On February 1, the 15th Finance Commission’s report was tabled in Parliament. The job of the finance commission – to draw a framework for h...
On February 1, the 15th Finance Commission’s report was tabled in Parliament. The job of the finance commission – to draw a framework for how to distribute monies between New Delhi and the states every five years – might seem dour but it is also critical to keep the world’s largest federation running.
There weren’t many surprises in the report, except for one. The commission recommended the creation of a “Defence Modernisation Fund” focussed on the capital needs of India’s military.
Dyarchy
To understand why this is problematic, we’ll need to understand that the Indian constitution, under its Seventh Schedule, divvies up responsibilities between the Union and the states. Subjects such as defence and foreign affairs are in the Union list while responsibilities like law and order are in the state list. India also has a concurrent list – a unique, centralising feature of its federalism adopted from the British Raj – where both the state and the Union have a role with a distinct tilt in powers to the latter (it is using this that Prime Minister Narendra Modi’s government brought in the farm laws, for example).
Another feature of Indian federalism inherited from the Raj is that while the states do most of the...
