The concept of freebies has become a buzzword with the preponderance of promises made by political parties. Promises or distribution of free electricity, free water supply, etc. have become commonplace in the Indian political milieu. In light of the above events, a few months ago, a PIL petition was filed to oppose the practice of political parties promising freebies. The petitioner...
The concept of freebies has become a buzzword with the preponderance of promises made by political parties. Promises or distribution of free electricity, free water supply, etc. have become commonplace in the Indian political milieu. In light of the above events, a few months ago, a PIL petition was filed to oppose the practice of political parties promising freebies. The petitioner had challenged promise/distribution of private goods/services, which are not for public purposes, from public funds before the election, under Articles 14, 162, 266(3), and 282 of the constitution. Among the grounds of challenge, A.282 was an essential ground as the funds for freebies are granted under this article by the centre or state if it satisfies the criterion of public purpose. In this blog, the author will attempt to address the flaw in A.282 by critically examining the judgments relating to A.282 and then unearth the ostensible purpose with which it was incorporated into the constitution by delving into its history and referring to the reports of relevant committees.
The methods of intergovernmental transfer of funds were incorporated from the Government of India Act, 1935. It essentially consists of two ways, those are 1) distribution between the union and the state and grants from union to state upon the recommendation of the Finance Commission under Articles 270 and 275 respectively, and 2) grants by union or states for public purpose under Article 282.
Article 282 states that “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”.
The uniqueness of grants under Article 282 is that the union or state can use those funds for subjects over which they do not have legislative competence. Now, what makes Article 282 muzzling is the discretionary power the government holds for making grants under this article and the Finance Commission can not recommend, like in the case of Articles 270 and 275 of the Constitution.
As India got independence, plethora of socio-economic issues created a huge burden on the government and to address it, planning commission was constituted to formulate schemes for alleviating the predicaments. All the schemes formulated by the planning commission were funded by using Article 282 until it existed. However, the increasing grants under A.282 for CCS (Centrally Sponsored Schemes) conflicted with the ostensible purpose of the article (discussed later in the blog) inferred from the constitution. To resolve this conflict, it was imperative to ascertain the scope and purpose of A.282.
Determination Of Scope By The Judiciary
The case of Bhim Singh v. Union of India is considered locus classicus for interpreting A.282. However, prior to this judgment, there are also other cases that discussed the scope of this article.
Laxman Moreshwar Mahurkar v.Balkrishna Jagannath Kinikarwas was one of the first significant cases which exclusively pondered upon the scope of this article. In this judgment, the court held that it is for the government to decide what is public purpose and what is not in A.282. The way the executive spends money cannot be questioned in a court of law and the proper place to criticize the government’s action with regard to spending money would be the Legislature or the Appropriation committee and thereby, giving it a wide interpretation.
The same position was reiterated in Bira Kishore Mohanty v. State of Orissa and KN Subba Reddy v.State of Karnataka and others as well.
According to the commentary of D.D. Basu, A.282 gives power to the government to grant funds for subjects over which they do not have legislative competence as long as they are for public purposes. Case in point, making grants and subsidies for agriculture, irrigation, education, etc, are subjects beyond the legislative competence of the union as per the Seventh schedule. They can also grant loans to municipal or local government bodies to facilitate construction and other public activities. The interpretation of the term public purpose can only be determined by the government and the courts can not interfere as long as it’s not unconstitutional. If the money is collected by legitimate means, there is no judicial review over the distribution or spending of that money and government is free to make any law authorising expenditure for public purpose.
Now coming to the case of Bhim Singh v. Union of India, in this case, the MPLADS (Members of Parliament Local Area Development Scheme) was challenged where one of the significant grounds of challenge was inconsistency with respect to Article 282. The Supreme Court held that A.282 must be construed widely as it promotes the purpose underlying the DPSP (Directive Principles of State Policy). It further said that this article should not be given a restrictive interpretation as it’s not subject to any other article in the constitution. Therefore, the MPLAD scheme was held to be constitutionally valid under A.282 for the advancement of DPSP. In addition to this, the applicability of A.282 must be debated in the parliament and the courts should not interfere unless it’s unconstitutional.
Relying upon the Bhim Singh case, the Supreme court in S. SubramaniumBalaji v. the Government of Tamil Nadu and Ors. kept the pot boiling by following the same approach with regard to A.282. The Court invoked the Directive Principles in determining the meaning of the phrase “public purpose” under Article 282 of the Constitution. It held that the Tamil Nadu state government’s distribution of free televisions was a valid “public purpose” under Article 282 because it was in pursuance of the Directive Principles.
From these significant judgments pertaining to A.282, inference can be drawn that the word “public purpose” is interpreted in the light of directive principles. In various judgments, the courts have defined DPSPs as social goals to be achieved. Ever since the enactment of the constitution, the scope of social goals has widened so substantially that now even the distribution of free televisions has been interpreted to be a part of it. The issue is that if this approach is followed, the plethora of present and imminent social goals will indiscriminately increase the use of A.282.
Evidently, the position regarding A.282 by the courts has been consistent. Interestingly, the High Court of West Bengal in BJP v. State of West Bengal deviated from the ordinarily followed ratio. The court said the State Government cannot by merely characterizing a purpose as public purpose, make a grant unless the State Government can establish that the purpose for which the grant has been made is a public purpose. The concept of ‘Public Purpose’ becomes justiciable in a court of law as the ordinary members of the public cannot challenge the decision of the Government either before the legislature or before the Appropriation Committee. Although even in this case, the court did not touch upon the scope of A. 282 and merely took a differing view regarding its justiciability in the court of law.
Debilitating The Fiscal Equilibrium
To ascertain the ostensible purpose, it’s imperative to go back to history. First of all, the wide power which is conferred on the government to grant funds under A.282 as per the courts raises a rather serious question. Is the power held by the government under A.282 actually discretionary? It is essential to note that sub-clause 3(b) of A.280, which confers on the Finance Commission the duty to make recommendations to the President as to the principles which should govern the grants-in-aid of the revenues of the States out of the Consolidated Fund of India, does not mention that its scope is limited to A.275 only. Had A.282 been excluded from the purview of sub-clause 3(b) of A.280, it would have been mentioned by the framers of the constitution in it as an exception. The ostensible travesty in extrication of A.282 from the ambit of proviso 3(b) contrived discretionary powers to the government.
Now adhering merely to the scope of A.282, as aforementioned, this article was taken from Section 150 of the Government ofIndia Act, 1935, which was also placed under the chapter of “Miscellaneous Financial Provisions”. This article was used to provide special assistance by central government to Bengal during famine in 1943 and later on, for making ad hoc grants for purposes like growing more food, post war development, rehabilitation, etc. The incorporation of this article in the Indian constitution was tacitly supposed to be used for ad hoc purposes, nevertheless, the government construed it in a manner to augment its domination.
Therefore, what arguably distinguishes the A.282 is not the discretionary power held by the government by excluding it from the purview of sub-clause 3(b) but the purpose for which it is to be used.
By and large, the Supreme Court and many High Courts have given a wide interpretation to A.282, however, the critical approach espoused by certain commissions and committees has tendered a caveat with regard to the rise in the usage of A.282 in granting funds. With the growing transfers under A.282, the Rajmannar Committee in its report briefly discussed the scope of this article. The committee deduced that the increase in grants by the union for planned expenditure routed via A.282 has engendered apprehension regarding its purpose. Article 282 is a provision that was intended to be used as a residuary power of the centre to grant funds for public purpose, for the said article comes under the chapter of “Miscellaneous Financial Provision”. The planning commission was created by the executive itself whose ex-officio chairperson is the Prime Minister. Unlike Finance Commission, it was not a statutory body upon whose recommendation, grants are made under A. 270 and A.275. The probability of being arbitrary and unfair in granting funds to the state made the provision a matter of concern. Consequently, the eclipse of non-plan grants by plan grants prompted the committee to talk about the apparent misuse of Article 282. Eventually, the committee took a rigid stance by saying that grants from the centre to state should only be made upon the recommendation of the Finance Commission.
Later, in the second report of the Ninth Finance Commission, Justice A S Qureshi in his dissent note considered its scope wherein he said A.282 was not envisaged to be used as a regular channel of transfer of funds by the constitution makers due to centre’s discretionary power and the regular grants should only be covered by A.275. The Third Finance Commission also said that as much as 75% of the total volume of grants should be made under Article 275.
Since the inception of the Constitution, various commissions and committees have favoured a restrictive approach of A.282. Owing to the centre’s ostensible bias, the transfer of funds was intended to primarily be made through A. 275 upon the recommendation of the Finance commission, and A. 282 was envisaged to be used on an ad hoc basis to meet exceptional and emergency situations only.
The ambiguity in Article 282 has made it difficult to come to a definite interpretation. Nevertheless, it appears that A.282 was intended to be used restrictively. From the judgments mentioned above, the scope of A.282 has been construed very widely, but the alarming rise of using A.282 for granting funds has curtailed the pertinence of A.275, which was meant to be the major channel for the intergovernmental transfer of funds. The lacuna in A.282 appears to have developed due to the contradiction between the intent behind this article and the interpretation of the term “public purpose” by the courts. Thus, as a consequence of this, an imbalance has transpired in the fiscal equilibrium.
Views are personal.