CONCLUSION AND SUGGESTIONS

7.1 Conclusion

The state of Jammu and Kashmir is one of the twenty-nine federal units in
the Indian federation, strategically so important with an area of 222236 square
kilometers sharing international border with Pakistan, Afghanistan and China from
west to east and for administrative point of view, is divided into two division i.e.
Kashmir and Jammu headed by division commissioner with further division into
twenty-two districts and sub-divisions as well. The federal relations of the state
with union of India are regulated by article 370 of the Indian constitution which
also provides certain immunities commonly known as special status of the state in
the Indian federation.

Historically the state came into existence as an independent entity with the
execution of treaty of Amritsar (1846) executed between Maharaja Gulab Singh
and British government for an amount of seventy-five lacs and remained under
Dogra rulers until the execution of the instrument of accession (1947) with
government of India by then Maharaja Hari Singh the ruler of the state.

In fact, the state remained under British suzerainty even after Maharaja
Gulab Singh got possession cum sovereignty over the entire state territory and in
order to continue their rule an amendment had to be passed in the terms of the
above said treaty whereby rulers of the state were allowed to adopt their successor
from collateral branch of their family in absence of natural heir. Further in 1870
government of India took over the trade and commerce across Ladakh region
besides they also appointed a resident political officer in the state, but Britishers
never ruled on the state directly due to reasons.

Later on after the death of Maharaja Partap Singh, Hari Singh became the
head of the state who introduced the concept of state subjects (MULKHIS) in 1927
with an aim to secure jobs opportunities for their local residents in the
services(jobs) provided by state government and all such state subjects were used
to be divided into four groups like class-I, class-I, class-III and class-IV with a
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provision for preference to class one over second and likewise second classed state
subjects were preferred over third and so on in certain matters like jobs or
scholarships etc., but presently since 1952 the expression „state subject‟ has been
replaced by new expression „permanent resident‟ of the state and in order to
regulate status of the residents in the state, section 6 of the J&K constitution
provides that provisions incorporated in part II of the Indian constitution must be
read with law enforceable in the state also, moreover now there are only two
classes of local residents of the state covering erstwhile classes I,II and III with no
more provision for IV class like corporate bodies that too without any preference.

Interestingly to say that gender based discrimination being practiced in the

state in pretext of the status of permanent resident to deprive women section of the
state from certain rights now has been mitigated up to some extent by historic
judgment in the Susheela case pronounced by the division bench of the hon‟ble
high court of the state, wherein it was observed that on marry to an outsider a
woman cannot be deprived of her status of permanent resident with all rights and
privileges like right to continue in government services etc. except few like
whether her children are entitled to inherit her immovable property in the state or
not and in this fray a writ petition is still pending disposal before court, because as
per statutory provisions enforceable in the state such gray area remains uncovered
in the current scenario

Moreover after the incident that took place in 1931 during the trial of an
Indian national namely Abdul Qatar at central jail (Srinagar) in which twenty one
people were killed, at this Hari Singh head of the state constituted a committee
headed by B.J. Galancy to inquire the grievances reflected by different
communities, which submitted its final report in 1932 with recommendations that
an equal opportunity should be given to all state subjects in case of employment
with a minimum qualifications, to be recruited by an independent authority besides
this other such recommendation was that there must be freedom of press. Later on
said report proved a turning point in the state especially towards the introduction of
the democratic process in the state like the promulgation of J&K Constitution

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Act,1934 with some statutory provisions for a legislative body namely Praja
Parishad no doubt with limited powers introduced for the first time in the state of
Jammu and Kashmir.

Further in this respect the other important event was the constitution of a
political party i.e. Muslim Conference first time to project political causes in the
state and later on in 1938, it allowed entry to all irrespective of their religion on
secular base by changing its name from Muslim Conference to National
Conference(NC) which played a vital role in the state politics like in 1944 it
presented a vision document to be known as Naya Kashmir to express their
aspirations which was later on was incorporated in the state constitution in the
form of directive principle of the state policy i.e. (Sections 11 to 26) setting forth
certain obligations both for state government as well as for local residents of the
state e.g. to defend mother land etc.

The quit Kashmir movement of 1946 launched by NC with an aimed to

remove ruler from power in order establish democratic based institutions in the
state. No doubt the basic reason for such movement was to protest against the
appointment of Mian Ahamed Yar as minister in the king‟s council although
welcomed step towards political representation in such body but unfortunately on
20th May 1946 Sheikh Mohd. Abdulla a political leader was arrested and
convicted on the charges of conspiracy for a period of nine years.

That on the political status of the princely states as per Butter Committee
report, that none of the Indian princely states ever had any international status on
the laps of the British power over the Indian sub-continent because no member of
the world community had ever accorded recognition to these states including the
state of J&K especially between 15-8-1947 to 26-10-1947 the date on which state
acceded with union of India by executing instrument of accession by head of the
state as envisaged under section 6 of government of India Act,1935, who was
competent authority to signed and set forth the term and conditions as were later on
incorporated by the constituent assembly under article 370 of the Indian
constitution. Hence the legality of instrument of accession cannot be challenged
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being legally valid both under national as well as under international law because it
was duly approved by the constituent assembly of the state.

Moreover the temporary provisions under article 370 was incorporated in

the year of 1950 with main purpose whether constitution of the of the India would
apply fully to state or not because presently it applies with certain exceptions and
modifications like eight parts still not applicable and those apply with some
reservation too resultantly said provisions has nothing to do with the political
status of the state as the analysis has revealed. At this point the hon‟ble supreme
court in Virender Singh’s case has observed that moral obligation cannot override
the statutory provisions hence the commitment by Indian government to the people
of J&K to express their wishes in 1947 is no more a ground for challenge the state
accession with the union of India as alleged by government of Pakistan including
some local stakeholders in the state

In fact on 20th October, 1947 the ruler of the state Maharaja Hari Singh
wrote a letter to the governor-general of India to explain that I will take some time
to decide about the political future of the state, hence during the pendency of final
disposal of the state a standstill agreement was executed with both the countries on
which was signed by Pakistan signed but India delayed it with a view to have
formal talks with the representatives of the state.

Therefore this indecision on the part of Maharaja of the state caused further
delay to execute instrument of accession as pointed out by Compel Johnson while
commenting on that legality of the accession of the state which is also beyond the
any doubt, because a duly elected constituent assembly of the state approved the
accession to end further speculation on this issue.

The reservation sought at the time of state‟s accession with India later on
finalized in May 1949 at Delhi agreement and terms and conditions so agreed were
incorporated under article 370 as temporary provision. The other concession
acceded to the state by union government were like that article 238 of the Indian
constitution would not be applicable to the state of J&K, besides constitution for

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the state would be framed by constituently assembly duly elected by their local
people whereas the issues like the division of powers and future of the royal king
in the state were left to be decided by it.

However after the tribal invasion aided by the Pakistan regular army then
compelled Maharaja Hari Singh to extend request for army assistance from
government of India to defend state territory because at that point of time J&K was
not integral part of the republic of India, hence the instrument of accession was
executed to authorized government of India to come forward to defend the state by
landing their army troops at Srinagar airport on very next day and after deriving
out all those invaders, India lodged a written complaint before the security council
of UN on 1-1-1948 with prayer that Pakistan government may be asked not to
participate further in the invasion through tribal in terms of military and other
supply. At this Security Council of UN resolved on 27 -1-1948 to invite both the
parties for direct talk wherein both side were directed to improve situation in the
region besides on 21-4-1948 security council also placed its good office for
restoration of peace and order and to hold plebiscite with the co-operation of both
countries with certain pre-conditions that India has to release all political leaders
,minimize military troops required for civil administration in the state provided the
Pakistan occupied Kashmir be completely vacated from tribal but dismay to know
that this term remained to the executed by Pakistan because some part of the state
still lies under illegal occupation of the Pakistan to be known as POK. It was also
mentioned in the resolution that administrator so appointed to be allowed to work
freely with power to seek assistance from the government of India.

In this direction the bilateral Shimla agreement of 1971 between India and
Pakistan wherein it was pledged that both parties will resolved all their disputes
through peaceful dialogues so as to limit the further scope of UNSC on Kashmir
issue, hence in the present scenario whenever Pakistan government tried to raise
the issues like border shelling in J&K UN always refused to entertain the same

The J&K constituent assembly was convened on with a view to finalize the
accession of the state with the union of India, was given the status of legislative
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assembly as per section 13 of the J&K Constitution Act, 1934. The constituent
assembly being sovereign body and its decisions were supposed to be of binding
nature irrevocable in the eyes of law. It was also endowed with other functions like
to decide about the accession, division of powers, and future of the royal dynasty
and the issue of compensation to the land lord on the transfer of their land to tillers
and finally it resolved that the institution of monarchy is incompatible with the
spirit and needs of the modern times and hence recommended for its abolition.

On the issue of article370 Mirza Mohd. Afzal Beg said that it is merely till
the process for framing the constitution of the state and on completion of the same
we shall give pal what is pal‟s and peter. Article 370 is one of those provisions of
the India constitution which were placed in the part XI and incorporated as
temporary to regulate the federal relations with union of India but it still exists
even today as it was incorporated in 1950.

Therefore perusal of this provision shows that it accords certain rights to

the state in the Indian federalism which is the only exception, that is why state of
J&K enjoys special status in terms of application of constitutional provisions and
various other union legislations in the state, because for the extension of any
provisions in state either consultation or concurrence of the state government is
mandatory as it has been observed since 1950

Thus at present there are eight parts of Indian constitution which do not
apply in J&K and an annexure No. XI has also appended at the end of this research
work for further reference. Similarly various enactments of the central government
either in union list or concurrent are also not enforceable in the state of J&K for
which either state legislative assembly has passed its own law for same purpose or
such subject remained uncovered at par with other part of the country as shown in
annexure No. IX

Moreover the constitution provisions those applied by way of presidential

constitution order since 1950 certain exceptions and modifications were also made

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as per office report office report in this context collected for research work e.g. part
third of the Indian constitution

The amendment of article 370 is not exclusive affair of the union

government because an initiative to this effect only can be from the state
government as per expression constituent assembly of the state incorporated in
clause(2) of the said article for which mandatory resolution must be passed by the
state government before issuance of an constitution order by the president of India
and finally power to amend the constitution lies with the union parliament to
incorporate relevant provisions to regulate the federal relations between union and
state of J&K. The article 370 can be amended provided procedure prescribed be
followed and parliament has secondary role in this context.

The interpretation of the various constitutional provisions in light of the

Supreme Court ruling in Shankeri Prasad‟s case rebuts the claim by some stake
holders to reconstitute state constituent assembly in order to amend article 370
because as per article 141 of the Indian constitution, that decisions of apex court is
binding and work like law of country. Moreover at the time of adoption of the state
constitution by the constituent assembly, it did not comment on the nature of
article 370 whether to retain or abolish it.

Thus the implications of the above said temporary provisions are like that
part third of the Indian constitution was applied to the state with some exceptions
and modifications that is why permanent residents of the state are still entitled to
fundamental right to property and side by side the gender based discrimination is
also as a result of special status of the state, besides permanent residents of the
state are deprived from the constitutional guarantees in matters of reservation in
promotions in the state because the division bench of the state high court in the
case of Ashok Kumar in December 2015 has declared section 6 read with rules
9,10 and 34 of the state law as ultra vires in view of Indira Sawhney ruling because
constitutional protection to such provisions is provided by constitution
amendments i.e. 77th,81st and 85th passed by the parliament which unfortunately
do not apply in the state.
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 Categorically in political matters only scheduled castes have been provided
with reservation in the state legislative assembly whereas no such constitutional
provisions for scheduled tribes of the state with further effect of the special status
in the state, that not operation of latest delimitation process carried in whole
country has seized scheduled castes reserved seats in the state up to 2026 in terms
of the legislative assembly normal terms and till next census to be conducted for
fresh population figures these seats shall continue up to 2032 which seems to be
unfair and irrational in the democratic set up. Moreover the apex court also
dismissed petition filed in this context filed by Jammu and Kashmir National
Panthers Party supremo professor Bhim Sing in 2009 wherein it was observed by
the apex court that there is complete bar to adjudicate on delimitation matters.

The jurisdiction of the federal institution over the state was extended from
time to time with concurrence of the state government like Supreme Court; the
provisions under article 135,138,139 and 139-A are not applicable in the state. The
other such institution is the comptroller and auditor general of India(CAG)
commonly known as guardian of public purse got full jurisdiction in the state in
1958 except whatever amendments have been affected in its constitution and
powers seems to have no effect with respect to J&K state

Similarly election commission of India prescribed under part XV applied to

the state with some modification e.g. under article 324 power of the election
commission with respect parliament election only because the expression in this
provision that any references to the „constitution‟ mean constitution of J&K,
whereas any reference to expression „state‟ in article 325,327,329 mean not
including the state of J&K and when voting age was reduced to 18 years by way
61st amendment to the constitution of India, the state assembly passed 21st
constitutional amendment to their own constitution to reduce voting age in the
state. The first election conducted by the election commission of India in the state
of J&K was in 1967 when 4th general elections for the parliament of India were
held.

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 The legislative relation between union of India and J&K state shows that
parliament has limited jurisdiction over the state , because it can frame law/s with
respect to matters enumerated in the union or concurrent list which have been
acceded by state government to union of India hence whatever left is exclusively
within the jurisdiction of state government, moreover there is no state list to limit
the legislative power of the state and various entries enumerated in the union as
well as in the current list of the seventh schedule as are applicable in the state of
J&K are shown in the annexure No. V and VI that is why in most of the central
legislations we witness the expression „except‟ the state of Jammu and Kashmir
and for purpose another annexure No. IX is there. The residuary powers another
fertile area of legislation also lies with the state assembly except in few matters
wherein parliament has jurisdiction like levy taxes in matters of foreign travel by
air or sea, inland air travel, postal articles, including money orders, phonograms
and telegrams.

Further the analysis of federal relations with union government show that
doctrine of federal supremacy as per article 246 is also not applicable in the state
especially in case of conflict between union and state law however parliament law
has such primacy in state with regard to concurrent power only. The union
legislation applicable in the state directly, under article 370, which do not apply
and those framed under article 252,253, etc. are also shown in the annexure No. X
as testimony to the wide legislative power of the state assembly.

The legislative history traced back during the British rule recalls that then it
was Mont-Ford report which recommended federal form of government with a
provision for division of powers between central and provinces government as a
mark of federalism in India, further in this direction another such kind of
legislation(1935) with view to introduced federal system with an independent
identity to the provinces with certain autonomy, an important feature of federal
framework wherein all subjects were placed in three lists i.e. federal, provincial
and concurrent with further scope for discretionary power governor-general to
assigned unspecified matters if any either to central or provincial as per section 104

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of the Act. The constitutional framework so adopted by the constituent assembly of
India with unitary biased to ensure peace and coordination over vital issues
between central and state government with exclusive power to parliament on
residuary matters as per article 248 read with entry 97 of the union list except with
respect to the state of J&K. The legislation passed by parliament under this
jurisdiction are like acquisition of electrical undertaking, administration of the
evacuee property, management of estates, Indian tariff law seeking to remove the
disability of the member of the legislature, constitution of inquiry commission to
inquire into the subject matter of the state falling under list-II, law relating to
disputes between an individual workman and employer in an industrial
establishment, law relating to prohibition of forcible conversion and recently
parliament has passed disaster management Act

Whereas on the taxation matters legislations like tax on building contract,

tax on expenditures, tax on management of all India public institution ,Tax on gift,
Tax on wealth including the capital value of the agricultural land and water cess
law and property tax. Originally there were 97 entries in the union list, 47 in the
concurrent list and 66 in the state list but with the passage of time this number got
changed and now with the passage of 101st amendment to the constitution(GST
bill) union list remains with 98 entries whereas state list has 60 and 52 in third list.

Significantly the concurrent list was framed with main purpose to ensure
uniformity in certain matter throughout the Indian territory, to suppress some
mischiefs which cannot be handled by the state government effectively due to the
principle of territorial extent as per article 245 moreover the concurrent list so
adopted is based on the Canadian pattern and was extended to the J&K state in
1954 with certain exceptions and modifications. The matters covered under list are
like procedural laws, contempt of court, preventive detention, adulteration of food,
essential commodities, and laws so passed are like The Food Adulteration
(Prevention) Act, Essential commodities Act, the contempt of court Act and
organization of court for administration of justice as per entry 11-A.The parliament

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passed Administration Tribunal Act, 1985 which is not applicable in the state on
account of the special status of the state.

However the rules of interpretation that in case of conflict between these

entries and substantive law, the latter will prevail over former because the
expression used in the entries prescribed only area for legislative action can be
taken whereas authority for such action is provided under article 245 subject to
other provisions of the constitution. Also other rules evolved for the resolution of
jurisdictional overlapping by the supreme court of India like rule of pith and
substances when a legislation challenged under entries of various lists and if in pith
and substances it is found within the competency then it is immaterial to consider
whether it encroach incidentally on other field whereas federal supremacy and
doctrine of repugnancy are other such rule to solve jurisdiction conflict.

Moreover Judicial view on residuary power after analysis of various cases

shows that prior to H.S. Dhillon case the supreme court consistently opined that
before recourse can be had to the residuary it must be found there is no entry in any
of the three lists under which impugned legislation can be placed fall, because if
the impugned legislation is found to come under any of the entry in list II, then
residuary entry would not apply. Similarly, if the impugned legislation falls within
any entry in one or the other of the two remaining lists, recourse to the residuary
entry will hardly be necessary. The general principle that all the entries in the three
lists, including the specific Entries 1 to 96 in the union list, should be given broad
interpretation so as to avoid resort to the residuary matters. If there is a competition
or apparent conflict between items in the state list and the specific items in union
list/concurrent list, attempt should be made to harmonize them if necessary, by
delimiting their scope. But, where competing entries are an entry in state list versus
entry 97 of union list, the entry in the state list must be given a broad and liberal
interpretation. It was emphasized that in a constitution like ours where there is a
division of legislative subjects but the residuary power is vested in parliament,
such residuary power cannot be so expansively interpreted so as to whittle down

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the power of the state legislatures as discussed in this report when apex court
refused to resort to this particular entry of the union list.

Parliament has wide legislative power to control over the state‟s legislative
authority by direct control either in normal condition like under article 249, 252,
253 or when national emergency under article 250 is in operation besides the
failure of the constitutional machinery in the state may also empower the union
legislature as per article 356(1)b of the Indian constitution whereas the scope for
indirect control federal government in India with in authority of constitutional
provisions expressly provided under articles 31-A, 31-C, 200, 201, 285, 286, 288,
289 and 304(b) etc.

However the states resolutions under article 252 authorized the union
parliament legislative to enact legislations like Estate Duty Act, The Prize
Competition Act, Seeds Act, Water (Preservation and Control of Pollution) Act,
Urban Land (Ceiling and Regulation Act), Transplantation of Human Organs Act,
and The clinical establishment (Registration& Regulation) Act,

Similarly under article 253 parliament has power to make any law for
whole or any part of the territory of India for implementing any treaty, agreement
or convention with any other country or countries or any decision made at any
international conference, association or other body. Provided that after the
commencement of the Constitution (application to J&K) order, 1954, no decision
affecting the disposition of the state of J&K shall be made by the government of
India without the consent of the government of the state whereas as per article 31-
A in its original form when applied to the state immune state to seek president
approval for laws passed with a view to carry on land reforms in the state. The
state governor of the state has no more power to reserve legislative enactment for
the consideration of president as constitution of the state.

So far as the administrative relations between union and states in India are
concerned a detailed constitutional framework is provided in the constitution
which applies uniformly throughout the entire territory of the India except state of

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Jammu and Kashmir, to settle disputes of any kind between centre and states or
state versus state if any arises while functioning in their respective field. Whereas
article 355 imposes certain responsibilities upon the union government to protect
the states governments e.g. from external aggression etc

Apparently it should be noted that administrative relation connotes every

activity of the centre or the state government can be perceived and scrutinized
under this head and the executive power of the centre government over all matters
referred in the union list is at par with their legislative power. Similarly the
exclusive executive power is vested with the state executive when matters fall in
the state list even though union government has power to issue directions (article
365) to the state executive and non compliance on the part of state would result in
certain sanctions e.g. imposition of article 356 but no such instance is there. The
president of India is vested with union executive power to be exercised with the aid
and advice of a council of ministers headed by the prime minister. Similarly at the
state level the executive is headed by governor, although real powers to carry on
execution are enjoyed by council of ministers headed by the chief minister.

Actually the administrative function of the state is direct result of the

legislation hence both administrative and legislative function are complimentary to
each other. The hon‟ble Supreme Court (SC) of India in the case of Ram Jawaya
Kapoor case observed that it may not be possible to frame an exhaustive definition
of what executive function means and implies. Ordinarily, the executive power
connotes the residue of governmental functions that remained after the legislative
and judicial functions are taken away. Accordingly it also includes determining
policy as well as their execution including initiation of legislations, the
maintenance of law and order promotion of social and economic welfare or to
determine foreign policy etc. it can be concluded that that all such powers required
to carry forward aims and objectives of the constitution/government necessarily
falls under the executive function including any international obligation in case of
union government.

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 In this backdrop union government of India has no separate agency for the
execution or adjudication for its laws except in few cases as such it has to relied on
state executive machinery including judicial wing in case of any dispute as a result
of union legislation and in this context constitutional provisions are there to entrust
such functions to state government like under the Central Sales Tax Act enacted by
parliament as per entry 92-A enlisted in List I when read with article 269(1) (a) of
the constitution of India with an aim to levy of tax on sale or purchase of goods,
other than news-papers, which takes place in the course of inter-State trade to be
levied by the union which is to be assessed and collected by respective states on
behalf of the central government in other cases it leave the administration of union
legislation entirely to the states and a typical example of this mode is The
Electricity (Supply) Amendment Act

As the classical federalism is no more practicable in the changed scenario

and the framer of the Indian constitution had acknowledged fact to incorporated
provisions for co-operative federalism in the constitution e.g. article 263 inter-state
council and delegation of function interse etc. and presently the constitution of new
body namely NITI Aayog at national level by replacing planning commission age
old non-statutory body along with other fora like conference of the chief ministers
of states, conference of the governor and empowered committee of the state
finance ministers in certain cases is the testimony of cooperative trend in the Indian
federalism and moreover the central sponsored schemes and their implementation
in the country are other factors in this context because there cannot be a better way
to do so than by cooperative federalism, as explained by Nani Palkhivala a noted
jurist in India in this context

“Who dies if India lives who lives if India dies..... People of several
states sink or swim together, and that in the long run, prosperity
and salvation are in innovation and not in division; mutuality and
not conflict; cooperation and not competition”
So much so Union executive power the clause (1) of the article 73 provides
that subject to the provisions of constitution the executive power of the union shall
extend to the matters with respect to which parliament has power to make laws;

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and to exercise of such rights, authority and jurisdiction as are exercisable by the
government of India by virtue of any treaty or agreement, Provided that the
executive power referred to in sub-clause (a) shall not, save as expressly provided
in this constitution or in any law made by parliament, extent in any state to matters
with respect to which the legislature of the state has power to make laws. Whereas
as per clause (2) that until otherwise provided by the parliament, a state and any
office or authority of a state may, notwithstanding anything in this article, continue
to exercise in matters with respect to which parliament has power to make laws for
that state, such executive power or functions as state or officer or authority thereof
could exercise immediately before the commencement of this constitution. In case
of concurrent legislation by union government normally lies with state government
except when new administrative machinery is to be created or as provided by the
parliament.

Similarly article 162 provides for the extent of the executive power of state
which says that subject to the provisions of this constitution, the executive power
of a state shall extend to the matters with respect to which the legislature of the
state has power to make laws, provided that in any matter with respect to which the
legislature of a state and parliament have powers to make laws, the executive
power of the state shall be subject to and limited by in the case of when executive
power either expressly conferred by constitution or by any law made by the
parliament upon the union government or authorities thereof.

The division of executive powers between the union and the states even
with reference to matters in list I and List II is not sharp, hard and fast. Whilst the
limits of their executive powers indicated by articles 73 and 162 is flexible and
extensible one. In certain matters the executive power of the union may extend
over to ambit of states also for instance, in the matter of any grant for any public
purpose the division of powers with reference to three lists in seventh schedule
seems to no significance.

The part VI of the constitution of India is not applicable to the state of J&K
except few provisions that are also with some exceptions and modifications
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because the state has its own constitution. The constitutional framework in India
that provides for the administrative relations in part XI of the India constitution is
not fully applicable to this state and moreover section 5 of the state‟s own
constitution lays down provisions for the extent of legislative and executive power
of the state concerning all matters except those with respect to which parliament of
the India has power to make laws for the state as per constitutional provision

However the expression „constitution‟ of India mean as made applicable to

the state by the order of president issued under article 370 and only limitation on
the executive power of the state regarding those matters over which parliament has
power under union or concurrent list of the seventh schedule. As per section 26 the
head of the state executive shall be designated as the governor whereas the
executive power of the state shall be vested in the governor and shall be exercised
by him directly or through officers subordinate to him in accordance this
constitution. Certain function assigned by state government to union or its agencies
which are exclusively within its executive jurisdiction e.g. maintenance of roads in
the state under article 258-A of the Indian constitution.

The expression fiscal federalism refers to those principles which provide

for how the budgetary functions like allocation, redistribution and stabilization be
performed by governments at different level within a country for efficient
economic performance and growth. It also deals with allocation of expenditure and
revenue sides between union government and states government, although taxation
is a recognised fiscal tool to achieve certain objectives like reduction in
inequalities e.g. as provided under article 38 of the Indian constitution and merely
allocation of taxation powers between state and centre is not an assurance for the
effective functioning of the government because for proper functioning by a
government a balance ought to be maintained between the financial resources in
their control and constitutional responsibilities and functions as provided by the
constitution of India in part XII.

The constitution of India provides much elaborated scheme of centre-state

financial relationship with two most prominent features like a complete separation
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of centre-state taxing powers to raise their own revenue by way of taxation on their
respective list and other one is transfer of funds from centre to states both by
statutory and non-statutory mode to states for revenue gap. Besides to make system
smooth and operational one it has also provided in the constitution for the
appointment of finance commission after a gap of every five years so as to resolve
any dispute, if arises between the union and the states governments regarding the
distribution of revenue resources etc. and in addition to this some other provisions
are there to provide for taxes sharing and grant in aid to supplement the financial
resources of the states as per their needs. The distribution of taxes provides upper
edge to union government resulting vertical imbalance in fiscal federalism in India
hence provision to is there o reduce this gap as cited above.

Besides exclusive power to levy tax, there are other categories of taxes like
duties levied by the union government but collected and appropriated by the states
such as stamp duties on bills of exchange, excise duties on medicinal and toilet
preparations fall in this category; Service tax levied by union government and
collected and appropriated by the union and states; certain taxes are levied and
collected by the union government but net proceeds of such taxes are distributed
among the states and each state gets such amount of taxes which is collected within
its territory like sale tax on interstate trade and commerce etc.; certain taxes are
levied and collected by the union but the proceeds of such taxes are distributed
between the centre and the states e.g. taxes on non-agricultural incomes as per of
the Indian constitutional provision. Other aspect of the Indian fiscal federalism like
inter-governmental immunities from taxation power and transfer of funds from
union government to states are seem to be logical and for fair deal in the federal set
up in India.

After the commencement of the constitution parliament has passed four

important amendments to the constitution to deal with financial issues between
union and states which in terms enhanced the union government power in this field
also e.g. interstate sale tax and service tax.

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 Recently much awaited goods and services tax bill passed to bring indirect
tax reform in the country which in terms will replace many of the taxes currently
levied by both the government in their respective sphere which is considered to be
more benefited to the consumers because the regime of tax over tax will be out of
operation in neat future. The institution of the finance commission has played
pivotal role to balance the financial conditions of the by adopting criteria for
devolution of funds from union to states government and recently the
recommendation of the XIV Finance Commission with regard to 42% of the union
resources to be assigned to the states to left them with wide scope to utilize their
finances as per their needs and suitability without intervention from union
government e.g. as it happens in the case of central sponsored schemes.

Further the abolition of planning commission has shifted the responsibility

to the union finance minister to transfer planned funds from union government to
state as there is no provisions in the constitution of newly constituted body namely
NITI Aayog in this context. Moreover financial relations between union of India
and state of J&K in concerned, the state of J&K enjoys more financial power than
other states in the Indian federation because all amendments (especially 46th, 80th,
88th) relating to fiscal aspects passed by the union parliament have not been
applied in the state especially except 6th as a result the position with respect to
state still exists as it was before 46th amendment of 1982. The service taxation
power still lies with the state government in the state as such no share of union
taxes on service section shared with the state government but services tax levied in
the state under J&K General Sale Tax Act 1962 which applies both on goods and
services without any distinction besides the state‟s power to levy professional tax
in the state with maximum up to Rs 250 per annum whereas it was enhanced to Rs
2500 by 60th constitutional amendment by parliament which is also not applicable
in the state. Therefore as per article 270 now all union taxes are shareable but with
respect to the state of J&K such sharing as per constitutional provision prior to
88th constitutional amendment Act,2003 i.e. only income tax proceeds forms the
part of states share now excluding corporate income.

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 The constitution of the state has a full chapter XIV titled as Financial,
Property and Contract (sections 114 to 123) similar to the constitution of India
except there is no list of subjects likes entries mentioned in the 7th schedule
enumerating the power of the respective government to levy tax.

The state of J&K is one of the eleven states in India which are designated
as special category states for the purpose of fiscal devolution and financial
resources for the state expenditure as shown in the state‟s budget are like own tax,
non- tax revenue, shares in union tax, capital gains and grants from union
government. As per the report of the J&K commercial department the maximum
tax collection was from general sale tax and value added tax(VAT) followed by
stamps duties, motor spirit and then passenger tax whereas minimum from
property tax other source of revenue for the state. The budgetary analysis for last
four years shows that very less percentage of the state revenue remains with state
government for non-revenue expenditure and moreover the state liability to gross
state domestic product ratio as per RBI reports on state finances 2016 shows that it
remained more than 50% for last ten years.

The non-implementation of 73 and 74th amendments in the state during the

XIIIFC (Financial Commission) award about 81% of the total allocation was
remained unreleased in the state. after rationalisation of the center sponsored
schemes their number reduced to 66 out of which thirty five (35) schemes relating
to subjects following in the state list and thirty one (31) relating to the concurrent
list and according classified like based legislations based schemes like Nation
Rural Employment Guarantee Act, 2005; Right to Education Act, 2009; Nation
food security Act, 2013 etc. Whereas those are covered under central sector are
like catalytic development program of sericulture, Nation river conservation
programme now called as Nammai Gange (2016-16) and third one falling under
state or concurrent list of the seventh schedule as the case may be with and sharing
pattern is 60:40 % for general and 90:10 for special category states. So far as the
state of J&K is concerned there are fifty-six (56) Centrally Sponsored Schemes in

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which state has to bear only ten percentage of the total financial burden being a
special category state in India

7.2 Suggestions

After the analysis of special status of the state of Jammu and Kashmir in
the Indian federal set up like legislative, administrative and financial as per the
constitutional provisions applicable in the state the researcher has suggested that
following steps should be taken with respect to the special status of the J&K state
in the Indian federation.

 It is suggested that article 370 should be amended to omit sub-clause (a)

of the clause (1) which deals with application of article 238 which has no
more relevancy after 7th constitutional amendment Act,1956 because
presently entire territory of the country is divided between states and
union territory without any further classification of the states into classes
like A,B,C or D.

 The expression “constituent assembly” used in clause (3) of the article

370 should be replaced by expression “state legislative assembly”
because as per supreme court ruling in case of Shankeri Parasad v Union
of India that parliament has constituent power to amend constitution as
such there is no need to reconstitute J&K constituent assembly again to
amend constitution, similarly the legislative assembly of the state can do
so in the state with respect to required concurrence for the amendment of
article 370 of the Indian constitution and moreover the concurrence given
by the state government since 1957 has also diluted the significance of
this expression in this context because almost all the provisions of the
Indian constitution except few apply herein the state along with a number
of union legislations as per official reports.

 It is also suggested that all amendments passed by parliament should be

extended to the state in order to remove psychological barrier as well as
not to deprive the permanent residents of the state who are also citizen of
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 India from all those rights enjoyed by those who are residing in other part
of the country e.g. reservation issue, local bodies, financial resources etc.
and moreover state government should implement proposed goods
service tax regime within the state without any delay being consuming
state besides this tax reform will be implemented throughout entire
country on the same date so in general.

 Suggested again that delimitation process should be undertaken in view

of 2011 census in the state by amendment to the state constitution to
rationalization of the assembly seats as well as for rotation of reserved
constituencies for scheduled caste because presently same seats are be
represented for fourth terms and if no amendment passed in this context,
then in view of present constitutional position such seats likely to be
represented for a consecutive six terms which is nothing more than
mockery of the Indian constitutional provisions in pretext of the special
status in this part of the country violating the democratic right of the
general category candidates, besides in toto deviating from the purpose
behind the political reservation.

 Suggested that residuary power should be divided into two groups i.e.
when matters are of national importance parliament should frame law and
in other cases it should be placed in the concurrent list.

 Also suggested that expression “special status” should be incorporated in

the marginal note to the article 370in order to represent the actual legal
implications of the substantive provisions incorporated in the article.

 The special status of the state should be maintained for the progressive
development of the state rather for stagnation as it has happened till date
in the shade of special identity or autonomy

 It is again suggested that state subject law applicable in the state should
be reviewed in light of the fundamental rights applicable to the citizens of
the India, because it has no more relevancy in the present scenario of
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 globalization, as it had been deemed by then ruler of the state in 1927,
because now the resident of the state are also in a position to compete at
national level and examples are like Shah Fazal secured first rank in
UPSC exams and if the main purpose for this law was to secure job
opportunities for the local resident then it cannot be a valid reason.

 It is also suggested that government of India as well as state government

should update their official records relating to the constitution order
issued by president of India to reflect the actual position of the union laws
applicable in the state for the proper analysis of the federalism besides
special status of the state e.g. presently two central investigating agencies
CBI and NIA their power and jurisdiction in the state of Jammu and
Kashmir.

 Suggested that interstate council should deliberate on the terms of

references to evolve a consensus with regard to terms of reference for
financial commission because till date only union government has power
to decide about such terms resultantly it will be a progressive step for the
cooperative federalism in India and further, this body should meet once
after a gap of every two years gap to discuss various issues especially of
federal aspect

 The state politics should come forward with clean hands to put an end to
the issue of temporary status in order to merge general public of the state
emotionally with union of India because legally there is no bar to amend
article 370 of the Indian constitution, moreover recently supreme court
has also opined that it is a legislature‟s job than judiciary to adjudicate on
the constitutionality of the article 370 and article 35-A of the India
constitution although parliament has no unilateral power to amend article
370 unilaterally, hence it is suggested

 Suggested that so far as the federal relations with respect to the

legislative, administrative and financial power is concerned no major

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 change recommended even by the commissions on the union-state
relations as it is working well provided union government should take
states into confidence on such issues of states concerned so it is submitted
that the until some major issue comes in present frame work should be
maintained.

 Suggested that on Kashmir issue government of India should not talk

with Pakistan with regard to IOK but only on POK because the accession
of the state with India is legally valid and temporary provision as per
article 370 has no implications on accession but merely with regard to the
operation of other constitutional provisions and parliamentary laws in the
state.

 last but not the least it is loudly suggested that a lawmakers should be
made accountable to the law so framed as it occurs in the case of member
of the parliament(MP) representing the state of J&K in the union
legislative body, because all laws passed by parliament are not applicable
in the state and if an offence created under such law is committed by
chance any MP in the state where such law is not enforceable no criminal
proceeding can be initiated against such MP which seems to be the only
exception in this legal world.

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