60 WPM Shorthand Dictation - Kailash Chandra - Volume 1 - Transcription No 18

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Mr. Vice-Chairman I wish the matter had not come up for discussion in this House in the form in which it has come because we will be discussing it appears the same subject more or less piecemeal in connection with the other two Bills as well. What was necessary for the Government in this connection was provide for a general discussion on the report of the Finance commission, the kind of thing that we have on such reports, and after hearing the views of the Members here they should have formulated a Bill. Even if they had formulated the Bill earlier, the Bill should have been preceded by a discussion on the report. It would then have given us an opportunity of dealing with this rather important subject in our public finance and indeed in our national life. But now, we are asked to treat this matter piecemeal and deal with the Bill as it comes separately. I say, Sir, this would not seem very fair. It is true that we have had two other Reports of the Finance commission and that we have had certain opportunities of discussing the issues raised by the Finance Commission on previous occasions. But that should not be precluded a thorough discussion of the Third Report, more especially after the experience of the two five year plans and generally also, after the experience of States in the matter of public finance and as regards relations between the States and the Centre. All I can say is that the Government does not understand the magnitude of the problem or urgency or the seriousness of the issues involved. It is possibly because they think that all the State Governments are under their control and that the State Government would toe the line whatever is laid down from here. Suppose, Sir, today a number of States had been outside the control of the same party which controls the Central Government problems would have become acute because conflicts between the State Governments controlled by the certain other parties and those controlled by Congress Party which controls the Central Government would have arisen sharply calling for a thorough discussion and mutual consultation in a different way. Once they can get passed whatever they like and also, once it is passed, the States will more or less accept without any protest the dispensation of the Centre. Now that the bill is before us, we have to speak on this subject rather on the general themes. Yet, I would like to make certain general observations in this connection because the basis of the Bill is the Report of the Third Finance Commission. This is a long standing issue facing the pubic finance of the country. Those who have studied Economics will know well how this matter had come up even during the British time when we did not have either independence or any kind of autonomy in the States even in that set up. Even at the time, the State Governments functioning under the British felt that something should be done with regard to adjustment of finance, especially in regard to the relations between the Centre and the States. There had been a long-standing controversy as to how the taxes, especially the income-tax, should be divided between the Centre and the States. I do not deny the existence of the controversy, and this controvery is not easy to resolve. I entirely agree. But I should have thought that the Third Finance Commission should be tried to face their problems before it not more or less in a routine manner but in the context of the new things not only as they are today but as they are going to shape in the coming future. We have got what is called a quasi-federal constitution. I do not say 'federal-constitution' although the spirit is there, but a quasi-federal Constitution because most of the powers; many of the powers, that should remain with the States are now in the hands of the Central Government. Therefore, in that way it is more unitary in character than federal. At the same time, structurally speaking, we have got the State Assemblies, Legislatures, State Budgets and so on. They function more or less in the same way. But if you go a little deeper into the affairs, it would immediately lead you to think that the States do not have any substantial, real power, especially in the matter of finance. Perhaps at the time when the Constitution was framed, this aspect did not figure very much in minds of the makers of the Constitution. We had just become free and the concept of welding India into a solid nation was uppermost in the minds of those people who framed the Constitution and all others as well. In that background, it was quite understandable that it should be the dominant thought as to how to put the different segments of our country into a whole, namely, the Indian union.