Question 1 · 10 marks · 170 words written
Opening · a constitutional or legal provision
As per Bommai case, federalism is a part of "Basic structure" of the constitution
Resource allocation as a keystone of federal structures
Body · points
- Fiscal federalism giving taxation powers to multiple levels of the government
- Distribution of tax subjects & non tax revenues like currency, banking etc
- Allotment of subjects under 7th schedule as per resource allocation
101st Amendment → led to the introduction GST. Its impact → (1) Cooperative federalism under GST Council constituted under Article 279A. (2) Reduced double taxation (3) Enabled state & central government to frame laws on GST imposed by centre & state
Limitations (1) low GST tax revenues to the states (2) Difficult for states to cooperate at GST Council (3) Use of cesses & surcharges has increased by 130% in last 5 years (4) Third tier government → PRIs & ULBs have suffered further
Way Ahead (1) Fiscal council → N.K. Singh (2) Say to states in Finance commission
Close · a way forward
Smooth working of federal model is crucial for realising vision of "Team India"