Salient Features Of The 74th Amendment Act
Institutions of urban self-government shall be known by the general name ‘municipalities’. Nagar Panchayat: For transitional areas Municipal Councils: For smaller urban areas Municipal Corporations: For larger urban areas It shall be obligatory for every state to constitute such units. The members of a municipality would be elected by direct election. Certain provisions may be made for the nomination of unrepresented groups. For Wards having a population of three lakhs or more, ward committees would have to be established. Reservations shall be made for the scheduled castes, scheduled tribes and women in every municipality: Every municipality shall enjoy a tenure of five years and may be dissolved according to law. Individuals who have attained the age of 21 years and who are qualified to be chosen to State Legislature shall be eligible to contest the election. State legislatures shall confer all such powers and authority as may be necessary on the municipalities.
The Finance Commission shall be constituted to review the financial position and suggest measures for the allocation of resources among the different levels of the municipalities. The state election commission shall supervise, direct and control the elections to the municipalities. District Planning Committees and metropolitan planning committees shall be appointed.
Financial Provisions In The Indian Constitution
Financial control of the administration is the bulwark of parliamentary democracy and for exercising financial control an independent audit agency is an essential pre-requisite. The Constitution provides for a Comptroller and Auditor General of India to be appointed by the President. The Articles governing the financial aspects are dealt with in chapter 5 of part VI and in parts XII and XIII of the Indian Constitution. The important articles in this field are from 148 to 151 and 264 to 307.
Finance, Property, Contracts And Suits
Article 265 upholds the salutary democratic principle of ‘No taxation without representation and categorically declares that no taxes can be imposed without the authority of law.
Consolidated Fund
Subject to the provision of a Contingency Fund and allocations to the States, all revenues received or loans etc. raised by the Government of India shall constitute a Consolidated Fund of India. Similarly, there will be a Consolidated Fund for each of the States. No amount can be withdrawn from the Consolidated Fund without the authority of law. This restriction does not apply to public accounts (Article 266).
Contingency Fund
To meet contingent situations where some expenditure may be required to be incurred urgently, Article 267 authorises Parliament and State Legislatures to form their contingency funds. The Contingency Fund is placed at the disposal of Union or State Government (President or Governor) to enable him to make advances for meeting unforeseen expenses pending authorization by the legislature.
Distribution of Revenues between the Union and the States
A scheme for the distribution of revenues between the Union and the States is laid down in articles 268-273. The proceeds of all the taxes levied by the State are fully retained by the concerned States themselves while taxes in the Union List may be in part allotted to the States. Thus, taxes that belong exclusively to the Union include Customs, Corporation Tax, taxes on the capital value of assets, a surcharge on income tax, etc. and taxes in respect of matters in the Union List. Taxes belonging exclusively to the States include land revenue, Stamp Duty on items included in the State List, taxes on passengers and goods carried on inland waterways, lands and buildings, mineral rights, animals and boats, road vehicles, advertisements, consumption of electricity, luxuries, amusements etc., taxes on entry of goods into a local area, State tax tolls, fees in respect of matters in the State List and taxes on professions, trades, etc. not exceeding Rupees 250 per annum. Stamp duties on Bills of exchange etc. and duties of excise on medicinal and toilet preparations mentioned in the Union List shall be levied by the Union but collected and appropriated by the States and form part of their revenues except in the case of Union Territories (article 268).
R Duties in respect of succession to property other than agricultural land, estate duty in respect of property other than agricultural land, terminal taxes on goods or passengers carried by railways, sea or air, taxes on railway fares and freights, taxes on transactions in stock exchanges, taxes on sale or purchase of newspapers and on advertisements therein; taxes on inter-Státe sale or purchase of goods other than newspapers, taxes on inter-State consignment of goods, shall all be assigned to the States concerned and distributed among the States as may be decided by Parliament by law.
The proceeds attributable to Union Territories, however, shall form part of the Consolidated Fund of India (article 269). There are some taxes like income tax and excise duties in the Union List which are levied and collected by the Union but their proceeds are distributed between the Union and the States. After a Finance Commission has been constituted, a Presidential Order in regard to the distribution of proceeds from income tax shall be issued after considering the Commission’s recommendations.
In case of excise duties, the distribution of proceeds shall be determined by Parliament by law (articles 270-272). Articles 273, 275 and 282 provide for three kinds of grants-in-aid and the circumstances in which these may be extended to the States by the Union. Thus, grants may be given by the Union to the States of Assam, Bihar, Orissa and West Bengal in lieu of export duty on jute and jute products (article 273).
Grants may be given to any State in need as may be deemed essential (article 275). Under article 282 the Union or a State may make a grant for any public purpose irrespective of that purpose being outside the legislative jurisdiction of the Union or State concerned. Article 274 requires that in case of Bills affecting taxation in which States are interested, in effect, prior recommendation of the President would be necessary.
The State Legislatures may by law levy taxes on professions, trades, callings or employment. The total amount of these taxes payable by an individual shall not exceed Rs. 2500 per annum. The provision would not affect the power of Parliament to make laws in respect of income from professions etc.
Here are some notes on Finance Commission, Freedom Of Trade.