Perspectives of Indian Politics as adopted by

Constituent
1.Two Models: Gandhian and Assembly
Euro-American
2.Political Institution: Parliamentary and Presidential
3.A Federal Polity with Unitary Features
4.Socialist Ideals
5.Liberal- Democratic Ideals
6.Ideals of a Secular Polity
7.Universal Adult Franchise
8.Jammu and Kashmir
9.Reservation for Minorities
10.Office of the President and Governors
11.Link Language
12.Fundamental Rights
13.Village Panchayat
 Salient Features of Indian Constitution

1. Written Constitution
2. Unique Combination of Rigidity and Flexibility
3. Parliamentary system of Government
4. Blend of Federal and Unitary Features
5. Makes India a Secular State
6. Fundamental Rights
7. Directive Principles of State Policy
8. Independence of Judiciary
9. Universal Adult Franchise
10.Single Citizenship
11.Special Provisions for Backward Classes
 Preamble of the Indian Constitution

We, the People of India, having solemnly resolved to Constitute India into a
SOVEREIGN, SOCIALIST, SECULAR, DEMOCRATIC, REPUBLIC and to secure to
all its citizens JUSTICE SOCIAL ECONOMIC and POLITICAL.

LIBERTY of thought, expressions, belief, faith and worship.

EQUALITY of status and of opportunity, and to promote among them all.
FRATERNITY assuring the dignity of individual and the unity and integrity of nation.
 Main Principles of Constitution

1. People as source of all authority

2. Sovereign State
3. Socialist State
4. Secular State
5. Democratic State
6. Republic
 Objectives of the Constitution

1. Justice- Social, Economic and Political

2. Liberty of Thought, Expression, Belief, Faith and
Worship
3. Equality of Status and Opportunity
4. Fraternity assuring Dignity of Individual
5. Unity and Integrity of Nation
 Part- III of Indian Constitution
Fundamental Rights

 Articles 12-35 of Indian Constitution deal with Fundamental Rights. These human
rights are conferred on the citizens of India for Constitution tells that these
rights are inviolable. Right to Life, Right to Dignity, Right to Education etc. all
come under one of the six main fundamental rights.
What are Fundamental Rights?
1.Right to Equality
Fundamental rights are the basic human rights enshrined in
2.Right to Freedom
the Constitution of India which are guaranteed to all
3.Right against Exploitation
citizens. They are applied without discrimination on the
4.Right to Freedom of Religion
basis of race, religion, gender, etc.
5.Cultural and Educational Rights
Significantly, fundamental rights are enforceable by
6.Right to Constitutional Remedies
the courts, subject to certain conditions.

Why are they called Fundamental Rights?

These rights are called fundamental rights because of two reasons:
1.They are enshrined in the Constitution which guarantees them
2.They are justiciable (enforceable by courts). In case of a violation, a person can approach a court
of law.
 List of Fundamental Rights
There are six fundamental rights of Indian constitution along with the constitutional articles related to them
are mentioned below:
 Right to Equality (Article 14-18)
 Right to Freedom (Article 19-22)
 Right against Exploitation (Article 23-24)
 Right to Freedom of Religion (Article 25-28)
 Cultural and Educational Rights (Article 29-30)
 Right to Constitutional Remedies (Article 32)

Why Right to Property is not a Fundamental Right?

There was one more fundamental right in the Constitution, i.e., the right to property. However, this right was
deleted from the list of fundamental rights by the 44 th Constitutional Amendment. This was because this right
proved to be a hindrance towards attaining the goal of socialism and redistributing wealth (property)
equitably among the people.

 Introduction to Six Fundamental Rights (Articles 12 to 35)

Under this section, we list the fundamental rights in India and briefly describe each of them.

1. Right to Equality (Articles 14 – 18)

 Right to equality guarantees equal rights for everyone irrespective of religion, gender, caste, race or place
of birth. It ensures equal employment opportunities in the government and insures against discrimination
by the State in matters of employment on the basis of caste, religion, etc. This right also includes the
abolition of titles as well as untouchability.
 Right to Freedom (Articles 19 – 22)
 Freedom is one of the most important ideals cherished by any democratic society. The
Indian Constitution guarantees the freedom to citizens. The freedom right includes
many rights such as:
 Freedom of speech
 Freedom of expression
 Freedom of assembly without arms
 Freedom of association
 Freedom to practise any profession
 Freedom to reside in any part of the country
 Some of these rights are subject to certain conditions of state security, public morality
and decency and friendly relations with foreign countries. This means that the State
has the right to impose reasonable restrictions on them.
3. Right against Exploitation (Articles 23 – 24)
This right implies the prohibition of traffic in human beings, begar, and other forms of
forced labour. It also implies the prohibition of children in factories, etc. The Constitution
prohibits the employment of children under 14 years in hazardous conditions.
4. Right to Freedom of Religion (Articles 25 – 28)
This indicates the secular nature of Indian polity. There is equal respect given to all
religions. There is freedom of conscience, profession, practice and propagation of
religion. The State has no official religion. Every person has the right to freely practice his
5. Cultural and Educational Rights (Articles 29 – 30)
These rights protect the rights of religious, cultural and linguistic minorities, by facilitating them
to preserve their heritage and culture. Educational rights are for ensuring education for everyone
without any discrimination.
6. Right to Constitutional Remedies (32 – 35)
The Constitution guarantees remedies if citizens’ fundamental rights are violated. The
government cannot infringe upon or curb anyone’s rights. When these rights are violated, the
aggrieved party can approach the courts. Citizens can even go directly to the Supreme
Court which can issue writs for enforcing fundamental rights.

Features of Fundamental Rights

1. Fundamental rights are different from ordinary legal rights in the manner in which they are
enforced. If a legal right is violated, the aggrieved person cannot directly approach the SC
bypassing the lower courts. He or she should first approach the lower courts.

2. Some of the fundamental rights are available to all citizens while the rest are for all persons
(citizens and foreigners).

3. Fundamental rights are not absolute rights. They have reasonable restrictions which means
they are subject to the conditions of state security, public morality and decency and friendly
relations with foreign countries.

4. They are justiciable, implying they are enforceable by courts. People can approach the SC
5. Fundamental rights can be amended by the Parliament by a constitutional amendment but only if
the amendment does not alter the basic structure of the Constitution.

6. Fundamental rights can be suspended during a national emergency. But, the rights guaranteed
under Articles 20 and 21 cannot be suspended. The application of fundamental rights can be
restricted in an area which has been placed under martial law or military rule.

Fundamental Rights Available Only to Citizens

The following is the list of fundamental rights that are available only to citizens (and not to
foreigners):
Prohibition of discrimination on grounds of race, religion, caste, gender or place of birth (Article 15).
Equality of opportunity in matters of public employment (Article 16).
Protection of freedom of (Article 19)
Speech and expression
Association
Assembly
Movement
Residence
Profession
Protection of the culture, language and script of minorities (Article 29).
Right of minorities to establish and administer educational institutions (Article 30).
Importance of Fundamental Rights

Fundamental rights are very important because they are like the backbone of the country. They are
essential for safeguarding the people’s interests.

According to Article 13, all laws that are violative of fundamental rights shall be void. Here, there is an
express provision for judicial review. The SC and the High Courts can declare any law unconstitutional
on the grounds that it is violative of the fundamental rights. Article 13 talks about not just laws, but
also ordinances, orders, regulations, notifications, etc.
Amendability of Fundamental Rights

Any changes to the fundamental rights require a constitutional amendment that should be passed by
both the Houses of Parliament. The amendment bill should be passed by a special majority of
Parliament.

As per the Constitution, Article 13(2) states that no laws can be made that take away
fundamental rights.
The question is whether a constitutional amendment act can be termed law or not.

1. In the Sajjan Singh case of 1965, the Supreme Court held that the Parliament can amend any part
of the Constitution including fundamental rights.

2. But in 1967, the SC reversed its stance taken earlier when in the verdict of the Golaknath case, it
said that the fundamental rights cannot be amended.
This is the basis in Indian law in which the judiciary can strike down any amendment passed by
Parliament that is in conflict with the basic structure of the Constitution.

4. In 1981, the Supreme Court reiterated the Basic Structure doctrine.

It also drew a line of demarcation as April 24th, 1973 i.e., the date of the Kesavananda Bharati
judgement, and held that it should not be applied retrospectively to reopen the validity of any
amendment to the Constitution which took place prior to that date.

Doctrine of Severability

This is a doctrine that protects the fundamental rights enshrined in the Constitution.
It is also known as the Doctrine of Separability.
It is mentioned in Article 13, according to which all laws that were enforced in India before the
commencement of the Constitution, inconsistent with the provisions of fundamental rights shall to the
extent of that inconsistency be void.
This implies that only the parts of the statute that is inconsistent shall be deemed void and not the
whole statue. Only those provisions which are inconsistent with fundamental rights shall be void.

Doctrine of Eclipse

This doctrine states that any law that violates fundamental rights is not null or void ab initio, but is
only non-enforceable, i.e., it is not dead but inactive.
This implies that whenever that fundamental right (which was violated by the law) is struck down, the
law becomes active again (is revived).
 UNIT- 2 TOPIC-1

DIRECTIVE PRINCIPLES OF STATE POLICY

Articles 36-51 under Part-IV of Indian Constitution deal with Directive Principles of State Policy
(DPSP). They are borrowed from the constitution of Ireland which had copied it from the Spanish
Constitution. This article will solely discuss the Directive Principles of State Policy, its importance
in the Indian Constitution and the history of its conflict with Fundamental Rights.

What are the Directive Principles of State Policy?

The Sapru Committee in 1945 suggested two categories of individual rights. One being justiciable
and the other being non-justiciable rights. The justiciable rights, as we know, are the Fundamental
rights, whereas the non-justiciable ones are the Directive Principles of State Policy.

DPSP are ideals which are meant to be kept in mind by the state when it formulates policies and
enacts laws. There are various definitions to Directive Principles of State which are given below:

They are an ‘instrument of instructions’ which are enumerated in Government of India Act, 1935
They seek to establish economic and social democracy in the country
DPSPs are ideals which are not legally enforceable by the courts for their violation
Directive Principles of State Policy – Classification
Indian Constitution has not originally classified DPSPs but on the basis of their content and
direction, they are usually classified into three types-
1. Socialistic Principles,
2. Gandhian Principles,
3. Liberal-Intellectual Principles.
4. International Policy

IMPORTANCE OF DPSP:

1. Directive Principles as Moral ideals

2. Directive Principles as basis of a Welfare State

3. Directive Principles as Beacon to the Courts

4. Constitutional Importance of Directive Principles

5. Mirror of Public opinion

6. Assertion of Noble principles

 1. DPSP – Socialistic Principles
Definition: They are the principles that aim at providing social and economic justice and set the
path towards the welfare state. Under various articles, they direct the state to:

Article 38 Promote the welfare of the people by securing a

social order through justice—social, economic and
political—and to minimise inequalities in income,
status, facilities and opportunities

Article 39 Secure citizens:

•Right to adequate means of livelihood for all
citizens
•Equitable distribution of material resources of the
community for the common good
•Prevention of concentration of wealth and means
of production
•Equal pay for equal work for men and women
•Preservation of the health and strength of
workers and children against forcible abuse
•Opportunities for the healthy development of
children
Article 39A Promote equal justice and free legal aid to the
poor
Article 41 In cases of unemployment, old age,
sickness and disablement, secure citizens:
•Right to work
•Right to education
•Right to public assistance,

Article 42 Make provision for just and humane

conditions of work and maternity relief

Article 43 Secure a living wage, a decent standard of

living and social and cultural opportunities
for all workers

Article 43A Take steps to secure the participation of

workers in the management of industries

Article 47 Raise the level of nutrition and the

standard of living of people and to improve
public health
 2. DPSP – Gandhian Principles
Definition: These principles are based on Gandhian ideology used to represent the programme of
reconstruction enunciated by Gandhi during the national movement. Under various articles, they
direct the state to:
Article 40 Organise village panchayats and endow them
with necessary powers
and authority to enable them to function as units
of self-government
Article 43 Promote cottage industries on an individual or
co-operation basis in rural areas
Article 43B Promote voluntary formation, autonomous
functioning, democratic control and professional
management of co-operative societies
Article 46 Promote the educational and economic interests
of SCs, STs, and other weaker sections of the
society and to protect them from social injustice
and exploitation

Article 47 Prohibit the consumption of intoxicating drinks

and drugs which are injurious to health
Article 48 Prohibit the slaughter of cows, calves and other
milch and draught cattle and to improve their
breeds
 3. DPSP – Liberal-Intellectual Principles
Definition: These principles reflect the ideology of liberalism. Under various articles, they direct
the state to:

Article 44 Secure for all citizens a uniform civil code throughout

the country

Article 45 Provide early childhood care and education for all

children until they complete the age of six years

Article 48 Organise agriculture and animal husbandry on

modern and scientific lines

Article 49 Protect monuments, places and objects of artistic or

historic interest which are declared to be of national
importance

Article 50 Separate the judiciary from the executive in the

public services of the State

Article 51 •Promote international peace and security and

maintain just and honourable relations between
nations
•Foster respect for international law and treaty
obligations
 4. Directive Principles Concerning International Policy and
Behavior

The Directive Principles also provide the guidelines to the states for the formation of International
Policy and Behavior Article: 51

1. The State shall try to promote International Peace and Security

2. The State shall maintain friendly relations with other States

3. The State shall solve its disputes by peaceful means like Arbitration

4. The State shall create respect for International Laws and Treaties
What are the new DPSPs added by the 42nd Amendment Act, 1976?
42nd Amendment Act, 1976 added four new Directive Principles in the list:

S.No Article New DPSPs

1 Article 39 To secure opportunities for

the healthy development
of children

2 Article 39A To promote equal justice

and to provide free legal
aid to the poor
3 Article 43A To take steps to secure the
participation of workers in
the management of
industries
4 Article 48A To protect and improve the
environment and to
safeguard forests and
wildlife
Facts about Directive Principles of State Policy:

A new DPSP under Article 38 was added by the 44th Amendment Act of 1978, which
requires the State to minimise inequalities in income, status, facilities and
opportunities.
The 86th Amendment Act of 2002 changed the subject-matter of Article 45 and made
elementary education a fundamental right under Article 21A. The amended directive
requires the State to provide early childhood care and education for all children until
they complete the age of six years.
A new DPSP under Article 43B was added by the 97th Amendment Act of 2011 relating
to co-operative societies. It requires the state to promote voluntary formation,
autonomous functioning, democratic control and professional management of co-
operative societies.
The Indian Constitution under Article 37 makes it clear that ‘DPSPs are fundamental in
the governance of the country and it shall be the duty of the state to apply these
principles in making laws.’

Criticism of Directive Principles of State Policy

The following reasons are responsible for the criticism of Directive Principles of State
Policy:
What is its full form? Directive Principles of State Policy
From which country is it borrowed? Ireland (Which had copied it from Spanish
Constitution)
How many articles are under DPSP? Article 36-51 belong to DPSP
Which part in Indian Constitution deals with DPSP? Part-IV belongs to DPSP
How many types of DPSP are there? There are three types:
1. Socialist
2. Gandhian
3. Liberal-Intellectual
Have Directive Principles ever amended? Yes, 42nd Amendment Act, 44th Amendment Act, and
86th Amendment Act have added/deleted a few
DPSPs.
Are DPSP justiciable? No, DPSPs are non-justiciable in nature.
Are DPSP sub-ordinate to Fundamental Rights? There is a balance between both. Fundamental
Rights can be amended to implement Directive
Principles until it does not harm basic structure of
the Constitution.
Who described DPSP as ‘novel feature’ of Dr. B.R. Ambedkar
Constitution?
From where does Indian DPSPs find its motivation? Irish Home Rule Movement
What are the recent developments in favor of There are various such acts enacted to enforce
DPSPs? DPSP. They are:
What is the conflict between Fundamental Rights and DPSPs?

With the help of four court cases given below, candidates can understand the relationship between
Fundamental Rights and Directive Principles of State Policy:
Champakam Dorairajan Case (1951)
Supreme Court ruled that in any case of conflict between Fundamental Rights and DPSPs, the
provisions of the former would prevail. DPSPs were regarded to run as a subsidiary to Fundamental
Rights. SC also ruled that Parliament can amend Fundamental Rights through constitutional
amendment act ti implement DPSPs.
Result: Parliament made the First Amendment Act (1951), the Fourth Amendment Act (1955) and
the Seventeenth Amendment Act (1964) to implement some of the Directives.
Golaknath Case (1967)
Supreme Court ruled that Parliament cannot amend Fundamental Rights to implement Directive
Principles of State Policy.
Result: Parliament enacted the 24th Amendment Act 1971 & 25th Amendment Act 1971 declaring
that it has the power to abridge or take away any of the Fundamental Rights by enacting
Constitutional Amendment Acts. 25th Amendment Act inserted a new Article 31C containing two
provisions:
No law which seeks to implement the socialistic Directive Principles specified in Article 39 (b)22
and (c)23 shall be void on the ground of contravention of the Fundamental Rights conferred by
Article 14 (equality before law and equal protection of laws), Article 19 (protection of six rights in
respect of speech, assembly, movement, etc) or Article 31 (right to property).
Kesavananda Bharti Case (1973)
Supreme Court ruled out the second provision of Article 31C added by the 25th Amendment Act
during Golaknath Case of 1967. It termed the provision ‘unconstitutional.’ However, it held the
first provision of Article 31C constitutional and valid.
Result: Through the 42nd amendment act, Parliament extended the scope of the first provision of
Article 31C. It accorded the position of legal primacy and supremacy to the Directive Principles
over the Fundamental Rights conferred by Articles 14, 19 and 31.

Minerva Mills Case (1980)

Supreme Court held the extension of Article 31C made by the 42nd amendment act
unconstitutional and invalid. It made DPSP subordinate to Fundamental Rights. Supreme Court
also held that ‘the Indian Constitution is founded on the bedrock of the balance between
the Fundamental Rights and the Directive Principles.’

Supreme Court’s rulings following the case were:

Fundamental Rights & DPSPs constitute the core of the commitment to social revolution.
The harmony and balance between Fundamental Rights and Directive Principles of State Policy is
an essential feature of the basic structure of the Constitution.
The goals set out by the Directive Principles have to be achieved without the abrogation of the
means provided by the Fundamental Rights.
Conclusion: Today, Fundamental Rights enjoy supremacy over the Directive Principles. Yet,
Directive Principles can be implemented. The Parliament can amend the Fundamental Rights for
implementing the Directive Principles, so long as the amendment does not damage or destroy the
 INDIAN PARLIAMENT
The supreme legislative organ of the union of India is called the Parliament. Indian Constitution
provides us a Parliamentary Democracy. Parliament of India is made from Lok Sabha, Rajya Sabha
and President. Articles 79-122 of the Indian Constitution deal with the composition, powers and
procedures of the Parliament of India.

Composition of the Parliament

Article 79 of the Constitution of India states that there shall be a Parliament for the
Union, which comprises of the President and the two Houses- Rajya Sabha (the council of states)
and Lok sabha (House of the people).

Article 80 of the Constitution specifies the composition of the council of states, which consists
of 12 members nominated by the President and 238 representatives of the state and
union territories.

The allocation of seats in the council of states to be fulfilled by representatives of states and union
territories in accordance with the provisions contained in the 4th schedule.

Representation from States- They shall be elected by the elected members of the legislative
assembly of the state in accordance with the system of proportional representation by means of
The Parliament in India comprises the President of India, the Upper House i.e. Rajya Sabha and the
Lower House i.e. Lok Sabha.
Hindi names of both the houses, i.e. Rajya Sabha and Lok Sabha had been adopted by the Upper
House and the Lower House respectively.
The Constitution describes the structure of parliament in Article 79. It states that the Parliament
comprises of the President and the two houses i.e. the Lower House or House of People and Upper
house or Council of States.

To understand the functions served by the President, we can say that the post of president is somewhat
equivalent to the role and functions of the Queen or Crown in the United Kingdom.
Even though the President is a part of the legislature, he doesn’t sit in parliament.
However, a bill passed by houses can’t be made law without the assent of the President.
Now, let’s discuss the Upper house or Rajya Sabha.
Features of the Indian Constitution

Representatives from Union Territories: By convention the representatives are indirectly elected
by members of an electoral college and the election is held in accordance with the system of
proportional representation by means of the single transferable vote. Among all the Union Territories
only Delhi and Pondicherry have representation since all other UT’s have less population.
Nominated Members- those persons who have special knowledge or practical experience in the
fields of literature, science, art and social service are provided opportunity to enter Rajya Sabha
without going through process of election. Recently this clause was in news for nomination of Sachin
Tendulkar as it does not provide for sportspersons to enter Rajya Sabha through Presidential
nomination but later it was accepted.
Article 81 specifies the composition of the house of the people, which consists of not more than 530
members chosen by direct elections from territorial constituencies in the states; not more than 20
members representing the union territories; 2 Anglo-Indians.
Representation of States- They are elected by the people directly by universal adult franchise.
Each state shall be allotted number of seats in the house of the people in such a manner that the
ratio between the number and the population of the state is equal for all the states. There is also a
provision for reservation of seats for SC/ ST communities on the basis of population ratio.
Representation from Union Territories- According to the law prescribed by the Parliament the
union territories direct election to the house of people act 1965 was passed and thereby they are
also elected directly by people.
Nominated Members- President has powers to elect 2 members from Anglo-Indian community if
the President feels that their community is not adequately represented.
Qualification for Membership of Parliament-

According to Article 84 following are the qualifications for members of Parliament. It states that a
person shall not be qualified to be chosen to fill a seat in Parliament unless he-

Citizen of India
• Makes and subscribes before some person authorized in that behalf by the election commission an
oath or affirmation according to the form subscribed to that purpose in the third schedule.

• In case of council of states the age of the member should not be less than 30 years and in case of
house of people the age should not be less than 25 years.

• Possessing such other qualification as mentioned by Parliament from time to time. Accordingly
Parliament has passed Representation of peoples act 1951, following are additional qualifications
as per this act.

• A person shall not be qualified to be chosen as a representative of any state or UT in the council of
states unless he is an elector of a parliamentary constituency in India

• A person shall not be qualified to be chosen to fit a seat in the house of people unless in case of a
seat reserved for the scheduled castes or scheduled tribe in any state, he is a member of any of
SC / ST respectively whether of that state or of any other state and he is an elector for any
parliamentary constituency.
• A person shall be disqualified where the convicted person is sentenced to only fine, for a period of 6
years from the date of such conviction or imprisonment, from the date of such conviction and shall
continue to be disqualified for a further period of 6 years since his release.

• If the election commission is satisfied that a person has failed to lodge an account of election
expenses within the time and the manner required

Disqualification on the ground of corrupt practices and disloyalty

The following are declared as corrupt practices under Representation of Peoples act 1951:

• The appeal to vote or refrain from voting for any person on the ground of his religion, race, caste,
community or language

• Promotion of feeling of enmity or hatred between different classes of citizens on the ground of
religion, race, caste, community or language

• Publication of any statement of fact which is false in relation to personal character or conduct of any
candidate

• Booth capturing

• Incurring expenditure in contravention to that specified

• Obtaining assistance from any person in service of government

Working of the Parliament –
• Each house is the master of its procedure and may make rules for regulating its procedure and
conduct of business subject to the provisions of the constitution.

• The validity of any proceedings in Parliament cannot be questioned in a court of law on the
grounds of any alleged irregularity of procedure.

• Some of the basic rules of procedure and conduct of business have been laid down in the
constitution itself. Every first hour of Parliamentary sittings start with question hour during which
the members ask question for which ministers are supposed to give their answer.

• The answers given by them shall depend on the type of question asked. Accordingly the questions
can be starred for which the minister gives oral answers and other members can also ask
supplementary questions depending on the answer provided by the minister.

• The questions can be unstarred for which usually written answer is provided by minister.

• Another type of question is short notice question for which a notice of 10 days is provided before
asking questions for which also minister is supposed to give oral answer.

• Next to question hour is the zero hour which lasts till the agenda of the day. It is also utilized by
members of Parliament to ask questions without giving any prior notice.
• The constitution has declared that Hindi and English can be the language of the Parliament.
However presiding officer can permit for any other language to be used.

• Also every minister and attorney General has the power to take part in proceedings of any house
of Parliament.

• They have the right to speak but without the right to vote in any other house other than the
house to which they belong to.
• Proceeding of the house- the President from time to time summons each house of Parliament.

• The maximum period with in which a session to be held is 6 months i.e. it should meet at least
twice a year. Normally these sessions can be classified into 3 sessions in a year i.e.

Budget Session – February – May

Monsoon Session – July – September
Winter Session- November- December
 The Rajya Sabha
• Rajya Sabha is the Upper House of the Indian Parliament.
• This house is permanent in nature as it can never be dissolved. This is because every member
elected to the Rajya Sabha serves for a term of 6 years and one-third of members do retire
biennially, while the other members continue their tenure. It’s like an election in different
batches.
• Retired members are subject to re-election.
• This house consists of 250 members out of which, 238 members are elected by means of a
single transferable vote. 12 members are nominated by the President on the advice of the
council of ministers.
• The method of election of these members is listed in Article 80(1) of the Indian Constitution.
• It says that the members would be elected by the elected members of respective state
assemblies in accordance with proportionate representation of every state.
•Article
This 84
provision thus reflects
of the Indian the federal
Constitution providesnature of the
for the Council oftoStates,
qualification becomewhere every state
a member is
of Rajya
represented
Sabha, i.e. oneproportionally.
must have the nationality of India, doesn’t holds any office of profit and must have
•completed
However,30 theyears
number of members
of age. representing
Article 102 each
of the Indian state varies
Constitution from 1 for
provides to as large as on
conditions 31 (for
which
oneUttar
can Pradesh).
be disqualified from either of the houses. It says that one must be disqualified as a member
of the house if,
•he/she holds any office of profit;
•he/she is of unsound mind;
•he/she is discharged insolvent;
•he/she is not a citizen of India and has voluntarily accepted the nationality of other nations;
•he/she is disqualified under any law made by the Parliament.
Chairperson and Deputy Chairperson of Rajya Sabha

In Rajya Sabha, the Vice-President of India presides of its sessions and is ex-officio chairperson of the
house.
However, to take care of its day-to-day affairs, and to preside over the sessions in the absence of the
Chairperson, i.e. the Vice-President, a member of the house itself is chosen internally by the Rajya
Sabha as Deputy Chairperson of the house.

The utility of the Rajya Sabha

• Regarding utility and need of a second chamber in the parliament, an extensive debate took place
in the constituent assembly while framing of the constitution.
• Ultimately, it was agreed to adopt a bicameral system of legislature and thus the Rajya Sabha was
formed as the second chamber with a different method of election and different composition
altogether.
• The utility of the Rajya Sabha can be understood by this hypothetical situation. Suppose, after
general elections, a single political party comes to a thumping majority in the lower house.
• Now, having this majority, they can pass any bills or piece of legislation even if the same is not
fruitful to the people and democracy unless there is a system of check.
• So, this second house serves as a safety valve and a system of check regarding all the functions
of the lower house.
 The Lok Sabha

• The provisions of Article 331 of the Indian Constitution provides for the existence of the house of the
people and shall consist of a maximum of 530 chosen members from different states, not more than
20 members to be chosen from the Union Territories.

• If President feels that there is a lack of representation of the Anglo-Indian Community in parliament
he may nominate two members of the Anglo-Indian Community.

• Some seats are also reserved for the Scheduled Caste and Scheduled tribes communities especially
laid aside for them all over the country.

• The representation is allocated to the states and the Union Territories according to the
Representation of the people Act passed by the Parliament of India in 1951.

• The Lok Sabha, unless dissolved midway, continues its tenure for 5 years from the day of its first
meeting.

Territorial Constituencies

As the members of the Lok Sabha are elected directly, it needs to have a proper division of the country
into smaller units.
And for this purpose, India is divided into small territorial constituencies.
These constituencies are sorted out in such a way so that each Indian state has an adequate share of
Qualification for Membership of Parliament

Qualifications necessary for becoming a member of parliament is provided in

Article 84 of the Indian Constitution.
Following are the qualifications:
•he/she should be a citizen of India.
•In the case of Upper House,i.e. Rajya Sabha, he/she should have completed at least 30 years
of age and for Lower House,i.e. Lok Sabha, he/she should have completed 25 years of age.
•he/she need to comply with other such qualifications as prescribed in any law by the Indian
Parliament.

Now. let us take a look into grounds on which one can be disqualified as a Member of
Parliament.
Disqualification
Now, Article 102 of the Indian Constitution lays the grounds on which a legislator can be
disqualified as a member of the Parliament.

Those grounds are:

•If he/she holds any office of profit under the Government of India or any of the states;
•If he/she is declared of unsound mind by a Court;
•If he/she is an undischarged insolvent;
•If he/she is not a citizen of India anymore;
•If he/she is disqualified by virtue of any law passed by the parliament of India.
Office of Profit

As it is a ground for disqualification as a member of Parliament, it is essential to understand what

exactly does the office of profit means.
Office of profit refers to any post or position under central or state government which fetches salaries,
bonuses, perks and other benefits to the individual.
However, the quantity of profit gained is irrelevant under this disqualification.
Disqualifications under the Representation of Peoples Act
A member of parliament can also be disqualified under the Representation of Peoples Act, 1951. This
act was passed by the Parliament under Article 327 of the Indian Constitution, which provides for the
procedure and the conduct to be followed during the election to Parliament and state legislatures.

Following are the grounds:

•If he/she is convicted for indulging in corrupt practices during the election or any other election-related
offenses.

•If he/she is convicted under certain acts of Indian Penal Code, Unlawful Activities Prevention Act,
Prevention of Terrorism Act 2002, etc.

•If he/she is convicted under any law that results for at least two years of imprisonment and will remain
disqualified for a further 6 years after his release.

•If he/she is convicted under any law relating to drugs or dowry prevention.
•Dismissal from the government due to disloyalty or involvement in corrupt practices.
Disqualification on ground of defection

The need for an anti-defection law was felt in India when in 1967, one legislator from Haryana, Gaya
Lal, changed his party thrice in a single day. Also, the General Elections of 1967 saw a great number
of defections was seen as around 150 MPs flitted their political parties. However, an act tackling such
problems was passed by Parliament in the year 1985.
With 52nd amendment to Indian Constitution, provisions regarding disqualification of the basis of
defection were inserted in the 10th schedule of the Indian Constitution.

As per the provisions, the members can be disqualified on the following grounds:

•When members of a political party don’t abide by his/her party leadership or voluntarily resigns from
the party.
•When members don’t votes or refrains from voting according to his/her party whip.
•An Independent member stands disqualified if he/she joins a political party.
•For nominated members, if he/she is not a member of any political party, he/she if want, has to join a
political party within 6 months of nomination or membership stands canceled.

Now let’s look for which people have the authority to disqualify the members.
The chairman, in the case of Rajya Sabha and the Speaker, in the case of Lok Sabha has powers to
disqualify a member on grounds of defection.
And, regarding complaints of Speaker/Chairperson involved in defecation, a member elected by the
house itself will take necessary actions regarding the same.
This law also has some exceptions, specifically when political parties merge with some other political
Vacation of seats

Now, the question comes in our mind is, what if a member vacates his seat?
And what are the grounds of vacation of seats?
So, to deal with such situations, our Constitution provides us with Article 101 in the Fifth part of the
Indian Constitution.
Thus, as envisaged under this Article, a member must vacate his/her seat if

•He/she is elected in both houses as this article clearly states that no person shall be chosen as
members in both the houses.
•He/she becomes a member of the Central legislature as well as a state legislature, then he must vacate
his seat in the house.
•He/she becomes subject to any of the disqualifications mentioned by Parliament
•He/she, without permission of the speaker, is absent from the house for consecutive 60 days
And, after a seat is vacated in either of legislative houses, polls are conducted to fill the vacancy.
 Speaker and Deputy Speaker of Lok Sabha

To preside over sessions of the house, the Speaker of the Lok Sabha is elected among the sitting
members of the house. He/she is generally elected in the first meeting of the Lok Sabha and serves a
tenure of 5 years along with that particular Lok Sabha. And as normally practiced, the Speaker is a
member of the ruling party or alliance.

Regarding the election of the Speaker, sitting MPs proposes names and the same are notified to the
President of India.
Then a date for the election is notified.

Now, if only one name is proposed by the MPs, no formal voting happens but, in a case where a
proposal for more than one name shows up, a division vote is organized and the Speaker is chosen
accordingly.

Inter alia (among other things), one of the main functions of a Speaker is to decide upon whether a bill
is a money bill or not.

His/her function also includes maintaining decorum and discipline in the house and punishing those who
are not complying with his guidelines. Also, in the order of precedence, he/she is ranked 6th, parallel to
the Chief Justice of India.

According to Article 94 and Article 96 of the Indian Constitution, a Speaker can be removed by a
resolution passed with an effective majority, i.e More the 50% of the members of the house.
He/she can also be removed according to The Representation of the People Act and when a bill is
Sessions of Parliament

Now coming to Sessions of the Parliament, let’s first understand what exactly a session is.
So, whenever either of the houses meets for the conduct of its business, for the period it meets, is
called a session.
With not more than a 6-months gap, the president can summon either of the houses for conducting a
session.
Thus, the Parliament must necessarily meet at least two times a year.

As per convention, three sessions are conducted by the Indian Parliament in a year:
•Budget Session between February and May.
•Monsoon Session between July and September.
•Winter Session between November and December.

Prorogation

Prorogation of the house essentially means termination of a session of the house.

The notice of prorogation is issued by the Speaker or the Chairperson of the House. After a session is
ended, the presiding officer adjourns the house sine die, i.e with no appointed date for resuming the
house and then after a few days, the notice is issued.
However, houses of the Parliament can also be adjourned or prorogued when in session.
This is provided under Article 85(2) of the Indian Constitution.
Dissolution

The power to dissolve the Lok Sabha is placed with the President of India in accordance with Article 85
of the Indian Constitution.
In two cases, dissolution of the Lok Sabha is possible:

•When the term of the Lok Sabha, i.e 5 years complete and is dissolved by the leader of the ruling party.
•When the government loses the majority and floor test is about to happen, in that case, the president
can dissolve the house.

And, it is completely different from adjournment or prorogation as Dissolution means the end of the
term of that particular Lok Sabha.

Effect of Dissolution on the business pending in the House

Articles 107 and 108 of the Indian Constitution deals with these situations.
It states that whenever the Lok Sabha is dissolved, be it after completing its whole term or midway, all
the business, which includes bills, notices, petitions, motions, etc, do lapses.
When a new Lok Sabha is elected and it begins with its sittings, all the motions, bills and notices need
re-introduction in the house.
 Functions of the Parliament

From the gist of what our constitution provides, we may infer that Parliament is an institution which
exerts an amalgamation of executive and legislative authority.

There are certain functions that the Parliament of India serves.

Following are the functions:

•Legislation

The basic function which the Parliament serves is of legislating.

Legislating essentially means making laws and provisions for the smooth functioning of the
government and the nation at large.
This function is embedded in Article 107-108 of the Indian Constitution.
Raison d’etre of this function is the realization of the constitutional objective of India as a welfare
state.

•Providing the cabinet

Another basic function of the parliament is providing the cabinet, which stands responsible for the
Parliament itself and provides the proper aide to the President.
However, the cabinet is accountable only towards the Lok Sabha, it may consist of members from
Rajya Sabha too.
•Control of the cabinet

It is a function of the parliament to see if the cabinet is able to maintain its trust through the
majority of the ruling party, i.e. if the ruling party loses trust or majority, the cabinet must have to
resign.
The same is expressed in Article 75(3) of the Indian Constitution.

•Criticism and evaluation of the cabinet

Criticizing and evaluating the cabinet and the ministers is the foremost function of the parliament.
As the cabinet is responsible for the Parliament, evaluation of the actions and decisions of the
cabinet must be done by other members. This serves as a safety valve and provides for a system
of checks.
It bars the government to act in a dictatorial way while avoiding the public interest. This function
can be discharged by both the houses of the parliament.

•Financial control

The legislature has exclusive authority to allocate expenditures and finances for public services
and other affairs. It also provides with the measures to be taken for raising revenue and receipts
to be appropriated according to needs.
These authorities are wielded in such a way that keeps the democracy basic essence of our
constitution alive.
President’s Assent

According to Article 111 of the Indian Constitution, when a bill is passed by both the houses of the
Parliament it must be presented to the President and he/she needs to declare that he/she assents to the
bill or withholds assent.

Money Bill

According to Article 110 of the Indian Constitution, a bill can be defined as a money bill if it deals with
imposition, abolition, alteration or regulation of any taxes and such bills can only be introduced in the
Lok Sabha and only by a member having a ministerial portfolio.
It can only be introduced on the recommendation of the president. Also, it requires certification of the
Lok Sabha Speaker, when transferred to the Rajya Sabha.
If this bill is defeated in the Lok Sabha, the entire cabinet has to resign, and also, it can’t be returned for
Financial
review by the Bills
President.

Financial bills are quite similar to those of Money bills.

To understand what a Financial bill is, we may assert that any such bill which carries some of the
provisions of Article 110 of the Indian Constitution relating to expenditure and taxation is a financial bill.
Such bills are introduced only in Lok Sabha on the recommendation of the President and it needs to be
passed in both the houses.
Now, the question which arises is what are the differences between a Money Bill and a Financial Bill?
To understand easily, we may say that Money Bills are a kind of subset of Financial Bills, i.e. all the
Money Bills are Financial bills but the same is not true vice-versa.
The distinction between Money Bills, Financial Bills and Bills involving expenditures

The major difference between a Money Bill and a Financial Bill is that Rajya Sabha can’t amend the
Money bill but this is not the case with the Financial Bills.
Also, a Money Bill strictly deals only with the provisions as laid down in Article 110 of the Indian
Constitution while a Financial bill can also cover other provisions than taxation and expenditure.
A Money bill needs certification from the Speaker of the Lower House, while a Financial Bill doesn’t need
any such certification.
Annual Financial Statement (Budget)

The Annual Financial Statement or as often called, budget is

an important document dealing with the finances of a nation.
Provisions relating to Budget are discussed in Article 112 of
the Indian Constitution.

The budget is presented in such a way that expenditure and

receipts regarding fiscal and deficits of the current year, the
previous year and the year for which budget is presented.

The Annual Financial Statement consists of three parts i.e

Consolidated fund of India, Public Account of India and
Contingency Fund of India.
It also includes an account of loans advanced by the
Discussion and voting on Budget

So, after a budget is proposed by the Finance Minister, it is followed by Extensive discussion in the
house and lastly, voting is done.
The voting is done on the Demands of Grants.
Now, what are the Demands of Grants?
Demands of Grants basically mean expected spending by a particular department or ministry. Now
after this voting is done, the parliament happens to be in recess.
After the recess is over, then all the standing committees submit their respect reports followed by
discussion and voting.
This is all how discussion and voting are done during the tabling of the budget in the budget session of
parliament.

Appropriation Bills

After the discussions are over on budget and expenses, then an appropriation bill is tabled by the
government if it intends to withdraw funds from the Consolidated Fund of India.
This is done when the government wants to withdraw the funds for expanding and meeting the
expenditure.
It must be noted that this bill is introduced only in the Lok Sabha.
Supplementary Additional or Excess Grants

Excess Grants are granted to the Government when the amount authorized for a particular service by
virtue of a law is found to be insufficient.These funds are granted by the President of India.
Also, when the actual expenditure incurred on a certain service or scheme is more than what was
allocated for the same, then the Comptroller and Auditor General takes action and brings notice to the
Parliament.
After that, the respective ministers raise demand for excess grant and then the procedure regarding
the same is followed by voting and discussion.
General Rules of Procedure
The General rules of procedure deal with the procedure and conduct to be followed in both the
houses. It lays down the parliamentary procedures and rules according to which the parliament must
function.
It also lay down process according to which the parliament must table and pass a bill or other kinds of
legislation. It also deals with the structure and function of the standing committees on different
matters
These rules are fundamental for the genuine working and functioning of the Parliament.
Parliamentary Control over Financial Matters
Financial matters in India are largely controlled by the Parliament. This control includes control over
revenue matters and expenditure related issues.
As stated in the Constitution in Article 265, no tax can be collected or levied by the executive
authorities without any law supporting it. So, if tax is imposed upon anyone without having legislative
backing, then the person can go to court for redressal.
As Parliament holds control over the Consolidated Fund of India, its control over the expenditure is
Parliamentary Committees

Parliamentary committees are made to ease the scrutinizing of the legislative and other matters of the
Parliament. Broadly, these committees can be classified as Standing committees, which are permanent
and ad hoc committees that are temporary and are constituted according to the need.
Among the standing committees, the estimates committee, public accounts committee and public
undertakings committees are the major ones.
However, 17 different standing committees for different departments are also constituted for easing the
business. Some such committees are committees of petitions, a committee of privileges, committee on
papers laid, etc.
While the Ad Hoc committees are more of temporary committees. These committees address matters
like committees on five-year plans, the joint committee on Bofors agreement, committee on food
management in the parliament, etc.
Language to be used in Parliament
The official languages of India can be used in the Parliament of India, i.e. Hindi and English.
Article 343 of the Indian Constitution provides for the official language of India. However, the
members can use any of the scheduled languages while in discussion or debate.

Restriction on discussion in Parliament

To keep the doctrine of Separation of Power intact, the Constitution of India forbids the Parliament to
legislate and discuss certain matters.
Article 121 discusses these provisions.
This includes any discussion regarding the conduct of the judges of the Supreme Court or judges of
any of the High Courts. However, the discussion can happen in the question of the impeachment of
a judge.
Courts not to inquire into proceedings of Parliament

This may be seen as vice-versa provision of Article 121. Article 122 of the Constitution provides for the
provision that the courts can not inquire into the proceedings of the legislation.
Also, any officer or member of the Parliament while exercising his powers endowed upon him/her by
parliament is not subject to the jurisdiction of any of the Courts.
Prime Minister of India

The Prime Minister of India is the head of the executive branch of the Government of India. His position
is distinct from that of the President of India, who is the head of the State. As India follows a
parliamentary system of government modelled after the Westminster system, most of the executive
powers are exercised by the Prime Minister. He acts as an advisor to the President and is the leader of
the Council of Ministers. The President appoints the Prime Minister of India and on his advice, appoints
the Council of Ministers. The Prime Minister can be a member of either the Lok Sabha or the Rajya
Sabha.

Roles and Responsibilities of Prime Minister

The roles and responsibilities of the Prime Minister are as follows:

Link between President and Council of Ministers:

The Prime Minister is the leader of the Council of Ministers and serves as the channel of communication
between the President and the Council of Ministers. It is his duty to communicate to the President all the
decisions taken by the Council of Ministers and to provide information regarding administration of the
Union or proposals for the legislature as called for by the President.

Allocation of Portfolios:
He allocates portfolios among the ministers and distributes work among various ministries and offices.
The Prime Minister coordinates work among various ministries and departments through the Cabinet
Secretariat.
In-Charge of Ministries:

Prime Minister also retains certain portfolios that are not allocated to other ministers. He is generally in
charge of the following ministries/departments:

Ministry of Personnel, Public Grievances and Pensions

Ministry of Planning
Department of Atomic Energy
Department of Space
Appointments Committee of the Cabinet

Leader of the Cabinet:

The Prime Minister summons and presides over meetings of the cabinet and determines what business
shall be transacted in these meetings.

Link between the Parliament and the Cabinet:

The Prime Minister is also the link between the cabinet and the Parliament. He is the chief spokesperson
of the government in the Parliament, along with the leader of the party in majority in the Lok Sabha. It
is his responsibility to announce important policy decisions. The Prime Minister can also intervene in
debates of general importance in the Parliament to clarify the government’s stand or policy.
Official Representative:
The Prime Minister represents India in various delegations, high-level meetings and international
organisations and also addresses the nation on various occasions of national importance.

Powers/Authorities of Prime Minister

The various powers and authorities enjoyed by the Prime Minister are as follows:

Head of the Government:

The Prime Minister of India is the head of the Government. Though the President is the head of the
State, most of the executive decisions are taken by the Prime Minister. All the important decision-
making bodies in India, like the Union Cabinet and the Planning Commission, run under his
supervision.
Leader of the Council of Ministers:
As far as the Prime Minister’s relation to the Council of Ministers is concerned, his position is that of
“First among Equals”. In the case of death or resignation of the Prime Minister, the entire Council of
Ministers has to resign. The ministers directly report to the Prime Minister. He can also remove a
minister by asking for his resignation or having him dismissed by the President. If any difference of
opinion arises between the Prime Minister and any other minister, the opinion of the Prime Minister
prevails.

Leader of the Parliament:

The Prime Minister is the Leader of the House to which he belongs. He can also take part in debates
in the House of which he is not a member. He can also advise the President to dissolve the Lok
Representative of the Country:
Sabha.
In international affairs, he is the spokesperson of the country. The Prime Minister plays a major role in
directing India’s foreign policy.
Selection Process of Prime Minister

The Constitution states that the President of India should appoint the leader of the party or alliance
which is in majority in the Lok Sabha as the Prime Minister of India. In case no party or alliance enjoys
majority, the President appoints the leader of the largest party or alliance as the Prime Minister. But he
has to win the confidence vote in the Lower House of the Parliament as early as possible. A member of
either the Lok Sabha or the Rajya Sabha can be appointed as the Prime Minister. If he is not a member
of either House of the Parliament then he has to be elected to either House within six months of his
appointment. As the Prime Minister, he is the Leader of the House of which he is a member.
Term and Retirement Age of Prime Minister
Unlike the President, the Prime Minister does not have a fixed tenure. The full term of the Prime
Minister is five years, which coincides with the normal life of the Lok Sabha. However, the term can
end sooner if he loses the vote of confidence in the Lower House. So, it can be said that he remains in
power as long as he enjoys the confidence of the Lok Sabha. The Prime Minister can also resign by
writing to the President.

There are no term limits on the office of the Prime Minister. There is also no official retirement age.

Eligibility Criteria to become Prime Minister of India

•To be eligible for the position of the Prime Minister of India, a person should:
Be a citizen of India.
•Be a member of either the Lok Sabha or the Rajya Sabha.
•Complete 25 years of age if he is a member of the Lok Sabha or 30 years if he is a member of the
Rajya Sabha.
Name Took office Left office Party
Shri. Narendra Modi May 30, 2019 Incumbent Bharatiya Janata Party
Shri. Narendra Modi May 26, 2014 May 24, 2019 Bharatiya Janata Party

Dr. Manmohan Singh May 22, 2004 May 26, 2014 Indian National Congress

Shri Atal Bihari Vajpayee Mar 19, 1998 May 22, 2004 Bharatiya Janata Party

Shri Inder Kumar Gujral Apr 21, 1997 Mar 19, 1998 Janata Dal

Shri H. D. Deve Gowda Jun 1, 1996 Apr 21, 1997 Janata Dal

Shri Atal Bihari Vajpayee May 16, 1996 Jun 1, 1996 Bharatiya Janata Party

Shri P. V. Narasimha Rao Jun 21, 1991 May 16, 1996 Congress (I)
Shri Chandra Shekhar Nov 10, 1990 Jun 21, 1991 Janata Dal (S)

Shri Vishwanath Pratap Singh Dec 2, 1989 Nov 10, 1990 Janata Dal

Shri Rajiv Gandhi Oct 31, 1984 Dec 2, 1989 Congress (I)
Smt. Indira Gandhi Jan 14, 1980 Oct 31, 1984 Congress (I)
Shri Charan Singh Jul 28, 1979 Jan 14, 1980 Janata Party
Shri Morarji Desai Mar 24, 1977 Jul 28, 1979 Janata Party
Smt. Indira Gandhi Jan 24, 1966 Mar 24, 1977 Congress
Shri Gulzari Lal Nanda Jan 11, 1966 Jan 24, 1966 Congress

Shri Lal Bahadur Shastri Jun 9, 1964 Jan 11, 1966 Congress

Shri Gulzari Lal Nanda May 27, 1964 Jun 9, 1964 Congress
Shri Jawaharlal Nehru Aug 15, 1947 May 27, 1964 Congress
 UNIT- 3 Indian Federalism

Federalism is a system of government in which powers have been divided between the centre and its
constituent parts such as provinces or states. Unlike a unitary state, sovereignty is constitutionally split
between at least two territorial levels so that units at each level have final authority and can act
independently of the others in some area. The constituent units possess certain level of autonomy
depending on type of federation.

There are two types of federations:

(1) Holding together federation: In this form of federation, the powers are shared among various social
groups/constituent parts to accomodate the diversity present in the society. In this type of federation,
the powers are somewhat tilted towards the central authority. India, Spain, Belgium etc follow this form
of
(2)federalism.
Coming together federation: In this form of federation, the independent states come together to
form a bigger unit and sacrifice some of their powers to be enjoyed by the central authority. The states
here enjoy more autonomy as compared to the states in "holding together federation" system.
Countries such as the USA, Switzerland, Australia follow this form of federalism.

The features of federal system include governments atleast at two levels, division of powers between
different levels of the government, rigidity of constitution, independent judiciary, bicameralism, dual
citizenship etc.
 Features of Federalism

The best way to comprehensively understand the federal system is to learn about its features. These characteristics
combined to reflect the true essence of federalism. Let us study them.

1.The essential feature, which is the definition of federalism is that there are two levels of governance in the country
at least. There can even be more. But the entire power is not concentrated with one government.

2.All levels of governance will govern the same citizens, but their jurisdiction will be different. This means that each
level of government will have a specific power to form laws, legislate and execute these laws. Both of the
governments will have clearly marked jurisdiction. It will not be that one of the government is just a figurehead
government.

3.Another important feature is that the constitution must guarantee this federal system of government. Which means
the powers and duties of both or all governments must be listed down in the constitution of that country hence
guaranteeing a federal system of governance.
4.As stated above the federalism of a country must be prescribed by the constitution. But it is also important that just
one level of government cannot make unilateral changes or amendments to the important and essential provisions of
the constitution. Such changes must be approved by all the levels of the government to be carried through.

5.Now there are two levels of government with separate jurisdictions and separate duties. Yet there is still a
possibility that a conflict may arise between the two. Well in a federal state, it will fall upon the courts or rather the
judiciary to resolve this conflict. The courts must have the power to interfere in such a situation and reach a
resolution.

6.While there is power sharing between the two levels of government, there should also be a system in place for
revenue sharing. Both levels of government should have their own autonomous revenue streams. Because if one
India – A Federal State

India is a federal country. But not once in the constitution is the word “federation” ever mentioned.
Instead what is said is that India is a “Union of States’.Actually many historians believe that India is a
quasi-federal country. It means it is a federal state with some features of a unitary government. Let us
see the reasons.

The constitution of India has essentially prescribed a federal state of government. As you already know
we have several levels of government, The Government at the center, which id the Lok Sabha and the
Rajya Sabha. Then the various state governments, the Vidhan Sabhas, and the Vidhan Parishad. And
finally, we have the Municipal Corporations and the Panchayats, which are forms of local governance.

Our constitution makes a clear demarcation about legislative powers and jurisdictions. It is done
through the three lists.

•Union List: This includes subjects that carry national importance, like defense, finance, railways,
banking etc. So such subjects only the Central Government is allowed to make laws.

•State List: Includes all matters important to the functioning of a particular trade like transport, Trade,
Commerce, agriculture etc. The state government is the deciding authority for framing laws on these
subjects

•Concurrent List: This list includes topics on which both the Union and the state government can make
laws. These are related to education, forests, trade unions etc. One point to be noted is if the two
Indian Model of Federalism

The Government of India Act, 1919 introduced the concept of division of powers between the centre and
the provincial legislatures by separating the central and provincial subjects. For the first time, it
introduced bicameralism consisting of an Upper House and Lower House. The Constitution of does not
mention India as a 'federation' but 'Union of states'. Below are the features of the federalism followed in
India:

(1) Supremacy of the constitution: Constitution is the supreme law in India. The constitution is
regarded as the guide in framing policies of the government. It lays out the ideas and philosphy of the
constitution framers. It secures the right of the citizens.
(2) Written constitution: India has the lengthiest written constitution in the whole world. The
provisions of the constitution of India have been drawn from various sources. Indian constitution is a
blend of rigidity and flexibity.
(3) Vertical power sharing: The Constitution has divided the powers between the Union and the
States. It helps in accomodating diversity of the country. It enables the state governments to take
decision with flexibility according to the local needs. The powers in India have been, to some level,
tilted towards the centre.
(4) Horizontal power sharing: India has three wings of the government- Legislature, Executive and
Judiciary. Unlike USA, in India political executive is a part of the legislature.
(5) Bicameralism: The Parliament of India has two houses - Lok Sabha and Rajya Sabha. Most of the
states in India do not have bicameral legislature.
(6) Independent judiciary: The Indian constitution provides for an independent and an integrated
Critical Appraisal of Indian Federalism

Features such as horizontal and vertical power sharing, independent judiciary, written constitution,
supremacy of constitution and bicameralism strengthen India's federalism. Though, India has adopted
federal form of government, but it does not follow certain principles of federalism. Our constitution has
made centre more powerful which is in resemblance to the feature of unitary government. These
features have been mentioned here:

(1)Not a rigid constitution: The constitution of India is a blend of rigidity and flexibility. Some of its
provisions can be easily amended by the parliament and in some provisions ratification from the
states is required. The procedure to amend the constitution is tough where the amendments seek to
make changes in the arrangements of federalism. But, In any case, the procedure for passage of
amendments is not as tough as in the USA.

(2) Centre more powerful: The constitution has made centre more powerful as the Union List has
more subjects than the State List. Moreover, it has empowered the parliament to override the law made
by a state legislature on the matters related to concurrent list. In some cases, the parliament is also
empowered to make laws on state list subjects. The residuary power are vested in the centre which are
not in line with the principle of federalism.

(3) Unequal representation of states in Upper House: The states in India do not have equal
representation in Rajya Sabha. The representation is based on the population. For example-Uttar
Pradesh, Rajasthan and Goa have 31, 10 and 1 representative respectively in the Rajya Sabha.
(4) Executive is a part of legislature: The political executive of the centre and the states are the
part of the parliament and the state legislature respectively. It betrays the principle of division of
powers between the different organs of the government. However, checks and balances limit the power
of the executive , the legislature and the judiciary.

(5) Lok Sabha more powerful than Rajya Sabha: The Lok Sabha is more powerful than the Rajya
Sabha. Certain bills such as money bill can only be introduced in the Lok Sabha. A no-confidence motion
against the government can only be initiated in the Lok Sabha. However, Rajya Sabha has been given
certain powers which are not available to Lok Sabha such as introduction of a bill for new All-India
Service. Unequal powers to two houses is not in line with the features of a federation.

(6) Emergency Powers: The centre has been provided with emergency powers. Three types of
emergency are national emergency, state emergency (president's rule) and financial emergency. During
emergency, the level of control of centre over the states increases. These provisions undermine the
autonomy of states.

(7) Integrated judiciary: Judiciary in India, though indepent, is integrated. That means, India does not
have separate judiciary at the centre and the state level.

(8) Single citizenship: The constitution provides for a single citizenship for the citizens of the country.
It does not provide for state's citizenship to the citizens separately. The provision of single citizenship
increases the feeling of nationality among the citizens which helps in maintaining unity in spite of
cultural and regional diversity. It is also in line with some fundamental rights such as freedom of
movement and residence in any part of the country.
(9) Appointment of governor: The governor of a state is appointed by the President. The state has
no role in his appointment. He acts as an agent of the central government in the state.

(10) All India Services: Services including Indian Administrative Services (IAS), Indian Police Services
(IPS) and Indian Forrest Services (IFS) are part of All India services. The centre, through these services,
intrudes into the power of the states and control the executive functions of the states. Though
immediate control of these services is in hand of state but unlimate powers lies with the centre. These
services provide efficiency and uniformity in administration throughout the country.

(11) States not indestructible: Parliament may by law, form a new State by separation of territory
from any State or by uniting two or more States or parts of States or by uniting any territory to a part of
any State. It can also increase or diminish the area, alter the boundaary or change the name of state.
Parliament require to pass such a bill following the procedure of an ordinary bill. That means, states in
India are not indestructible entity.

(12) Veto over states bill: The governor of a state has the authority to reserve certain types of bills
for the consideration of the president. The president enjoys the absolute veto on these bills. He can
even reject the bill at the second instance i.e if the bill is sent after reconsideration by the state
legislature. Most of the state legislatures have single house. So, the provision empowers the President
to check any arbitrary decision by the state assembly. But, this provision is a deviation from the
principles of federalism.

(13) Integrated Election Machinery: The Election Commission of India is responsible to conduct free
and fair elections at both the centre and the state level. The Chairman and the members of the election
commission are appointed by the president.
(14) Integrated Audit Machinery: The Comptroller and Auditor General is appointed by the
President. However, he audits the account of both the centre and the states. There is no separate
provision for an audit machinery at state level.
(15) Authority to remove key functionaries: The state legislature or government is not empowered
to remove government functionaries even at state level such as Election Commissioner of a state,
member or chairman of state public service commission, judges of the high court etc.

Important Supreme Court Decisions

State Of West Bengal vs Union Of India (1962)

The case involved the question of sovereignty of individual states in India.

The Supreme Court held that:
(i) the Indian Constitution does not provide for absolute federalism. It provides to decentralize the
authority, so that the large territory of India can be governed efficiently.
(ii) the individual state has no power to amend the constitution which is vested only in the parliament.
(iii) the Constitution has divided powers between the centre and the states in such a way that the
national policies and local governance could be executed by the centre and the individual states
respectively
(iii) the Constitution provides supreme power to the judiciary to invalidate any law made by legislature
if it violates the constitution
S. R. Bommai v. Union of India (1994)

In this case, the Supreme Court discussed about the provisions of Article 356 (President's Rule. It laid
down the conditions under which it can be imposed, so that the misuse of Article 356 can be checked.
The Supreme court laid down certain principles regarding Article 356:

(i) President has power to impose Article 356, but the decision is not immune from judicial review.
The judiciary can examine whether the Proclamation was justified or it was imposed with malafide
intention.

(ii) The Supreme Court or the High Court can strike down the proclamation if it is found to be malafide
or based on irrelevant grounds.

(iii) It was held that the President has conditional power and not absolute power in regrads to imposition
of Article 356.

(iv) It was held that the Article 356 is an extreme power and is to be used as a last resort in cases
where it is manifest that there is an impasse and the constitutional machinery in a State has collapsed.
Federal Features of the India Union
•Two governments i.e. Union Government and State governments
•Division of powers between the union and its constituents (Seventh Schedule of the Constitution
contains three lists such as the Union List, State List, and Concurrent List)
•Supremacy of the Constitution (Basic structure of the Constitution is made indestructible by the
Judiciary)
•Partial rigidity of the Constitution
•Independent Judiciary
•Bicameralism
Unitary Features of the Constitution
A strong centre – The Union Government becomes all powerful in certain times like emergencies. Article
200 of the Constitution of India demands that the States must comply with the central laws. Other
features include
•Single Constitution
•Single citizenship
•Flexibility of Constitution
•Integrated judiciary
•Appointment of the Centre
•All India Services
•Emergency provisions
Importance of Federalism in India
Federalism is the most relevant factor of modern constitutionalism. The core objectives of Indian
federalism are unity in diversity, devolution in authority, and decentralization in administration. Through
federalism, the State pursues the goal of common welfare in the midst of wide diversity in socio-
 15 Issues and Challenges faced by Indian Federalism: CENTER-STATE RELATIONS
1. Regionalism
•It is considered one of the significant challenges to federalism in India.
•Federalism best thrives as a democratic system when it mitigates the centralization of power sharing
between the centre and the states.
•The pluralist character of India gives rise to many factors including regionalism. People from far
northeast sometimes feel themselves at a formidable distance from New Delhi and people in southern
part of the country with bigger states feel neglected having been within larger states.

•Regionalism or love for one’s area, despite India’s tradition of successful federal rule over the years
since independence, still raises its head in different parts of the country.

•The voice for the demand of more states has become more prominent in recent times, especially after
the formation of Telangana in 2014. Recent demands like four-fold division of Uttar Pradesh and the
creation of Gorkhaland from West Bengal are instances of aggressive regionalism that pose a threat to
the federal structure of India.

•The agitations for Gorkhaland, Bodoland, and KarbiAnglong have been revived. This is apart from the
new demands for a separate Vidarbha State in Maharashtra, and Harit Pradesh and Poorvanchal in Uttar
Pradesh. The more the number of states the more the centre will be held hostage to state parties on
matters of national importance.

•For instance, West Bengal threatened India’s Teesta river waters treaty with Bangladesh because of its
possible potential costs for West Bengal. Even growing regional powers may affect effective foreign
2. Division of Powers

•Unlike the USA and Australia, in India distribution of power is made under Three Lists found in the
Seventh Schedule of the Constitution. The powers of both the Central and State Governments are
specifically enumerated in the Union list and State list respectively while powers mentioned in the
Concurrent list are enjoyed by the two sets of governments. The residuary powers are vested in the
Central government.

•The general principle underlying the division of powers is that all matters of national importance, e.g.
defence, foreign affairs, railways, currency are allotted to the Central government while matters that
are primarily of local or regional importance e.g., education, public health, police, local administration
are assigned to regional governments. Some matters which require the involvement of both the centre
and states like criminal law, forest, economic and social planning are assigned in the Concurrent List.
However, in the case of conflict over the legislation on any of the subjects mentioned in the Concurrent
List, the Centre supersedes the States.

•Article 200 (reservation of State Bills by the Governor for consideration of the President), emergency
provisions under Article 352, 356 and 360 and compulsory compliance by the States with the executive
power of the Centre under Article 256 and 257 amount to centralisation of power which has been the
major concern among the states. Centralisation is as such a threat to Indian federalism.
3. Absence of Fiscal Federalism

•The Indian Constitution, while expressly vesting the Centre with greater powers of taxation, also
provides for an institutional mechanism — the Finance Commission — to determine the
share of the States in the Central tax revenues by way of correcting this imbalance.

•While deciding the devolution of taxes and the provisions of grants the Finance Commission is required
to address both the vertical imbalance between the Centre and the States and the horizontal imbalance
between states.

•At present, about 40 percent of Central revenues (tax and non-tax) is transferred to the States, and this
includes the grants they get from the Planning Commission and the Central Ministries.

•Despite the enlargement of the shareable pool under the 80th Amendment which includes all central
taxes, the revenue accruals of the Centre and the States have not seen any major changes.

•Asymmetrical sharing of revenue and resource crunch at the periphery results in uneven development
across the country. The current Goods and Services Tax measure is feared by many states to be against
fiscal federalism in India. It has amalgamated the various taxes into a single tax, procurement of which
will then be divided among states in a prescribed ratio. Many states in India demand for more financial
autonomy in India.
4. Unequal Representation of Units

•With a view to preventing the evil of predominant influence of larger units over smaller units in a
federation, most federations in the world have resorted to some constitutional mechanism like an equal
representation of units or states in the Second Chamber and ratification of all amendments to the
Constitution by states.
•In India, there is no such provision of an equal representation of states in the RajyaSabha, the Second
Chamber and nor the states have any substantial say over the amendments done to the Constitution
from time to time.

5. Centralized Amendment Power

In a typical federation, the power of amendment to the Federal Constitution lies on a shared basis
between the federation and its units. In India, the power of constitutional amendment lies with the
Centre under Article 368 and other provisions. Although ratification of half of the states is sought for in
some
6. Thelimited areas, the Union
Indestructible states in the Destructible
with Indian Union have virtually no power in this critical area of
Units
governance.
•Unlike successful federations, India Constitution doesn’t have the provision for the secession of states
from the Union of India. The Union has been made indestructible with a view to protecting unity and
integrity in a country like India.

•However, this typical Indian arrangement checks the growing demand for secession from the Indian
Union. The simmering demand for ‘Dravida Nadu’ comprising southern States and voice of separation in
the eastern and western part of India pose a great threat to the unity and sovereignty of India.
•Even if it appears anti-federal in content, it has proved a blessing in disguise for if states would have
given plenary power in deciding their geographical territory, there would have been much chaos and
impasses leading to serious law and order problems in the country.

•All major federal democracies have in their Constitutions the provision that a state cannot be divided
or merged with another state without its prior consent. This is the essence of federalism. However, the
power of making, remaking states lies with the Union Parliament.

•Our nation-builders were wise in drafting the Constitution to suit our requirements. While prior consent
of the state was not necessary under the Constitution, in practice every state has been formed with
prior consent, in most cases after a detailed, impartial examination by an independent commission.

•However, in certain cases, states concerned are often being ignored by the Union Government in a
matter of division of their geographical territory. The recent formation of the State of Telangana is a
case in point.

•The resolute efforts of the Union government and its frequent declarations that Andhra Pradesh would
be divided irrespective of the legislature’s views pose a grave danger to Indian federalism and unity.

•In the sensitive matters like redrawing the territory of a state in India the views of concerned states
should be given due weightage by the Centre. Any arbitrary decision of the Centre without the consent
of the State and a negotiated settlement in this regard will effectively convert states into municipalities,
and India into a unitary state. Neither the Constitution-makers nor nation-builders intended such an
outcome. India’s future will be in danger if such an effort is made to make the nation effectively unitary
7. Office of the governor

•The office of the Governor for each state in India has been a sensitive issue as it sometimes poses a
threat to the federal character of Indian Union. Centre’s visible arbitrariness in misusing such
constitutional office has been the subject of acrimonious debates and divergent opinions in the country.
•The imposition of President’s Rule in Arunachal Pradesh in January 2016, while there was an elected
government in the State, created a bizarre incidence in the constitutional history of India. The
Supreme Court on July 13 termed Governor’s decision unconstitutional ordered restoration of Congress
government in Arunachal Pradesh.
•The overt support of the Central Government to the Governor in this critical matter speak volume of
the inbuilt weakness in India’s quasi-federal structure. The abuse of the power under Article 356 by the
Central Government is replete in the political history of the country. This has resulted in cementing of
centralized forces and disaffection of constituent states towards the federal character of the Indian
Polity.

8. Single Constitution and Citizenship

•Unlike the Constitution of the USA, the Constitution of India lays down the constitution for the States as
well and no state except Jammu and Kashmir has right to decide its own constitution.
•The Indian Constitution, unlike the other federal constitutions of the world, introduces single
citizenship. It is based upon the idea of ‘one nation one citizenship’. All are citizens of India irrespective
of whichever state he/she lives in. The States don’t confer any separate status as a citizen of the State.
9. Integrated Services

The integrated judiciary is a typical feature of Indian federation. Unlike typical federations, in India
Supreme Court is the apex court and all other courts are subordinate to it. The States don’t have
separate independent courts dealing specially with state matters. Also, the machinery for election,
accounts, and audit
10. Centralised in India is integrated.
Planning
Although economic and social planning is found in the Concurrent List of the Seventh Schedule to the
Constitution, the Union Government enjoys unbridled authority over national and regional planning in
India. Centralised planning, through the Planning Commission, now NITI Aayog appointed by the Centre,
considerable preponderance in legislative power for the Union, the financial dependence of the states
on the Centre’s mercy, the administrative inferiority of the states make the states meek and weak. The
States only fill the blank spaces meant for in the text for planning. There is no special planning
commission for the states in India. It also adds to the misery of states and poses smooth functioning of
federal spirit across the country.
11. Language Conflicts
Diversity in languages in India sometimes causes a blow the federal spirit of the Constitution. There are
22 languages constitutionally approved in India. Besides, hundreds of dialects are spoken across the
country. Trouble arises when the strongest unit of the federation attempts to force a particular language
on others. The tussle for official language in India is still a burning issue. The southern states’ opposition
to Hindi as the official language of India has led to deep-seated language crisis in India.
12. Issue of Religion
India is a fine example of religious heterogeneity that sometimes gives rise to turmoil to weaken the
federation. But the religious process need not be always divisive. So long as there is a reasonable
tolerance on the part of the people and a genuine secular policy on the part of the government, religion
13. Economic Incompatibilities of the units
Differences economic standards and relative economic and fiscal incompatibilities among the constituent
states also pose a threat to a federation. The forces of imbalances in the field are demands for economic
planning and development and for regional economic equality and financial autonomy of states. Demand
for a financial equality of a region creates problems in a federation.
In India, some states are declared as poor and on the principle of equalization, are getting grants-in-aid.
But the dilemma in a federation emerges that if the principle of equalization is adhered to, the national
income and the total income growth will suffer. Again, if much attention is paid to economic
development, equalization of all units cannot be attained.

14. Physical Environment

Physical environment may also create hurdles for a federation by affecting communication. A federation
in which the lines of communication are long and difficult has to face the difficulty of keeping in touch
with all the units. It is easy for creating misunderstanding and conflict and perhaps this was one of the
important causes for the separation of the east wing from Pakistan. Moreover, in the absence of good
communication, the poorer units tend to develop a complex of neglect and feel that they are receiving
less than their fair share of resources for development. In India, the North- Eastern states are having
similar feelings and creating problems for the federation.

15. External forces

External forces also create hindrances for a federation. The tension in the North Eastern States in India is
due to the interference of neighbouring countries. China’s claim on some portion of the territory of
Arunachal Pradesh on LAC threats the territorial integrity of India. The Tamil issue in Sri Lanka creates
 CENTER-STATE RELATIONS

Federalism or federal form of government is the most suitable form for a vast and pluralistic country like
India. It tries to facilitate the socio-political cooperation between two sets of identities through various
structural mechanisms of ‘shared rule’.

But because of the above reasons, center- state relations and the state autonomy have become the
cardinal issues of the Indian federalism. The union government appointed Sarkaria Commission in 1983
to examine and review the working of the Indian Federalism. But many recommendations of this
Commission are still to be implemented properly.

The Union government also took in a very easy approach some of the recommendations made by this
commission. This shows that even though our constitution is said to be federal, but this overemphasis
on the power of the federal government makes incapable of dealing effectively with socioeconomic
challenges and strengthening national unity. Hence, it is appropriate to restructure Indian Federalism to
make it more effective and promote center – state relation.
Critical Assessment of Federal System in India

The temperament of federalism in India during the coalition era has been changed discernibly. Political
deliberation seems to surpass the administrative and financial aspects of the Union-state relations in
India. The states having the governments of those parties that form part of the central coalition give the
impression that to have little conflict with the Centre. Their complaint is submissive or subdued and the
general awareness is that they get particular contemplation and hold in matters of resources approved
by the Centre. As a consequence, it is raising that noise sometimes that the Centre is being partial
against the states having governments of the opposition parties. However, when one becomes aware of
the allocations of the Central plan fund released by the Planning Commission on an annual basis, it
appears that there is no such obtrusive discrimination. There is called for a more widespread perception
of evenhandedness and fairness.

There has been a steady requirement of the National Development Council, that is a delegate institution
of the Centre and the states, should become more energetic and effective. It may be brought to mind
that the First Administrative Reforms Commission had suggested that the NDC be supposed to meet
twice a year. Even after more than forty years, this proposal has not been put into practice. In a true
federal spirit, the NDC, instead of becoming a mere routinized rubber stamp, should re-emerge as a
verbal and effectual gadget of Centre-state discourse in matters of development. Here is an
organization that has the potentiality of making the Indian federal economic structure more powerful
and therefore, this instrumentality ought not to become a superfluous union.

A linked problem pertains to the role played by the state planning system. Most of the socio-economic
plans calculated at the state level are an upshot and replicas of the priority structures and store
management projects of the Central government, more particularly of the Planning Commission. Hence,
 10 Major Conflicts between the Centre and the
States
The following points highlight the ten major conflicts between the Centre and the State.

1. In some cases the entire revenue is allo­cated among the States. But the rates and bases are wholly
decided by the Centre regardless of the policies and desires of the States. This is virtual spoon-
feeding of the States by the Centre.

2. Secondly, it is felt that the Centre has failed to take sufficient initiative to impose all the taxes as per
Article 269, the entire net pro­ceeds of which are supposed to be appropriated by the States.
3. The States make notable contribution to the development of the private corporate sector. They
provide an integrated infrastructure for in­dustrial development in the form of power, water, roads,
land, factory sheds and even raw materials. Moreover, the State Governments have to provide huge
amount of financial incentives and conces­sions to attract industries. Yet they were excluded from
sharing the revenue of such taxes. This is unjust and unfair.

4. The Centre has replaced certain items, previously subject to State sale tax, by various excise duties.
The wider coverage given to excise duties has added to the financial hardship of the States.

5. The allocable excise duties have been totally excluded from the allocable resource (or divisible
pool). Moreover the Centre has deliber­ately raised the rates of these excise duties as also special and
auxiliary duties. But the additional revenues collected from these sources are not to be shared with
the States or to be shared in any small proportions. By contrast, the rates of those duties which are to
be shared with the States have been kept at low levels for years together.
6. The contribution to the divisible pool made by income-tax (other than corporate tax) and Union
excise duties is considered to be grossly inadequate to meet the revenue gap of the States. The
present 85% allocation of income tax pro­ceeds seems to have reached a ceiling. There is no scope for
extending the coverage of the various excise duties either.
7. The conditional grants are treated as a tax on the States in the sense that they interfere with state
priorities and create pressure on the States. On the contrary, unconditional grants vir­tually become
financial deficit grants since they create considerable divergence between the power to spend and the
need to tax.

8. Loans are given by the Centre to the State at concessional rates by extending overdraft fa­cilities
without any consideration of productivity and repayment capacity. These loans have been rising
steadily over the entire plan period. Such loans are outside the scope of recommendations of the
Finance Commissions. Hence the growth indebtedness of the States to the Centre is not a healthy
development in the area of federal finance.

9. Originally, the railway passenger taxes were entirely appropriated by the States. But they were
subsequently abolished. To compensate for the loss of revenue the Centre has arbitrarily fixed a grant
in lieu of railway passenger tax.

10. The Central Government raised the ex­emption limit on income tax over the years. But it did not
suffer much loss because it raised the sur­charge on income tax. But the States had to lose because the
proceeds of the surcharge were not shared with the States.
India is a union of states. The constitution of India has divided the legislative, executive and financial
powers between the centre and the states, which gives the constitution a federal character whereas
judiciary is integrated in a hierarchical structure.

The centre-state relations are divided into three parts, which are mentioned below:
(A) Legislative Relations (Article 245-255)
(B) Administrative Relations (Article 256-263)
(C) Financial Relations (Article 268-293)

Legislative Relations

Articles 245 to 255 in Part XI deals with different aspects of legislative relations between centre and
states. These include:
(1) Territorial jurisdiction of laws made by the Parliament and by the Legislatures of States.
(2) Distribution of legislative subjects
(3) Power of parliament to legislate with respect to a matter in the State List
(4) Centre's control state legislation
However, Seventh Schedule of the Constitution provides for the distribution of legislative powers
between the centre and the states. The legislative subjects are divided into List I (the Union List), List II
(the Concurrent List) and List III (the State List).
•At present, there are 100 subjects in the Union list which includes subjects such as foreign affairs,
defence, railway, postal services, banking, atomic energy, communication, currency etc.

•At present, there are 61 subjects in the State list. The list includes subjects such as police, public
order, roadways, health, agriculture, local government, drinking water facilities, sanitation etc.

•At present, there are 52 subjects in the concurrent list. The list includes subjects such as education,
forests, protection of wild animals and birds, electricity, labour welfare, criminal law and procedure,
civil procedure, population control and family planning, drugs etc.

Article 245 empowers the centre to give directions to the states in certain cases in regards to the
exercise of their executive powers.

Article 249 empowers the parliament to legislate with respect to a matter in the State List in the
national interest.

Under Article 250, the parliament becomes empowered to make laws on the matters related to state
list when national emergency (under Article 352) is in operation.

Under Article 252, the parliament is empowered to legislate for two or more States by their
consent.
Administrative Relations

Article 256 to 263 deals with the administrative relations between the centre and the states. Article
256 states that "the executive power of every State shall be so exercised as to ensure compliance with
the laws made by the parliament and any existing laws which apply in that State, and the executive
power of the Union shall extend to the giving of such directions to a State as may appear to the
Government of India to be necessary for that purpose".

Cooperation Between the Centre and the States

The constitution lays down various provisions to secure cooperation and coordination between the
centre and the states. These include:

(i) Article 261 states that "Full faith and credit shall be given throughout the territory of India to public
acts, records and judicial proceedings of the Union and of every State".

(ii) According to Article 262, the parliament may by law 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.

(iii) Article 263 empowers the President to establish an inter-State Council to inquire into and advise
upon disputes between states, to investigate and discuss subjects in which some or all of the States, or
the Union and one or more of the States, have a common interest.
Centre-State Relations during Emergency

(i) During a national emergency (under Article 352), the state government become subordinate to the
central government. All the executive functions of the state come under the control of the union
government.

(ii) During a state emergency (under Article 356), the president can assume to himself all or any of the
functions of the Government of the State and all or any of the powers vested in or exercisable by the
Governor or authority in the State other than the Legislature of the State.

(iii) During the operation of financial emergency (under Article 360), the Union may give directions to
any State to observe such canons of financial propriety as may be specified in the directions, and to the
giving of such other directions as the President may deem necessary and adequate for the purpose.

Financial Relations

The Constitution deals with the centre-state financial relations in Article 268-293 of Part XII.
Allocation of taxing powers
The Constitution has provided the union government and the state governments with the independent
sources of revenue. It allocates the powers to centre and the states in the following way:
(i) The parliament has exclusive power to levy taxes on the subjects mentioned in the Union List.
(ii) The state legislatures has exclusive power to levy taxes on the subjects mentioned in the
State List
(iii) Both the parliament and the state legislature are empowered to levy taxes on the subjects
mentioned in the Concurrent List.
However, in case of tax revenue distribution,

•article 268 states that duties are levied by the Union but are collected and appropriated by the States;

•Service tax levied by Union and collected and appropriated by the Union and the States (Article 268-A);

•Taxes levied and collected by the Union but assigned to the States (Article 269);

•Taxes levied and collected by the Union but distributed between the Union and the States (Article 270).

•Surcharge on certain duties and taxes for purposes of the Union (Article 271)

Under Article 275, the parliament is authorized to provide grants-in-aid to any state as parliament
may determine to be in need of assistance, and different sums may be fixed for different States.
Under Article 282, the union or a state may make any grants for any public purpose, notwithstanding
that the purpose is not one with respect to which Parliament or the Legislature of the State, as the case
may be, may make laws.
Under Article 352, during the operation of national emergency, the distribution of revenues between
the centre and the states can be altered by the president.
Under Article 360, during the financial emergency, the executive authority of the Union shall give
directions to any State to observe such canons of financial propriety as may be specified in the
directions and to the give the directions as the President may deem necessary and adequate for the
purpose.
The important recommendations of the first administrative reforms commission related
to the centre-state relations are:

Establishment of an Inter-state council under Article 263

1.Decentralization of powers to the states as much as possible

2.More transfer of financial resources to the states

3.Arrangements for devolution in such a way that the states can fulfil their obligations

4.Advancement of loans to states should be related to as ‘the productive principle’.

5.Deployment of central armed forces in the states either on their request or otherwise

During state emergency, under Article 356, President's Rule can be imposed in event of the failure
of constitutional machinery in a state.
 Electoral Reforms in India Introduction
It is generally accepted that while the first three general elections were held in a free and fair
manner, a plummeting of standards started during the fourth general elections in 1967. Many
consider the electoral system in the country as the basis of political corruption. In the next sections,
we will talk about the challenges in this regard, and some of the previous attempts at electoral
reform.

Issues in Electoral Politics in India

There are multiple issues plaguing the electoral process in India. Some of the most prominent ones
are mentioned below.
Money Power
In every constituency, candidates have to spend crores of rupees for campaigning, publicity, etc.
Most candidates far exceed the permissible limit of expenses.

Muscle Power
In certain parts of the country, there are widespread reports of illegal and untoward incidents during
polling such as the use of violence, intimidation, booth capturing, etc.

Criminalisation of Politics and Politicization of Criminals

Criminals enter into politics and ensure that money and muscle power wins them elections, so that
the cases against them are not proceeded with. Political parties are also happy as long as they have
winnable candidates. Political parties field criminals in elections for funds and in return provide them
with political patronage and protection.
Misuse of Government Machinery
There is a general opinion that the party in power uses government machinery such as using
government vehicles for canvassing, advertisements at the cost of the exchequer, disbursements out
of the discretionary funds at the disposal of the ministers, and other such means to improve the
chances of their candidates winning.

Non-serious Independent candidates

Serious candidates float non-serious candidates in elections to cut a good portion of the votes that
would otherwise have gone to rival candidates.

Casteism
There are cases of certain caste groups lending strong support to particular political parties. Thus,
political parties make offers to win over different caste groups, and caste groups also try to
pressurize parties to offer tickets for their members’ elections. Voting on caste lines is prevalent in
the country and this is a serious blotch on democracy and equality. This also creates rifts in the
country.

Communalism
Communal polarization poses a serious threat to the Indian political ethos of pluralism,
parliamentarianism, secularism and federalism. Read more about Communalism in the linked article.

Lack of Moral Values in Politics

The political corruption in India has led to politics becoming a business. People enter the political
arena for making money and retaining their money and power. There are very few leaders who enter
Powers and Functions of Election Commission of India

1. To prepare, revise, update and maintain the list of voters for all the Elections

2. To conduct and supervise elections and by- elections

3. To delimit constituencies for election to the Parliament and to the State Legislatures and to
allot number of seats to each of them.

4. To fix the election Prog, including dates for nomination, and scrutiny of candidates, date of
elections, necessary arrangement for setting up of polling booths, procedure for secret
ballots, appoint adequate returning officers, declare results after proper counting of votes,
reelection in constituency where necessary.

5. To advice President and governor regarding electoral matters and related to disqualification
of member.

6. To prepare guidelines for code of conduct for political parties candidates and voters.
7. To fix the limit of electoral expecnse and to examine the accounts of candidates.

8. To determine criteera for recognizing political parties, deciding and allocating election
symbol, allocate the useof radio and tV for election campaign and promotion.
9. To prepapre alist of free symbols to independent candiodates.
Electoral Reforms Undertaken
Electoral reforms undertaken by authorities can be broadly divided into two categories: pre-
2000 and post-2000. Both of these are discussed in the section below:

Electoral Reforms Pre-2000

1.Lowering of Voting Age: The 61st Amendment Act to the Constitution reduced the
minimum age for voting from 21 to 18 years. (read about
important amendments in the Indian Constitution, in the linked article.)
2.Deputation to Election Commission: All personnel working in preparing, revising and
correcting the electoral rolls for elections shall be considered to be on deputation to the EC for
the period of such employment, and they shall be superintended by the EC.
3.Increase in the number of proposers and the security deposit: The number of electors
required to sign as proposers in the nomination papers for elections to the Rajya Sabha and the
State Legislative Councils has been raised to 10% of the electors of the constituency or ten such
electors, whichever is less chiefly to prevent frivolous candidates. The security deposit has also
been hiked to prevent non-serious candidates.
4.Electronic Voting Machine (EVMs): First introduced in 1998 during the state elections of
Delhi, Madhya Pradesh and Rajasthan, EVMs are used widely now as they are fool-proof,
efficient and a better option in terms of the environment.
5.Disqualification on conviction for violating the National Honours Act, 1971: This shall
lead to disqualification of the person for 6 years from contesting to the Parliament and the state
legislatures.
6.Restriction on contesting from more than 2 constituencies: A candidate cannot contest
1.Death of a contesting candidate: Previously, the election was countermanded on the death of
a contesting candidate. In the future, no election will be countermanded on the death of a contesting
candidate. If the deceased candidate, however, was set up by a recognized national or state party,
then the party concerned will be given an option to nominate another candidate within 7 days of the
issue of a notice to that effect to the party concerned by the Election Commission.
2.It is prohibited by law to go to or near a polling booth bearing arms. This is punishable by
imprisonment for up to 2 years.
3.On poll days, employees of organisations get a paid holiday and violation of this is punishable by a
fine.
4.Prohibition on sale of liquor: No liquor or other intoxicants shall be sold or given or distributed
at any shop, eating place, or any other place, whether private or public, within a polling area during
the period of 48 hours ending with the hour fixed for the conclusion of poll.
5.Time limit for bye-elections: Bye-elections to any House of Parliament or a State Legislature
will now be held within six months of the occurrence of the vacancy in that House. (Read about
Parliament & State Legislature in the linked article.)
6.The period of campaigning has been reduced.
Electoral Reforms Post 2000

The electoral reforms target the election process in the country. The list of such electoral reforms are
given below:
1.Ceiling on election expenditure: At present, there is no limit on the amount a political party can
spend in an election or on a candidate. But, the Commission has put a cap on individual candidates’
spending. For the Lok Sabha elections, it is Rs. 50 – 70 lakh (depending on the state they are
contesting the Lok Sabha seat from), and Rs. 20 – 28 lakh for an assembly election.
2.Restriction on exit polls: The EC issued a statement before the 2019 Lok Sabha elections saying
that exit poll results could be broadcast only after the final phase of the elections were over. This was
done to avoid prospective voters being misguided or prejudiced in any manner.
3.Voting through postal ballot: In 2013, the EC decided to expand the ambit of postal ballot voting
in the country. Previously, only Indian staff in missions abroad and defence personnel in a limited way,
could vote via postal ballots. Now, there are 6 categories of voters who can use the postal ballot:
service voters; special voters; wives of service voters and special voters; voters subjected to
preventive detention; voters on election duty and Notified voters.
4.Awareness Creation: The government decided to observe January 25th as ‘National Voters Day’ to
mark the EC’s founding day. Read more on the National Voters’ Day here.
5.Political parties need to report any contribution in excess of Rs 20000 to the EC for claiming income
tax benefit.
6.Declaring of criminal antecedents, assets, etc. by the candidates is required and declaring false
information in the affidavit is now an electoral offence punishable with imprisonment up to 6 months
Secularism in India

Secularism refers to Separation of Religion from the state. The Indian Constitution allows individuals
the freedom to live by their religious beliefs and practices.
With the 42nd Amendment of the Constitution of India enacted in 1976, the Preamble to the
Constitution asserted that India is a secular nation. It separated the power of religion and the power
of the state.

Relevant constitutional provisions pertaining to Secularism

•Fundamental rights
Article 14: Equality before law.
Article 15: Prohibition of discrimination on grounds of religion, race, caste, sex or place of birth.
Article 16: Equality of opportunity in matters of public employment.
Article 19: Protection of certain rights regarding freedom of speech etc.
Article 21: Protection of life and personal property.
Article 25: Freedom of consigns and free profession, practise, and propagation of religion.
Article 26: Freedom to manage religious affairs.
Article 27: freedom as to payment of taxes for promotion of any particular religion.
Article 28: freedom as to attendance at religious instruction or religious worship in certain
educational institutions.
Articl2 29: Protection of interest of minorities.
Article 30: Right of minorities to establish and administer educational institution.
•Directive Principles of State Policy

Article 44: Uniform civil code for the citizens.

Article 48: Organization of agriculture and animal husbandry.
Article 51 A: Fundamental duties
Clause (e): To promote harmony and the spirit of common brotherhood amongst all people of India
transcending religious linguistic and regional or sectional diversities and to renounce practices
derogatory to the dignity of women.
Clause (f): To value and preserve the rich heritage of our composite culture

How state prevents domination by the religious group.

1. State should be non-theocratic:- A state must not be run by the heads of any particular
religion. A state governed directly by a priestly order is called theocratic. For example- the Papal
States of Europe in the Medieval period, Taliban controlled states in recent times.
For this, states should have a separation from religion at the primary level, but this is not sufficient.
2. States should have no formal, legal alliance with any religion:- Many non-theocratic states
have a close alliance with a particular religion.
For example- England in the 17th century was not run by a priestly class but clearly favoured the
Anglican Church and its members. England had an established Anglican religion, which was the
official religion of the states. Today Pakistan has an official state religion, namely Islam. Such regimes
may leave little scope for internal dissent on religious equality.
Two modes of secularism

1.Western secularism
All secular states have one thing in common, they are neither theocratic nor do they establish a
religion.
Features of the Western concept of secularism:

•State and religion have a separate sphere of its own, with independent jurisdiction i.e. Mutual
exclusion of state and religion, the principled distance of state from religion and no illegitimate
intrusion of religion in the state.
•The state cannot aid any religious institutions.
•The state cannot hinder the activities of religious communities as long as they are within the
broad limits set up by the law of the land.
For example – if religious women forbid a woman from becoming a priest, then the states cannot
do anything. Like this, if a particular religion forbids the entry of some of its members in the
sanctum of its temple, then the states have no option but to let the matter rest exactly where it
is.
Drawbacks:
Such states focus on intra-religious domination by the strict separation of state from religion to
realise among other things individual freedoms, issues of inter-religious (and therefore minority
rights) equality are often neglected. This model leaves no scope for the idea of the state-
supported religious reforms.
2.Indian Secularism

Nehru’s view was – “Equal protection by the state to all religion“. He wanted a secular state
to be one that “protects all religions but does not favour one at the expense of others and does
not itself adopt any religion as the state religion.”
Indian secularism is fundamentally different from western secularism. It does not focus only on
Church-State separation and the idea of inter-religious equality is crucial to the Indian
conception.

Features
There was already a culture of inter-religious ‘tolerance’ in India. Tolerance is compatible with
religious domination. It may allow some space to everyone but such freedom is usually limited.
The advent of western modernity, brought to the notice, neglected and marginalized notions of
equality in Indian thought. It ushered ideas of inter-community equality to replace the notion of
hierarchy. Its operation is done through three factors- Scientific and rational education,
Legislation, social reforms, Urbanization and industrialization.
So, Indian secularism took on a distinct form as a result of an interaction between what already
existed in a society that had religious diversity and the ideas that came from the west. It resulted
in an equal focus on intra-religious and inter-religious domination.
Major concerns regarding Secularism:
•The grievance of the majority Hindus that rules, regulations and restrictions are applicable only
to their religious institutions.
•Non-implementation of the uniform civil code.
•Appeasement of radical and orthodox Muslim elements by the passage of Muslim Women’s
Divorce Act.
•Propagation of religion and large scale religious conversions by Muslims and Christians especially
in the tribal belts and among poor people.
•Provision of unjustified protection to minority educational institutions.
Thus, we can conclude that India is totally secular constitutionally but socially it is not.
Measures to make India truly Secular :

•Separation of religion from politics

Suitable legislation has to be immediately passed to separate religion from politics.

•Right to propagate religion

There is considerable controversy over placing Right to propagate religion as a fundamental right.
In this area, there have been many verdicts delivered by the Supreme Court and the High Court all
of which have stated that the right to propagation is not a right to conversion. This problem has to
be addressed by removing the word “propagation” from Article 25.
•Withdrawing protection of minority educational institutions
Article 30(1) of the constitution gives the right to minority educational institutes the right to
establish and administer educational institutions. There was significant opposition to this article in
the Constituent assembly. It is the right time to do away with this right as it encourages separate
identities and undermines the spread of secular education. With globalization and spread of
information technology, there is no justification to continue this right even to linguistic minorities.

•Rationalize prohibition of cow slaughter

There is no universal demand for the ban of cow slaughter form all the Hindus and the prohibition
cannot only be solely justified only based on the religious sentiments of the Hindus. This demand is
unviable especially in drought-hit areas in a number of states like Maharashtra.

•Restructuring police departments

Weaknesses and inadequacies of police have been attributed for starting or escalating of communal
violence. Politicization and Communalization of police in various states have to be prohibited.

•A Commission on secularism
A commission on secularism has to be set up by amending the constitution to ensure adherence to
the constitutional mandate on secularism. The commission should be made to be presided over by
a former chief justice of India. The report of the commission has to be submitted to the Parliament
and also has to be simultaneously released to media and public.
UNIT- 4

TOPIC-1

Nature of Indian Economy: Structure and Key Features

Since independence India has been a 'Mixed Economy'. India's large public sectors were responsible
for rendering the country a 'mixed economy' feature. Indian economy is basically based in the
contribution of service sector (currently provides 60% share of GDP) and near about 53% of its
population is dependent on the Agriculture. As soon as the time is passing, the share of Agriculture is
decreasing and share of service sector is increasing. Currently India is called a developing economy of
the world.
Features of Indian Economy
1. Since independence India has been a 'mixed economy'. India's large public sectors were responsible
for providing employment and revenue to the economy.
2. India’s share in global exports and imports increased from 0.7% and 0.8% respectively in 2000 to
1.7% and 2.5% in 2012 as per the WTO estimates.
3. Indian economy overview was highly inspired by Soviet Union's practices post-independence. It had
been recording growth rate not greater than five jumped till 1980s. This stagnant growth was termed
by many economists as 'Hindu Growth Rate'.
4. In 1992, the country ushered into liberalization regime. Thereafter, the economy started scaling
upward. This new trend in growth was called 'New Hindu Growth Rate'.
5. India's diverse economy encompasses traditional village farming, modern agriculture, handicrafts, a
wide range of modern industries and a multitude of services.
6. Services are the major source of economic growth, accounting for more than half of India's output
Current Analysis
1. The current GDP factor cost is (at 2004-05 prices) Rs. 5748564 cr (2013-14)
2. Per capita Income (at current prices) Rs. 74920 (2013-14)
3. Gross domestic saving rate (at current market price as % of GDP) for 2-11-12 is 30.8%
4. Tertiary sector contributes 56% of GDP (2012-13).
5. Total food grain production is 265 million tone (2013-14).
6. India’s share in world export is 1.8% of total trade.
7. India’s share in total world import is 2.5%.
8. Total size of Indian population is 1.26 bn (2014).
9. Beating America and China, India saw the highest FDI inflow for new projects among
all nations in the first half of calendar 2015. To boot, India attracted $31 billion against
$12 billion in the first half of last year in capital expenditure (Capex) from foreign
companies, while China and the US attracted $28 billion and $27 billion, respectively, in
the same period.
10. Total size of foreign exchange reserve of India is $ 330 bn in 2015.
11. Exports of top five sectors — engineering, petroleum, gems and jewelery, textiles
and pharmaceuticals - fell by about 25% to $13.33 billion in August 2015 due to global
demand slowdown. These five sectors accounted for about 65% of the country's total
merchandise exports in 2014-15. In August last year, exports of these sectors stood at
$17.79 billion.
12. Poverty Estimation:
i. The Rangarajan panel's recommendation (those who spends Rs 32 in a day in rural
areas and Rs 47 in towns and cities should not be considered poor,), results in an
increase in the below poverty line population, which is estimated at 363 million in
2011-12, compared to the 270 million estimate based on the Tendulkar formula — an
increase of almost 35%.
ii. This means 29.5% of the India population lives below the poverty line as defined by
the Rangarajan committee, as against 21.9% according to Tendulkar. For 2009-10,
Rangarajan has estimated that the share of BPL group in total population was 38.2%,
translating into a decline in poverty ratio by 8.7 percentage points over a two-year
period.
Indian economy is a mixed economy (combination of public and private sector).
Currently India is considered as one of the most developing economy of the world
because of its nature: part of agriculture in total GDP is decreasing, part of service
sector is increasing or the contribution of tertiary sector is increasing in the GDP on
year to year basis.

Major Problems Faced by the Indian Economy

Since 1991, the Indian economy has pursued free-market liberalization, greater
openness in trade and increase investment in infrastructure. This helped the Indian
economy to achieve a rapid rate of economic growth and economic development.
However, the economy still faces various problems and challenges. let’s have a look on
1. Unemployment
Despite rapid economic growth, unemployment is still an issue in both rural and urban
areas. The fast rate of economic growth has left unskilled workers behind, and they have
struggled to find work in growing industries. In 2017, the official unemployment rate was
just below 5%. However, a report by the OECD found over 30% of people aged 15-29 in
India are not in employment, education or training (NEETs). Livemint reported on March 6,
2017. WIth, little if any government welfare support for the unemployed, it leads to dire
poverty.
2. Poor educational standards
Although India has benefited from a high % of English speakers, (important for call centre
industry) there is still high levels of illiteracy amongst the population. It is worse in rural
areas and amongst women. Over 50% of Indian women are illiterate. This limits economic
development and a more skilled workforce.
3. Poor Infrastructure
Many Indians lack basic amenities lack access to running water. Indian public services are
creaking under the strain of bureaucracy and inefficiency. Over 40% of Indian fruit rots
before it reaches the market; this is one example of the supply constraints and
inefficiency’s facing the Indian economy.
4. Balance of Payments deterioration.
Although India has built up large amounts of foreign currency reserves, the high rates of
economic growth have been at the cost of a persistent current account deficit. In late 2012,
the current account reached a peak of 6% of GDP. Since then there has been an
improvement in the current account. But, the Indian economy has seen imports growth
faster than exports. This means India needs to attract capital flows to finance the deficit.
5. High levels of private debt
Buoyed by a property boom the amount of lending in India has grown by 30% in the past year.
However, there are concerns about the risk of such loans. If they are dependent on rising property
prices it could be problematic. Furthermore, if inflation increases further it may force the RBI to
increase interest rates. If interest rates rise substantially it will leave those indebted facing rising
interest payments and potentially reducing consumer spending in the future
6. Inequality has risen rather than decreased.
It is hoped that economic growth would help drag the Indian poor above the poverty line. However,
so far economic growth has been highly uneven benefiting the skilled and wealthy
disproportionately. Many of India’s rural poor are yet to receive any tangible benefit from the
India’s economic growth. More than 78 million homes do not have electricity. 33% (268million) of
the population live on less than $1 per day. Furthermore with the spread of television in Indian
villages the poor are increasingly aware of the disparity between rich and poor. (3)
7. Large Budget Deficit
India has one of the largest budget deficits in the developing world. Excluding subsidies, it
amounts to nearly 8% of GDP. Although it is fallen a little in the past year. It still allows little scope
for increasing investment in public services like health and education.
8. Rigid labour Laws
As an example Firms employing more than 100 people cannot fire workers without government
permission. The effect of this is to discourage firms from expanding to over 100 people. It also
discourages foreign investment. Trades Unions have an important political power base and
governments often shy away from tackling potentially politically sensitive labour laws.
9. Inefficient agriculture
Agriculture produces 17.4% of economic output but, over 51% of the work force are employed in
agriculture. This is the most inefficient sector of the economy and reform has proved slow.
10. Poor tax collection rates.
According to the Economist, India has one of the poorest tax to GDP rates in the whole world.
India’s tax revenue as a % of GDP is just 12%. Compared to an EU average of 45%. This poor tax
collection rate reflects widespread corruption, tax avoidance and complicated tax rates. In 2017,
Narendra Modi has sought to improve tax collection rates and reduce complications through the
introduction of a general sales tax (GST) which involves a single tax rate – rather than tax rates
applied multiple times at different stages of production. (Modi’s tax gamble at Economist)
11. Business difficulties
According to the World Bank, the ease of doing business in India is poor. India ranks 130/190. Big
issues for companies include
Ease of enforcing contracts
Dealing with construction contracts
Paying taxes
Trading across border
12. Inequality within regions
India’s economic growth has benefitted some regions more than others. Technological hubs, such
as Delhi and Mumbai have attracted higher paying jobs. This has attracted an inflow of most
mobile and skilled workers; this has created congestion in these super-cities but failed to address
the poverty of rural areas, especially in the north east
TOPIC-3

Budgetary procedure in India

The budgetary procedure in India involves four different operations that are
Preparation of the budget
Enactment of the budget
Execution of the budget
Parliamentary control over finance
Preparation of the budget
The exercise of the preparation of the budget by the ministry of finance starts sometimes around in
the month of September every year. There is a budget Division of the Department of Economic affair
of the ministry of finance for this purpose.
The ministry of finance compiles and coordinates the estimates of the expenditure of different
ministers and departments and prepare an estimate or a plan outlay.
Estimates of plan outlay are scrutinized by the Planning Commission. The budget proposals of finance
ministers are examined by the finance ministry who has the power of making changes in them with
the consultation of the prime minister.
Enactment of the budget
Once the budget is prepared, it goes to the parliament for enactment and legislation. The budget has
to pass through the following stages:
The finance minister presents the budget in the Lok Sabha. He makes his budget in the Lok Sabha.
Simultaneously, the copy of the budget is laid on the table of the Rajya Sabha. Printed copies of the
budget are distributed among the members of the parliament to go through the details of the
budgetary provisions.
The proposals on revenue and expenditure are discussed in the Parliament. Members of the
Parliament actively take part in the discussion.
Demands for grants are presented to the Parliament along with the budget These demands for
grants show that the estimates of the expenditure for various departments and they need to be
voted by the Parliament.
After the demands for grants are voted by the parliament, the Appropriation Bill is introduced,
considered and passed by the appropriation of the Parliament. It provides the legal authority for
withdrawal of funds of what is known as the Consolidated Fund of India.
After the passing of the appropriation bill, finance bill is discussed and passed. At this stage, the
members of the parliament can suggest and make some amendments which the finance minister
can approve or reject.
Appropriation bill and Finance bill are sent to Rajya Sabha. The Rajya Sabha is required to send
back these bills to the Lok Sabha within fourteen days with or without amendments. However,
Lok Sabha may or may not accept the bill.
Finance Bill is sent to the President for his assent. The bill becomes the statue after presidents’
sign. The president does not have the power to reject the bill.
Execution of the budget
Once the finance and appropriation bill is passed, execution of the budget starts. The executive
department gets a green signal to collect the revenue and start spending money on approved
schemes.
Revenue Department of the ministry of finance is entrusted with the responsibility of collection
of revenue. Various ministries are authorized to draw the necessary amounts and spend them.
For this purpose, the Secretary of minister’s acts as the chief accounting authority.
The accounts of the various ministers are prepared as per the laid down procedures in this
regard. These accounts are audited by the Comptroller and Auditor General of India.
Parliament Control over Finance
There is a prescribed procedure by which the Finance Bill and the Appropriation Bill are
presented, debated and passed.
The Parliament being sovereign gives grants to the executive, which makes demands. These
demands can be of varieties like the demands for grants, supplementary grants, additional
grants, etc.
The estimates of expenditure, other than those specified for the Consolidated Fund of India, are
presented to the Lok Sabha in the form of demands for grants.
The Lok Sabha has the power to assent to or to reject, any demand, or to assent to any demand,
subject to a reduction of the amount specified. After the conclusion of the general debate on the
budget, the demands for grants of various ministries are presented to the Lok Sabha.
Formerly, all demands were introduced by the finance minister; but, now, they are formally
introduced by the ministers of the concerned departments. These demands are not presented to
the Rajya Sabha, though a general debate on the budget takes place there too.
The Constitution provides that the Parliament may make a grant for meeting an unexpected
character of the service, the demand cannot be stated with the details ordinarily given in the annual
financial statement.
An Appropriation Act is again essential for passing such a grant. It is intended to meet specific
purposes, such as for meeting war needs.
Merging Railway budget into Union budget – Pros and Cons
After 92 years of seeing them separately, the year 2017 witnessed the Railway budget being
merged into Union budget. This move is being lauded for it will be beneficial for the economy at
large and there will be positive influence in the development in railways.

During the British reign, having a separate Railway budget made sense because a larger part of the
country’s GDP depended on railway revenue. The tradition of having the budgets separately
continued when India gained freedom even though the revenue from railway continued to go lower
than most of the organizations in the public and private sector.

Pros
1. The scores: During the British rule Railways took up to 85 percent of the yearly budget while
now it has gone down to about 15 percent only. Having separate railway budget stopped making
sense long ago but the old tradition was not done away with. Scrapping the old for the renewed and
better is always a positive change to look upon.

2. Better policies: Now that the Railway budget will be introduced along with the union budget,
there will be less wastage of time when a new policy is to be initiated and implemented. Keeping
them separate resulted in a lot of drawbacks and hindrances that had to be faced by the railway
ministry before it could decide upon a solution.
3. Party politics: Minority parties fighting to meet their intentions and ministers of certain states
arguing new railways and trains for their region has always been known to result in an everlasting
brawl. There will be less of political pressure on the Railway budget and the centre will have the
ultimate hold of the decision making.

4. Goodbye to annual dividend: When Rail budget had to be introduced separately, the railways
needed to pay an annual dividend to render its budgetary support to the government. The railways
will be free of this now and the same fund could now be used in better ways for development the
conditions of Indian railways.

5. The huge loss: Our railways are running on loss. There are lesser funds for development plans
and most of them are wasted in wrongful manner when there emerges a demand from the regional
MLA who promised new trains and stoppages for their location during the time of election. When it
goes into the hands of finance ministry, it would mean and absolute end to this and a more
commercialized distribution of resources.

Cons

1. The rise and fall: Henceforth, the distribution and allocation of funds to various departments
will all go under the finance ministry, which will take decisions according to rise and fall of budget.
A fall in the annual budget will mean a similar cut in the railway and other budgets. This will be
something unusual for the railways and they might not react supportively to that.
2. Conditions of government departments: The depleting conditions of the various
departments under the government have always been prominent. There is lesser attention
paid to the responsibilities and everyone is busy sorting out their own means. Railways might
see drastic disadvantage if the merging doesn’t reap the desired result.

3. Goodbye to privatization: There have previously been talks of privatization of Indian

railways in order to improve and develop them with world class facilities and cleanliness. It
was not well received earlier and after the merging, there will a complete end to any future
chances of privatization. At the efficient hands of government employees, nothing big could
be expected.

4. Loss for the railways: We know how much our parties love making promises and then
reducing price to earn the favor of the voters. Not in their wildest dreams would they want to
hike the railway prices and lose the vote bank that flows from commuters. Lesser hikes in
price might pose loss for the railways department.

There have been mismanagement of the highest order in Indian railways and if there are
chances of seeing it improve, merging it with the Union budget is just the solution that could
help. The falling revenue and more projects for new trains and stoppages have been a difficult
project for the railway ministry which took the right step by merging the two budgets.
Budget advancement:
The objective behind this move is to have the Budget constitutionally approved by Parliament
and assented to by the President, and all allocations at different tiers disseminated to budget-
holders, before the financial year begins on April 1.
The proposal for a change in the budget presentation date was first mooted by some of the
government’s senior most bureaucrats as part of a ‘Transforming India’ initiative in January
2016.
Presenting the budget earlier comes with both advantages and disadvantages.
Advantages:
In the existing system, the Lok Sabha passes a vote on account for the April-June quarter,
under which departments are provided a sixth of their total allocation for the year. This is done
by March. The Finance Bill is not passed before late April or early May. If the Budget is read in
January and passed by February-March, it would enable the government to do away with a vote
on account for the first three months of a financial year.
Retired and serving officials say the biggest plus would be that the Finance Bill, incorporating
the Budget proposals, could be passed by February or March. So, government departments,
agencies and state-owned companies would know their allocations right from April 1, when the
financial year begins.
It would also help the private sector to anticipate government procurement trends and evolve
their business plans. And, civil society could deliberate on and give feedback in time for the
Disadvantages:
One big disadvantage of advancing the Budget preparations is lack of comprehensive
revenue and expenditure data. Currently, work on the Budget begins in earnest by December.
By the time it is finalised in mid-February, data on revenue collections and expenditure trends
is available for the first nine months of the financial year, i.e April-December. Based on which,
projections for the full year can be made.
To read the Budget in January, the centre will have to start preparing it by early October. To
go by less than six months of data and making projections for the full year and the next year,
based on such an incomplete picture, will be an impossible task.
Advancing the Budget dates would be fraught with practical difficulties. Effective Budget
planning also depends on the monsoon forecasts for the coming year, making the advancing
the whole exercise even more difficult.
Besides, whether the chambers of Parliament and its standing committees will get adequate
time to deliberate on the budget is a moot point. The standing committees of Parliament,
whose charter is to examine the justification of the ministry-wise allocations and funding
needs of concomitant programmes included in the Budget, undertake their scrutiny during a
two to three-week gap within the budget session period, when the houses are adjourned. This
scrutiny is an essential element in the parliamentary budget approval system.
Way ahead:
Advancing the presentation of the Budget, so as to allow Parliament to vote on tax and
spending proposals before the beginning of the new financial year on April 1, is a good
idea. It would do away with the need for a vote on account and allow new direct tax
measures to have a full year’s play. Members of Parliament now will have to work hard
over two months to vet Budget proposals, for this to work.
Conclusion:
These reforms make sense, but Budget reform has to go further, to incorporate a
multi-year time horizon and shift to outcome-linked expenditure management, as had
been recommended by a committee headed by C Rangarajan in 2011.
TOPIC- 4
What is an Annual Report:
The single source of getting information about any company whether it is the past or
present performance or for that matter, the future outlook, detailed financial
performance through the financial statements, corporate governance or CSR activities,
all is compiled in the Annual Report of the company. It helps in assessing the year’s
operations and provides the company’s view of the upcoming year and future prospects.
It is a report that each company must provide to its shareholders’ at the end of the
financial year, rather it is a report that every investor must read. It is the most
comprehensive means of communication between a company and its stakeholders,
rightly called the pinnacle of corporate communications.
Key constituents of Annual Report:
The major components of the annual report mirrors the psyche of the company, giving a
fair idea on the sustainability of business and how sound the business is.
Letter from the Chairman:This part of the annual report mainly tells you how the
company has performed during the year. It’s a place to find apologies and reasons if the
performance doesn’t meet the expectations. The goals and strategies for the future are
also laid down by the leading hands in this section of the annual report.
Ten-year financial summary:Assuming that a company is at least ten years old, many
annual reports contain a snapshot of the financial results over that period of time. This
helps in seeing the growth / de-growth trend of revenues and profits and other leading
indicators of a company’s financial success.
List of directors and other officers: All the data regarding the leading managers like
the president, chief executive officer (CEO), vice presidents, chief financial officer (CFO) is
provided here. Also, information pertaining to the other seniors who may not be a part of
the organization, but are present on the board of the company, to help and guide the
organization is available in this section of the annual report.
Management discussion and analysis (MD&A):This is the place where the company’s
management has the opportunity to present a discussion on the significant financial
trends within the company over the past couple of years. It also includes data on the
industry of which the company is a part of. Reading between the lines gives all the hints
that the management is trying to indicate regarding where the company is and where is it
expected to be. It also contains a brief SWOT analysis (strength, weakness, opportunity
and threat) and highlights the business strategy that the management intends to follow
for the coming fiscal.
Directors report: The director’s report comprises of all the key events that happened
during the reporting period. It contains all the information like summary of financials,
operational performance analysis, details of new ventures, partnerships and businesses,
performance of subsidiaries, details of change in share capital and details of dividends. In
short, it provides a recap of the fiscal year under consideration.
Corporate information: Subsidiaries, brands, addresses: This section has all the
information regarding company locations (domestic and foreign), contact information, as well
as brand names and product lines.
General shareholders’ information and corporate governance: The report on corporate
governance covers all the aspects that are essential to the shareholder of a company and are
not a part of the daily operations of the company. It provides all the details regarding the
directors and management of the company, for e.g. their background and remuneration. It
also provides data regarding board meetings as to how many directors attended how many
meetings. It also provides general shareholder information such as correspondence details,
details of annual general meetings, dividend payment details, stock performance (stock
history, stock price trends, listing stock exchanges), details of registrar and transfer agents
and the shareholding pattern.
Financial statements and schedules: This section includes the
financial performance data of the company. It provides details regarding the operational
performance and financial strength of a company during the reporting period through the
income statement, balance sheet and cash flow statement. The footnotes are equally
important as they provide information about the organization’s structure and financial status
that has not been covered anywhere else in the report. For example: information on
management reorganization or details on bad debts that was written off by the company.
Further, the schedules provide a detailed breakup of the individual components of the
financial statements.
a) Profit and Loss statement: It is the financial statement that summarizes the
revenues, costs and expenses incurred during a specific period of time. It clearly indicates
how much was earned and what went into getting those earnings.
b) Balance Sheet: This provides the summary of the assets and liabilities of a company. It
gives a fair idea of what the company owns and what it owes.
c) Cash Flow: Cash Flow Statement is the accounting statement that provides the details
of how much cash is generated and used by the company over a specific period of time.
Reading an Annual Report:
Although one would have all the information about a company readily available, there are
certain things to keep in mind while browsing an annual report.
One should have the skill to read the annual report to the extent that one can pick the hints
that the company provides regarding future growth or disasters expected. These are
indicated in the Chairman speech, MD&A or the sales and marketing section if any.
Review the company’s financial statements and look for trends in profitability, growth,
sustainability and dividends.
Footnotes and schedules are to be carefully read for complete understanding of the
financial statements.
Carefully read the letter of Auditor opinion to be sure that the financial statements are an
accurate representation of the company’s financial reality.
Objectives of Annual Report: It is made with the following objectives:
Taking prospective economic decisions
Providing information about the financial position, performance and changes in financial
position of an entity
Presenting and disclosing information about the company
To lure new investors and make adequate disclosures to the existing ones
Purpose of Annual Report:
Provide Financial Information
An annual report provides information on the company’s fiscal year. The financial information
provided in the annual reports helps determine the current status of business, how the
company is funding operations and growth, and how good the company is placed at making
money for its investors.
Accountability
Annual report is considered as the main accountability mechanism. Accountability is a pre-
requisite, as it gives an idea of how far the company has met its responsibilities towards its
owners, and fulfilled the role defined, which through the financial reports should reflect the
extent of performance that are related to the entity.
Decision making
The objective of reporting the financial statements’ is to inform about the performance of the
company that could be helpful to a wide range of potential users for evaluating and making
economic decisions.
Promote / Marketing the Company
In addition to providing financial information, an annual report serves as a marketing tool for the
company. Inclusion of positive feedbacks from employees and customers or key developments in
the company worth highlighting can increase the readership of the report and appeal to new
investors and customers.
Achievements highlighted
Annual reports provide information on the company’s mission and history and summarizes the
company’s achievements in the past year. The achievement section also includes information on
aspects like sales increases and factors related to growth in profitability and productivity. This
serves the purpose of making the shareholders and stakeholders feel good about their investments
or participation in the company.
TARGET AUDIENCE:
Current shareholders and potential investors are the primary audiences for annual reports. By and
large it is also required by lenders, banks and potential employees for taking appropriate
financially viable decisions.
Conclusion:
Although the annual report serves as a communication tool and determines the reality of the
organization in the public mind, it depends on the quality of information provided in the annual
UNIT-5

TOPIC-1
Liberalization, Privatization and Globalization in India
The economy of India had undergone significant policy shifts in the beginning of the 1990s. This
new model of economic reforms is commonly known as the LPG or Liberalisation, Privatisation
and Globalisation model. The primary objective of this model was to make the economy of India
the fastest developing economy in the globe with capabilities that help it match up with the
biggest economies of the world.

The chain of reforms that took place with regards to business, manufacturing, and financial
services industries targeted at lifting the economy of the country to a more proficient level. These
economic reforms had influenced the overall economic growth of the country in a significant
manner.

Liberalisation
Liberalisation refers to the slackening of government regulations. The economic liberalisation in
India denotes the continuing financial reforms which began since July 24, 1991.

Privatisation and Globalisation

Privatisation refers to the participation of private entities in businesses and services and transfer
of ownership from the public sector (or government) to the private sector as well. Globalisation
stands for the consolidation of the various economies of the world.
LPG and the Economic Reform Policy of India
Following its freedom on August 15, 1947, the Republic of India stuck to socialistic economic
strategies. In the 1980s, Rajiv Gandhi, the then Prime Minister of India, started a number of
economic restructuring measures. In 1991, the country experienced a balance of payments
dilemma following the Gulf War and the downfall of the erstwhile Soviet Union. The country had
to make a deposit of 47 tons of gold to the Bank of England and 20 tons to the Union Bank of
Switzerland. This was necessary under a recovery pact with the IMF or International Monetary
Fund. Furthermore, the International Monetary Fund necessitated India to assume a sequence of
systematic economic reorganisations. Consequently, the then Prime Minister of the country, P V
Narasimha Rao initiated groundbreaking economic reforms. However, the Committee formed by
Narasimha Rao did not put into operation a number of reforms which the International Monetary
Fund looked for.

Dr Manmohan Singh, the present Prime Minister of India, was then the Finance Minister of the
Government of India. He assisted. Narasimha Rao and played a key role in implementing these
reform policies.

Narasimha Rao Committee's Recommendations

The recommendations of the Narasimha Rao Committee were as follows:
Bringing in the Security Regulations (Modified) and the SEBI Act of 1992 which rendered the
legitimate power to the Securities Exchange Board of India to record and control all the
Doing away with the Controller of Capital matters in 1992 that determined the rates and
number of stocks that companies were supposed to issue in the market.

Launching of the National Stock Exchange in 1994 in the form of a computerised share buying
and selling system which acted as a tool to influence the restructuring of the other stock
exchanges in the country. By the year 1996, the National Stock Exchange surfaced as the
biggest stock exchange in India.

In 1992, the equity markets of the country were made available for investment through
overseas corporate investors. The companies were allowed to raise funds from overseas
markets through issuance of GDRs or Global Depository Receipts.

Promoting FDI (Foreign Direct Investment) by means of raising the highest cap on the
contribution of international capital in business ventures or partnerships to 51 per cent from 40
per cent. In high priority industries, 100 per cent international equity was allowed.

Cutting down duties from a mean level of 85 per cent to 25 per cent, and withdrawing
quantitative regulations. The rupee or the official Indian currency was turned into an
exchangeable currency on trading account.

Reorganisation of the methods for sanction of FDI in 35 sectors. The boundaries for international
investment and involvement were demarcated.
The outcome of these reorganisations can be estimated by the fact that the overall
amount of overseas investment (comprising portfolio investment, FDI, and investment
collected from overseas equity capital markets ) rose to $5.3 billion in 1995-1996 in the
country) from a microscopic US $132 million in 1991-1992. Narasimha Rao started
industrial guideline changes with the production zones. He did away with the License
Raj, leaving just 18 sectors which required licensing. Control on industries was
moderated.

Highlights of the LPG Policy

Given below are the salient highlights of the Liberalisation, Privatisation and
Globalisation Policy in India:
Foreign Technology Agreements
Foreign Investment
MRTP Act, 1969 (Amended)
Industrial Licensing
Deregulation
Beginning of privatisation
Opportunities for overseas trade
Steps to regulate inflation
Tax reforms
Abolition of License -Permit Raj
TOPIC-2
Five Year Plans of India
The concept of economic planning in India is derived from the Russia (then USSR). India has
launched 12 five year plans so far. First five year plan was launched in 1951. Now the present
NDA government has stopped the formation of five year plans. So 12th five year plan would be
called the last five year plan of India.
1. First Five Year Plan:
I. It was made for the duration of 1951 to 1956.
II. It was based on the Harrod-Domar model.
III. Its main focus was on the agricultural development of the country.
IV. This plan was successful and achieved growth rate of 3.6% (more than its target)
2. Second Five Year Plan:
I. It was made for the duration of 1956 to 1961.
II. It was based on the P.C. Mahalanobis Model.
III. Its main focus was on the industrial development of the country.
IV. This plan was successful and achieved growth rate of 4.1%
3. Third Five Year Plan:
I. It was made for the duration of 1961 to 1966.
II. This plan is called ‘Gadgil Yojna’ also.
III. The main target of this plan was to make the economy independent and to reach self active
position of take off.
IV. Due to china war, this plan could not achieve its growth target of 5.6%
Welfare Programmes by the Government of India
4. Plan Holiday:
I. The duration of plan holiday was from 1966 to 1969.
II. The main reason behind the plan holiday was the Indo-Pakistan war & failure of third plan.
III. During this plan annual plans were made and equal priority was given to agriculture its allied
sectors and the industry sector.
5. Fourth Five Year Plan:
I. Its duration was from 1969 to 1974.
II. There were two main objective of this plan i.e. growth with stability and progressive
achievement of self reliance.
III. During this plan the slogan of “Garibi Hatao” is given during the 1971 elections by
Indira Gandhi.
IV. This plan failed and could achieve growth rate of 3.3% only against the target of 5.7%.
6. Fifth Five Year Plan:
I. Its duration was 1974 to 1979.
II. In this plan top priority was given to agriculture, next came to industry and mines.
III. Overall this plan was successful which achieved the growth of 4.8% against the target of
4.4%.
IV. The draft of this plan was prepared and launched by the D.P. Dhar. This plan was
terminated in 1978.
7. Rolling Plan: This plan was started with an annual plan for 1978-79 and as a
continuation of the terminated fifth year plan.
8. Sixth Five Year Plan:
I. Its duration was from 1980 to 1985.
II. The basic objective of this plan was poverty eradication and technological self reliance.
III. It was based on investment yojna, infrastructural changing and trend to growth model.
IV. Its growth target was 5.2% but it achieved 5.7%.
9. Seventh Five Year Plan:
I. Its duration was from 1985 to 1990.
II. Objectives of this plan include the establishment of the self sufficient economy,
opportunities for productive employment.
III. For the first time the private sector got the priority over public sector.
IV. Its growth target was 5.0% but it achieved 6.0%.

Annual Plans: Eighth five Plan could not take place due to volatile political situation at the
centre. So two annual programmes are formed in 1990-91& 1991-92.
Nature of Indian Economy: Structure and Key Features
10. Eighth Five Year Plan:
I. Its duration was from 1992 to 1997.
II. In this plan the top priority was given to development of the human resources i.e.
employment, education, and public health.
III. Duing this plan Narasimha Rao Govt. launched New Economic Policy of India.
IV. This plan was successful and got annual growth rate of 6.8% against the target of
5.6%.
11. Ninth Five Year Plan:
I. Its duration was from 1997 to 2002.
II. The main focus of this plan was “growth with justice and equity”.
III. It was launched in the 50th year of independence of India.
IV. This plan failed to achieve the growth target of 7% and grow only at the rate of
5.6%.
12. Tenth Five Year Plan:
I. Its duration was from 2002 to 2007.
II. This plan aims to double the per capita income of India in the next 10 years.
III. It aims to reduce the poverty ratio 15% by 2012.
IV. Its growth target was 8.0% but it achieved only 7.2%.
13. Eleventh Five Year Plan:
I. Its duration was from 2007 to 2012.
II. It was prepared by the C. Rangarajan.
III. Its main theme was “faster and more inclusive growth”
IV. Its growth rate target was 8.1% but it achieved only 7.9%
14. Twelfth Five Year Plan:
I. Its duration is from 2012 to 2017.
II. Its main theme is “Faster, More Inclusive and Sustainable Growth”.
III. Its growth rate target is 8%.
IV. It is the current five year plan of India.
TOPIC-3
India and Population: India is considered to be one of the most populous countries at
global scale. Population in this country is growing speedily due to globalisation and
establishment of many factories which consecutively create jobs for many unskilled
workers. India has the second largest population in the world and will soon exceed China.
The majority of the population growth takes place in poverty suffering areas due to lack of
contraception and medical centres. The fertility rate which is the amount of children per
woman that would be birthed in her lifetime is at 6 children per woman; while, in
developed countries like U.S. the fertility rate is at 2 children per woman. The carrying
capacity of India is very restricted due to exaggerate utilization of natural resources. The
shortage of clean water and over harvesting of crops proves damaging to the
environment. Sustainability is a colossal issue in India and people of India are not well
educated to utilize resources in appropriate way. Such lack of knowledge about
replenishing resources is leaving people out of options on the next step to take.
In India, most of the population lives in crowded slums because land is limited and
pollution is increasing day by day. Though, India's financial system is improved due to new
business ventures. Many persons moved from rural areas to cities for better opportunities.
The probability of children going to school in the city is more common than in rural areas.
But job opportunities are still limited and with lack of education and skills, many people
are unemployed. With population growth astounding at an alarming rate, waste is also
accumulating in areas where children and old people are exposed of toxic waste. Many
parts of India are not capable of providing proper sanitary practices such as a bathroom
and toilet. Many rivers and lakes are contaminated with organic and man-made waste.
Many people bath, drink, and eat fish from the same source. It has adverse impact on
health on populace of India such as people are contracting salmonella and other
gastrointestinal illnesses due to unhygienic conditions. The poor are left to live amongst
waste that has accumulated from the explosion of the population and the wealth of the
economy. The worst condition due to increase in population is that many poor people
collect utility items through wastelands to build shelter. Unfortunately, poverty exists
throughout the world but is a growing problem in thickly populated nations such as India
and China. Government involvement is to reduce poverty in rural India. Many programs
funded by the government organized that help the poor which significantly changed many
lives. It has been observed that people are given education, welfare, and proper
sanitation.
Effects of the rapid population growth in India: There is unfavourable impact of population
explosion in India.
Providing employment to growing population: Job creation is major issue for countries in
which population is increasing at faster rate. The main reason is that in developing economies
majority of the population is uneducated. The burden of school age population has already
revealed signs of becoming unbearable. The proportion of children in schools is increasing fast
and, huge numbers are still not covered. The total number or illiterate persons increases every
year. This is only a sign of the wastage of human resources for want of appropriate development
opportunities.
Problem of utilisation of manpower: Another issue is how to use manpower. Better educated
manpower seeks for occupations of greater status, which are opened up by the new development
efforts. Because of its capital intensive nature, the ability, of the new economy for employment
generation becomes limited. Concurrently, it renders many of the old occupations out of day and
redundant. As a result, under-employment and unemployment, including unemployment of
educated persons, increases. There is therefore surplus of even developed human capital.
Over-strained infrastructure: Due to population explosion, numerous facilities such as
housing, transportation, health care, and education become insufficient. The worst symptoms of
overcrowding in every aspect of living conditions are manifested in the urban areas. In countries
such as India, a situation of "over urbanisation" exist which puts intolerable strain on urban
services. Overloaded houses, slums and unhygienic localities, traffic jamming and crowded
Pressure on land and other renewable natural resources: Population overcrowding put more
pressure on land and natural resources. Common properties such as forest and water are over-
exploited. This results in deforestation and desertification with permanent damage to the renewable
resources.
Increased cost of production: Human inventiveness and technological progression makes it
achievable to increase production of goods and services. But, due to increase in population, the cost
of production of the basic necessities of life, such as food, increases.
Inequitable distribution of income: Population growth in uneven manner can lead to unbalanced
distribution of salary. Both at the international and national levels, income inequality increased. The
increase in gross national product (GNP) is significantly reduced in per capita terms on account of
the rapidly growing population. With rapidly growing population, the major problem of a developing
country tends to be focused more on economic growth as such.
Air Pollution: The technical growth of India has lead not only to medical advancements, but also to
an increase in the number of factories. This results in air and water pollution. More energy needs to
be produced to power these factories. When fossil fuels are burnt, gases released in the
atmosphere. Many cities in India have crossed the limits of suspended particulate matter, sulfur
dioxide, and other pollutants due to vehicular and industrial emanation. Reports of the World Bank
Organization have shown that Delhi is one of the world's most contaminated cities. As the
population increases in future, more forests are cleared. The reasons for deforestation are to make
houses for increased number of people to live in, and to use wood as a fuel in the industries. As a
result, the trees that facilitate in reducing the air pollution through the process of photosynthesis are
not able to do so. Increased air pollution causes many air (polluted) borne diseases. Some of the
diseases caused by air pollution are "respiratory diseases, asthma, chronic obstructive pulmonary
disease, cardiovascular disease and cancer of the lung" (World Health Organization, Internet). Due
to the tropical climate of India, air pollution also causes smog which may result in headaches,
Water Pollution: Water pollution also poses threat to environment through the increasing
population. Water is considered the core of life. Nearly 10 percent of the world's population faces
constant freshwater shortage. This figure may rise if the population growth is uncontrolled. Due to
increase in population, numerous factories are set up. These factories lead to various kinds of
pollution, including water pollution. Also, India being an agrarian country, the water pollution also
comes from pesticides used for agriculture. Some of the major types of pollutants are petroleum
products required for automobiles, cooking, and other such human activities, pesticides and
herbicides used for agriculture by the Indian farmers, heavy metals from industries, automobiles'
exhausts and mines, hazardous wastes, excessive organic matter like fertilizers and other organic
matter used by farmers, sediments caused by soil erosion produced by strip mines, agriculture and
roads and thermal pollution caused by deforestation. One of the typical examples of water pollution
in India is the river Ganga. This river is considered sacred. People take holy bath in it for spiritual
renewal and drink water from it. But people do not realize that along with washing off their sins in
the river, they are also washing off their body wastes, leading to polluting the holy water of the
river. Also, cremated and partly cremated bodies are dumped into the river. Although, dumping
these bodies is a spiritual act in India among the Hindus, but it contaminate the water. Therefore,
when population increases, the number of people dying is also increasing, and it lead to the
pollution in the river Ganga. Additionally, the nearby factories and human colonies dump sewage
directly into the river. At present the river is so contaminated that some experts believe such water
should not even be exposed in nature without being treated. It can be said that when population
size is increasing, it results in increased pollution, which in turn is leading to a more hostile
 Available measures to Control Population
To control population, preventive actions are being taken at global scale. In India, government has initiated numerous programs to curb the population and has been
spending huge money on controlling the birth rate. Some of the programs have been triumphant, and the rate of increase has also reduced, but has still to reach the
sustainable rate. It has been highlighted in reports that the key factors that affect the population increase of India are the fast increasing birth rate and decreasing death
rates. Effective population control measures are necessary in present scenario. It is well established that birth rate is mainly responsible for rapid population growth.
Therefore measures which can reduce the birth rate should be adopted.
Figure:

Social Measure: Population outburst is considered to be a social problem and it is intensely rooted in the civilization. It is therefore necessary to make efforts to eliminate the social iniquities in
the country. Minimum age of Marriage: As fertility depends on the age of marriage therefore the minimum age of marriage should be raised. In India minimum age for marriage is 21 years for
men and 18 years for women fixed by law. This law should be strongly implemented and people should also be made aware of this through promotion.
Another aspect in controlling population is to raising the Status of Women. There is still favouritism to the women. They are restricted to house. They are still
confined to rearing and bearing of children. So women should be given opportunities to develop socially and economically. Free education should be given to
them.
Other preventive measure of population is to spread education. The spread of education changes the views of people. The educated men take mature
decisions and prefer to delay marriage and adopt small family custom. Educated women are health mindful and avoid frequent pregnancies and thus help in
lowering birth rate.
Adoption is also effective way to curb population. Some parents do not have any child, despite expensive medical treatment. It is recommended that they
should adopt orphan children. It will be helpful to orphan children and children to couples.
As preventive measure of population, there is a need to change in Social Outlook. Social outlook of the people should undergo a change. It must be taught
that marriage should no longer be considered a social compulsory.
Social Security is necessary for people. It is responsibility of government to include more and more people under-social security schemes. So that they do not
depend upon others in the event of old age, sickness, unemployment with these facilities they will have no desire for more children.
Economic Measures
There has to be numerous economic measures taken as a preventive measure for population explosion. Government must devise policies for more
employment opportunities. It is necessary is to raise the employment opportunities in rural as well as urban areas. Generally in rural areas there is disguised
joblessness. Another economic measure for population control is the development of Agriculture and Industry. If agriculture and industry are correctly
developed, huge number of people will get employment. When their income is increased they would enhance their standard of living and accept small family
norms. Good standard of living is a deterrent to large family norm. In order to maintain their enhanced standard of living, people prefer to have a small family.
Urbanisation process can reduce population increase. It is reported that people in urban areas have low birth rate than those living in rural areas. Urbanisation
should be encouraged.
Other Measures: Other actions to decrease population are many. First is late Marriage as
this will reduce the period of reproduction among the females and bring down the birth rate.
Another measure is self-control. Many practitioners advocated that self-control is one of the
dominant methods to control the population. It is an idyllic and healthy approach and people
should be provided to follow. It helps in reducing birth rate. The govt. can give different types
of incentives to the people to adopt birth control measures. Financial incentives and other
facilities like leave and promotion can be extended to the working class which adopts small
family norms. Employment to Woman is effective method to check the population. Women
should be given incentive to give services in different fields.
There is a need to follow strict birth control measures such as China has adopted the strategy
to decrease the birth rate. But it is not possible to reduce technological advancements to
decrease the death rate in India. In order to reduce the birth rate, several government-funded
agencies like the Family Planning Association of India spend excessive funds to promote on
family planning as a basic human right and the norm of a two-child family on a voluntary
basis. It is done to achieve a balance between the population size and resources, to get ready
young people for responsible attitudes in human sexuality, and to provide education and
services to all. The family planning methods provided by the family planning program are
vasectomy, tubectomy, IUD, conventional contraceptives (that is condoms, diaphragms,
jelly/cream tubes, foam tables) and oral pills. Additionally, induced abortion is available, free
of charge, in institutions recognized by the government to control population increase.
However, the success of the family planning program in India depends on many factors such
as literacy, religion and the region where the people live.
Problems with implementing measures to control population
As it is well documented in literature that India is a country of diverse culture and people come from
different family background therefore it is difficult to change the perception of people toward such
norms like family planning. The success of family planning mainly depends on women and their status.
Thus, it is crucial for the women to get proper education so that they can decide on the number of
children they want and be aware of the available birth control measures. In India, it is important for
the women to have equal rights to take decision about the number of children to be produced. Women
also need to get educated about the impacts of having so many children on their health and the
impacts on their children. Additionally, the older women need to be educated so that they can teach
the correct family planning to their own daughters. Nevertheless, in India, society does not give more
importance on women education because of the financial conditions in some families and the religious
and social norms. In such a case, educating women about family planning becomes an even more
difficult task. These factors lead to population increase and government face problem in implementing
population control strategies. Another factor that create problem in controlling population is that most
of the population in India live in the rural areas. However, family planning is not extensively
advertised in rural areas. Also, in rural areas, social and religious norms are more firmly followed. It
has been observed that family planning is considered as an offence in most of the tribal and rural
communities.
To summarize, Population escalation is a major issue around the world which has adverse impact on
numerous environmental and human health problems. Population growth continue to increase in the
world at a fast pace. As the population enlarges, many experts are concerned about its dangerous
results. The growth rate of population is a function of migration, birth rate and death rate in a country.
The change in population caused by net migration as a proportion of total population of the country is
almost insignificant and, therefore, can be easily ignored. That leaves us with birth rate and death
rate. The difference between the birth rate and the death rate measures the growth rate of
TOPIC-4
Poverty in India: Causes, Effects and Solutions
Poverty is humiliation, the sense of being dependent on them, and of being forced to accept
rudeness, insults, and indifference when we seek help.” —Latvia 1998
In the simplest term, poverty may be defined as a social condition where individuals do not have
financial means to meet the most basic standards of life that is acceptable by the society.
Individuals experiencing poverty do not have the means to pay for basic needs of daily life like
food, clothes and shelter.

Poverty also staves people off from accessing much needed social tools of well-being like
education and health requirements. The direct consequences stemming from this problem are
hunger, malnutrition and susceptibility to diseases which have been identified as major problems
across the world. It impacts individuals in a socio-psychological way with them not being able to
afford simple recreational activities and getting progressively marginalized in the society.
The term poverty is interconnected with the notion of the poverty line/ threshold that may be
defined as the minimum figure of income that is required in a particular country for maintaining
the socially acceptable quality of life in terms of nutritional, clothing and sheltering needs. The
World Bank has updated its international poverty line figures to 1.90 USD (Rs. 123.5) per day on
October 2015 (based on prices of commodities in year 2011-2012), from 1.5 USD(Rs. 81) as a
response to the changes in the cost of living across the world as per current economy. The
organization estimates that – “Just over 900 million people globally lived under this line in 2012
(based on the latest available data), and we project that in 2015, just over 700 million are living in
extreme poverty.”
Poverty is a worldwide cause of concern even in economically stable countries like the USA.
Current statistics state that over half the populations in the world, about 3 billion people, are
forced to live on less than 2.5 dollars per day. In India, as per 2014 government reports, monthly
per capita consumption expenditure is Rs. 972 per person in rural areas and Rs. 1407 per person
in urban areas. This data is currently being accepted as the poverty threshold of the country. As of
2015, 21.9% of the total population lives below the national poverty threshold, as per the data of
Asian Development Bank, that’s a whopping 269.7 million individuals not having enough money.

Causes of Poverty in India

Factors contributing to the persistent problem of poverty in the country are many and they need
to be identified in order to be addressed properly. They can be categorized under the following
heads.
1. Demographic – the main factor that contributes to poverty-ridden state of the country from a
demographical point of view is the problem of over population. The growth of population in the
country has so far exceeded the growth in economy and the gross result is that the poverty
figures have remained more or less consistent. In rural areas, size of the families is bigger and
that translates into lowering the per capita income values and ultimately lowering of standard of
living. Population growth spurt also leads to generation of unemployment and that means diluting
out of wages for jobs further lowering income.

2. Economic –there are a host of economic reasons behind persistence of the poverty problems
which are outlined hereunder:-
a. Poor Agricultural Infrastructure –Agriculture is the backbone of Indian economy. But
outdated farming practices, lack of proper irrigation infrastructure and even lack of formal
knowledge of crop handling has affected the productivity in this sector tremendously. As a
b. Unequal distribution of assets – with the economy changing directions rapidly, the earning
structure evolves differently in different economic income groups. Upper and middle income groups
see a faster increase in earnings than lower income groups. Also assets like land, cattle as well as
realty are distributed disproportionately among the population with certain people owning majority
shares than other sectors of the society and their profits from these assets are also unequally
distributed. In India it is said that 80% wealth in the country is controlled by just 20% of the
population.
c. Unemployment – another major economic factor that is causative of poverty in the country is
the rising unemployment rate. Unemployment rates is high in India and according to a 2015 survey
data, at the all-India level, 77% of families do not have a regular source of income.
d. Inflation and Price hike – the term Inflation may be defined as an increase in prices of
commodities coinciding with the fall in the purchasing value of money. As a direct consequence of
inflation, effective price of food, clothing items as well as real estate rises. The salaries and wages
do not rise as much in keeping up with the inflated prices of commodities leading to effective
decrease of the per capita income.
e. Faulty economic liberalization – the LPG (Liberalization-Privatization-Globalization) attempts
initiated by the Indian Government in 1991 were directed towards making the economy more suited
to international market-trends to invite foreign investments. Successful to certain extent in reviving
the economy, the economic reforms had detrimental effects on increasing the wealth distribution
scenario. Rich became richer, while the poor remained poor.

3. Social – The various social issues plaguing the country that contributes towards poverty are:-
a. Education and illiteracy – Education, rather its lack thereof and poverty form a vicious cycle
that plagues the nation. Not having enough resources to feed their children, the poor consider
b. Outdated Social Customs – Social customs like the caste system cause segregation and
marginalization of certain sections of the society. Certain castes are considered untouchables still
and are not employed by upper caste, leaving very specific and low paying jobs that they can live
off. Economist K. V. Verghese put forth the problem in a very lucid language, “Caste system acted
as a spring­board for class exploitation with the result that the counterpart of the poverty of the
many is the opulence of the few. The second is the cause of the first.”
c. Lack of skilled labour – lack of adequate vocational training makes the huge labour force
available in India largely unskilled, which is unsuitable for offering maximum economic value. Lack
of education, much less higher education, is also a contributing factor towards this.
d. Gender inequality–the weak status attached with women, deep-rooted social marginalization
and long embedded perceptions of domesticity renders about 50% of the country’s population
unable to work. As a result the women of the family add to the number of dependents that need to
be fed instead of being able to contribute considerably in the family income which might assuage
the poverty situation of the family.
e. Corruption – despite considerable efforts from the government in the forms of various schemes
to mollify the poverty situation, allegedly only 30-35% actually reaches the beneficiaries due to
wide-spread practices of corruption in the country. Wealthy people with privileged connection are
able to acquire more wealth simply by bribing government officials to maximize their profits from
such schemes while the poor remain in a state of neglect for not being able to assert such
connections.

4. Individual – individual lack of efforts also contribute towards generating poverty. Some people
are unwilling to work hard or even not willing to work altogether, leaving their families in the
darkness of poverty. Personal demons like drinking and gambling also leads to draining of the family
5. Political – in India, socio-economic reform strategies has been largely directed by political
interest and are implemented to serve a choice section of the society that is potentially a
deciding factor in the elections. As a result, the issue is not addressed in its entirety leaving much
scope of improvements.
6. Climatic – maximum portion of India experiences a tropical climate throughout the year that
is not conducive to hard manual labour leading to lowering of productivity and the wages suffer
consequently.

Effects of Poverty
The resounding effect of poverty echoes through various layers of an India citizen’s life. If we try
to have a systematic look at them, we should proceed under the three following heads:-
1. Effect on Health – one of the most devastating effects that poverty has is on the overall
health of the nation. The most prominent health issue stemming from poverty is malnutrition.
The problem of malnutrition is widespread in all age-groups of the country but children are most
adversely affected by this. Limited income in larger families leads to lack of access to sufficient
nutritious food for their children. These children over time suffer from severe health problems like
low body weight, mental, physical disabilities and a general poor state of immunity making them
susceptible to diseases. Children from poor backgrounds are twice as susceptible to suffer from
anemia, nutrient deficiencies, impaired vision, and even cardiac problems. Malnutrition is a gross
contributor of infant mortality in the country and 38 out of every 1,000 babies born in India die
before their first birthday. Malnutrition among adult also leads to poor health in adults that
leaches their capacity for manual labour leading to a decrease in income due to weakness and
diseases. Poverty also causes definite decline in the sanitary practices among poor who cannot
afford proper bathrooms and disinfectants. As a result susceptibility to waterborne diseases peak
2. Effects on Society – poverty exerts some gravely concerning effects over the overall societal
health as well. These may be discussed along the following lines:-
a. Violence and crime rate – incidence of violence and crime have been found to be
geographically coincident. In a backdrop of unemployment and marginalization, the poor resort to
criminal activities to earn money. Coupled with lack of education and properly formed moral
conscience, a poverty ridden society is more susceptible to violence by its people against its own
people from a sense of deep-seated discontent and rage.
b. Homelessness – apart from a definite drop in the esthetic representation of the country,
homelessness affects child health, women safety and overall increase in criminal tendencies.
c. Stress – lack of money is a major cause of stress among the middle-class and the poor and leads
to decline in productivity of individuals.
d. Child labour – one of the hallmarks of a poverty-ridden society is the widespread practices of
exploitation and the worst of it comes in the form of child labour. Large families fail to meet the
monetary needs of the members and children as young as 5 years are made to start earning in
order to contribute to the family income.
e. Terrorism – proclivity of youth towards terrorism stems from a combination of extreme poverty
and lack of education making them susceptible to brainwashing. Terrorist organizations offer
poverty-ridden families money in exchange for a member’s participation in their activities which
induces a sense of accomplishment among the youth.
3. Effect on Economy –poverty is a direct index indicating success of the economy of the country.
The number of people living under the poverty threshold indicates whether the economy is powerful
Solutions
The measures that should be taken to fight the demon of poverty in India are
outlined below:-
1. Growth of population at the current rate should be checked by implementation of
policies and awareness promoting birth control.
2. All efforts should be made to increase the employment opportunities in the
country, either by inviting more foreign investments or by encouraging self-
employment schemes.
3. Measures should be taken to bridge the immense gap that remains in
distribution in wealth among different levels of the society.
4. Certain Indian states are more poverty stricken than others like Odhisha and the
North East states. Government should seek to encourage investment in these
states by offering special concessions on taxes.
5. Primary needs of people for attaining a satisfactory quality of life like food items,
clean drinking water should be available more readily. Improvement of the Subsidy
rates on commodities and Public Distribution system should be made. Free high
school education and an increased number of functioning health centers should be
provided by the government.
TOPIC-5
Unemployment occurs when a person who is actively searching for employment is unable to find
work. Unemployment is often used as a measure of the health of the economy. The most frequently
cited measure of unemployment is the unemployment rate. This is the number of unemployed
persons divided by the number of people in the labour force.
Features of Unemployment in India
For many of us the notion of unemployment is one of those who do not have a job or, are paid no
salary. This is partly correct but not wholly. Such a notion would apply largely to the educated
people who are not able to find work or to those in urban areas who come to seek employment. We
will leave out a large section of people, in fact the majority, who are engaged in agriculture and
who may not be paid wages. For example, a person cultivating a small piece of land which he owns
is also employed; through he is not paid a wage. He is more known as self-employed in agriculture.
Similarly there are vast numbers of people in rural and urban area who do not get wages for the
work they do. These are farmers, artisans, petty shop owners, small and big industrialists, taxi
drivers, mechanics etc. These people are also regarded as being employed.
All these people as well as those drawing salaries are regarded as being “gainfully employed”
because they get some material rewards (in cash or kind) for the work they do. Those who are not
gainfully employed are unemployed. The next problem is of identifying the unemployed. This is not
an easy task. Normally in our country we regard those people who are between the ages 15 and 58
as being “economically active”. In other words these people have the potential of being gainfully
employed. Therefore those who are not gainfully employed in this age group are unemployed. This
supposition will again not be fully correct. There could be a large number of people in this age
group who do not wish to seek employment. They could be students or people who can depend on
other people's earnings and they do not wish to be employed.
Till recently women were considered in this category since a large section of women (married
Types of Unemployment in India
So, we can see unemployment is a serious problem which is not always easy to identify. Let us
discuss the different types of unemployment in India.
Seasonal Unemployment
Normally when we talk of employed people we mean those who have work throughout the year.
But this may not possible for all. In agriculture, work is seasonal even though agricultural
activities are performed throughout the year. During the peak agricultural seasons (when the
crop is ready for harvesting) more people are required for work. Similarly in the sowing, weeding
and transplantation period more labour is required. Employment therefore increases at this time.
In fact we will find that there is hardly any unemployment in rural areas during these peak
agricultural seasons. However, once these seasons are over the agricultural workers, especially
those who do not own land or whose land is not sufficient to meet their basic requirement (these
are landless labourers and marginal farmers respectively), remain unemployed. This type of
unemployment is known as seasonal unemployment.
Voluntary Unemployment
People who are unwilling to work at prevailing wage rate and people who get a continuous flow of
income from their property or any other sources and need not to work, such people are
voluntarily unemployed.
Frictional Unemployment
Unemployment attributable to the time required to match production activities with qualified
resources. Frictional unemployment essentially occurs because resources, especially labor, are in
the process of moving from one production activity to another. Employers are seeking workers
and workers are seeking employment, the two sides just haven't matched up. Hence
Causal Unemployment
Cyclical unemployment is based on a greater availability of workers than there are jobs for workers.
It is usually directly tied to the state of the economy. Lower demand for products due to lack of
consumer confidence , disinterest, or reduction in consumer spending results in the workforce
cutting back on production. Since production is reduced, companies that retail such products may
also cut back on workforce, creating yet more cyclical unemployment.
Disguised Unemployment
There are also instances where we find too many people working when so many are not required. In
agriculture we may find that all members of the family work. It is possible that 3-4 people can do a
given work in the farm, but we find that the whole family of say 10 people doing the job. This may
be because the excess people are not able to find employment elsewhere, so rather than remain
unemployed they prefer to do the work along with others. This is known as disguised
unemployment. This occurs when more than the necessary numbers of people are employed for the
specified work. Disguised unemployment is found in agriculture because of the lack of employment
opportunities elsewhere. Similarly disguised unemployment can be found in industry and offices as
well.
Causes and Consequences of Unemployment in India
The major cause of unemployment in India is the slow pace of development. As GDP growth rate is
still slow even after sixty five years of independence. The major causes which have been
responsible for the wide spread unemployment can be spelt out as under.
Rapid Population Growth: It is the leading cause of unemployment in Rural India. In India,
particularly in rural areas, the population is increasing rapidly. It has adversely affected the
unemployment situation largely in two ways. In the first place, the growth of population directly
encouraged the unemployment by making large addition to labour force. It is because the rate of
job expansion could never have been as high as population growth would have required. Secondly,
the rapid population growth indirectly affected the unemployment situation by reducing the
resources for capital formation. Any rise in population, over a large absolute base as in India,
implies a large absolute number.It means large additional expenditure on their rearing up,
maintenance, and education. As a consequence, more resources get used up in private
consumption such as food, clothing, shelter and son on in public consumption like drinking water,
electricity medical and educational facilities. This has reduced the opportunities of diverting a
larger proportion of incomes to saving and investment.
Limited Land: Land is the gift of nature. It is always constant and cannot expand like population
growth. Since, India population increasing rapidly, therefore, the land is not sufficient for the
growing population. As a result, there is heavy pressure on the land. In rural areas, most of the
people depend directly on land for their livelihood. Land is very limited in comparison to
population. It creates the unemployment situation for a large number of persons who depend on
agriculture in rural areas.
Seasonal Agriculture: In Rural Society agriculture is the only means of employment. However,
most of the rural people are engaged directly as well as indirectly in agricultural operation. But,
agriculture in India is basically a seasonal affair. It provides employment facilities to the rural
people only in a particular season of the year. For example, during the sowing and harvesting
period, people are fully employed and the period between the post harvest and before the next
sowing they remain unemployed. It has adversely affected their standard of living.
Fragmentation of Land: In India, due to the heavy pressure on land of large population results
Backward Method of Agriculture: The method of agriculture in India is very backward. Till now,
the rural farmers followed the old farming methods. As a result, the farmer cannot feed properly
many people by the produce of his farm and he is unable to provide his children with proper
education or to engage them in any profession. It leads to unemployment problem.
Decline of Cottage Industries: In rural India, village or cottage industries are the only mans of
employment particularly of the landless people. They depend directly on various cottage industries
for their livelihood. But, now-a-days, these are adversely affected by the industrialisation process.
Actually, it is found that they cannot compete with modern factories in matter or production. As a
result of which the village industries suffer a serious loss and gradually closing down. Owing to this,
the people who work in there remain unemployed and unable to maintain their livelihood.
Defective education: The day-to-day education is very defective and is confirmed within the class
room only. Its main aim is to acquire certificated only. The present educational system is not job
oriented, it is degree oriented. It is defective on the ground that is more general then the
vocational. Thus, the people who have getting general education are unable to do any work. They
are to be called as good for nothing in the ground that they cannot have any job here, they can find
the ways of self employment. It leads to unemployment as well as underemployment.
Lack of transport and communication: In India particularly in rural areas, there are no
adequate facilities of transport and communication. Owing to this, the village people who are not
engaged in agricultural work are remained unemployed. It is because they are unable to start any
business for their livelihood and they are confined only within the limited boundary of the village. It
is noted that the modern means of transport and communication are the only way to trade and
commerce. Since there is lack of transport and communication in rural areas, therefore, it leads to
unemployment problem among the villagers.
Inadequate Employment Planning: The employment planning of the government is not adequate
in comparison to population growth. In India near about two lakh people are added yearly to our
existing population. But the employment opportunities did not increase according to the
proportionate rate of population growth. As a consequence, a great difference is visible between the
job opportunities and population growth. On the other hand it is a very difficult task on the part of
the Government to provide adequate job facilities to all the people. Besides this, the government
also does not take adequate step in this direction. The faulty employment planning of the
Government expedites this problem to a great extent. As a result the problem of unemployment is
increasing day by day.
As a result of massive unemployment there is poverty and increase in social evils like robbery, crime
etc. The social consequences of the educated unemployed are quite serious. We will find that people
with superior qualifications are doing jobs which could be done by less qualified people. This results
in under-utilisation of one's capacity. We can find graduate engineers doing jobs which could be
performed by diploma holders. Similarly there may be clerks and typists with postgraduate
qualifications where perhaps matriculates could do the work. This is because people with lesser
qualifications (matriculates) are unable to find jobs so they go for higher education with the hope
that they will be in a better position to qualify for the same jobs.
Many thieves, pickpockets, smugglers, drug traffickers etc. take up these activities because they are
unable to find gainful employment. The frustrations of unemployed youth can also lead to terrorism.
The highly educated unemployed have anger against society for their state of affairs. They feel that
if this system cannot meet their aspirations for getting proper jobs it should be destroyed. This leads
them to take to organised violence against the state. Terrorism in Assam and in many other parts of
the country is largely a result of the large number of educated unemployed youth in these states,
among other factors.
Rural and Urban Unemployment in India
The unemployment rate at all India level stood at 3.8 per cent while in rural and
urban areas it was 3.4 per cent and 5 per cent respectively. Unemployment rate is
more in urban areas than in rural areas as in urban areas educated unemployed
are more in numbers and also in urban areas it requires some vocational training
or technical skill to do a job as compared to rural areas. Urban unemployment is
that unemployment which exit in urban areas. It is not only painful at personal
level but also at social level.
Despite this problem the government has not given attention to it. Urban
unemployment can be classified into two forms.

Industrial unemployment: The exact size of the industrial unemployment is not

known because the necessary data for its estimation are not available.
Educated unemployment: It constitutes large part of urban unemployment in
India. Rural unemployment is the main problem of Indian government and it
requires huge capitalization of capital. Disguised unemployment, seasonal
unemployment etc are some of the example of rural unemployment.
The educated are not the only ones who face the problem of unemployment in the
urban areas. There are large numbers of people in the rural areas who do not have
a high level of education and who are unemployed.