Governance in India Test - 5

The Seventh Schedule of Indian Constitution provides for three lists – Union, State and Concurrent. The Union List has a range of subjects under which the Parliament may make laws. The Union List or List-I is a list of 100 numbered items on which Parliament has exclusive power to legislate. This list includes defence, foreign affairs, railways, banking, among others.

Taxes on railway fares and freight taxes are exclusively and totally assigned to the Central Government by the Constitution.

Indian constitution has divided the taxing powers as well as the spending powers (and responsibilities) between the Union and the state governments. The subjects on which Union or State or both can levy taxes are defined in the 7^th schedule of the constitution.

Further, limited financial powers have been given to the local governments also as per 73^rd and 74^th amendments of the constitution and enshrined in Part IX and IX-A of the constitution. The Constitution provides for the formation of a Finance Commission (FC) by President of India, every five years, or any such earlier period which the President deems necessary via Article 280. Based on the report of the Finance Commission, the central taxes are devolved to the state governments.

The 42^nd Amendment Act, implemented in 1976, restructured the Seventh Schedule, ensuring that State List subjects like education, forest, protection of wild animals and birds, administration of justice, and weights and measurements were transferred to the Concurrent List.

Panchayati Raj is the basic unit of administration in a system of governance. The Constitutional (73^rd Amendment) Act 1992 came into force in India on 24^th April, 1993, to provide constitutional status to the Panchayati Raj institutions. Currently, the Panchayati Raj system exists in all the states of India except Nagaland, Meghalaya, and Mizoram, and in all Union Territories except Delhi.

Panchayati Raj has three levels: Gram Panchayat (village level), Mandal Parishad or the Block Samiti or Panchayat Samiti (block level) and Zilla Parishad (district level). It has been established by the State Legislatures for the creation of democracy at the grassroots level in all the states of India by decentralising the power of democracy.

The Panchayati Raj system was first adopted by the state of Rajasthan in Nagaur district on 2^nd October, 1959. During the 1950s and 1960s, other state governments adopted this system as laws were passed to establish Panchayats in various states. The second state was Andhra Pradesh, while Maharashtra was the ninth state.

The taxes imposed by the village Panchayats are important source of income of Gram Panchayats, which include taxes on land and houses, custom duty, toll tax, license fee on transport and communication, etc. Even taxes are collected from professions, trade and commerce, schools, hospitals, dispensaries, markets, the resting places and like places used by the common people, as well as for lighting the streets. Hence, vehicle tax is not a source of revenue for the Panchayats.

Gram Sabha consists of all the eligible voters of a village or clusters of villages, or all the persons whose names are included in the electoral rolls for the Panchayat at local level. The Gram Sabha members also elect the representatives to the Gram Panchayat. Together, the Sarpanch and Panchs, form a Gram Panchayat. A Gram Panchayat is elected for five years.