Tinkering with federalism

Draft Electricity (Amendment) Bill is another classic case of legislative overreach

AuthorPublished: 17th Sep 2020  12:00 amUpdated: 16th Sep 2020  6:46 pm

The success of any federal set-up lies in providing freedom and flexibility for the States to take decisions in tune with local conditions. A string of recent policy moves by the NDA government has, unfortunately, been at variance with the federal spirit, infringing upon the rights of the States even in matters that fall in their domain. The draft Electricity (Amendment) Bill, 2020, now awaiting the approval of Parliament, is one such glaring instance of how the Centre is trying to appropriate to itself the sweeping powers, much to the detriment of the interest of the States. It is a classic case of legislative overreach. Since agriculture is a State subject, the Centre is constitutionally bound to consult the States and develop consensus before going ahead with any legislation that impacts farmers. There are several gaping holes in the proposed legislation that would result in undermining the rights of the States. In the present form, the legislation is dangerous as it would end the subsidies for the agriculture sector and deprive the States of any role in selecting the members of the State Electricity Regulation Commission (ERC). As per the provisions of the new act, the States will be forced to purchase power from Renewable Energy (RE) generation companies located somewhere else in the country. In such a scenario, the hydel power generated by Nagarjuna Sagar and Srisailam will not be considered as Renewable Energy, forcing Telangana to purchase it from the northern States. It is preposterous to impose conditions on the States to purchase power from private companies.

Not surprisingly, the new legislation has evoked strong protests from many States, including Telangana, because it is arbitrary, draconian and goes against the federal spirit enshrined in the Constitution. In the last few years, there has been a growing tendency to centralisation of powers, be it in the implementation of the Goods and Services Tax (GST) regime, devolution of taxes to the States or framing guidelines for the management of the Covid-19 pandemic. The recent directive linking the hike in borrowing limit to a set of conditionalities also amounted to insulting the States and reducing them to the level of supplicants. By invoking the provisions of the Disaster Management Act (DMA), the Centre had also appropriated to itself the sweeping powers to deal with the pandemic. Instead of blanket imposition of its decisions across the country, the Centre must leave such matters entirely to the discretion of the States and also give them fiscal flexibility. Since subjects like agriculture, public health and law and order are included in the State List, the State governments should have complete freedom to take decisions in the interest of the people of the region.


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