendra Kumar, 2013 held the constitution of the CBI itself invalid; the order was stayed by the Supreme Court and the question remains open, a striking fact very few candidates know.

Why the power is not absolute

State of West Bengal v. Committee for Protection of Democratic Rights, 2010 is the governing authority: a constitutional court may direct a CBI investigation without state consent, and judicial review is part of the basic structure.

Fertico Marketing, 2021 and Kanwal Tanuj, 2020 confirm that post facto consent validates an investigation already under way.

The Enforcement Directorate under the PMLA needs no state consent at all, so withdrawal of CBI consent shifts cases rather than stopping them.

West Bengal's suit against the union under Article 131, over CBI registration of cases after withdrawal of consent, was held maintainable, so the dispute has itself become a federal question.

The federal reading and the way forward

The Sarkaria and Punchhi Commissions both examined the deployment of central agencies in states and recommended restraint and consultation.

The Parliamentary Standing Committee on Personnel has repeatedly recommended a dedicated CBI statute in place of the 1946 Act.

Successive CVC annual reports document the agency's dependence on state police for manpower, which is the practical limit on its reach.

Comparative note: the FBI derives jurisdiction from the existence of a federal offence, not from state consent, which suggests the real reform is to define the offences the agency may investigate rather than to bargain over consent.

The devolution index score stands at 43.9 per cent, and the Sixteenth Finance Commission has raised rural local body grants to ₹4.4 lakh crore.

What has changed

Who sits at the table: Over 2.5 lakh panchayats hold about 31 lakh elected representatives, and women occupy close to half the seats.

Planning has moved down: About 96 per cent of gram panchayats uploaded development plans on eGramSwaraj for the last financial year.

Delivery runs through them: Water supply, sanitation and rural employment works are executed by panchayats, which no line department could reach.

What has not

Money stays borrowed: Own revenue is barely one per cent of panchayat income, so the tier spends what others grant.

Functions stay upstairs: Few of the 29 subjects in the Eleventh Schedule are truly devolved, and parallel bodies run health and education.

Decentralisation has changed who sits at the table far more than who decides. Representation is transformed, while power is only half devolved.

Decode

To what extent asks for a measured verdict, not a celebration of the 73rd Amendment.

Implicit demand

The examiner wants the gap between political decentralisation, which has succeeded, and administrative and fiscal decentralisation, which has not.

Architecture

A data hook → what has changed → what has not → verdict that separates representation from power.

Articulation

Anchor: devolution score of 43.9 per cent, ₹4.4 lakh crore of grants, 31 lakh representatives, own revenue at one per cent. Money line: decentralisation has changed who sits at the table far more than who decides.

The record

The 73rd and 74th Amendments of 1992 made local elections, reservation and State Finance Commissions constitutional obligations.

The devolution index prepared for the Ministry of Panchayati Raj rose from 39.9 per cent to 43.9 per cent between 2013 and 2022, with Karnataka, Kerala and Tamil Nadu at the top.

About 14.5 lakh elected women representatives sit in panchayats, since 21 states reserve half the seats.

Gram panchayats routed ₹38,491 crore through the online payment system linked to eGramSwaraj last year.

Kerala's People's Plan Campaign of 1996 devolved about a third of the state plan to local bodies, and remains the deepest Indian experiment.

The gaps

The Reserve Bank found own tax and non tax revenue at about one per cent of panchayat revenue, with the rest coming as grants.

District Planning Committees under Article 243ZD exist on paper in most states but rarely produce an integrated district plan.

Metropolitan Planning Committees under Article 243ZE have been constituted in very few cities.

Panchayats have no cadre of their own, and a shared secretary often serves several villages.

Parastatals and centrally sponsored schemes bypass the elected tier, which reduces it to an implementing agency.

Mayors in most cities have short terms and little executive authority, unlike commissioners appointed by the state.

What the new award changes

The Sixteenth Finance Commission gives ₹9.47 lakh crore to local bodies over five years, of which ₹4.4 lakh crore is rural.

Grants are 80 per cent basic and 20 per cent performance based, and half the basic grant is untied.

Entry conditions require duly held elections, published audited accounts and timely constitution of the State Finance Commission.

Tied grants are earmarked for sanitation, solid waste and water management.

Grants cannot be used for salaries, which protects capital spending but limits staffing.