INDIAN POLITY & INDIAN ECONOMY

AVKS ACADEMY

INDIAN POLITY
&
INDIAN ECONOMY

1st EDITION

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INDIAN POLITY & INDIAN ECONOMY

DEDICATED TO ALL
MARTYRED SOLDIERS for INDIA

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ABOUT AVKS ACADEMY

AVKS ACADEMY (for capf ac coaching) Foundation was done in 2015 as Online
platform from 2017 onwards established as full time OFFLINE CAMPUS with an
objective to provide the CAPF ASSISTANT COMMANDANT aspirants useful,
qualitative and updated teaching facility and study material. AVKS ACADEMY
Foundation has set high standards for teaching in BOTH UPSC CAPF PAPER 1
AND PAPER 2, and also for UPSC CAPF ASSISTANT COMMANDANT Interview . It is
the result of hard work and dedication of our Faculty, Content Developers and
Research Team that AVKS ACADEMY Foundation is today undoubtedly ONLY
Institute for CAPF AC in India.
UPSC CAPF ASSISTANT COMMANDANT EXAM (in 3 stages) :-

👉 WRITTEN EXAM (PAPER 1 + PAPER 2).

👉 PHYSICAL and MEDICAL.

👉 CAPF FINAL STAGE INTERVIEW.

BRANCH: HEAD OFFICE- HYDERABAD , CORPORATE OFFICE- DELHI
Mail:[email protected]
Website: www.avksacademy.in

1st EDITION 2019

ABOUT THE AUTHOR: SRAVAN KUMAR SAMBRANI (R & D (AVKS) NIIT JAIPUR ,
CIVILS INTERVIEW ACHIEVER, AUTHOR OF MANY STATE FAME BOOKS and UPSC
CAPF BOOKs)

Copyrights @avks academy

Edited by :A PADMAJA

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INDIAN POLITY & INDIAN ECONOMY

***********Acknowledgement***********
During making the book the Research and Development team of AVKS
academy has been dedicatedly contributing for the completion of this book.
A special thanks to the Director& Founder A Vinay Kumar (AVKS) , CO-
Founder N. Rajesh Kumar, Delhi branch manager Jutta Sheshadri Rao
Research & Development head Sravan Kumar Sambrani , History subject
experts Upendra Kumar , Jonathan Sundaram and Sandeep ,Surya prakash,
Geography subject experts Anurag Kumar, R Rohit Sagar and Rohit kumar,
Polity subject expert Sravan Kumar Sambrani and Chintu, Economy subject
experts Raj Kumar and Mahesh, science subject experts Sudheer srisailam and
M.Satyam Reddy, Arthematic and reasoning subject experts M.Srinivas and
Santosh.
We also thank the dedicated Assistant commandants who were rigorously
supporting us which includes Rohit Sharma (SSB) , Moparthy Prudvinath (BSF) ,
Vikas Chowdary (CRPF) , G S Yashwanth , Raghu Kuram and many more..

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Indian polity
List of contents :
• Making of Indian constitution- 11
• Schedules of Indian constitution-8
• Parts -6
• Preamble -26
• Part 1 – Union and its territory- 30
• Part 2- Citizenship- 36
• Part 3 – Fundamental rights- 44
• Part 4 – Directive principles of state policy- 62
• Part 4 A – Fundamental duties- 72
• Parliament- 77 ONWARDS
President of India
Rajya Sabha
Lok Sabha
Bills in Indian parliament
Tools in Indian Parliament
• Central Government- 125 OWNWARDS
Prime Minister
Council of Ministers
Cabinet
• State Legislature-149 ONWARDS
Governor
Legislative assembly
Legislative council
Bills in state legisalture
• State Government- 161 ONWARDS
Chief Minister
Council of ministers
• Centre State relations- 176 ONWARDS
Legislative relations
Administrative relations
Financial Relations
Various Commissions on centre state relations
• Union territories in India
• Special provisions to states
• Special provisions to jammu & kashmir
• Local self governments (Panchayati’s and municipalities)-183

• Judicial system in India- 196 ONWARDS

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Hierarchy
Supreme Court
High Court
Lok adalats
• Constitutional and Non Constitutional bodies-213 ONEARDS
• Recent constitutional amendments
• Practise questions
• Previous year questions
ECONOMY 254

PARTS OF INDIAN CONSTITUTION:

PART I THE UNION AND ITS TERRITORY Art.( 1-4 )
PART II CITIZENSHIP Art.( 5-11 )
PART III FUNDAMENTAL RIGHTS Art.( 12-35 )
PART IV DIRECTIVE PRINCIPLES OF STATE POLICY Art.( 36-51 )
PART
FUNDAMENTAL DUTIES Art.( 51A )
IVA
PART V THE UNION Art.( 52-151 )
PART VI THE STATES Art.( 152-237 )
PART
THE STATES IN PART B OF THE FIRST SCHEDULE Art.( 238 )
VII
PART
THE UNION TERRITORIES Art.( 239-243 )
VIII
Art.( 243-243zg
PART IX PANCHAYATS
)
PART Art.( 243-243zg
MUNICIPALITIES
IXA )
PART X THE SCHEDULED AND TRIBAL AREAS Art.( 244-244A )
RELATIONS BETWEEN THE UNION AND THE
PART XI Art.( 245-263 )
STATES
PART XII FINANCE, PROPERTY, CONTRACTS AND SUITS Art.( 264-300A )
PART TRADE,COMMERCE AND INTERCOURSE WITHIN
Art.( 301-307 )
XIII THE TERRITORY OF INDIA

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PART
SERVICES UNDER THE UNION AND THE STATES Art.( 308-323 )
XIV
PART Art.( 323A-323B
TRIBUNALS
XIVA )
PART
ELECTIONS Art.( 324-329A )
XV
PART SPECIAL PROVISIONS RELATING TO CERTAIN
Art.( 330-342 )
XVI CLASSES
PART
OFFICIAL LANGUAGE Art.( 343-351 )
XVII
PART
EMERGENCY PROVISIONS Art.( 352-360 )
XVIII
PART
MISCELLANEOUS Art.( 361-367 )
XIX
PART
AMENDMENT OF THE CONSTITUTION Art.( 368 )
XX
PART TEMPORARY, TRANSITIONAL AND SPECIAL
Art.( 369-392 )
XXI PROVISIONS
SHORT
PART
TITLE,COMMENCEMENT,AUTHORITATIVE TEXT Art.( 393-395 )
XXII
IN HINDI AND REPEALS

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SCHEDULES OF INDIAN CONSTITUTION :

First Schedule 1. Names of the States and their territorial jurisdiction.

2. Names of the Union Territories and their extent.

Second Provisions relating to the emoluments, allowances, privileges and

Schedule so on of:

1. The President of India

2. The Governors of States
3. The Speaker and the Deputy Speaker of the Lok Sabha

4. The Chairman and the Deputy Chairman of the Rajya Sabha

5. The Speaker and the Deputy Speaker of the Legislative Assembly

in the states

6. The Chairman and the Deputy Chairman of the Legislative

Council in the states

7. The Judges of the Supreme Court

8. The Judges of the High Courts
9. The Comptroller and Auditor-General of India

Third Forms of Oaths or Affirmations for:

Schedule
1. The Union ministers
2. The candidates for election to the Parliament

3. The members of Parliament

4. The judges of the Supreme Court
5. The Comptroller and Auditor-General of India

6. The state ministers

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7. The candidates for election to the state legislature

8. The members of the state legislature

9. The judges of the High Courts

Fourth Allocation of seats in the Rajya Sabha to the states and the union
Schedule territories.
Fifth Schedule Provisions relating to the administration and control of scheduled
areas and scheduled tribes.

Sixth Provisions relating to the administration of tribal areas in the

Schedule states of Assam, Meghalaya, Tripura and Mizoram.

Seventh Division of powers between the Union and the States in terms of
Schedule List I (Union List), List II (State List) and List III (Concurrent List).
Presently, the Union List contains 100 subjects (originally 97), the
state list contains 61 subjects (originally 66) and the concurrent list
contains 52 subjects (originally 47).

Eighth Languages recognized by the Constitution. Originally, it had 14

Schedule languages but presently there are 22 languages. They are:
Assamese, Bengali, Bodo, Dogri (Dongri), Gujarati, Hindi, Kannada,
Kashmiri, Konkani, Mathili (Maithili), Malayalam, Manipuri,
Marathi, Nepali, Oriya, Punjabi, Sanskrit, Santhali, Sindhi, Tamil,
Telugu and Urdu. Sindhi was added by the 21st Amendment Act of
1967; Konkani, Manipuri and Nepali were added by the 71 st
Amendment Act of 1992; and Bodo, Dongri, Maithili and Santhali
were added by the 92nd Amendment Act of 2003.

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Ninth Acts and Regulations (originally 13 but presently 282) 19 of the

Schedule state legislatures dealing with land reforms and abolition of the
zamindari system and of the. Parliament dealing with other
matters. This schedule was added by the 1st Amendment (1951)
to protect the laws included in it from judicial scrutiny on the
ground of violation of fundamental rights. However, in 2007, the
Supreme Court ruled that the laws included in this schedule after
April 24, 1973, are now open to judicial review.

Tenth Provisions relating to disqualification of the members of

Schedule Parliament and State Legislatures on the ground of defection. This
schedule was added by the 52nd Amendment Act of 1985, also
known as Anti-defection Law.

Eleventh Specifies the powers, authority and responsibilities ofPanchayats.

Schedule It has 29 matters. This schedule was added by the 73rd
Amendment Act of 1992.

Twelfth Specifies the powers, authority and responsibilities of

Schedule Municipalities. It has 18 matters. This schedule was added by the
74th Amendment Act of 1992

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Making of Indian Constitution

East India Company was basically a trading company which to secure its
business interests manipulated the local rulers engaging, in the process, in
warfare and annexation of territories which are activities alien to a trading
company. The British government facilitated these activities of the company by
granting them charters with powers to recruit and maintain an army and a navy,
and confer Magistracy on its employees for preservation of order; all in the
name of protecting and furthering the company’s business interests. In return
the company made an annual payment of four million pounds sterling to the
government. After annexation of vast territories in Bengal, Bihar, Orissa and
some areas in the South following armed conflicts with the local Rulers news
started trickling into England about some of the highhandedness of the
company’s men against the natives. This resulted in demands of government’s
control over its functioning. The matter was referred by the British parliament
to a select committee and after taking in to consideration the committee’s
recommendations the Regulatory Act of 1773 was passed.

The Industrial revolution has helped the English merchants accumulate a lot of
capital from the countries of Asia, Africa and America. They now wanted to
invest this wealth in setting up industries and trade with India. The mass
production of goods through machines that we witness today was pioneered
through the Industrial Revolution which occurred first in England during the
late 18th and the early 19th century. This led to a massive increase in the
output of finished products. The East India Company helped in financing and
expanding their industrial base. During this time there was a class of
manufacturers in England who benefited more from manufacturing than
trading. They were interested in having more raw materials from India as well
as sending their finished goods back. Between 1793 and 1813, these British
manufacturers launched a campaign against the company, its trade monopoly
and the privileges it enjoyed. Ultimately, they succeeded in abolishing the East
India Company’s monopoly of Indian trade. With this India became an
economic colony of Industrial England.

Regulating Act of 1773

This act is of great constitutional importance as
a. It was the first step taken by the British government to control and regulate
the affairs of the east India company in India
b. It recognised, for the first time, the political and administrative functions of
the company.
c. It laid the foundations of central administration in India.

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Salient features of the act:

1. The Regulating Act although implying the ultimate sovereignty of the British
Crown over new territories, asserted that the Company could act as a sovereign
power on behalf of the Crown. It could do this while concurrently being subject
to oversight and regulation by the British government and parliament. The
company was also required to appoint a governor general with a four member
council in Calcutta who was to act as the highest administrative authority in the
company’s possessions in India. Governor General in council were also required
to be appointed for Madras and Bombay but they were to act in subordination
to the governor general in Calcutta
2. The Court of Directors of the East India Company (60 members) were
required under the Act to submit all communications regarding civil, military,
and revenue matters in India for scrutiny by the British government.
3. For the governance of the Indian territories, the act asserted the supremacy
of the Presidency of Fort William (Bengal) over those of Fort St. George (Madras)
and Bombay.
4. It also nominated a Governor-General (Warren Hastings) and four councillors
for administering the Bengal presidency (and for overseeing the Company's
operations in India).The subordinate Presidencies were forbidden to wage war
or make treaties without the previous consent of the Governor-General of
Bengal in Council, except in case of imminent necessity. The Governors of these
Presidencies were directed in general terms to obey the orders of the Governor-
General-in-Council, and to transmit to him intelligence of all important matters.
5. The Regulating Act also attempted to address the prevalent corruption in
India: Company servants were henceforth forbidden to engage in private trade
in India or to receive "presents" from Indian nationals.
6. It provided for the establishment of a Supreme Court at Calcutta 1774
comprising one chief justice and three other justices. The governor general
could make rules and regulations for running the administration but these were
to be deposited in the Supreme Court for their scrutiny.
This was followed by the Judicature Act of 1781, the Pitts’ India Act of 1784 and
the Declaratory Act of 1788.
The Judicature Act of 1781
The Judicature Act of 1781 extended the jurisdiction of the Supreme Court to all
the inhabitants of Calcutta and at the same time excluded the Governor General
and his council members from its jurisdiction for acts done by them in their
official capacity. The requirement of depositing the rules and regulations made
by the governor general with the Supreme Court was also dispensed with
because of the inconvenience it caused.

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Pitts India Act, 1784

To rectify the drawbacks of regulating act of 1773 British Parliament brought
Pitts India Act, 1784. It was also the first attempt on the parliament to control
the company indirectly.
Important provisions of Pitt’s India Act, 1784:
1. It distinguished between commercial and political functions of company.
2. A Board of control (governing board) was constituted with six members, two
of whom were members of the British Cabinet and the remaining from the Privy
Council. The Board also had a president, who soon effectively became the
minister for the affairs of the East India Company. The Act stated that the Board
would henceforth "superintend, direct and control" the government of the
Company's possessions, in effect controlling the acts and operations relating to
the civil, military and revenues of the Company.
3. The Governor General –in-council of the Company was reduced to three from
four members, and the governor-general, a crown appointee, was authorized to
veto the majority decisions.
4. The governors of Bombay and Madras were also deprived of their
independence. The governor-general was given greater powers in matters of
war, revenue and diplomacy.
5. The supreme court of Calcutta was meant only for English subjects.
6. The act authorized court of directors to make all the recruitments in India.
By a supplementary act passed in 1786 Lord Cornwallis was appointed as the
second governor general of Bengal, and he then became the effective ruler of
British India under the authority of the Board of Control and the Court of
Directors. The constitution set up by Pitt's India Act did not undergo any major
changes until the end of the company's rule in India in 1858.
Besides the above charters granted to the company were also revised from time
to time and at regular intervals of 20 years in 1793, 1813, 1833 and 1853.
Charter act of 1793
The Act made only fairly minimal changes to either the system of government in
India or British oversight of the Company's activities. Most importantly, the
Company's trade monopoly was continued for a further 20 years. Salaries for
the staff and paid members of the Board of Control were also now charged to
the Company. Other provisions of the Act included:
• The Governor-General was granted extensive powers over the subordinate
presidencies.
• The Governor-General's power of over-ruling his council was affirmed, and
extended over the Governors of the subordinate presidencies.
• Senior officials were forbidden from leaving India without permission.

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• Royal approval was mandated for the appointment of the Governor-General,

the governors, and the Commander-in-Chief.
• The East India Company was empowered to grant licences to both individuals
and Company employees to trade in India (known as the "privilege" or "country"
trade), which paved the way for shipments of opium to China.
The Company's charter was next renewed by the Charter Act of 1813.
Charter Act of 1813
The East India Company Act 1813, also known as the Charter Act of 1813, was
an Act of the Parliament of the United Kingdom which renewed the charter
issued to the British East India Company, and continued theCompany's rule in
India.
Its important provisions were as follow
1. The Company's commercial monopoly was ended, except for the tea trade
and the trade with China. Reflecting the growth of British power in India.
2. The Act expressly asserted the Crown's sovereignty over British India.
3. It allotted Rs. 100,000 (1 lakh) to promote education in India.
4. Christian missionaries were allowed to come to British India and preach their
religion.
5. The power of the provincial governments and courts in India over European
British subjects was also strengthened by the Act.
6. Financial provision was also made to encourage a revival in Indian literature
and for the promotion of science.
Charter act of 1833
This act was final step towards centralism in India.
Important Provisions of Charter Act of 1833
1. Complete ended monopoly on all items of trade including tea and opium
(complete free trade policy). East India Company became purely became purely
administrative body.
2. The Charter Acts of 1833 centralized the administration in India. The Governor
General of Bengal, according to the act was declared as the Governor General
of India. The First Governor General of India was Lord William Bentinck.
3. Governor General in council got powers of superintendence, direction and
control of the whole civil and military government and the revenues of India.
4. It attempted to introduce a system of open competition for selection of civil
servants, and stated that the Indian should not be debarred from holding any
place, office and employment under the company. However this provision was
negated after opposition from court of directors.
5. The charter Act of 1833 enlarged the Executive council by the addition of
fourth member (Law Member) for legislative purposes. T.B Macaulay was the
first law member.

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6. All the laws and enacts passed by the legislative council were called as Acts
of the Government of India, before this they were called as regulations.
7. It provided for the appointment of a law commission in India
8. The Act provided that there would be no indiscrimination made between the
Indian and the British residents in Indian provinces on the basis of caste, creed
and religion Charter of 1833 made provision to create uniform and codified
system of law in India.
Charter Act of 1853
It was the last of the series of charter acts.
1. The Act separated, for the first time, the legislative and executive functions of
the Governor-General's Council.
2. It made 4th member of governor general in council at par with other members
as right to vote was conferred to him. It provided for further addition of 6
members to governor general in council known as 'Legislative Councilors'. Six
Members were the Chief Justice and a puisne judge of Calcutta Supreme Court,
and four representatives, one each from Bengal, Madras, Bombay and NWFP.
Therefore, the total number of members became 10. This Legislative wing of the
council functioned as a mini parliament, adopting the same procedure as British
parliament. Thus, legislation, for the first time, was treated as the special
function of the government.
3. Relieved the governor general from the responsibility of governor of Bengal
(Lord Dalhousie became first governor general without the additional
responsibility) A lieutenant governor was appointed for Bengal (Andrew Fraser).
4. Renewed the term of East India Company for an indefinite period;
5. Reduced the number of Board of Directors from 24 to 18 and 6 out of them
were nominated;
6. Indian Civil Service became an open competition. Macaulay was made
Chairman of the Committee on the Indian civil services (Macaulay committee).
Written competitive exams started from 1854.
7. The Act for the first time introduced local representation in the Indian
(Central) Legislative Council. The Governor-General's Council had six new
legislative members out of which four members were appointed by the local
(provincial) governments of Madras, Bombay, Bengal and Agra.
GOI Act 1858:
1. It provided that India henceforth was to be governed by, and in the name of,
Her Majesty. It changed the designation of the Governor-General of India to
that of Viceroy of India. He (viceroy) was the direct representative of the
British Crown in India. Lord Canning thus became the first Viceroy of India.
2. It ended the system of double government by abolishing the Board of
Control and Court of Directors.

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3. It created a new office, Secretary of State for India, vested with complete
authority and control over Indian administration. The secretary of state was a
member of the British cabinet and was responsible ultimately to the British
Parliament.
4. It established a 15-member Council of India to assist the secretary of state
for India. The council was an advisory body. The secretary of state was made
the chairman of the council.
5. It constituted the secretary of state-in-council as a body corporate, capable
of suing and being sued in India and in England.
Councils act 1861:
Features of Act
• The three separate presidencies (Madras, Bombay and Bengal) were brought
into a common system.
• System of legislative devolves by this act.
• The Act added to the Viceroy's Executive Council a fifth member - a jurist.
• Viceroy's Executive Council was expanded by the addition of not less than six
and not more than 12 additional members for the purposes of legislation, who
would be nominated by the Governor-General and would hold office for two
years. Therefore, the total membership increased to 17.
• Not less than half of these members were to be non-officials.
• The legislative power was to be restored to the Council of Bombay and
Madras, while Councils were allowed to be established in other Provinces in
Bengal in 1862 and North West Frontier Province (NWFP) in 1886, Burma and
Punjab in 1897.
• Canning had introduced the Portfolio system in 1859 that divided into several
branches, which entrusted to different members of the Governor General's
council. It also envisages that the member in-charge of his department could
issue final orders with regard to matters which concerned his department.
• Lord Canning nominated three Indians to his legislative council-the Raja of
Banaras, the Maharaja of Patiala and Sir Dinkar Rao in 1862.
Councils act 1892:
1. It increased the number of additional (non-official) members in the Central
and provincial legislative councils, but maintained the official majority in them.
2. It increased the functions of legislative councils and gave them the power of
discussing the budget and addressing questions to the executive.
3. It provided for the nomination of some non-official members of the (a)
Central Legislative Council by the viceroy on the recommendation of the
provincial legislative councils and the Bengal Chamber of Commerce, and (b)
that of the Provincial legislative councils by the Governors on the

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recommendation of the district boards, municipalities, universities, trade

associations, zamindars and chambers.
Councils act 1909 :
Also referred as Minto Morley reforms

• The legislative councils at the Centre and the provinces increased in size.
• Central Legislative Council – from 16 to 60 members
• Legislative Councils of Bengal, Madras, Bombay and United Provinces – 50
members each
• Legislative Councils of Punjab, Burma and Assam – 30 members each
• The legislative councils at the centre and the provinces were to have four
categories of members as follows:
• Ex officio members: Governor General and members of the executive
council.
• Nominated official members: Government officials who were nominated by
the Governor-General.
• Nominated non-official members: nominated by the Governor-General but
were not government officials.
• Elected members: elected by different categories of Indians.
• The elected members were elected indirectly. The local bodies elected an
electoral college who would elect members of the provincial legislative
councils. These members would, in turn, elect the members of the Central
legislative council.
• The elected members were from the local bodies, the chambers of
commerce, landlords, universities, traders’ communities and Muslims.
• In the provincial councils, non-official members were in a majority.
However, since some of the non-official members were nominated, in total,
a non-elected majority was there.
• Indians were given membership to the Imperial Legislative Council for the
first time.
• It introduced separate electorates for the Muslims. Some constituencies
were earmarked for Muslims and only Muslims could vote their
representatives.
• The members could discuss the budget and move resolutions. They could
also discuss matters of public interest.
• They could also ask supplementary questions.
• No discussions on foreign policy or on relations with the princely states
were permitted.
• Lord Minto appointed (on much persuasion by Morley) Satyendra P Sinha as
the first Indian member of the Viceroy’s Executive Council.

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• Two Indians were nominated to the Council of the Secretary of State for
Indian affairs
Aditional information :

• Lord Curzon had carried out the partition of Bengal in 1905. After the
Bengal uprising following the partition, the British authorities understood
the need for some reforms in the governance of Indians.
• The Indian National Congress (INC) was also agitating for more reforms and
self-governance of Indians. The earlier Congress leaders were moderates
but now extremist leaders were on the rise who believed in more
aggressive methods.
• INC demanded home rule for the first time in 1906.
• Gopal Krishna Gokhale met Morley in England to emphasise the need for
reforms.
• Shimla Deputation: A group of elite Muslims led by the Aga Khan met Lord
Minto in 1906 and placed their demand for a separate electorate for the
Muslims.
• John Morley was a member of the Liberal government and he wanted to
make positive changes in India’s governance
GOI Govt of India act 1919 :
Also referred as Montague Chelmsford reforms
1. It relaxed the central control over the provinces by demarcating and
separating the central and provincial subjects. The central and provincial
legislatures were authorised to make laws on their respective list of subjects.
However, the structure of government continued to be centralised and unitary.
2. It further divided the provincial subjects into two parts—transferred and
reserved. The transferred subjects were to be administered by the governor
with the aid of ministers responsible to the legislative Council. The reserved
subjects, on the other hand, were to be administered by the governor and his
executive council without being responsible to the legislative Council. This dual
scheme of governance was known as ‘dyarchy’—a term derived from the
Greek word di-arche which means double rule. However, this experiment was
largely unsuccessful.
3. It introduced, for the first time, bicameralism and direct elections in the
country. Thus, the Indian Legislative Council was replaced by a bicameral
legislature consisting of an Upper House (Council of State) and a Lower House
(Legislative Assembly). The majority of members of both the Houses were
chosen by direct election.
4. It required that the three of the six members of the Viceroy’s executive
Council (other than the commander-in-chief) were to be Indian.

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5. It extended the principle of communal representation by providing separate

electorates for Sikhs, Indian Christians, Anglo-Indians and Europeans.
6. It granted franchise to a limited number of people on the basis of property,
tax or education.
7. It created a new office of the High Commissioner for India in London and
transferred to him some of the functions hitherto performed by the Secretary
of State for India.
8. It provided for the establishment of a public service commission. Hence, a
Central Public Service Commission was set up in 1926 for recruiting civil
servants.
9. It separated, for the first time, provincial budgets from the Central budget
and authorised the provincial legislatures to enact their budgets.
10. It provided for the appointment of a statutory commission to inquire into
and report on its working after ten years of its coming into force.
GOI Act 1935 :
1. It provided for the establishment of an All-India Federation consisting of
provinces and princely states as units. The Act divided the powers between the
Centre and units in terms of three lists—Federal List (for Centre, with 59
items), Provincial List (for provinces, with 54 items) and the Concurrent List (for
both, with 36 items). Residuary powers were given to the Viceroy. However,
the federation never came into being as the princely states did not join it.
2. It abolished dyarchy in the provinces and introduced ‘provincial autonomy’
in its place. The provinces were allowed to act as autonomous units of
administration in their defined spheres. Moreover, the Act introduced
responsible governments in provinces, that is, the governor was required to
act with the advice of ministers responsible to the provincial legislature. This
came into effect in 1937 and was discontinued in 1939.
3. It provided for the adoption of dyarchy at the Centre. Consequently, the
federal subjects were divided into reserved subjects and transferred subjects.
However, this provision of the Act did not come into operation at all.
4. It introduced bicameralism in six out of eleven provinces. Thus, the
legislatures of Bengal, Bombay, Madras, Bihar, Assam and the United Provinces
were made bicameral consisting of a legislative council (upper house) and a
legislative assembly (lower house). However, many restrictions were placed on
them.
5. It further extended the principle of communal representation by providing
separate electorates for depressed classes (scheduled castes), women and
labour (workers).
6. It abolished the Council of India, established by the Government of India Act
of 1858. The secretary of state for India was provided with a team of advisors.

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7. It extended franchise. About 10 per cent of the total population got the
voting right.
8. It provided for the establishment of a Reserve Bank of India to control the
currency and credit of the country.
9. It provided for the establishment of not only a Federal Public Service
Commission but also a Provincial Public Service Commission and Joint Public
Service Commission for two or more provinces.
10. It provided for the establishment of a Federal Court, which was set up in
1937.
Indian Independence Act 1947 :

India Independence Act 1947 was an Act passed by the Parliament of the
United Kingdom (UK) that divided the British India into two new independent
dominions of India and Pakistan. The Act received the assent of the royal
family on July 18, 1947 after which, India came into existence on August 15
and Pakistan on August 14 in the year .

Important provisions under this Act

• Partition of the British India into two new and fully sovereign dominions-
India and Pakistan with effect from August 15, 1947;

• Division of the provinces of Bengal & Punjab among the two newly
formed countries;

• The offices of Governor-General in both the countries would be set up.

These Governor-General would be representing the Crown;

• The complete legislative authority would be conferred in the hands of

the Constituent Assemblies of the two new countries;

• The British suzerainty over the princely states would be terminated from
August 15, 1947;

• Abolishing the use of title “Emperor of India” by the British monarch;

• The Act includes the division of the armed forces between the two
countries.
Indian Demand for Constituent Assembly: As early as 1922, Gandhiji
demanded that the future of the country must be decided by the chosen
representatives of the people. The failure of the Round Table Conference to
solve the constitutional deadlock of India provided further strength to the idea
of the Constituent Assembly. It was thought that Indians must be left unto

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themselves to solve their own problem by means of a representative body. In

May 1934 the Congress officially adopted the programme of a Constituent
Assembly. The Faizpur Congress, 1936, while rejecting the Constitution Act of
1935, proposed the Constituent Assembly as a constructive alternative.
Meeting of the Constituent Assembly In accordance with the provisions of the
Cabinet Mission Plan, election to the Constituent Assembly was held in July
1946. Out of the 296 seats allotted the provinces, the Congress bagged as
many as 211, the Muslim League 73 and the remaining 12 seats were captured
by the other political parties, including a few independents. The Indian Princes
did not participate in the election to the Constituent Assembly as a mark of
protest.
Constituent Assembly at Work Though the Constituent Assembly was
constituted through indirect election, yet it can be emphatically said that its
membership included almost all the distinguished personalities with the only
exception of Mahatma Gandhi who preferred to stay out. It consisted of
eminent jurists, lawyers, scholars, social workers, administrators and
experienced statesmen. Its members consisted of distinguished persons like
Pandit Nehru, Sardar Patel, C.Rajagopalachari, Dr.Rajendra Prasad, Dr. B.R
Ambedkar, Professor K.T Shah, Archarya Kripalani, K.M Munshi, B.N Rau,
Purushottamdas Tandon, Maulana Azad, Govind Ballabh Pant and Alladi
Krishnaswami Iyer. People from all parts of the country and from different
walks of life became its members.
On Monday, December 9, 1946 the Constituent Assembly, met in the
Legislative Assembly Chamber under the temporary chairmanship of
Dr.Sachidannada Sinha. On 11th December Dr. Rajendra Prasad was elected as
permanent president. On 13th December, Pandit Nehru moved the Resolution
on Aims and Objectives. It was adopted by the Constituent Assembly on
January 22. The resolution started with the sentence that, Assembly declares
its firm and solemn resolve to proclaim India as an Independent Sovereign
Republic and to draw up for her future governance a Constitution.

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Note : On 29 August, 1947, the Constituent Assembly set up a Drafting

Committee under the Chairmanship of Dr. B.R. Ambedkar to prepare a Draft
Constitution for India. While deliberating upon the draft Constitution, the
Assembly moved, discussed and disposed of as many as 2,473 amendments
out of a total of 7,635 tabled

Drafting Committee

1. On 29 August 1947, a Drafting Committee was appointed, with Dr B. R.

Ambedkar as the Chairman along with six other members assisted by a
constitutional advisor.
2. These members were Pandit Govind Ballabh Pant, Kanaiyalal Maneklal
Munshi (K M Munshi, Ex- Home Minister, Bombay), Alladi
Krishnaswamy Iyer (Ex- Advocate General, Madras State), N
Gopalaswami Ayengar (Ex-Prime Minister, J&K and later member of
Nehru Cabinet), B L Mitter (Ex-Advocate General, India), Md. Saadullah
(Ex- Chief Minister of Assam, Muslim League member) and D P Khaitan
(Scion of Khaitan Business family and a renowned lawyer).
3. The constitutional advisor was Sir Benegal Narsing Rau (who became
First Indian Judge in International Court of Justice, 1950–54). Later B L

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Mitter resigned and was replaced by Madhav Rao (Legal Advisor of

Maharaja of Vadodara).
4. A Draft Constitution was prepared by the committee and submitted to
the Assembly on 4 November 1947. A Draft constitution was debated
and over 2000 amendments were moved over a period of two years.
5. Finally on 26 Nov. 1949, the process was completed and the Constituent
assembly adopted the constitution. 284 members signed the document
and the process of constitution making was complete.
6. The Drafting Committee prepared the first Draft of the constitution.
This was then circulated for the comments of jurists, lawyers, judges
and other public men.
7. In the light of this criticism Drafting Committee prepared a second draft
which consisted of 315 Articles and 8 Schedules.
8. The second Draft was placed before the Constituent Assembly in Feb,
21-1948. The Draft was then considered clause by clause by the
Assembly.
9. The third reading commenced on Nov-14 and was finished on Nov-26,
1949. On this date the constitution received the signature of the
President of the Assembly and was declared as passed. It had taken 2
years 11 months and 18 days to complete the task.

Important questions :
Making of constitution : b. Britain
1.The Constituent Assembly of India was c. Weimer Constitution of Germany
step up under the framework of? d. Constitution of South Africa
a. Cripps mission (1942) 4. The national Anthem was adopted by
b. Cabinet mission (1946) the constituent Assembly on which of the
c. Simon commission (1927) following day?
d. None of these a. 24 January, 1947
2.The Constituent Assembly of India was b. 22 July, 1947
passed and adopted on which of the c. 29 August, 1947
following days? d. 26 November, 1949
a. 24 January, 1950 5. The first meeting of the Constituent
b. 26 January, 1950 Assembly had taken place on December
c. 26 November, 1949 9, 1946 was presided by whom as its
d. 29 August, 1947 interim president?
3.The provisions in the Constitution of a. Pandit Jawaharlal Nehru
India like Constitutional Amendment can b. Dr. B.R. Ambedkar
be done by 2/3rd majority in c. Dr. Rajendra Prasad
Parliament and election of the members d. Dr. Sachidanand Sinha
of Rajya Sabha on the basis of
proportional representation are 6. The constituent assembly was
incorporated form ? constituted under the scheme
a. Government of India Act, 1935 formulated by the Cabinet Mission Plan.

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What were the features of the scheme? 3) Drafting Committee - Dr. B.R.
Ambedkar
1) One seat was to be allotted for every 4) Rules of Procedure Committee - Dr.
million population. Rajendra Prasad
2) Voting was to be by the method of a. 1, 2, 4
proportional representation by means of b. 3, 4
single transferable vote. c. 1, 2 and 3
3) The representatives of princely state d. All of the above
were to be nominated by the heads of 9. Who among the following were the
princely states. members of drafting committee of the
a. 1, 2 constitution?
b. 2, 3
c. 1, 3 1) Syed Mohammad Saadullah
d. All of the above 2) Jawaharlal Nehru
7. Which of the following are true? 3) N. Madhava Rau
4) H. C. Mukherjee
1) Constituent Assembly adopted the a. 1, 3, 4
national flag on July 22, 1947. b. 1, 4
2) Constituent Assembly adopted the c. 1, 3
national anthem on January 24, 1950. d. 2, 3, 4
3) On January 24, 1950, the Constituent 10. Which of the following changes took
Assembly held its final session. place in the Constituent Assembly due to
a. 1, 2 the India Independence Act of 1947?
b. 2, 3
c. 1, 3 1) Assembly became fully sovereign
d. All of the above body.
8. Which of the following are correctly 2) Assembly as a legislative body was
matched? chaired by Jawaharlal Nehru.
3) Muslim league members (hailing from
1) States Committee (Committee for Pakistan) withdrew from the Assembly.
Negotiating with states) - Jawaharlal a. 1, 2
Nehru b. 2, 3
2) Provincial Constitution Committee - c. 1, 3
Sardar Patel d. All of the above

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INDIAN POLITY & INDIAN ECONOMY

PREAMBLE
The Preamble to the Constitution of India records the aims and aspirations of
the people of India which have been translated into the various provisions of
the Constitution. A Preamble means the introduction to the statute. The
objectives before the Constituent Assembly were to Constitute India into a
“sovereign democratic republic” and to secure its citizens “justice liberty,
equality, and fraternity”. The ultimate aim of the makers of the Constitution
was to have a welfare state and an egalitarian society projecting the aims and
aspirations of the people of India who sacrificed everything for the attainment
of country’s freedom.
The Preamble to the Indian constitution is based on “Objective Resolution” of
Nehru. Jawaharlal Nehru introduced an objective resolution on December 13,
1947, and it was adopted by Constituent assembly on 22 January 1947. The
drafting committee of the assembly in formulating the Preamble in the light of
“Objective Resolution” felt that the Preamble should be restricted to defining
the essential features of the new state and its basic socio-political objectives
and that the other matters dealt with Resolution could be more appropriately
provided for in the substantive parts of the Constitution.
Preamble text in Indian constitution says:

“WE, THE PEOPLE OF INDIA, having solemnly resolved to constitute India into a
SOVEREIGN SOCIALIST SECULAR DEMOCRATIC REPUBLIC and to secure to all its
citizens:

JUSTICE, social, economic and political;

LIBERTY, of thought, expression, belief, faith and worship;

EQUALITY of status and of opportunity;

and to promote among them all

FRATERNITY assuring the dignity of the individual and the unity and integrity of
the Nation;

IN OUR CONSTITUENT ASSEMBLY this twenty-sixth day of November, 1949, DO

HEREBY ADOPT, ENACT AND GIVE TO OURSELVES THIS CONSTITUTION.”

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Sovereign
The Preamble proclaims that India is a Sovereign State. 'Sovereign' means that
India has its own independent authority and it is not a dominion or dependent
state of any other external power. The Legislature of India has the powers to
enact laws in the country subject to certain limitations imposed by the
Constitution.
Socialist
The word 'Socialist' was added to the Preamble by the 42nd Constitutional
Amendment in 1976. Socialism means the achievement of socialist ends
through democratic means. India has adopted 'Democratic Socialism'.
Democratic Socialism holds faith in a mixed economy where both private and
public sectors co-exist side by side. It aims to end poverty, ignorance, disease
and inequality of opportunity.
Secular
The word 'Secular' was incorporated in the Preamble by the 42nd
Constitutional Amendment in 1976. The term secular in the Constitution of
India means that all the religions in India get equal respect, protection and
support from the state. Articles 25 to 28 in Part III of the Constitution
guarantee Freedom of Religion as a Fundamental Right.

Democratic
The term Democratic indicates that the Constitution has established a form of
government which gets its authority from the will of the people expressed in
an election. The Preamble resolves India to be a democratic country. That
means, the supreme power lies with the people. In the Preamble, the term
democracy is used for political, economic and social democracy. The
responsible representative government, universal adult franchise, one vote
one value, independent judiciary etc. are the features of Indian democracy.

Republic
In a Republic, the head of the state is elected by the people directly or
indirectly. In India, the President is the head of the state. The President of
India is elected indirectly by the people; that means, through their
representatives in the Parliament and the State Assemblies. Moreover, in a
republic, the political sovereignty is vested in the people rather than a
monarch.
Justice
The term Justice in the Preamble embraces three distinct forms: Social,
economic and political, secured through various provisions of the Fundamental
and Directive Principles.

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Social justice in the Preamble means that the Constitution wants to create a
more equitable society based on equal social status. Economic justice means
equitable distribution of wealth among the individual members of the society
so that wealth is not concentrated in few hands. Political Justice means that all
the citizens have equal right in political participation. Indian Constitution
provides for universal adult suffrage and equal value for each vote.
Liberty
Liberty implies absence of restraints or domination on the activities of an
individual such as freedom from slavery, serfdom, imprisonment, despotism
etc. The Preamble provides for liberty of thought, expression, belief, faith and
worship.
Equality
Equality means absence of privileges or discrimination against any section of
the society. The Preamble provides for equality of status and opportunity to all
the people of the country. The Constitution strives to provide social, economic
and political equality in the country.

Fraternity
Fraternity means feeling of brotherhood. The Preamble seeks to promote
fraternity among the people assuring the dignity of the individual and the unity
and integrity of the nation.

Amendment in the Preamble

In 1976, the Preamble was amended (only once till date) by the 42nd
Constitutional Amendment Act. Three new words ie , Socialist, Secular, and
Integrity were added to the Preamble. The Supreme Court held this
amendment valid.
Interpretation by the Supreme Court
The Preamble was added to the Constitution after the rest of the Constitution
was already enacted. The Supreme Court in the Berubari Union case (1960)
held that the Preamble is not a part of the Constitution. However, it recognised
that the Preamble could be used as a guiding principle if a term in any article of
the Constitution is ambiguous or has more than one meaning.
In Kesavanand Bharti case (1973), the Supreme Court overturned its earlier
decision and held that the Preamble is a part of the Constitution and can be
amended under Article 368 of the Constitution. Again, in LIC of India case, the
Supreme Court held that the Preamble is a part of the Constitution.

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Practise questions :
1. Which of the following (A) All religions are equal in the
statements is not true? eyes of the government
(A) The date of implementation of (B) Special importance to a religion
Indian Constitution is November related to minorities
26, 1949 (C) One religion is promoted by the
(B) The “Secular” word was added government
by the 42nd Constitution (D) None of the following
Amendment 4. Who among the following said
(C) The 42nd Constitutional that the preamble of the Indian
Amendment was done in 1976 Constitution is "The Key note of the
(D) Social, Economic and political Constitution"?
justice has been taken from the (A) Ernest Barker
Russian Revolution in the Indian (B) Jawaharlal Nehru
Constitution (C) Dr. Ambedkar
2. K.M. Munshi was related to...... (D) Nelson Mandela
(A) Constitution draft committee 5. "The language of Preamble"
(B) Preamble Committee of Indian constitution is taken from
(C) Public Accounts Committee the constitution of......
(D) None of the following (A) America
3. What is the true meaning of (B) Canada
"Secular"? (C) Australia
(D) Ireland

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Union and its Territory

ARTICLE 1 : NAME AND TERRITORY OF THE UNION
India, that is Bharat, shall be a Union of States. (2) The States and the
territories thereof shall be as specified in the First Schedule. (3) The territory of
India shall comprise – (a) the territories of the States; (b) the Union territories
specified in the First Schedule; and (c) such other territories as may be
acquired.

ARTICLE 2 : ADMISSION OR ESTABLISHMENT OF NEW STATES

Parliament may by law admit into the Union, or establish, new States on such
terms and conditions as it thinks fit.

ARTICLE 3:FORMATION OF NEW STATES AND ALTERATION OF AREAS,

BOUNDARIES OR NAMES OF EXISTING STATES
Parliament may by law – form a new State by separation of territory from any
State or by uniting two or more States or parts of States or by uniting any
territory to a part of any State; (b) increase the area of any State; (c) diminish
the area of any State; (d) alter the boundaries of any State; (e) alter the name
of any State:
Article 4 : Laws made under articles 2 and 3 to provide for the amendment of
the First and the Fourth Schedule and supplemental, incidental and
consequential matters.

Which one of the following was the mandate of the Dhar Commission (1948)
?( CAPF 2017)
(a) To study the classification of States
(b) To recommend whether the States can be re-organized on linguistic basis
(c) To study the Centre-State relations
(d) To examine whether Madras city can be transferred to Andhra
state reorganisation committees: dhar commission there was a demand from
different regions, mainly south india, for reorganization of states on linguistic
basis. consequently, in june 1948, the government of india appointed the
linguistic provinces commission under the chairmanship of s.k.dhar to study
the feasibility of organizing states on linguistic basis. the commission, later on,
rejected the linguistic basis of reorganization of states and recommended the
reorganization of states on the basis of following criterias :

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1. Geographical continuity 2.financial self-reliance 3. administrative viability

4. potential for development jvp committee (jawaharlal nehru, vallahbhai
patel, pattabhi sitaramayya) the report submitted by dhar commission led to
much resentment among the people. as a result, in the jaipur session of 1948,
congress appointed a three member committee to consider the
recommendations of dhar commission. this committee also rejected the
linguistic factor of reorganization of the states. this committee recommended
the reorganization of states on the basis of security, unity and economic
prosperity of the nation. however, the indian government was forced by the
death of potti sriramulu to create the first linguistic state, known as andhra
state, by separating the telugu speaking areas from the madras state. potti
sriramulu became famous for undertaking the hunger strike in support of the
formation of an indian state for the telugu-speaking population of madras
presidency; he lost his life in the process. his death sparked public rioting, and
indian prime minister jawaharlal nehru declared the intent to form andhra
state three days following.
Fazal ali commission:
chairman : Fazl Ali members : Hridaynath Kunzru and k.m.panikkar after the
formation of Andhra Pradesh on the basis of linguistic factor, all hell break
loose.
• The other regions also started demanding for creation of separate states
on the basis of linguistic factor. the intense pressure forced the Indian
government to form a new commission to visit the whole question of
whether the linguistic basis of separation of states can be considered or
not.
• It led to the formation of Fazal Ali commission in December 1953. the
commission submitted its report on September 1955 and acknowledged
4 major factors to be taken into account in any scheme of reorganization
of states :
1. linguistic and cultural Homogenity
2. preservation and strengthening of the unity and security of the nation.
3. financial, economic and administrative considerations.
4. planning and promotion of the welfare of the people in each state as well as
of the nation as a whole.
it suggested the reorganization of 27 states of various categories into 16 states
and 3 union territories. the recommendations of the Fazal Ali commission was
accepted by the Indian government with minor modifications. as a result, the
state reorganization act of 1956 was passed by the parliament to give effect to
the recommendation of the commission. it led to the formation of 14 states
and 6 union territories on 1st november, 1956.

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States created after 1956 :

29 Indian states
Uttar Pradesh (1947): The state has been a confluence of culture, religions,
and art. Initially, the Oudh and Agra regions were united by the British
government, calling it the United Provinces. In 1950, it was renamed Uttar
Pradesh.
West Bengal (1947): The victory of the Battle of Plassey (1757) acted as the
gateway into India for Britishers. The battle also secured their entry into
Bengal, which was their administrative capital for a long time. In 1905, Bengal
was partitioned into East and West Bengal. However, by 1911, it was reunited.
The infamous Hindu-Muslim riots in the run-up to partition ended up
hastening the final division of Bengal.
Rajasthan (1948): Known as the Rajputana under British India, the princely
states in the area came together to form the United State of Rajasthan, in
1948. In May 1949, it was renamed United state of Greater Rajasthan and
finally, in 1956, the state of Rajasthan was born.
Jammu and Kashmir (1948): In October 1947, the Dogra King Maharaja Hari
Singh signed the Instrument of Accession to India. It was in 1956 that J&K
completed the process of merging with the Indian Union.
Assam (1950): Ruled by the Ahoms for over six hundred years, Assam became
a British protectorate in 1826 when the Burmese handed the territory to the
British. Assam was separated from Bengal in 1874. In 1912, it was reformed as
Assam province under British rule. Greater Assam included Meghalaya,
Nagaland, and Mizoram, amongst other areas, before they ultimately became
independent states in the later years.
Odisha (1950): Orissa was made a separate province in 1936 by the British and
in 1950 became a state. It was renamed Odisha in 2011.

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Bihar (1950): Officially formed as a state in 1950, Bihar has remained a

politically important state.
Tamil Nadu (1950): Erstwhile the Madras Presidency, was reorganized as a
state in 1950 and renamed Tamil Nadu in 1969.
Tripura (1972): Surrounded by Bangladesh on three sides, Tripura remained a
Union Territory till 1972, when it became an independent state.
Madhya Pradesh (1956): What was Central Provinces and Berar under British
India, merged with Madhya Bharat, Vindhya Pradesh, and Bhopal to form
India’s second largest state in 1956.
Kerala (1956): Former states of Travancore, Cochin, and Malabar were merged
together to form the state of Kerala in 1956.
Karnataka (1956): Mysore state was created by bringing together all Kannada
speaking regions together in 1956. The state was renamed Karnataka in 1973.
Andhra Pradesh (1956): Post-independence, in 1953, all Telugu speaking
regions were separated from the erstwhile Madras Presidency and unified as
Andhra Pradesh. In 1956, at the time of reorganization of states, Hyderabad
state was merged with Andhra Pradesh and the state officially came into
existence. The formation of Andhra Pradesh acted akin to the opening of the
Pandora’s box, leading to consequent creation of other states based on
linguistic lines. Post formation of Telangana in 2014, Amravati is the new
capital of Andhra Pradesh.
Maharashtra (1960): At the time of independence, Bombay Province covered a
large part of western India. In 1960, the states of Maharashtra and Gujarat
were formed as independent states. Some southern districts of the Bombay
state were also transferred to the then existing Mysore.
Gujarat (1960): Part of Bombay Presidency in British India, Gujarat was
separated and formed as an independent state in 1960.
Nagaland (1963): In 1957, the Naga Hills Tuensang Area was brought under
central control, with its administration from Assam. Following increasing calls
and protests for a separate identity to preserve its unique culture, the region
was separated from Assam and the state of Nagaland was formed in 1963 with
Kohima as its capital.
Punjab (1966): Post independence, the princely state of Patiala was merged
with eight other similar states to form Patiala and East Punjab States Union
(PEPSU). In 1956, this region was merged with the rest of Punjab and in 1966,
Haryana was separated as an independent state. Both Punjab and Haryana
continue to share Chandigarh as their capital, which is a Union Territory.
Haryana (1966): Created from Punjab in 1966.

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Himachal Pradesh (1971): Himachal Pradesh was created with the merger of
30 princely states in 1950, and in 1956, was declared a Union Territory. It
became an independent state in 1971 with Shimla as its capital.
Manipur (1972): While Manipur gained independence along with India in 1947,
it joined the Indian Union as a C state in 1950. In 1956, it became a Union
Territory and became an independent state in 1972, with Imphal as its capital.
Meghalaya (1972): The northeastern state of Meghalaya was formed as an
autonomous state within Assam in 1970. It became a separate state in 1972
with Shillong as its capital.
Sikkim (1975): This peaceful state was an Indian protectorate until it merged
with the Indian Union as an independent state in 1975 with Gangtok as its
capital.

Q: Sikkim became the state of India according to which amendment(CAPF

2018)
a)32nd b)33rd c) 34th d) 35th

Goa (1987): This Portuguese colony was liberated in 1961 by the Indian Army
and taken in as a Union Territory, along with Daman and Diu. The state of Goa
was formed in 1987, while Daman and Diu continue to remain as Union
Territories.
Arunachal Pradesh (1987): The strategically important state of Arunachal
Pradesh was part of the North East Frontier Agency (NEFA) and controlled by
the Central government but was part of the Assam region. In 1972, it became a
Union Territory and in 1987 became an independent state of India with
Itanagar as its capital.
Mizoram (1987): Initially a district of Assam, it was declared a Union Territory
in 1972. After the peace accord was signed with the Mizo National Front in
1986, Mizoram was declared an independent state in 1987 with Aizawl as its
capital.
Chhattisgarh (2000): The central Indian state of Chhattisgarh was carved out of
Madhya Pradesh and formed as an independent state in 2000 with Raipur as
its capital.
Jharkhand (2000): This tribal dominated state was carved out of Bihar and
made an independent state in 2000 with Ranchi as its capital.
Uttarakhand (2000): The hilly state of Uttaranchal was carved out of Uttar
Pradesh as an independent state in 2000 with Dehradun as its capital. In 2007,
the state was renamed Uttarakhand.
Telangana (2014): The state was carved out of Andhra Pradesh as an
independent state in 2014 with Hyderabad as its capital. The demand for an

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independent Telangana dates back to the time of reorganization of Indian

states in the post-independence period.
National Capital Territory of Delhi (1991): Delhi is neither a full-fledged State
nor a full-fledged Union Territory. It has a special status.
6 Union Territories
1956: Lakshadweep
1956: Andaman and Nicobar Islands
1961: Dadar and Nagar Haveli
1963: Puducherry (original name Pondicherry – under Indian control since
1954; renamed Puducherry in 2006)
1966: Chandigarh
1987: Daman and Diu (earlier part of Goa, Daman & Diu)

Questions:
1.which among the following state became the 22nd state in India
a) Himachal Pradesh B) Sikkim c) Gujrat d) Delhi
2. Reorganisation of states according to article 3 of Indian Constitution is an
example of which type of bill
a) ordinary b) money c) constitutional amendment d) none
3. Sikkim became the state of India according to which amendment
a)32nd b)33rd c) 34th d) 35th
4. Fazal Ali committee was appointed in
a) 1952 b) 1953 c) 1954 d) 1956
5. Presently how many states in India have schedule 5 areas
a) 10 b)11 c) 12 d) 13

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Part 2: Citizenship:
It is regarded as the highest form of nationality. Part 2 of the constitution of
India deals with citizenship.
Methods of receiving citizenship in India:
By birth:
1) If you are born in India between 26th Jan 1950 and 1st July 1987, then you
will be deemed to be a citizen of India.
2)If born btw 1st July 1987 and 3rd Dec 2004 , either of your parents must be a
citizen of India.
3) If born after Dec 2004 then both of your parents must be citizens of India or
atleast one of them is not an illegal migrant to India.
By Descent :
1) If born outside the territory of India before 10th Dec 1992 then your father
has to be a citizen of india for you to acquire Indian Citizenship. If born after
10th Dec 1992 then either of your parents must be citizen at the time of your
birth.
2) Born after 3rd Dec 2004, then you must get enrolled of your birth in any of
the consulates there within one year, if not a permission from central govt can
forego the expiry limit.
By Registration :
1) a person of indian origin residing atleast for 7 years before applying for
registration.
2) a person of indian origin residing in anyplace of undivided india.
3) you are married to a citizen of india and residing for atleast 7 years before
registration.
4) If you are minor child of person who is residing in India
5) If your an adult and your parents re citizens of independent india and you
are residing for 1 complete years before application.
6) if you are residing overseas and holding overseas citizen of india for 5
years and residing in the territory of india for atleast 1 year before applying for
registration.
By Naturalization :
you can get a certificate of naturalisation from the central govt if you
fulfill following criteria :

1) you are not a citizen of any other nation and ready to renounce the
citizenship of anyother nation upon registration to India.

2) you have resided in india or in the service of Government of India or Partly

one and partly other throughout the period of 12months immediately

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preceeding the date of application;

3)and 14 years immediately preceeding the said 12 months you have either
resided in india or in the service of Government of India or partly resident of
other resulting in a total aggregate of 11 years,

4) you are of good character

5) adequate knowledge of the languages enshrined in the 8th schedule of the

Indian constitution.

Domicile : Domicile in India is considered an essential requirement for

acquiring the status of Indian citizenship. But the term 'domicile' is not defined
in the constitution anywhere. The domicile of a person is in that country in
which he either has or is deemed by law to have his permanent house. There is
distinction between domicile and residence. Residence alone in a place is not
sufficient to constitute the domicile. It must be accompanied by the intention
to make it his permanent home.
Every person having domicile in India at the commencement of the
constitution and fulfilling the following condition is the citizen of India.
Articles enshrined in the constitution:
Article 5:citizenship of india by birth.
At the commencement of this Constitution, every person who has his domicile
in the territory of India and—
• who was born in the territory of India; or
• either of whose parents was born in the territory of India; or
who has been ordinarily resident in the territory of India for not less than five
years immediately preceding such commencement, shall be a citizen of India.

Article 6:rights of citizens migrating from Pakistan to India.

Notwithstanding anything in article 5, a person who has migrated to the
territory of India from the territory now included in Pakistan shall be deemed
to be a citizen of India at the commencement of this Constitution if—
he or either of his parents or any of his grandparents was born in India as
defined in the Government of India Act, 1935 (as originally enacted); and
(i) in the case where such person has so migrated before the nineteenth day of
July, 1948, he has been ordinarily resident in the territory of India since the
date of his migration, or (ii) in the case where such person has so migrated on
or after the nineteenth day of July, 1948, he has been registered as a citizen of
India by an officer appointed in that behalf by the Government of the

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Dominion of India on an application made by him therefor to such officer

before the commencement of this Constitution in the form and manner
prescribed by that Government.

Article 7: Rights of citizenship of certain migrants to Pakistan.

Notwithstanding anything in articles 5 and 6, a person who has after the first
day of March, 1947, migrated from the territory of India to the territory now
included in Pakistan shall not be deemed to be a citizen of India: Provided that
nothing in this article shall apply to a person who, after having so migrated to
the territory now included in Pakistan, has returned to the territory of India
under a permit for resettlement or permanent return issued by or under the
authority of any law and every such person shall for the purposes of clause
(b) of article 6 be deemed to have migrated to the territory of India after the
nineteenth day of July, 1948.

Article 8: Rights of citizenship of certain persons of Indian origin residing

outside India.
Not withstanding anything in article 5, any person who or either of whose
parents or any of whose grandparents was born in India as defined in the
Government of India Act, 1935 (as originally enacted), and who is ordinarily
residing in any country outside India as so defined shall be deemed to be a
citizen of India if he has been registered as a citizen of India by the diplomatic
or consular representative of India in the country where he is for the time
being residing on an application made by him therefor to such diplomatic or
consular representative, whether before or after the commencement of this
Constitution, in the form and manner prescribed by the Government of the
Dominion of India or the Government of India.

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Indian diaspora can be categorised into three :

Article 9 : Persons voluntarily acquiring citizenship of a foreign State not to be

citizens
No person shall be a citizen of India by virtue of article 5, or be deemed to be a
citizen of India by virtue of article 6 or article 8, if he has voluntarily acquired
the citizenship of any foreign State.
Article 10: Continuance of the rights of citizenship. It also describes the
citizenship act.
Every person who is or is deemed to be a citizen of India under any of the
foregoing provisions of this Part shall, subject to the provisions of any law that
may be made by Parliament, continue to be such citizen.
Article 11 : Parliament to regulate the right of citizenship by law.
Nothing in the foregoing provisions of this Part shall derogate from the power
of Parliament to make any provision with respect to the acquisition and
termination of citizenship and all other matters relating to citizenship.
Note: Citizenship act was originally enacted in the year 1955. It was amended
so far.
Citizenship act amendment act .1957
Citizenship amendment act 1960
Citizenship act amendment 1985
Citizenship act amendment 1986
Citizenship act amendment 1992

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Citizenship act amendment 2003

Citizenship act amendment 2005
Citizenship act amendment 2015.
Ministry of Overseas Indian Affairs
• The Ministry of Overseas Indian Affairs (MOIA) aims to settle all the
disputes of NRIs in abroad. Setup in May 2004 as the Ministry of
NonResident Indians’ Affairs, it was renamed as the Ministry of Overseas
Indian Affairs (MOIA) in 2004.
• Driven by a mission of development through coalitions in a world without
borders, MOIA seeks to connect the Indian Diaspora community with its
motherland. Positioned as a ‘Services’ Ministry, it provides information,
partnerships and facilitations for all matters related to Overseas Indians
(comprising Persons of Indian Origin (PIOs) and NonResident Indians (NRIs) .
The Ministry is headed by a Cabinet Minister. It has four functional service
divisions to handle its diverse scope of services:
• Diaspora Services
• Financial Services
• Emigration Services
• Management Services
• The Ministry focuses on developing networks with and amongst Overseas
Indians with the intent of building partnerships with the Diaspora. Besides
dealing with all matters relating to Overseas Indians, the Ministry is
engaged in several initiatives with them for the promotion of trade and
investment, emigration, education, culture, health and science &
technology
Assam citizenship issue?
• After the agitation held in Assam ‘foreigners’, and the subsequent
Assam Accord signed in 1985 between the government of India and the
All Assam Students Union, the Citizenship Act, 1955, was amended.
• All Indian-origin people, including from Bangladesh who entered Assam
before January 1, 1966, were deemed as citizens.
• The one who came between January 1, 1966 and March 25, 1971 could
get citizenship after registering themselves and living for 10 years.
• The one who entered after March 25, 1971 were to be deported.

The National Register of Citizens (NRC) is the list of Indian citizens residing in
Assam. It was prepared in 1951, following the census of 1951. Since the
boundary lines were defined. It didn’t create problems.

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The NRC is a registry of all the state's legal residents. It was essentially a
serialized list of houses and property holdings in each Indian village with their
names and the number of people residing in them. The government then
ordered the records for the Deputy Commissioners and Sub-Divisional Officers
offices to be stored.

Later the data were handed collected in 1960s by NRC data was handed over the
police. However, by the 1980s, demands slowly began to rise about the updating
in the state Assam.

The primary reason was that native began to feel that illegal foreigners were
dominating their land, leading to movement in Assam in 1980. The All Assam
Students’ Union (AASU) and Assam Gana Parishad submitted a memorandum to
the Centre, seeking the ‘updation’ of the list. It was essentially a serialized list of
houses and land holdings in every Indian village, with the number of people
living there, along with their names. The government then ordered the records
for the Deputy Commissioners and Sub-Divisional Officers offices to be
stored.The reason behind their move was that to preserve the indigenous
culture of Assam from illegal immigrants from Bangladesh.

Practise questions :
1. Consider the following b. 1 & 4 only
statements.
c. 2, 3 & 4 only
1. The provisions relating to
d. All of the above
citizenship are contained in
2. Which of the statement is
Articles 5 to 11 in Part II of the
incorrect.
constitution of India.
a. The facility of overseas citizenship
2. The constitution of India provided
of India was made available to all
a single citizenship for the entire
the person of Indian origin of any
country.
country.
3. Since 2003, dual citizenship is
b. Dual citizens do not have voting
allowed by Indian law that is called
rights.
overseas citizens of India.
c. Neither can they be elected to
4. A non-resident Indian is a citizen of
Public Office nor they eligible for
India but has not resided in India
defence job.
for the required number of days.
Which of the above statement is / d. Dual citizens do not required visa
are correct. for travel to India
3. Consider the following
a. 1 only
statements.

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1. Those born in India on or after C: USA

26th January 1950 but before 1st D: China
July 1967 are citizens of India by 6. Who has the power to regulate
birth, irrespective of the the right of citizenship in India.
nationality of their parents. A: Union Cabinet;
2. Those born in India on or after July B: The Parliament;
1987, are considered citizens of C: Supreme Court;
India only if either of their parents D: High Court;
is a citizen of India at the time of 7. In the constitution of India,
their birth. Article 5 to 11 deals with –
A: Union and its territory;
3. Those born outside India on or
B: citizenship
after 26th January 1950 but before
C: Fundamental duties;
10th December 1992 are citizens
D: Fundamental rights
of India by descent, if their father
8. According to Indian
was a citizen of India at the time of
constitution, Domicile means.
their birth.
A: Temporary Home;
4. Any question related with B: Permanent Home;
citizenship, shall be determined by C: Home in foreign country
the concern state in which the D: Home in friend country;
citizen have its voter ID. 9. By the process of naturalisation
Which of the above statement is / which one among the following
are correct. can acquire the citizenship of
a. 1 only India.
b. 2 only A: Foreigner
B: Non Resident India
c. 3 only
C: Overseas Indian;
d. 4 only D: All of the above;
4. When the citizenship of a person 10 :Which of the following is/are
in India can not be terminated? true regarding Person of Indian
A: At the time of emergency in Origin (PIO) and Overseas Citizen of
country or state. India (OCI)?
B: At the time of war;
C: At election time; 1) OCI is entitled to lifelong visas
D: None of above; free travel to India whereas for PIO
5. Dual citizenship is the feature card holder, it is for 15 years.
of which country? 2) PIO card holder is required to
A: India register with local police authority
B: Russia for stay exceeding 180 days in India
on any single visit whereas OCI is

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exempted from registration with 1. a. Only 1

police authority for any length of b. Only 2
stay in India. c. Both 1 and 2
d. Neither 1 nor 2

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Fundamental Rights:
Rights are claims that are essential for the existence and development of
individuals. In that sense there will a long list of rights. Whereas all these are
recognized by the society, some of the most important rights are recognized by
the State and enshrined in the Constitution. Such rights are called fundamental
rights. These rights are fundamental because of two reasons. First, these are
mentioned in the Constitution which guarantees them and the second, these
are justiciable, i.e. enforceable through courts. Being justiciable means that in
case of their violation, the individual can approach courts for their protection. If
a government enacts a law that restricts any of these rights, it will be declared
invalid by courts. Such rights are provided in Part III of the Indian Constitution.

Various Type of Rights

• Natural Rights These are available to the individual by the virtue of his birth
as a human being. They are supposed to be given by nature or GOD to human
beings and thereby, are intrinsic to human lives. They are not conferred by
law but only enforced by law. For example, Right to Life.
• Human Rights: These are supposed to be a secular version of natural rights.
These are available to all individuals by virtue of being born as human beings.
In that sense, these are supposed to be universal in nature regardless of
nationality, race, religion, gender etc.
• Civil Rights : These are those rights, which are available to the citizens of a
country and are conferred to them either by law of the land or the
constitution itself. For example, Right to Freedom
• Legal rights These are those civil rights, which are conferred by the statutes
enacted by the legislature. Constitutional Rights These are the rights
enshrined in the constitution. Some are given special status like Fundamental
Rights, while others enjoy ordinary status only.

The Constitution guarantees six fundamental rights to Indian citizens as follows:

• Right to equality(article 14 to 18)

• Right to freedom(article 19 to 22)
• Right against exploitation,(article 23 to 24)
• Right to freedom of religion(article 25 to 28)
• Cultural and educational rights,(article 29 to 30)
• Right to property(article 31- Repealed)
• Right to constitutional remedies. (article 32)

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Article 12 : In this Part, unless the context otherwise requires, “the State’’
includes the Government and Parliament of India and the Government and
the Legislature of each of the States and all local or other authorities within
the territory of India or under the control of the Government of India.

Note: under article 12 the state means a nation i.e India. To have that
recognition it must also have the character of sovereignity.

( Source: Wikipedia)

Article 13:

Definition of law:

(1) All laws in force in the territory of India immediately before the
commencement of this Constitution, in so far as they are inconsistent with the
provisions of this Part, shall, to the extent of such inconsistency, be void.

(2) The State shall not make any law which takes away or abridges the rights
conferred by this Part and any law made in contravention of this clause shall, to
the extent of the contravention, be void.

Note: “law” includes any Ordinance, order, bye-law, rule, regulation,

notification, custom or usage having in the territory of India the force of law;

“laws in force” includes laws passed or made by a Legislature or other

competent authority in the territory of India before the commencement of this
Constitution and not previously repealed, notwithstanding that any such law or
any part thereof may not be then in operation either at all or in particular areas.

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Article 14 : Equality before law or Equal protection of law.

The concept of equality before law cenotes that everyone irrespective are
considered equal before law which also describes the similar concept in Britain.

The term equal protection of law describes it’s the responsibility of judiciary in
India to protect the law.

The State shall not deny to any person equality before the law or the equal
protection of the laws within the territory of India Prohibition of discrimination
on grounds of religion, race, caste, sex or place of birth.

The rule of law, at least historically, has been closely related to A.V. Dicey.
Dicey’s perception of the rule of law was introduced in his book Introduction to
the Study of the Law of the Constitution. According to Dicey, in line with the
concept of Parliamentary Sovereignty, the rule of law is one of the twin pillars
of the British Constitution. There are 3 conceptions of the rule of law which had
been highlighted by Dicey.

THE DICEY principles have three concepts mentioned in it:

no presence of eternal powers that is irrespective everyone can be punished in

India.

Equality before law.

Rights of an individual has been given the highest priority meaning thereby
courts need to protect the rights which are enforceable in nature.

Note :
• President or Governor of state is not answerable to court of law for
exercising their executive powers. According to article 361 they cannot
be punished while in office.
• No criminal proceeding against President or Governor of state can be
instituted or continued during their tenure in office.
• No civil proceeding in which there is a claim of compensation can be
instituted against President or Governor of state except after the expiry
of 2 month notice issued against them.
• Under international law, foreign diplomats who are on a visit to India or
posted here, and leaders or heads of state on their official visit are not
answerable in the local courts.

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Article 15 : discrimination on the grounds of caste race region religion and

gender has to be prohibited.
Note : the caste based reservations in India is not considered against
article 15 .
The Mandal Commission in India was established in 1979 by the Janata
Party government under Prime Minister Morarji Desai with a mandate to
"identify the socially or educationally backward."
It was headed by Indian parliamentarian Bindheshwari Prasad Mandal to
consider the question of seat reservations and quotas for people to
redress caste discrimination, and used eleven social, economic, and
educational indicators to determine "backwardness." In 1980, the
commission's report affirmed the affirmative action practice under Indian
law whereby members of lower castes (known as Other Backward Classes
and Scheduled Castes and Tribes) were given exclusive access to a certain
portion of government jobs and slots in public universities, and
recommended changes to these quotas, increasing them by 27% to 49.5%.
Note : The population of OBCs, both Hindu and non-Hindu, is around 52%
of the total population of India. Accordingly 52% of all post under the
Central Government should be reserved for them, but this provision may
go against the law laid down in a number of Supreme Court judgments
wherein it has been held that the total quantum of reservations under
Articles 15(4) and 16(4) of the Constitution should be below 50%. In view
of this the proposed reservation for OBCs would have to be pegged at a
figure which, when added to 22.5% of SCs and STs, remain below 50%. In
view of this legal constrain, the commission is obliged to recommend a
reservation of 27% only, even though their population us almost twice this
figure.
Article 16 : Equality of opportunity in matters of public employment
There shall be equality of opportunity for all citizens in matters relating to
employment or appointment to any office under the State. No citizen shall,
on grounds only of religion, race, caste, sex, descent, place of birth,
residence or any of them, be ineligible for, or discriminated against in
respect of, any employment or office under the State
Article 16(4) says that Nothing in this article shall prevent the State from
making any provision for the reservation of appointments or posts in
favour of any backward class of citizens which, in the opinion of the State,
is not adequately represented in the services under the State.
10% reservation to economically weaker sections in general category:
124th amendment bill and 103rd constitutional amendment act .

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It provides for the 10% reservation to economically weaker section

belonging to general category who are fulfilling the following criteria:
People who have an annual income of less than Rs.8 lakhs, or
People who own less than five acres of farm land, or
People who have a house lesser than 1,000 sq feet in a town (or 100 sq yard in
a notified municipal area).

(Source : THE HINDU)

Aricle 17: “Untouchability” is abolished and its practice in any form is forbidden.
The enforcement of any disability arising out of “Untouchability” shall be an
offence punishable in accordance with law.
Article 18 : abolition of titles except the military and academic titles.
No citizen of India shall accept any title from any foreign State
No person who is not a citizen of India shall, while he holds any office of profit
or trust under the State, accept without the consent of the President any title
from any foreign State.
No person holding any office of profit or trust under the State shall, without the
consent of the President, accept any present, emolument, or office of any kind
from or under any foreign State.

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Note: In india , there is no space for artificial distinctions among the same
society. Titles such as Rai Bahadur, Sawai, Rai Sahab, Zamindar, taluqdar etc are
abolished by the constitution.

Right to freedom : ( article 19 to 22)

Article 19: Protection of certain rights regarding freedom of speech, etc.
All citizens shall have the right—
to freedom of speech and expression;
to assemble peaceably and without arms;
to form associations or unions;
to move freely throughout the territory of India;
to reside and settle in any part of the territory of India;
f) to possess any occupation of his or her own choice.
A.K. Gopalan Case (1950): (Interpreted key Fundamental Rights including
Article 19 and 21)
This is a significant decision of the Supreme Court because it represented the
first case where the court meaningfully examined and interpreted key
fundamental rights enlisted in the constitution including article 19 and 21. The
contention was whether, under the writ of habeas corpus and the provisions of
the preventive detention act, there was a violation of the fundamental rights
entitled in article 13, 19, 21 and 22.
The Supreme Court restricted the scope of fundamental rights by reading them
in isolation of article 21 and 22 which provided guidelines for preventive
detention. The Supreme Court iterated that the term ‘due process’ prevented
the courts from engaging in substantive due process analysis in determining the
reasonableness of the level of the process provided by the Legislature.

Article 20 : No person shall be convicted of any offence except for violation of a

law in force at the time of the commission of the Act charged as an offence, nor
be subjected to a penalty greater than that which might have been inflicted
under the law in force at the time of the commission of the offence.
No person shall be given more punishment than what is deemed (no ex post
facto) No person shall be prosecuted and punished for the same offence more
than once.(no double jeopardy)
No person accused of any offence shall be compelled to be a witness against
himself.(no self incrimation).

Article 21 : No person shall be deprived of his life or personal liberty except

according to procedure established by law.

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Everyone has the right to life, liberty and the security of person.’ The right to life
is undoubtedly the most fundamental of all rights. All other rights add quality to
the life in question and depend on the pre-existence of life itself for their
operation. As human rights can only attach to living beings, one might expect
the right to life itself to be in some sense primary, since none of the other rights
would have any value or utility without it. There would have been no
Fundamental Rights worth mentioning if Article 21 had been interpreted in its
original sense. This Section will examine the right to life as interpreted and
applied by the Supreme Court of India.

Article 21 of the Constitution of India, 1950 provides that, “No person shall be
deprived of his life or personal liberty except according to procedure established
by law.” ‘Life’ in Article 21 of the Constitution is not merely the physical act of
breathing. It does not connote mere animal existence or continued drudgery
through life. It has a much wider meaning which includes right to live with
human dignity, right to livelihood, right to health, right to pollution free air, etc.
Note : supreme court of india will again and again gives various interpretitions
to article 21 and describes various features which are the prat of article 21.
Right to die with dignity
Right to privacy
Right to health
Right to shelter
Right to sleep
Right to fresh air
Right to good environment free from pollution
Right to live with human dignity
Right to intercaste marriages.
Right to get insurance etc.
Menaka Gandhi case (1978): (Article 21)
The case is a landmark judgement which played the most significant role
towards the transformation of the judicial view on Article 21 of the
Constitution of India so as to imply many more fundamental rights from article
21. A writ petition was filed by Menaka Gandhi under Article 32 of the
Constitution in the Supreme Court.
The main issues of this case were whether the right to go abroad is a part of
the right to personal liberty under Article 21 and whether the Passport Act
prescribes a ‘procedure’ as required by Article 21 before depriving a person of
the right guaranteed under the said article.
A new doctrine of a post-decision theory was evolved and the most significant
interpretation was made on the interconnections between the three articles
14, 19 and 21.

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Article 21A : It provides for the free and compulsory education to the children
from 6 to 14 years of age.
This article was added by 86th constitutional amendment act of 2002.
Article 22 : Protection against arrest and detention in certain cases
No person who is arrested shall be detained in custody without being informed,
as soon as may be, of the grounds for such arrest nor shall he be denied the right
to consult, and to be defended by, a legal practitioner of his choice.
Every person who is arrested and detained in custody shall be produced before
the nearest magistrate within a period of twenty-four hours of such arrest
excluding the time necessary for the journey from the place of arrest to the court
of the magistrate and no such person shall be detained in custody beyond the
said period without the authority of a magistrate.
In india usually there are two types of cases into existence that is punitive cases
where a person is punished after arrest and preventive cases where a person is
protected after the arrest.
It can be made only on four grounds which are as follows –
security of state,
maintenance of public order,
maintenance of supplies and essential services and defence,
foreign affairs or security of India
Note : A person may be taken to preventive custody only for 3 months at the
first instance. If the period of detention is extended beyond 3 months, the case
must be referred to an Advisory Board. The period of detention may be
extended beyond 3 months, only on approval by the Advisory Board. the
detainee is entitled to know the grounds of his detention. The state however
may refuse to divulge the grounds of detention if it is in the public interest to
do so (which leaves scope for arbitrary action on the part of the authorities).
Opportunity for representation against detention: Thirdly, the detaining
authorities must give the detainee earliest opportunities for making
representation against the detention.

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Right against exploitation :

Article 23: Prohibition of traffic in human beings and forced labour.
Traffic in human beings and beggar and other similar forms of forced labour
are prohibited and any contravention of this provision shall be an offence
punishable in accordance with law.
Nothing in this article shall prevent the State from imposing compulsory
service for public purposes, and in imposing such service the State shall not
make any discrimination on grounds only of religion, race, caste or class or
any of them.

The traffic in human beings (prevention,prohibition and rehabilitation) bill2018

The Bill creates a law for investigation of all types of trafficking, and rescue,
protection and rehabilitation of trafficked victims.

The Bill provides for the establishment of investigation and rehabilitation

authorities at the district, state and national level. Anti-Trafficking Units will be
established to rescue victims and investigate cases of
trafficking. Rehabilitation Committees will provide care and rehabilitation to
the rescued victims.
Article 24: Prohibition of employment of children in factories, etc.

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No child below the age of fourteen years shall be employed to work in any
factory or mine or engaged in any other hazardous employment.
The child labour prohibition act was enacted in the year 1986 which baned
child labour in hazardous factories while the amendment in 22006 prohibits
the child labour everywhere.
Right to freedom of Religion : (25 to 28)
Article 25: Freedom of conscience and free profession, practice and
propagation of religion.
Subject to public order, morality and health and to the other provisions of this
Part, all persons are equally entitled to freedom of conscience and the right
freely to profess, practise and propagate religion.
Nothing in this article shall affect the operation of any existing law or prevent
the State from making any law that is with reference to regulating or
restricting any economic, financial, political or other secular activity which may
be associated with religious practice;
providing for social welfare and reform or the throwing open of Hindu religious
institutions of a public character to all classes and sections of Hindus.
Note : The wearing and carrying of kirpans shall be deemed to be included in
the profession of the Sikh religion. It also refers to Hindus shall be construed
as including a reference to persons professing the Sikh, Jaina or Buddhist
religion, and the reference to Hindu religious institutions shall be construed
accordingly.
Article 26 : Freedom to manage religious affairs
Subject to public order, morality and health, every religious denomination or
any section thereof shall have the right.
to establish and maintain institutions for religious and charitable purposes;
(b) to manage its own affairs in matters of religion;
(c) to own and acquire movable and immovable property; and
(d) to administer such property in accordance with law.
Kesvananda Bharti case (1973):
(The Basic Structure of the Indian Constitution)
The Supreme Court reviewed the decision in Golaknath Vs The state of Punjab
and considered the validity of the 24th, 25th, 26th and 29th Amendments. The
Court held that although no part of the constitution, including fundamental
rights, was beyond the amending power of Parliament, the "basic structure of
the Constitution could not be abrogated even by a constitutional amendment.
It is a landmark judgement of the Supreme Court of India, and is the basis in
Indian law for the exercise of the Indian judicial of the power to judicially
review, and strike down amendments to the Constitution of India passed by
the Indian Parliament which conflict with the Constitution's basic structure.

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The judgment also defined the extent to which the Indian Parliament could
restrict the right to property, in pursuit of land reform and the redistribution of
large landholdings to cultivators, overruling previous decisions that suggested
that the right to property could not be restricted.
The concept of basic structure was reaffirmed in Indira Nehru Gandhi v. Raj
Narayan case.
The Supreme Court applied the theory of basic structure and struck down
Clause(4) of article 329-A, which was inserted by the 39th Amendment in 1975
on the ground that it was beyond the amending power of the parliament as it
destroyed the basic feature of the constitution.
The amendment was made to the jurisdiction of all courts, including the
Supreme Court, over disputes relating to elections involving the Prime Minister
of India. Some basic features of the Constitution were listed in this case which
is considered as unamendable such as sovereign democratic republic status,
equality of status and opportunity of an individual, secularism and freedom of
conscience and religion and rule of law.

Article 27 : Freedom from payment of taxes for religious promotion.

No person shall be compelled to pay any taxes, the proceeds of which are
specifically appropriated in payment of expenses for the promotion or
maintenance of any particular religion or religious denomination.
Article 28 : Ban of religious preaching in the educational institutions.
No religious instruction shall be provided in any educational institution wholly
maintained out of State funds. nothing shall apply to an educational institution
which is administered by the State but has been established under any
endowment or trust which requires that religious instruction shall be imparted
in such institution. No person attending any educational institution recognised
by the State or receiving aid out of State funds shall be required to take part in
any religious instruction that may be imparted in such institution or to attend
any religious worship that may be conducted in such institution or in any
premises attached thereto unless such person or, if such person is a minor, his
guardian has given his consent thereto.
Cultural and educational rights : ( article 29 and article 30)
Article 29: Any section of the citizens residing in the territory of India or any
part thereof having a distinct language, script or culture of its own shall have
the right to conserve the same.
No citizen shall be denied admission into any educational institution
maintained by the State or receiving aid out of State funds on grounds only of
religion, race, caste, language or any of them.

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Article 30 : All minorities, whether based on religion or language, shall have

the right to establish and administer educational institutions of their choice. In
making any law providing for the compulsory acquisition of any property of an
educational institution established and administered by a minority referred to
in clause (1), the State shall ensure that the amount fixed by or determined
under such law for the acquisition of such property is such as would not
restrict or abrogate the right guaranteed under that clause.]
The State shall not, in granting aid to educational institutions, discriminate
against any educational institution on the ground that it is under the
management of a minority, whether based on religion or language.
Right to property: ( article 31): Right to Aquire property.
The right to property was initially present in Indian constitution under part III :
Fundamental right , Article 31 but it was abolished by 44th Amendment Act
,1978. Initially it was made a fundamental right so as to provide protection of
property and give legality of land to the people living in newly independent
India.
Now it is made a constitutional right under Article 300A which states that no
person can be deprived of his / her property except by authority of law.
Note : the need of the hour was to create a clarity between right to property
and development of the nation especially the infrastructure projects.

Article 31A : Saving of laws providing for acquisition of estates, etc.

• The acquisition by the State of any estate or of any rights therein or the
extinguishment or modification of any such rights
• the taking over of the management of any property by the State for a limited
period either in the public interest or in order to secure the proper
management of the property, or
• the amalgamation of two or more corporations either in the public interest
or in order to secure the proper management of any of the corporations,
• the extinguishment or modification of any rights of managing agents,
secretaries and treasurers, managing directors, directors or managers of
corporations, or of any voting rights of shareholders thereof, or
• the extinguishment or modification of any rights accruing by virtue of any
agreement, lease or licence for the purpose of searching for, or winning, any
mineral or mineral oil, or the premature termination or cancellation of any
such agreement, lease or licence,

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Article 31B: Validation of certain Acts and Regulations.

Without prejudice to the generality of the provisions contained in article 31A,
none of the Acts and Regulations specified in the Ninth Schedule nor any of the
provisions thereof shall be deemed to be void, or ever to have become void, on
the ground that such Act, Regulation or provision is inconsistent with, or takes
away or abridges any of the rights conferred by, any provisions of this Part, and
notwithstanding any judgment, decree or order of any court or Tribunal to the
contrary, each of the said Acts and Regulations shall, subject to the power of any
competent Legislature to repeal or amend it, continue in force.

Article 31C: Saving of laws giving effect to certain directive principles.

• Notwithstanding anything contained in article 13, no law giving effect to the
policy of the State towards securing 4 [all or any of the principles laid down
in Part IV] shall be deemed to be void on the ground that it is inconsistent
with, or takes away or abridges any of the rights conferred by 5 [article 14 or
article 19].
Shankari Prasad Case (1951): (can fundamental rights be amended )
The validity of the 1st constitutional amendment which added Article 31-A and
31-B of the Constitution was questioned. The first time, the question whether
fundamental rights can be amended under Article 368 came for consideration
of the Supreme Court.
The Supreme Court rejected the contention that in so far as the First
Amendment took away or abridged the fundamental rights conferred by Part
III it should not be upheld in the light of the provisions of article 13(2).

Therefore "law" in article 13 must be taken to mean rules or regulations made

in the exercise of ordinary legislative power and not amendments to the
Constitution made in the exercise of constituent power. Article 13 (2) did not
affect amendments made under article 368.

Right to constitutional remedies: Article 32Article 32 deals with the right to

move to the supreme court for the enforcement of Fundamental Rights
including the Writs of

• A writ of Habeas corpus requires that a person under arrest should be

brought before a judge or court. The underlying principle behind the writ of
Habeas Corpus is that a prisoner should be released from unlawful detention.
It originated from the English Legal system and has been adopted in many
nations since. Another form of the writ known as the Great Writ is also a
complex order submitted to the court, which demands the custodian or the

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keeper of the prisoner to provide sufficient proof or documents in support of

his or her authority of keeping the prisoner.
• The Writ of Mandamus is another important jurisdictional remedy in which
an order is passed on from a superior institution to a supplementary,
subordinate court or authority that prohibits the court or government official
from performing a certain act under the nature of statutory obligation. This
is basically issued in the form of command to either take a form of action or
refrain from doing it and is backed with legal rights and reasoning.
• Prohibition is writ issued by the high court or the Supreme Court to the local
courts to prevent them from proceeding with a case which does not fall
under its jurisdiction.
• Certiorari is a writ issued to lower courts, when these courts have gone
beyond the scope of their jurisdictions.
• Quo Warranty writ is issued to a person who has been wrongly appointed in
the office of authority. This obligates the accused of presenting whatever
evidence he or she has to the court to support the reasons for occupying a
post.

Article 33: Power of Parliament to modify the rights conferred by this Part in
their application to Forces, etc.

Parliament may, by law, determine to what extent any of the rights conferred
by this Part shall, in their application to,— the members of the Armed Forces; or
the members of the Forces charged with the maintenance of public order; or
persons employed in any bureau or other organisation established by the State
for purposes of intelligence or counter intelligence; or person employed in, or in
connection with, the telecommunication systems set up for the purposes of any
Force, bureau or organisation referred to in clauses (a) to (c),

Article 34: Restriction on rights conferred by this Part while martial law is in
force in any area

Notwithstanding anything in the foregoing provisions of this Part, Parliament

may by law indemnify any person in the service of the Union or of a State or any
other person in respect of any act done by him in connection with the
maintenance or restoration of order in any area within the territory of India
where martial law was in force or validate any sentence passed, punishment
inflicted, forfeiture ordered or other act done under martial law in such area.

Note: The Armed Forces (Special Powers) Act-(AFSPA) was passed on September
11, 1958 to help the army in tackling the disturbed areas of the Northeast India.

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AFSPA was implemented in the Kashmir amid increase in the insurgency in 1990.
Presently, AFSPA, 1958 is operational in entire States of Assam, Nagaland,
Manipur (except Imphal Municipal area), three districts namely Tirap, Changlang
and Longding of Arunachal Pradesh and the areas falling within the jurisdiction
of the 8 police stations in the districts of Arunachal Pradesh, bordering the State
of Assam.

The powers of AFSPA are:

• Any suspect can be arrested without a warrant.
• Armed forces can search any house without any warrant and required force
can be used to search it.
• Under this law the armed forces have the authority to prohibit gathering of
five or more persons in an area.
• In some cases the forces can open fire on the disturbing factors after giving
due warning if they found any suspicious person.
• If a person is repeated offender and tries to disturb the peace of the area,
then armed forces are entitled to use force till his death.
• If the Armed Forces suspect that any militant or offender is hiding in
any house/building then the site or structure can be destroyed by the
forces.
• Any Vehicle can be stopped and searched.
• Even in the case of wrongful action by the armed forces, legal action is not
taken against them
Article 35: Legislation to give effect to the provisions of this Part.
Only the parliament have the power to make any type of changes regarding the
fundamental rights and give them the possible effect.

HUMAN RIGHTS:

• Human rights are those which are declared by united nations organization
through a charter.
• Every human being in the world must be respected with dignity and honour.
• He/she must not be discriminated based on caste race region religion and
gender.
Human Rights Commission:
• The United Nations has been working to protect the basic human rights of
people and in this effort, they have encouraged their member nations to do
the same.

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• In 1993, the Government of India passed an act of legislature to protect

human rights. A commission for human rights was set up under this law called
the National Human Rights Commission (NHRC).
• The commission has been given powers of a civil court extendable to the
entire country.
• The Government has also established other institutions to monitor and
inquire into situations in which rights are violated.
• Thus, we have different institutions such as the National Commission for
Women,
• National Commission for Protection of Child Rights,
• National Minority Commission and State Human Rights Commissions.
• NHRC is vested with the authority to make an inquiry, suo motu (on its own
initiative), or on a petition presented to it by a victim or any person on his /
her behalf.
• It intervenes in any proceeding involving any allegation of violation of human
rights pending before a court with approval of such court.
• It also makes and reviews the safeguards provided by or
• under the constitution for the protection of human rights and recommends
measures for their effective implementation.

NOTE: the first chairman of national human rights commission is Ranganath

Misra and the present chairman of NHRC is HL Dattu.

Questions :
Which of the following are covered
under the Right to Freedom?
1. Freedom of speech and expression.
2. Freedom to form associations
3. Freedom to move freely and reside in any
part of the country
4. Freedom to choose profession occupation
and business.
Select the correct answer using the code given
below:
(a) 1 and 2 only
(b) 2 and 3 only
(c) 1, 3, and 4 only
(d) 1, 2, 3 and 4
2. Which of the following writs can be issued to force a public authority to
perform a public or statutory duty?

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a) Mandamus
b) Habeas Corpus
c) Certiorari
d) Quo Warranto
3. Which of the following is difference between fundamental rights and rights
secured by other provisions of constitution?
1.Fundamental rights are immune from constitutional amendments.
2.If the rights follow from other provision of constitution, other aggrieved
person may have his relief by ordinary suit only
Select the correct answer from following codes
a.Only 1
b.Only 2
c.Both 1 and 2
d.Neither 1 nor 2
4. Consider the following statements regarding fundamental rights
1.Some are not self executory.
2.Fundamental rights are protected against invasion by legislature only.
Select the correct statements from the following codes
a.Only 1
b.Only 2
c.Both 1 and 2
d.Neither 1 nor 2
5. Which of the following are inferred from the rule of law?
1. Equality and equal protection of law
2. Separation of powers
Select the correct statements from the following codes
a.Only 1
b.Only 2
c.Both 1 and 2
d.Neither 1 nor 2
6. Special provisions for women are made in which of the following?
1.Fundamental duties
2.Fundamental rights
3.DPSP
4.11th and 12th schedule
Select the correct statements from the following codes
a.Only 2 and 4
b.Only 1 and 2
c.Only 1 and 3
d.1,2, 3 and 4

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7. Which of the following amendment Act makes the right to education as

the fundamental right to all the children under the age of 6-14 years by
inserting Article 21A to the constitution.
(a) 87th amendment, 2003
(b) 86th amendment, 2002
(c) 88th Amendment, 2003
(d) 89th Amendment, 2003
8. Right to Equality under Indian constitution refers to which of the following
conditions?
a) Opportunity to develop personality
b) No discrimination on grounds of religion, race, caste, sex, place of birth etc
c) Freedom from arbitrary arrest
d) Freedom granted to minority institutions
9. which among the following articles describes the abolition of untouchability
a) 16 b) 18 c) 17 d) 19
10. to enforce the fundamental rights who among the following can issue writs
a) supreme court
b) high court
c) district court
d) both a and b

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PART 4: Directive principles of state policy

The provisions contained in this Part cannot be enforced by any court, but
these principles are fundamental in the governance of the country and it shall
be the duty of the State to apply these principles in making laws.
The concept of Directive Principles of State Policy was borrowed from the Irish
Constitution. While most of the Fundamental Rights are negative obligations
on the state, DPSPs are positive obligations on the state, though not
enforceable in a court of law.
It denotes the ideals that the State should keep in mind while formulating
policies and enacting laws.
It resembles the ‘Instrument of Instructions’ enumerated in the Government of
India Act of 1935. In the words of Dr B.R Ambedkar, the Directive Principles are
like the instrument of instructions, which were issued to the Governor-General
and to the Governors of the colonies of India by the British Government under
the Government of India Act of 1935. What is called Directive Principles is
merely another name for the instrument of instructions. The only difference is
that they are instructions to the legislature and the executive’. It constitutes a
very comprehensive economic, social and political programme for a modern
democratic State which aimed at realising the high ideals of justice, liberty,
equality and fraternity as outlined in the Preamble to the Constitution. They
embody the concept of a ‘welfare state’ which was absent during the colonial
era.

Article 36 : definition of state

It has the same meaning like that of article 12 in fundamental rights.

Article 37: Application of the principles contained in this Part.

The provisions contained in this Part shall not be enforceable by any court, but
the principles therein laid down are nevertheless fundamental in the
governance of the country and it shall be the duty of the State to apply these
principles in making laws.

Three political experts namely MP SING, MP JAIN and D.K.JISHI have bifurcated
DPSP into three forms.

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Socialist principles: the word socialist indicates the welfare of all in the society
irrespective of caste creed race region and religion.

The modern political system, all the world over, is fashionably enamoured of
two political ideologies — Socialism and Secularism, which are complementary
to each other and have taken different shapes even in the fascist, totalitarian
and dictatorial regimes. These two political concepts are so significant and
imperative for the modern democratic polity that the Indian Constitution
despite being permeated with the spirit of Socialism and Secularism,
necessitated the 42nd amendment in 1976 to get the words like ‘Socialist’ and
‘Secular’ inserted in the Preamble of the Constitution as the basic philosophy or
postulates of the Indian polity. These basic constitutional concepts were added
to give economic content to justice, equality and fraternity and to affirm the
resolve of non-discrimination on grounds of religion.

Thus both socialism and secularism are acknowledged as the cherished goal or
professed aim of the Indian political system. Our goal is to achieve a socialistic
pattern of society in India. Socialism lays emphasis on the welfare of the people.
It seeks to give equality to the people and tries to remove exploitation of one
class by the other and ensures economic and political equality to all. It has been
held that not only political but economic and social democracies are equally
essential for the development of the country. Social and economic justices are
pillars of Socialism. That is why; the framers of our Constitution have prescribed
these fundamental principles in the shape of Directive Principles of State Policy
in part IV of our Constitution to establish a welfare state based on the principles
of Socialism.

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Article 38 : State to secure a social order for the promotion of welfare of the
people.

The State shall strive to promote the welfare of the people by securing and
protecting as effectively as it may a social order in which justice, social, economic
and political, shall inform all the institutions of the national life.

The State shall, in particular, strive to minimise the inequalities in income, and
endeavour to eliminate inequalities in status, facilities and opportunities, not
only amongst individuals but also amongst groups of people residing in different
areas or engaged in different vocations.

Article 39 : Certain principles of policy to be followed by the State.

It provides for

• that the citizens, men and women equally, have the right to an adequate
means of livelihood;
• that the ownership and control of the material resources of the community
are so distributed as best to subserve the common good;
• that the operation of the economic system does not result in the
concentration of wealth and means of production to the common detriment;
• that there is equal pay for equal work for both men and women;
• that the health and strength of workers, men and women, and the tender
age of children are not abused and that citizens are not forced by economic
necessity to enter avocations unsuited to their age or strength;
• that children are given opportunities and facilities to develop in a healthy
manner and in conditions of freedom and dignity and that childhood and
youth are protected against exploitation and against moral and material
abandonment.

Article 39A : The State shall secure that the operation of the legal system
promotes justice, on a basis of equal opportunity, and shall, in particular,
provide free legal aid, by suitable legislation or schemes or in any other way, to
ensure that opportunities for securing justice are not denied to any citizen by
reason of economic or other disabilities.

Article 41 : Right to work, to education and to public assistance in certain cases

The State shall, within the limits of its economic capacity and development,
make effective provision for securing the right to work, to education and to

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public assistance in cases of unemployment, old age, sickness and disablement,

and in other cases of undeserved want.

Article 42 : Provision for just and humane conditions of work and maternity
relief.

The State shall make provision for securing just and humane conditions of work
and for maternity relief.

Gandhian principles : These principles usually indicates the ideals and principles
of mahatma Gandhi. His basic ideas were towards the village development
because according to him rural development is the national development.

Articles related:

Article 40 : The State shall take steps to organise village panchayats and endow
them with such powers and authority as may be necessary to enable them to
function as units of self-government.

Note: the 73rd and 74th constitutional amendment acts were enacted in the
year 1992 to enforce the panchayatis and municipalities in india that is rural
and urban local bodies.

(kindly see local self government topic for further information)

Article 43 : The State shall endeavour to secure, by suitable legislation or

economic organisation or in any other way, to all workers, agricultural, industrial
or otherwise, work, a living wage, conditions of work ensuring a decent standard
of life and full enjoyment of leisure and social and cultural opportunities and, in
particular, the State shall endeavour to promote cottage industries on an
individual or co-operative basis in rural areas.

Article 43A : Participation of workers in management of industries.

The State shall take steps, by suitable legislation or in any other way, to secure
the participation of workers in the management of undertakings,
establishments or other organisations engaged in any industry.

Article 46 : Promotion of educational and economic interests of Scheduled

Castes, Scheduled Tribes and other weaker sections.

The State shall promote with special care the educational and economic
interests of the weaker sections of the people, and, in particular, of the

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Scheduled Castes and the Scheduled Tribes, and shall protect them from social
injustice and all forms of exploitation.

Article 47 : Duty of the State to raise the level of nutrition and the standard of
living and to improve public health

The State shall regard the raising of the level of nutrition and the standard of
living of its people and the improvement of public health as among its primary
duties and, in particular, the State shall endeavour to bring about prohibition of
the consumption except for medicinal purposes of intoxicating drinks and of
drugs which are injurious to health.

Article 48 : Organisation of agriculture and animal husbandry

The State shall endeavour to organise agriculture and animal husbandry on

modern and scientific lines and shall, in particular, take steps for preserving and
improving the breeds, and prohibiting the slaughter, of cows and calves and
other milch and draught cattle.

Note : article 48A. The State shall endeavour to protect and improve the
environment and to safeguard the forests and wild life of the country.

Liberal principles : The concept of democracy arose a long time ago and has
been a highly controversial one, but the version used by most mainstream
political scientists (especially transitologists) has its roots in Joseph
Schumpeter’s (1984, 336) famous minimalist definition of democracy as “that
institutional arrangement for arriving at political decisions in which individuals
acquire the power to decide by means of a competitive struggle for the people’s
vote.” In other words, democracy is characterized by the existence of
competitive elections for the executive and legislative posts instead of them
being filled by means of hereditary 10 (2012) 6 (2) 8 - 27 succession, violent
revolutionary means, etc. According to Schumpeter, this is a descriptive
definition, i.e., one that describes in an objective manner what modern
democracies are like, thus avoiding subjective, normative definitions which
prescribe what an ideal democracy should be like according to each author’s
worldview.
In simple words liberal indicates the freedom of an individual.
Articles related:

Article 44: Uniform civil code for the citizens. The State shall endeavour to
secure for the citizens a uniform civil code throughout the territory of India.

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Note: uniform civil code is the only directive principle which has not
implemented yet.
Meaning : A Uniform Civil Code means that all sections of the society
irrespective of their religion shall be treated equally according to a national civil
code, which shall be applicable to all uniformly.
They cover areas like- Marriage, divorce, maintenance, inheritance, adoption
and succession of property. It is based on the premise that there is no
connection between religion and law in modern civilization.
Shah Bano case (1985):- triple talaq.
A 73-year-old woman called Shah Bano was divorced by her husband using triple
talaq (saying “I divorce thee” three times) and was denied maintenance. She
approached the courts and the District Court and the High Court ruled in her
favour. This led to her husband appealing to the Supreme Court saying that he
had fulfilled all his obligations under Islamic law.
The Supreme Court ruled in her favour in 1985 under the “maintenance of wives,
children and parents” provision (Section 125) of the All India Criminal Code,
which applied to all citizens irrespective of religion. Further, It recommended
that a uniform civil code be set up.
Facts about the case:

Under Muslim personal law, maintenance was to be paid only till the period of
iddat. (three lunar months-roughly 90 days ).

Section 125 of CrPC (criminal procedure code) that applied to all citizens,
provided for maintenance of the wife.

Note : supreme court of India opined that during the triple talaq verdict the need
of uniform civil code is at most in the nation.
During the drafting of the constitution, prominent leaders like Jawaharlal Nehru
and Dr B.R Ambedkar pushed for a uniform civil code. However, they included

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the UCC in the Directive Principles of State Policy (DPSP, Article 44) mainly due
to opposition from religious fundamentalists and a lack of awareness among the
masses during the time.
Some of the reforms of this period were:-
The Hindu code bill -The bill was drafted by Dr.B R Ambedkar to reform Hindu
laws, which legalized divorce, opposed polygamy, gave rights of inheritance to
daughters. Amidst intense opposition of the code, a diluted version was passed
via four different laws.
• The Hindu Marriage Act
• Succession Act
• Minority and Guardianship Act
• Adoptions and Maintenance Act
Special Marriage Act- It was enacted in 1954 which provided for civil
marriages outside of any religious personal law.
Note : Goa is the only state in india that have the common family law that is
uniform civil code.
Article 49: It shall be the obligation of the State to protect every monument or
place or object of artistic or historic interest, 2 [declared by or under law made
by Parliament] to be of national importance, from spoliation, disfigurement,
destruction, removal, disposal or export, as the case may be.
Article 50 : The State shall take steps to separate the judiciary from the
executive in the public services of the State.
The need of the article arised because of the british invaders . the system will
not be complete if one pillar involves into the other. History has time and again
shown that unlimited power in the hands of one person or group in most cases
means that others are suppressed or their powers curtailed. The separation of
powers in a democracy is to prevent abuse of power and to safeguard freedom
for all. The system of separation of powers divides the tasks of the state into
three branches: legislative, executive and judicial. These tasks are assigned to
different institutions in such a way that each of them can check the others. As
a result, no one institution can become so powerful in a democracy as to
destroy this system.
The Legislative Power
The first of the three powers has the task of passing laws and supervising their
implementation. It is exercised by Parliament – i.e. the National and Federal
Councils – and the Provincial Diets.
The implementation of laws is the task of the executive and judicial branches

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The Executive Power

The executive branch has the task of implementing laws. It comprises the
Federal Government, the Federal President and all federal authorities including
the police and the armed forces.
The Judicial Power (Judiciary)
Judges administer justice, viz. they decide disputes independently and
impartially. It is their task to ensure that laws are complied with. Judges cannot
be deposed and cannot be assigned other positions against their will.
Article 51 : The State shall endeavour to—
promote international peace and security;
maintain just and honourable relations between nations;
foster respect for international law and treaty obligations in the dealings of
organized peoples with one another; and
encourage settlement of international disputes by arbitration.
New directive principles :
Four new Directive Principles were added in the 42nd Amendment Act of 1976
to the original list. They are requiring the state:
1. An added clause in Article 39: To secure opportunities for the healthy
development of children
2. An added clause in Article 39 as Article 39A: To promote equal justice and to
provide free legal aid to the poor
3. An added clause in Article 43 as Article 43 A: To take steps to secure the
participation of workers in the management of industries
4. An added clause in Article 48 as Article 48A: To protect and improve the
environment and to safeguard forests and wildlife
Practise questions:
1.Which of the following statements is not correct about Directive Principle
of State Policy?
(A) If a State does not apply Directive Principle of State Policy, then a case
may be filed against it in court.
(B) ‘Gandhism’ is also an element of Directive Principle of State Policy.
(C) Principles have been taken from the Constitution of Ireland.
(D) These principles are not binding on the state
2. Which of the following act is covered under the elements of Directive
Principle?
(A) Ban on slaughter of milking animals.
(B) All citizens have the right to get equal opportunities for livelihood
(C) Free education for all children up to fourteen years
(D) All
3. Which of the following is mis-matched?

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(A) Article 40: The formation of village Panchayats

(B) Article 44: Uniform Civil Code
(C) Article 41: Organization of Agriculture and Animal Husbandry
(D) Article 39A: Good Justice and Free Legal Education

4. Which among the following are the suggestions for making government
policies by following Directive Principles
of State Policy?
1.Prohibition of consumption of alcoholic liquor
2.Uniform civil code
3.Promotion of cottage industries.
Select the correct answer using the code given below:
a)1 and 2 only
b)2 and 3 only
c)1 and 3 only
d)1, 2 and 3

5. In the light of Indian Constitution, ‘Equal Pay for Equal Work’ is a

a) Fundamental Right
b) Directive Principle of State Policy
c) Constitutional Right but not Fundamental
d) None of the above

6. Consider the following provisions under Directive Principles of State Policy

as enshrined in the Constitution of India.
1. To promote educational and economic interests of SCs and STs.
2. To provide equal justice and free legal aid to the poor.
3. To protect monuments of national importance
4. To separate the judiciary from the executive in the public services of the
State
5. To secure for all citizens a uniform civil code throughout the country
Which of the above are the Liberal-Intellectual principles that are reflected in
the Directive Principles of
State Policy?
a) 1, 3, 4 and 5
b) 1, 4 and 5
c) 3, 4 and 5
d) All the above

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7. Which of the following is not correctly matched?

(a) Fundamental duties- Part IV-A
(b) Directive principles of State policy- Part IV
(c)Fundamental rights- Part III
(d) citizenship – part 1

8. Consider the following statements:

1. The fundamental Rights and Directive Principles together have been
described as the ‘conscience of the Constitution’ by Granville Austin
2. DPSP are in the nature of directives to all governments of the country,
Central, State as well as local.
3. Supreme Court has held that Fundamental Rights and DPSP are distinct
scheme and DPSP can override Fundamental Duties.
Select the correct answer using the code given below.
(a) 1 and 2 only
(b) 1 and 3 only
(c) 2 and 3 only
(d) 1, 2 and 3

9. With reference to Directive Principles of State Policy, consider the

following statements:
1. The Directive Principles of State Policy (DPSP) has been taken from the
constitution of Ireland
2. 97th Constitutional Amendment Act, 2011 has included Art. 43-B, the
state shall endeavour to promote voluntary formation, autonomous
functioning, democratic control and professional management of Co-operative
societies
Which of the statements given above is/are correct?
a)1 only
(b) 2 only
(c) Both 1 and 2
(d) None of these
10. which article under DPSP proposes for the separation of the Judiciary
from executive ?
(a) Art. 51
(b) Art. 50
(c) Art. 49
(d) Art. 48

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Part 4A – FUNDAMENTAL DUTIES

They were not present in the constitution from the beginning. After the
recommendations of swaran singh committee the title fundamental duties
were added according to 42nd constitutional amendment act of 1976.
Between the 1973 and 1975 several amendments came in but after the
imposition of emergency on midnight of the 25 June, 1975, the Constitution was
also made to suffer. One after another, amendments were carried out by a
Parliament whose life had already expired. In August 1975, when all the
opposition members in the Parliament were in jail, voices silenced and
newspapers not allowed to print, 41st Amendment Bill was passed. This
Amendment represents ultimate contempt for the rule of law. It provided the
following:-
Though the Congress government under Mrs. Gandhi suffered defeat one after
another in the court of law, it did not give up. In October 1976, when most of
the opposition members in Parliament were in jail and censorship at its peak, a
bill was passed by the Parliament and enacted as 42nd Amendment. This
Amendment represented the most devastating attack upon the Constitution.
Before we go on further, it must be remembered that these amendments were
made on the recommendation of a twelve member Congress Committee
headed by Mr. Swaran Singh. This committee was appointed by the Congress
President to look into the Constitution and suggest ways and means to amend
it in such a manner that it does not come in the way of so called ‘progressive’
and ‘socialist’ policies of the government. Based on the recommendations of
Swaran Singh Committee report, the 44th Amendment was introduced in the
parliament. Through this Amendment, 36 articles were amended, 15 articles
were inserted, four articles were substituted and so on. Altogether 68
sections/articles/clauses were amended/added/deleted in just one go.

FUNDAMENTAL DUTIES:
The provision under Article-5l A of the Constitution of India relates to
the(CAPF 2106)
(a) uniform civil code for the citizens
(b) organisation of village panchayats
(c) right to education
(d) fundamental duties

1. It shall be the duty of every citizen of India –to abide by the Constitution
and respect its ideals and institutions, the National Flag and the National
Anthem;
2. to cherish and follow the noble ideals which inspired our national struggle
for freedom;

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3. to uphold and protect the sovereignty, unity and integrity of India;

4. to defend the country and render national service when called upon to do
so;
5. to promote harmony and the spirit of common brotherhood amongst all the
people of India transcending religious, linguistic and regional or sectional
diversities; to renounce practices derogatory to the dignity of women;
6. to value and preserve the rich heritage of our composite culture;
7. to protect and improve the natural environment including forests, lakes,
rivers and wild life, and to have compassion for living creatures;
8. to develop the scientific temper, humanism and the spirit of inquiry and
reform;
9. to safeguard public property and to abjure violence;
10.to strive towards excellence in all spheres of individual and collective activity
so that the nation constantly rises to higher levels of endeavor and
achievement.
11.to provide opportunities for education by the parent the guardian, to his
child, or a ward between the age of 6-14 years.
Note : Article 51A(k) was added by 86th constitutional amendment act of
2002.
Changes after 86th amendment act of 2002:
Insertion of new article 21A- After article 21 of the Constitution, the following
article shall be inserted, namely:-
Right to education.-
"21A. The State shall provide free and compulsory education to all children of
the age of six to fourteen years in such manner as the State may, by law,
determine."
2. Substitution of new article for article 45- For article 45 of the Constitution,
the following article shall be substituted, namely:- .
"Provision for early childhood care and education to children below the age of
six years."
"45. The State shall endeavour to provide early childhood care and education
for all children until they complete the age of six years."
3. Amendment of article 51A- In article 51A of the Constitution, after clause
(J), the following clause shall be added, namely:-
"(k) who is a parent or guardian to provide opportunities for education to his
child or, as the case may be, ward between the age of six and fourteen years."

Note : The Indian National Flag represents the hopes and aspirations of the
people of India. It is the symbol of our national pride. Over the last five
decades, several people including members of armed forces have ungrudgingly
laid down their lives to keep the tricolour flying in its full glory. The significance

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of the colours and the chakra in the National Flag was amply described by Dr.
S. Radhakrishnan in the Constituent Assembly which unanimously adopted the
National Flag. Dr. S. Radhakrishnan explained—“Bhagwa or the saffron colour
denotes renunciation of disinterestedness. Our leaders must be indifferent to
material gains and dedicate themselves to their work. The white in the centre
is light, the path of truth to guide our conduct. The green shows our relation to
soil, our relation to the plant life here on which all other life depends. The
Ashoka Wheel in the center of the white is the wheel of the law of dharma.
Truth or satya, dharma or virtue ought to be the controlling principles of those
who work under this flag. Again, the wheel denotes motion. There is death in
stagnation. There is life in movement. India should no more resist change, it
must move and go forward. The wheel represents the dynamism of a peaceful
change.”

For the sake of convenience, Flag Code of India, 2002, has been divided into
three parts. Part I of the Code contains general description of the National
Flag. Part II of the Code is devoted to the display of the National Flag by
members of public, private organizations, educational institutions, etc. Part III
of the Code relates to display of the National Flag by Central and State
governments and their organisations and agencies. Flag Code of India, 2002,
takes effect from January 26, 2002 and supersedes the ‘Flag Code-India’ as it
existed.

Practise questions :
1. Which of the following statements is true with respect to 42nd
Constitutional Amendment Act?
1. Fundamental Duties were incorporated into the Constitution of India by
the 42nd Constitutional Amendment Act, 1976
2. Ten Fundamental Duties were included by this Amendment
3. The 11th Fundamental Duty was incorporated by the 86th
Constitutional Amendment Act, 2002
Select the correct answer using the code given below.
(a) 1 and 2 only
(b) 1 and 3 only
(c) 2 and 3 only
(d) 1, 2 and 3
2. Consider the following statements:
1. The duties enumerated in Art. 51-A are non-statutory duties and are not
enforceable by law.
2. Violation of the Fundamental Duties can be met with Punishment but

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constitution doesn’t mention any penalty for its violation.

3. Parliament can prescribe penalty for the violation of Specific Duties
Select the correct answer using the code given below.
(a) 1 and 2 only
(b) 1 and 3 only
(c) 2 and 3 only
(d) 1, 2 and 3

3. Which of the following is not a Fundamental Duty?

1. To uphold and protect the sovereignty, unity and integrity of India
2. To exercise our Universal Adult Franchise at the time of general elections
3. To value and preserve rich heritage of our composite culture
Select the correct answer using the code given below.
(a) 1 and 2 only
(b) 1 and 3 only
(c) 2 only
(d) 1, 2 and 3

4. The constitution of India, adopted Fundamental Duties from the

constitution of .......
(A) America
(B) Japan
(C) Russia
(D) Britain
5. In the Indian Constitution, Fundamental Duties are given in which article?
(A) Article 12 to 35
(B) Article 51A
(C) Article 36 to 50
(D) Article 19
6. Which Constitutional Amendment Act was passed to provide compulsory
education to children between 6 and 14 years?
(A) 82nd
(B) 83rd
(C) 86th
(D) 84th
7. Consider the following statements regarding the Fundamental Duties of
the citizens of India:
1. Fundamental Duties were not mentioned in the Original Constitution of
India.

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2. Fundamental Duties were added in the Constitution by 44 th Constitutional

Amendment.
3. Fundamental Duties of citizens were based upon the recommendations of
Swaran Singh Committee.
Which of the above statements are correct?
a) 1 and 2
b) 2 and 3
c) 1 and 3
d) All of the above
8. When was the 'Prevention of Insults to National Honour Act' passed?
(A) 1976
(B) 1972
(C) 1974
(D) 1971
9. How many Fundamental Duties are in the Indian Constitution ?
A. Nine
B. Eleven
C. Twelve
D. Twenty
10.By what term, The ten commandments of 42nd constitutional amendment
act are called?
(A) Fundamental rights (B) Fundamental duties
(C) Panchayati Raj Principle (D) Directive principle of state policy

Representation of 3 pillars in Indian constitution :

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PART 5 – UNION
PARLIAMENT :

Note : president is also considered the part of parliament .

Which one of the following is a characteristic of Presidential form of

Government?(CAPF 2016)
(a) President is not a part of legislative body
(b) It does not separate Legislative and Executive functions
(c) President follows the principle of collective responsibility
(d) The tenure of the President depends on the legislature

President of India:
President of India is considered to be the de jure head that is the nominal head
of the country.

Qualifications for President of India:

• He/she should be a citizen of India;
• should have completed the age of 35 years;
• should be qualified to be elected as a member of Lok Sabha;

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• should not hold any office of profit i.e. the candidate should not be a
government servant. (The office of the President, the Vice-President, the
Governor or the Minister of the Union or the State is not considered as an
office of profit for this purpose).
The procedure of Election of President
The President is elected by an Electoral College -elected members of both
Houses of Parliament i.e. Lok Sabha and Rajya Sabha and of the State
Legislative Assemblies.
Nominated members of Parliament and members of State Legislative Councils
are not a part of the Electoral College.
The election is held by a single transferable vote system of proportional
representation.
The voting is done by secret ballot.

Names of all the candidates are listed on the ballot paper and the elector gives
them numbers preferences. Every voter may mark on the ballot paper as many
preferences as there are candidates. Thus the elector shall place the figure “1 ”
opposite the name of the candidate whom he/she chooses for first preference
and so on.

To be elected, a candidate must get more than 50% of the total valid votes
polled. This is known as Quota. The Quota is determined by calculating the
total number of votes polled divided by the number of candidates to be
elected plus one.

In the first count, only first preference votes are counted. If any candidates
reach the quota, he/she is declared elected.

p. Thus the candidate getting the least number of votes is eliminated. If after
counting, a candidate reaches the quota, he/she is declared elected as
the President. This continues till any one candidate gets the quota of votes
Oath: The President has takes an oath of office in the presence of the Chief
Justice of India.
Article 60 in Constitution of India The president is required to make and
subscribe in the presence of the Chief Justice of India—or in his absence, the
senior-most judge of the supreme court—an oath or affirmation that he/she
shall protect, preserve and defend the constitution as follows
I, (name), do swear in the name of God (or solemnly affirm) that I will faithfully
execute the office of President (or discharge the functions of the President) of
the Republic of India, and will to the best of my ability preserve, protect and

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defend the Constitution and the law, and that I will devote myself to the
service and well-being of the people of the Republic of India.
—
Functions and Powers of the President:
These are divided into three heads-

Executive powers

Legislative powers

Financial powers

Executive Powers of the President of India

• All decisions of the Union Government are communicated to him/her by

the Prime Minister.
• All the functions are performed by the President on the advice of the Prime
Minister.
• All officials appointed by him/her (such as Governors and Ambassadors)
may be removed or recalled by him/her, on the advice of the Union Council
of Ministers.
• All laws enacted by the Union Parliament are enforced by him/her.
• All diplomatic work is conducted in his/her name (by the foreign office and
Indian envoys abroad), and all international treaties are negotiated and
concluded in his/her name.
• The President appoints India’s ambassadors and high commissioners in
other countries, and the President receives foreign ambassadors and high
commissioners.
• The President can declare war and make peace.
• In his/her capacity as head of state, the President conducts the country’s
foreign affairs.
• The President is the Supreme Commander of the armed forces. He/she
makes appointments of Chiefs of Army, Navy, and Air Force.
• The President appoints the Attorney General, the Comptroller and Auditor
General of India, the Chief Election Commissioner and other
Election Commissioners, the Chairman and Members of Union Public
Service Commission (U.P.S.C.).
• He/she also appoints the Governors of States and Lt. Governors of
Union Territories. All such appointments are made on the advice of the
Union Cabinet.

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• The President appoints the Chief Justice and other judges of the Supreme
Court and High Courts, the Chief Justice of India is consulted in these
appointments.
• He allocates portfolios among the ministers on the advice of the Prime
Minister. He may remove any Minister on the advice of the
Prime Minister.
• The President appoints the Prime Minister and he appoints other ministers
on the advice of the Prime Minister.

Legislative Powers of the President of India

• The President summons and prorogues the Houses of Parliament. He

summons the Parliament at least twice a year, and the gap between two
sessions cannot be more than six months.
• The President has the power to dissolve the Lok Sabha even before the
expiry of its term on the recommendation of the Prime Minister.
• The President nominates twelve members to Rajya Sabha from amongst
persons having special knowledge in the field of literature, science, art
and social service.
• The President may also nominate two members of the Anglo-Indian
community to the Lok Sabha in case that community is not adequately
represented in the House.
• The President can call a joint sitting of the two Houses of Parliament in case
of a disagreement between Lok Sabha and Rajya Sabha on a non-money
bill.
• The President has the right to address and send messages to Parliament.
The President addresses both Houses of Parliament jointly at the first
session after every general election as well as the commencement of the
first session every year. These addresses contain policies of the government
of the day.
• Every bill passed by Parliament is sent to the President for his/her assent.
The President may give his/her assent, or return it once for the
reconsideration of the Parliament. If passed again the President has to give
her assent.
• Without signing ,the president of India may also use his veto powers.
The purpose of this power is to
• prevent hasty and ill-considered legislation by the Parliament, and
• prevent a legislation which may be unconstitutional.
The President of India is vested with three types of veto power.
• Absolute veto

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• Qualified veto (Indian President doesn’t have qualified veto. It is possessed

by the President of America)
• Suspensive veto
• Pocket veto
Absolute Veto – This refers to the power of the President to withhold his
approval to any bill passed by the Parliament. Once the bill is withheld, it ends
and does not become an act. This veto is used in two cases.
In respect to private members’ bills (bills which are introduced by any member
of the Parliament who is not a Minister); and
In respect to the government bills when the cabinet resigns after the passage
of the bills but before the assent by the President and the new cabinet advises
the President not to give his assent to those bills.
Suspensive Veto – This is a power of the President when the President returns
a bill for reconsideration of the Parliament. However, if the bill is passed again
by the Parliament with or without amendments and again presented to the
President, the President has to give his assent this time. The President cannot
exercise Suspensive Veto in the case of money bills. In this case the President
can either approve the bill or withhold his approval, but cannot return it for
reconsideration of the Parliament. Usually, the President gives his assent to a
money bill as it requires a prior approval from the president before it is
introduced in the parliament.
Pocket Veto – This is the power where the President neither ratifies nor rejects
nor returns the bill, but simply keeps the bill pending for an indefinite period.
The President takes no action either positive or negative on the bill. This is
possible because the Indian Constitution does not provide any time-limit
within which the President has to take action on a bill presented to him for his
assent.
The 24th Constitutional Amendment Act of 1971 provided that the President
has to give his assent to a constitutional amendment bill.
Without his/her assent no bill can become a law.
The President may promulgate an ordinance when the Parliament is not in
session.The ordinance so issued has the effect of a law.
Such ordinance should be laid before both Houses of Parliament when they
reassemble. If no action is taken, it automatically lapses six weeks after
the commencement of the next session of Parliament.

Financial Powers of the President

All money bills are introduced in the Lok Sabha only with the prior approval of
the President.

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The President has the control over Contingency Fund of India. It enables the
government to advance money for the purpose of meeting unforeseen
expenses.

Contingency Fund of India: It is a fund kept by the Union Government to

meet any unforeseen expenditure for which money is immediately needed.
The President has full control over this Fund. The President permits
withdrawals from this Fund.

• Annual budget and railway budget are introduced in the Lok Sabha on the
recommendation of the President.
• Money bills are never returned for reconsideration.
• The President appoints the Finance Commission after every five years. It
makes recommendations to the President on some specific financial
matters, especially the distribution of Central taxes between the Union and
the States.
• The President also receives the reports of the Comptroller and Auditor-
General of India and has it laid in the Parliament.
Financial Powers and Functions

The President causes the annual budget of the Union Government to be laid
before Parliament every year.

No proposal for spending money or raising revenues for purposes of

government can be introduced in Parliament without previous permission of the
President.
Emergency Powers of the President
The constitution of India empowers the President to proclaim three kinds of
Emergencies:

National Emergency (Art. 352);

Emergency for failure of Constitutional Machinery in a State (Art. 356);

Financial Emergency (Art. 360)

(see emergency chapter for the complete details)

Military and Diplomatic Powers:
The constitution vests the supreme command of the Defense Forces in the.
President, but he is required to exercise that power in accordance with law
Parliament has exclusive Legislative Power relating to defense forces.

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It means that though the President may have the power to take action as to
declaration of war or peace or the employment of the defense forces. It is
Parliament that is to regulate or control the exercise of such powers.
The executive power relating to foreign and diplomatic affairs is exercised by the
Union Government, and all diplomatic business is conducted in the name of the
President.
Diplomatic envoys and consular agents are accredited to him, and he sends
diplomatic envoys and consular agents are accredited to him and he sends
diplomatic envoys to foreign countries. All treaties and international
agreements are negotiated and concluded in the name of the President.

Diplomatic Powers of the President of India:

• The president receives ambassadors, High Commissioners and diplomatic

envoys from foreign nations.
• All treaties and international agreements are concluded in the name of the
President.
• The President represents India in International Conferences.
• The President has the powers of appointing Indian Ambassadors to other
countries.

Judicial Powers:
• The President has the power to grant pardon reprieves, respites & remission
of punishment or to suspend remit or commute the sentence of any person
convicted of any offence.
• In all cases where the punishment & sentence is by court martial.
• In all cases where the punishment or sentence for an offence against a law
relating to a matter to which the, executive power of the Union extends.
• In all cases where the sentence is a death sentence.
• Pardon powers of the president of India :
• The pardoning powers of the Indian President are elucidated in Art 72 of
the Indian Constitution. There are five different types of pardoning which
are mandated by law.

Pardon: means completely absolving the person of the crime and letting him
go free. The pardoned criminal will be like a normal citizen.

Commutation: means changing the type of punishment given to the guilty into
a less harsh one, for example, a death penalty commuted to a life sentence.

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Reprieve: means a delay allowed in the execution of a sentence, usually a

death sentence, for a guilty person to allow him some time to apply for
Presidential Pardon or some other legal remedy to prove his innocence or
successful rehabilitation.

Respite: means reducing the quantum or degree of the punishment to a

criminal in view of some special circumstances, like pregnancy, mental
condition etc.

Remission: means changing the quantum of the punishment without changing

its nature, for example reducing twenty year rigorous imprisonment to ten
years.

Emergency powers of the president of india:

According to Indian constitution there are three forms of emergency

National emergency(Article 352)

State emergency(presidents rule)(Article 356)

Financial emergency( Article 360)

National emergency :
The President can declare a National Emergency on grounds of war or external
aggression or armed rebellion, if the President is satisfied that there is imminent
danger thereof.
War or External aggression means an External Emergency, and an armed
rebellion means Internal Emergency.
As per the Constitution’s 44th amendment in 1978, the President can declare
National Emergency in whole or in any part of India on grounds of war or
external aggression or internal disturbance.
Also National Emergency can be declared by President if any minister of cabinet
rank headed by PM tells him to do so.
44th Amendment of 1978
It replaced “internal disturbance” with “armed rebellion”; as “internal
disturbance” is a vague term and can be misused; as was done by Indira Gandhi
in 1975 to declare an Emergency on grounds of Internal Disturbance.
Now, the President can declare an Emergency only on the written advice of the
Cabinet and not on the request of the Prime Minister alone, as was done by
Indira Gandhi in 1975 without consulting the Cabinet.

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Parliamentary Approval and Duration of National Emergency

Every Proclamation of Emergency shall be laid down before each house of the
Parliament and must get approval in one month from its date of issue.
Provided that if at time of proclamation the Lok Sabha has been dissolved or
dissolution of the Lok Sabha takes place in mean time (i.e. within one month
from date of issue), then the Rajya Sabha must approve it within 30 days but
such proclamation shall cease to operate after 30 days from the first sitting of
the Lok Sabha after its reconstitution, if not, then after getting the approval of
the new Lok Sabha in 30 days.
Originally, the period for approval was 2 months; but it was reduced to one
month by the 44th Amendment passed in 1978.
If approved by both the houses of Parliament, then a National Emergency
shall continue for 6 months and it can be renewed any number of times by
approval of Parliament after every 6 months. But if the dissolution of the Lok
Sabha takes place in those 6 months and a resolution for renewal of National
Emergency is under consideration, then the Emergency continues till 30 days
from the first sitting of the newly elected Lok Sabha provided that has already
been approved by the Rajya Sabha.
As per the the 44th amendment of 1978, if the Parliament approves
proclamation of a National Emergency, then it remains in operation on pleasure
or desire of the Cabinet or the Executive.
Any of above resolutions related to the proclamation or renewal of a National
Emergency must be passed by both houses of Parliament by special
majority (i.e. majority of total membership of that house or not less than
2/3rd of members present and voting).
This provision was again added by the 44th Amendment of 1978 and before that,
such a resolution could be passed by a simple majority, i.e. more than the total
number of members present and voting.
Revocation or End of Proclamation
The President shall revoke the proclamation of an Emergency at any time, if
the Lok Sabha passes a resolution by simple majority in relation to disapproval
of continuation of National Emergency.
A notice in writing shall be given to the Speaker of the Lok Sabha or to the
President if the House is not in session, and that notice shall be signed by at least
one tenth of the total members of the Lok Sabha, in relation to their intention
to move a resolution to revoke a National Emergency.
A special sitting of the Lok Sabha shall be called within 14 days from date of such
notice.
Until the 44th amendment, 1978, there was no requirement of resolution to be
adopted by Lok Sabha for the removal of proclamation of National Emergency.

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The differences between Resolution of Proclamation and Revocation of National

Emergency are as follows:-

• The approval resolution must be passed by both houses but disapproval

resolution is required to be passed by the Lok Sabha only.
• The approval resolution must be passed by special majority but disapproval
resolution is need to be passed by simple majority.

Life of the Lok Sabha and State Assembly:

While a National Emergency is in action, the Parliament may by law extend the
normal term of the Lok Sabha for a period of a single year at a time, and it can
renew it any number of times as thinks fit. But it cannot extend to beyond a
period of 6 months after the Emergency has ceased to operate.

Similarly the Parliament empowers to extend life of state assembly for a period
of 1 year at a time during a National Emergency and cannot extend to beyond a
period of 6 months after emergency has ceased to operate.
Article 358
• Article 358 states that as soon as proclamation of National Emergency is
made, each of the six Fundamental Rights (FRs) under Article 19 (such as
freedom of speech or expression) are automatically suspended and no
separate order is required.
• Article 19 restricts power of state to make any law or take any executive
action. But any such law or executive action ceases to have effect as soon as
the proclamation cease to operate, except if provisions which are in conflict
with Fundamental Rights under Article 19 are either modified or omitted
before law cease to have effect.
• It means that legislative or executive action taken at the time of an
Emergency cannot be challenged even after the Emergency has ceased to
operate.
• The constraints imposed by the 44th Amendment, 1978 on Article 358 say
that, firstly, all of the six Fundamental Rights under Article 19 can be
suspended only when National Emergency is declared on grounds of war or
external aggression and not on grounds of armed rebellion.
• Only laws related to emergency are in protection from being challenged and
not other laws. Also, any executive action related to only those laws are
protected.

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Article 359
During a National Emergency, the President by order, can suspend the right to
move court for enforcement of such Fundamental Rights as mentioned in the
order.
This means that the mentioned Fundamental Rights are alive but their
enforcement is suspended. The Fundamental Rights can be suspended for the
whole of a National Emergency or for a shorter duration, and the suspension can
be applied to the whole or any part of India as mentioned in the order
Declarations Made so Far
• The National Emergency has been proclaimed three times so far in 1962,
1971 and 1975.
• In 1962, due to war or external aggression by China in Arunachal Pradesh,
National Emergency remained in force till 1968 due to war with Pakistan in
1965 as there was no provision of renewal in the constitution till 44th
amendment, 1978. In 1971, a National Emergency was declared on grounds
of war with Pakistan. And in 1975, a fresh proclamation of National
Emergency was made on grounds of Internal disturbance even when the
previous one was in operation.
State Emergency (Article 356):
• Article 356 provides that if the President, on receipt of a report from the
Government of a state or otherwise, is satisfied that a situation has arisen in
which the Government of the State cannot be carried on by the provisions of
the Constitution, the President may issue a proclamation.
• By that proclamation, the president may assume to himself all or any of the
powers vested in the Governor and may declare that the powers of the
legislature of the State shall be exercisable by the Parliament.
• The proclamation issued under Article 356 must be laid before each House
of the Parliament. If the proclamation is not approved by both Houses, it will
expire in two months.
• The Proclamation is so approved by Parliament (by simple majority) shall be
in operation for six months. However, it may be revoked in between or
extended further by the Parliament.
• A state of emergency can be declared in any state of India (except a special
case in Jammu and Kashmir) under article 356 on the recommendation of the
governor of the state. Every state in India except two
states, Chhattisgarh and Telangana has been under a state of emergency at
some point of time or the other. The state of emergency is commonly known
as 'President's Rule'.

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• If the President is satisfied, based on the report of the Governor of the

concerned state or from other sources, that the governance in a state cannot
be carried out according to the provisions in the Constitution, he may declare
an emergency in the state. Such an emergency must be approved by the
Parliament within a period of two months.
• It is imposed for an initial period of six months and can last for a maximum
period of three years with repeated parliamentary approval every six
months. In case of Jammu & Kashmir, first there should be a Governor's rule
for 6 months (under section 92 of Jammu & Kashmir constitution) then only
President rule can follow. The 42nd amendment act of 1976 extended the
initial time duration of state emergency from 6 months to 1 year.
Subsequently, 44th CAA 1978 restored the 1-year period back to 6 months.
Originally, the maximum period of operation of state emergency was 3 years.
This 3-year period was divided into 1 year of ordinary period and 2 years of
extra ordinary period for which certain conditions are to be fulfilled.
Therefore, from now on after every 1 year Parliament needs to approve the
same. If the emergency has to be extended for more than three years, it can
only be done by a constitutional amendment, as has happened
in Punjab and Jammu and Kashmir.
• During such an emergency, the President can take over the entire work of
the executive, and the Governor administers the state in the name of the
President. The Legislative Assembly can be dissolved or may remain in
suspended animation. The Parliament makes laws on the 66 subjects of the
state list (see National emergency for explanation). All money bills have to be
referred to the Parliament for approval. In this occasion ministers of state
legislature do not perform actions in state.
S. R. Bommai case (1994): (Misuse of Article 356 of the Constitution of India)
S. R. Bommai case was a landmark judgment of the Supreme Court of India,
where the Court discussed provisions of Article 356 of the Constitution of India
and related issues. This case had a huge impact on Centre-State Relations. The
judgement attempted to curb blatant misuse of Article 356 of the Constitution
of India, which allowed President's rule to be imposed on state governments.
R. Bommai v. The Union of India raised a serious question of law relating to the
Proclamation of President's Rule and dissolution of Legislative assemblies
according to Article 356 of the Constitution of India. This verdict stopped the
misuse of Article 356 (imposition of the president rule).
Note : The state to have presidents rule maximum number of times is Uttar
Pradesh i.e. totally 9 times.

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The state to have presidents rule for maximum no of days is jammu and
Kashmir i.e from 19th January 1990 to 9th October 1996 ( 6years 264 days)
The state of Punjab presidents rule continued from 11th may 1987 to 25th
February 1992( 4years 259 days)
Financial emergency :
• The provisions of Financial Emergency are enshrined under Article 360 of the
Constitution. This provision provides a safeguard for the Union Government
if any threat exists to the financial stability of India.
• If the President is satisfied that a situation has arisen whereby the financial
stability or credit of India or of any part of the territory thereof is threatened,
then he may declares a Financial Emergency.
• The 38th Amend 1975 states that satisfaction of President to declare a
Financial Emergency is immune from Judicial Review but provision is
subsequently deleted by 44th Amend which restored power of Judicial
Review even over satisfaction of President
• Article 360 empowers Union govt to take control over state govt on every
financial matter deals by a state. The Financial Emergency has never been
imposed in any part of country, neither has Article 360 been used till now.
Parliamentary Approval and Duration
• Every Proclamation to declare Financial Emergency shall be laid down before
each house of Parliament and must get approval in two months from date of
issue.
• Provided that if at the time of proclamation of a Financial Emergency, the Lok
Sabha (LS) has been dissolved or the dissolution of the Lok Sabha takes place
in mean time (i.e. within two months from date of issue) then must get
approval of the Rajya Sabha within 2 months, but such proclamation shall
cease to operate after 30 days from first sitting of Lok Sabha.
• Once the declaration of Financial Emergency is approved by both houses of
Parliament, it remains in operation till it is revoked by the President and no
maximum period is defined under the Constitution.
• The proclamation of Financial Emergency can be revoked or varied by
President any time by a subsequent proclamation.
Effects of Financial Emergency
When a Financial Emergency is in action, the executive authority of the Union
shall extend to the giving of directions to any State to observe such canons of
financial propriety as may be specified in the directions, and to the giving of such
other directions as the President may deem necessary and adequate for the
purpose.

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When a Financial Emergency is in operation, the directions given by or powers

assumed by Union or President are as follows:-

A provision requiring the reduction of salaries and allowances of all or any class
of persons serving in connection with the affairs of a State.

A provision requiring all Money Bills or other Bills to which the provisions of
article 207 apply to be reserved for the consideration of the President after they
are passed by the Legislature of the State.

It shall be competent for the President to issue directions for the reduction of
salaries and allowances of all or any class of persons serving in connection with
the affairs of the Union including the Judges of the Supreme Court and the High
Courts.

Removal of president of india :

• The office of the president of India falls vacant on the following grounds:
• On the expiry of their term.
• By reason of death.
• By reason of resignation.
• Removal by supreme court.
• Removal by impeachment.

Let us understand the removal procedure of the president.

Procedure for impeachment of the President.-

Note: article 61 of Indian constitution describes the procedure of

impeachment of president of India.

When a President is to be impeached for violation of the Constitution, the

charge shall be preferred by either House of Parliament.

No such charge shall be preferred unless-

• the proposal to prefer such charge is contained in a resolution which has

been moved after at least fourteen days’ notice in writing signed by not less
than one-fourth of the total number of members of the House has been given
of their intention to move the resolution, and
• such resolution has been passed by a majority of not less than two-thirds of
the total membership of the House.

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• When a charge has been so preferred by either House of Parliament, the

other House shall investigate the charge or cause the charge to be
investigated and the President shall have the right to appear and to be
represented as such investigation.
• If as a result of the investigation a resolution is passed by a majority of not
less than two-thirds of the total membership of the House by which the
charge was investigated or cause to be investigated, declaring that the
charge preferred against the President has been sustained, such resolution
shall have the effect of removing the President from his office as from the
date on which the resolution is so passed.

Note : no president in India was removed from the office so far.

Some additional information:

• Salary of Indian President is Rs.5 lakh. Until 2017, the President used to get
Rs 1.50 lakh per month. In Budget 2018, it was increased to Rs 5 lakh per
month.
• Indian President’s salary is 7000$*12=84,000$, which is much lower when
compared to US President’s salary of 4,00,000$.
• The president of the United States of America is also indirectly elected by
the people through the Electoral College, but to a four-year term. He is one
of only two nationally elected federal officers, the other being the Vice
President of the United States. (In total, there are 538 electors,
corresponding to the 435 members of the House of Representatives, 100
senators, and the three additional electors from the District of Columbia.)
• Under The Presidential and Vice-Presidential Elections Act, 1952, a
candidate, to be nominated for the office of president of India needs 50
electors as proposers and 50 electors as seconders for his or her name to
appear on the ballot.
• The general principle in Indian Presidential election is that the total number
of votes cast by Members of Parliament equals the total number of votes
cast by State Legislators.
• There are a total of 776 voters in both the Houses of Parliament. The
Electoral College also consisted of 4120 MLAs in the states.
• The formula to determine the value of the vote of an MLA = Population of
the state ÷ (No. of M.L.A.s in the state X 1000).
• The formula to determine the value of the vote of an MP = Total value votes
assigned to all the M.L.A.s ÷ Total number of MPs.
• Each MP had a vote value of 708 in the Presidential Election 2012.

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• Legislators from larger states cast more votes than those from smaller
states.
• If a state has few legislators, then each legislator has more votes; if a state
has many legislators, then each legislator has fewer votes.
• JFYI: The President of India moves around in a custom built heavily
armoured Mercedes Benz S600 Pullman Guard (which costs around Rs. 12
Crore).
• Nominated members cannot vote in the Presidential election. But they can
participate in President’s impeachment.
• PS: Nominated members can participate in Vice-President’s election and
removal.
• MLAs are involved in the Presidential election, but they have no role in
President’s impeachment. President’s impeachment resolution requires a
special majority of both houses of the parliament to pass.

Dr. Rajendra Prasad was the first President of India, who had worked as
president for two terms. He was also the President of the Constituent
Assembly and the Chief Leader of the Indian Independence Movement. He
was awarded Bharat Ratna in 1962.

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Dr. Sarvepalli Radhakrishnan was born on 5 September, 1888, and this day is
celebrated as Teacher's Day. He was awarded Bharat Ratna in 1954.

Dr. Zakir Husain became the first Muslim President of India and died at his
post. The immediate Vice President, V.V. Giri was made the acting President.
After that, Chief Justice of the Supreme Court Mohammad Hidayatullah
became acting President from 20 July 1969 to 24 August 1969. He was the
most famous tabla player of India
Mohammad Hidayatullah was awarded the Padma Bhushan in the field of art
by the Government of India in 2002. He also brought a revolution of education
in India. Under his leadership National Muslim University Jamia Millia Islamia
was established.

V.V Giri was the fourth President of India. His full name was Varahagiri
Venkata Giri. He became the only person to be elected President as an
independent candidate. In 1975, he was awarded with Bharat Ratna.

Fakhruddin Ali Ahmed was the fifth President of India. He was the second
President who died in the post of the President. BD Jattha was made Acting
President.

Neelam Sanjeeva Reddy became the sixth President of India. He was the first
Chief Minister of Andhra Pradesh. He was directly elected to the post from Lok
Sabha speaker and became the youngest President who occupied Rashtrapati
Bhavan and contested twice for the post of president.

Giani zail singh Prior to becoming the President, he was also the Chief Minister
of Punjab and the Minister at the Centre. He also used Pocket Veto on the
Indian Post Office Bill. During his presidency, many incidents took place, such
as the Operation Blue Star, the assassination of Indira Gandhi and the 1984
anti-Sikh riots.

R. Venkataraman was elected as the President of India from 25 July 1987 to 25

July 1992. Earlier he was Vice-President of India from 1984 to 1987. He has
received many honours from different parts of the world. He is a receiver of
Tamra Patra for his contributions in India's freedom struggle. Besides this the
Russian government had conferred the Soviet Land Prize for writing the
travelogue on former Tamil Nadu Prime Minister, Kumaraswami Kamaraj's

Shankar dayal sharma He was the eighth Vice President of India before
becoming president. From 1952 to 1956 he was the Chief Minister of Bhopal
and Cabinet Minister from 1956 to 1967. The International Bar Association

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gave them the 'Living Legend of Law Award of Recognition' due to multi-
achievements in the legal profession.

K. R. Narayanan was the first Dalit President of India and the first Malayali
person to receive the highest office of the country. He was the first President
to vote in the Lok Sabha elections and addressed the state assembly.

Dr. A. P.J. Abdul Kalam came to be known as ‘Missile Man of India’. He was
the first scientist who took over the post of President and the first President of
India who won the most votes. In his directorial, Rohini-1 satellites, Agni and
Prithvi missiles were successfully launched. The Pokhran-II nuclear tests
conducted in India in 1998 after the original nuclear test of 1974 saw him in a
pivotal political, organisational and technical role. He was awarded the Bharat
Ratna in 1997

Prathiba patel She was the Governor of Rajasthan before becoming the
President. From 1962 to 1985 she was a member of the Maharashtra
Legislative Assembly five times and was elected from Amravati to the Lok
Sabha in 1991. Not only this, she is also the first woman president to fly Sukhoi

Pranab Mukherjee was the finance minister in the central government before
contesting the presidential election. He was awarded the best Parliamentary
Award in 1997 and Padma Vibhushan, India's second highest civilian honour in
2008.

Ram Nath Kovind was born on 1 October, 1945 in Uttar Pradesh, India. He is
an Indian lawyer and politician. He is the 14th and current President of India.
He became President on 25 July, 2017 and is a member of Bhartiya Janata
party. He is the former Governor of Bihar. His approach towards political
problems earned him praise across the political spectrum. As, a Governor his
achievements was the creation of judicial commission to investigate corruption
in universities.

Articles associated with the president of India

Article No. Subject Matter
52. The president of India
53. Executive power of the president
54. Election of president
55. Manner of Election of president
56 Term of office of president
57. Eligibility of re-election

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58. Qualification for election as president

59. Conditions of president’s office
60. Oath or affirmation by the president
61. Procedure for impeachment of the president
62. Time of holding election to fill vacancy in the office of
president
65. Vice president to act as president or to discharge his
functions
71. Matters relating to the election of president
72. Powers of president to grant pardons etc. and to
suspend, remit or commute sentences in certain cases
74. Council of ministers to aid and advise the president
75. Other provision as to ministers like appointment, terms ,
salaries, etc.
76. Attorney general of India
77. Conduct of business of the government of India
78. Duties of prime minister in respect to furnishing of
information to the president etc.
85. Sessions of parliaments, prorogations and dissolution
111. Assent to bills passed by the parliaments
112. Union Budget (Annual Financial statement)
123. Power of president to promulgate ordinances
143. Power of president to consult supreme court

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Rajya sabha :

❖ It is also known as upper house of the parliament.

❖ Known as house of states
❖ Known as talent hunting chamber
❖ Known as house of elders
❖ Known as second house and secondary house.

The ‘Council of States’ which is also known as Rajya Sabha, a nomenclature that
was announced by the chair in the House on the 23rd August, 1954 has its own
distinctive features. The origin of the second Chamber can be traced to the
Montague-Chelmsford Report of 1918. The Government of India Act, 1919
provided for the creation of a ‘Council of State’ as a second chamber of the then
legislature with a restricted franchise which actually came into existence in
1921. The Governor-General was the ex-officio President of the then Council of
State. The Government of India Act, 1935, hardly made any changes in its
composition.

The Constituent Assembly, which first met on 9 December 1946, also acted as
the Central Legislature till 1950, when it was converted as ‘Provisional
Parliament’. During this period, the Central Legislature which was known as
Constituent Assembly (Legislative) and later Provisional Parliament was
unicameral till the first elections were held in 1952.

Extensive debate took place in the Constituent Assembly regarding the utility or
otherwise of a Second Chamber in Independent India and ultimately, it was
decided to have a bicameral legislature for independent India mainly because a
federal system was considered to be most feasible form of Government for such
a vast country with immense diversities. A single directly elected House, in fact,
was considered inadequate to meet the challenges before free India. A second
chamber known as the ‘Council of States’, therefore, was created with
altogether different composition and method of election from that of the
directly elected House of the People. It was conceived as another Chamber,
with smaller membership than the Lok Sabha (House of the People). It was
meant to be the federal chamber i.e., a House elected by the elected members
of Assemblies of the States and two Union Territories in which States were not
given equal representation. Apart from the elected members, provision was
also made for the nomination of twelve members to the House by the
President. The minimum age of thirty years was fixed for membership as against
twenty-five years for the Lower House. The element of dignity and prestige was

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added to the Council of State House by making the Vice-President of India ex-
officio Chairman of the Rajya Sabha who presides over its sittings.

Qualifications to get elected for rajya sabha

Article 84 of the Constitution lays down the qualifications for membership of
Parliament. A member of the Rajya Sabha must:

Be a citizen of India.

Make and subscribe before some person authorized in that behalf by

the Election Commission an oath or affirmation according to the form set out
for the purpose in the Third Schedule to the Constitution.

Be at least 30 years old.

Be elected by the Legislative Assembly of States and Union territories by

means of Single transferable vote through Proportional representation.

Not be a proclaimed criminal.

Not be a subject of insolvent, i.e. he/she should not be in debt that he/she is
not capable of repaying in a current manner and should have the ability to
meet his/her financial expenses.

Not hold any other office of profit under the Government of India.

Not be of unsound mind.

Possess such other qualifications as may be prescribed in that behalf by or

under any law made by Parliament.

Disqualifications

• Article 102 of the Constitution lays down that a person shall be disqualified
for being chosen as, and for being, a member of either House of Parliament
–
• if he holds any office of profit under the Government of India or the
Government of any State, other than an office declared by Parliament by
law not to disqualify its holder;
• if he is of unsound mind and stands so declared by a competent court;
• if he is an undischarged insolvent;

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• if he is not a citizen of India, or has voluntarily acquired the citizenship of a

foreign State, or is under any acknowledgement of allegiance or adherence
to a foreign State;
• if he is so disqualified by or under any law made by Parliament.

Method of election :

Electoral College:

The representatives of the States and of the Union Territories in the Rajya Sabha
are elected by the method of indirect election. The representatives of each
State and two Union territories are elected by the elected members of the
Legislative Assembly of that State and by the members of the Electoral College
for that Union Territory, as the case may be, in accordance with the system of
proportional representation by means of the single transferable vote. The
Electoral College for the National Capital Territory of Delhi consists of the
elected members of the Legislative Assembly of Delhi, and that for Puducherry
consists of the elected members of the Puducherry Legislative Assembly.
The Rajya Sabha seat quota for each state is fixed as per Schedule 4 of the
constitution. Elections to 1/3 of these seats occur every 2 years. Let’s take an
example of a state where there is Rajya Sabha election for 3 seats. Let there be
only two parties in the legislative assembly. Party A has 100 seats and party B
has 40 seats. Both parties can field three candidates each for the three Rajya
sabha seats.
To win a Rajya Sabha seat, a candidate should get a required number of votes.
That number (quotient) is found out using the below formula.
Quotient = Total number of votes divided by (Number of Rajya Sabha seats +
1 ) + 1.
In the illustrated case, a candidate requires (140/4)+1, ie. 36 votes to win.
Note: Members don’t vote for each seat. If that had been the case then only
the ruling party representatives would make it through. Rather, the members
give preferences for each candidate (as 1, 2, 3, 4, 5 and 6). If 36 or more
members choose a candidate as their first choice, he gets elected. So the Party
B (opposition party in Loksabha assembly) with 40 seats can get one member
elected if the members give preference for a candidate as first preference. The
ruling party (Party A) on the other hand can get 2 members elected (72 votes
from their 100 members).
Presiding Officers - Chairman and Deputy Chairman
The Presiding Officers of Rajya Sabha have the responsibility to conduct the
proceedings of the House. The Vice-President of India is ex-officio Chairman of
Rajya Sabha. Rajya Sabha also chooses from amongst its members, a Deputy

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Chairman. There is also a Panel of Vice-Chairmen in Rajya Sabha, the members

of which are nominated by the Chairman, Rajya Sabha. In the absence of the
Chairman and Deputy Chairman, a member from the Panel of Vice-Chairmen
presides over the proceedings of the House.

Secretary-General

The Secretary-General is appointed by the Chairman of Rajya Sabha and holds

rank equivalent to the highest civil servant of the Union. The Secretary-General
works with anonymity and is readily available to the Presiding Officers for
rendering advice on parliamentary matters. The Secretary-General is also the
administrative head of the Rajya Sabha Secretariat and the custodian of the
records of the House. He works under the direction and control of the
Chairman, Rajya Sabha.

Relation between the two Houses

• Under article 75(3) of the Constitution, the Council of Ministers is collectively

responsible to Lok Sabha which means Rajya Sabha cannot make or unmake
the Government. It can, however, exercise control over the Government and
this function becomes quite prominent, particularly when the Government
does not enjoy majority in Rajya Sabha.
• To resolve a deadlock between the two Houses, in case of an ordinary
legislation, the Constitution provides for the joint sitting of both Houses. In
fact, there have been three occasions in the past when the Houses of
Parliament had met in joint sitting to resolve differences between
them. Issues in joint sitting are decided by a majority of the total number of
members of both Houses present and voting. The joint sitting is held in the
Central Hall of Parliament House presided over by the Speaker, Lok Sabha.
However, in the case of a Money Bill, there is no provision in the Constitution
for a joint sitting of both Houses as Lok Sabha clearly enjoys pre-eminence
over Rajya Sabha in financial matters. As regards a Constitution amendment
Bill, it has been provided in the Constitution that such a Bill has to be passed
by the specific majority, as prescribed under article 368 of the Constitution,
by both Houses. There is, therefore, no provision for resolving a deadlock
between the two Houses in regard to a Constitution amendment Bill.
• Ministers may belong to either House of Parliament. The Constitution does
not make any distinction between the Houses in this regard. Every Minister
has the right to speak and take part in the proceedings of either House but
he is entitled to vote only in the House of which he is a member.

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• Similarly, with regard to powers, privileges and immunities of the Houses of

Parliament, their members and committees thereof, the two Houses are
placed absolutely on equal footing by the Constitution.
• Other important matters in respect of which both Houses enjoy equal powers
are election and impeachment of the President, election of the Vice-
President, approving the Proclamation of Emergency, the proclamation
regarding failure of constitutional machinery in States and financial
emergency. In respect of receiving reports and papers from various statutory
authorities, etc., both Houses have equal powers.
• It is thus clear that except in the case of collective responsibility of the Council
of Ministers and certain financial matters, which fall in the domain of Lok
Sabha only, both Houses enjoy equal powers.

Special Powers of Rajya Sabha

• Rajya Sabha being a federal chamber enjoys certain special powers under
the Constitution. All the subjects/areas regarding legislation have been
divided into three Lists - Union List, State List and concurrent List. Union
and State Lists are mutually exclusive - one cannot legislate on a matter
placed in the sphere of the other. However, if Rajya Sabha passes a
resolution by a majority of not less than two-thirds of members present and
voting saying that it is “necessary or expedient in the national interest” that
Parliament should make a law on a matter enumerated in the State List,
Parliament becomes empowered to make a law on the subject specified in
the resolution, for the whole or any part of the territory of India. Such a
resolution remains in force for a maximum period of one year but this
period can be extended by one year at a time by passing a similar resolution
further.
• If Rajya Sabha passes a resolution by a majority of not less than two-thirds of
the members present and voting declaring that it is necessary or expedient
in the national interest to create one or more All India Services common to
the Union and the States, Parliament becomes empowered to create by law
such services.
• Under the Constitution, the President is empowered to issue Proclamations
in the event of national emergency, in the event of failure of constitutional
machinery in a State, or in the case of financial emergency. Every such
proclamation has to be approved by both Houses of Parliament within a
stipulated period. Under certain circumstances, however, Rajya Sabha
enjoys special powers in this regard. If a Proclamation is issued at a time
when Lok Sabha has been dissolved or the dissolution of Lok Sabha takes

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place within the period allowed for its approval, then the proclamation
remains effective, if the resolution approving it is passed by Rajya Sabha
within the period specified in the Constitution under articles 352, 356 and
360.

Rajya Sabha in Financial Matters

• A Money Bill can be introduced only in Lok Sabha. After it is passed by that
House, it is transmitted to Rajya Sabha for its concurrence or
recommendation. The power of Rajya Sabha in respect of such a Bill is
limited. Rajya Sabha has to return such a Bill to Lok Sabha within a period of
fourteen days from its receipt. If it is not returned to Lok Sabha within that
time, the Bill is deemed to have been passed by both Houses at the expiration
of the said period in the form in which it was passed by Lok Sabha. Again,
Rajya Sabha cannot amend a Money Bill; it can only recommend
amendments and Lok Sabha may either accept or reject all or any of the
recommendations made by Rajya Sabha.
• Apart from a Money Bill, certain other categories of Financial Bills also cannot
be introduced in Rajya Sabha. There are, however, some other types of
Financial Bills on which there is no limitation on the powers of the Rajya
Sabha. These Bills may be initiated in either House and Rajya Sabha has
powers to reject or amend such Financial Bills like any other Bill. Of course,
such Bills cannot be passed by either House of Parliament unless the
President has recommended to that House the consideration thereof.
• From all this, however, it does not follow that Rajya Sabha has nothing to do
in matters relating to finance. The Budget of the Government of India is laid
every year before Rajya Sabha also and its members discuss it. Though Rajya
Sabha does not vote on Demands for Grants of various Ministries - a matter
exclusively reserved for Lok Sabha - no money, however, can be withdrawn
from the Consolidated Fund of India unless the Appropriation Bill has been
passed by both the Houses. Similarly, the Finance Bill is also brought before
Rajya Sabha. Besides, the Department-related Parliamentary Standing
Committees that examine the annual Demands for Grants of the
Ministries/Departments are joint committees having ten members from
Rajya Sabha.

Leader of the House

Apart from the Chairman and the Deputy Chairman, Leader of the House is
another functionary who plays important role in the efficient and smooth
conduct of the business in the House. The Leader of the House in Rajya Sabha

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is normally the Prime Minister, if he is its member or any Minister who is a

member of the House and is nominated by him to so function. His primary
responsibility is to maintain coordination amongst all sections of the House for
a harmonious and meaningful debate in the House. For this purpose, he remains
in close contact not only with the Government but also with the Opposition,
individual ministers and the Presiding Officer. He occupies the first seat in the
Chamber in first row at right the side of the Chair so that he is easily available to
the Presiding Officer for consultation. Under the rules, the Leader of the House
is consulted by the Chairman in regard to the arrangement of Government
business in the House, allotment of days or allocation of time for discussion on
the President’s Address, Private Members’ business on any day other than
Friday, discussion on No Day-Yet-Named Motions, Short Duration Discussions
and consideration and return of a Money Bill. He is also consulted by the
Chairman in the matter of adjournment or otherwise of the House for the day
in case of death of an outstanding personality, national leader or international
dignitary. In the era of coalition governments, his task has become more
challenging. He ensures that all possible and reasonable facilities are made
available to the House for a meaningful discussion on any matter that is brought
before it. He works as the spokesperson of the House in expressing sense of the
House and represents it on ceremonial or formal occasions. The following
members have been the Leaders of the House in the Rajya Sabha:

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Vice president of India:

Qualifications:

• Be a citizen of India
• Have completed more than 35 years of age
• Not hold any office of profit
While in order to be a President, a person must be qualified for election as a
member of the Lok Sabha (House of Peoples), the Vice President must be
qualified for election as a member of the Rajya Sabha (Council of States). This
difference is because the Vice President is to act as the ex officio Chairman of
the Rajya Sabha.
Powers :
• The Constitution provides for a Vice-President whose role in the
Government is comparatively insignificant. Going through the provisions
dealing with his office, one can easily see a striking similarity between the
role of the Vice-President of India and that of his counter part in the United
States.
• The American Vice-President is sometimes called “His Superfluous
Highness” to characterize his comparative insignificance in the
administration. But there is a provision in the American Constitution which
makes the Vice-President potentially important. According to this, if the
President dies in office, or is removed from office, the Vice-President takes
over the President’s office and continues in that capacity for the full length
of the unexpired term.
• But under the India Constitution, if the President dies or resigned or is
otherwise incapacitated and, as a result, the Presidential office become
vacant, the Vice-President will act as President only for a maximum period
of six months.
• The main function of the Vice-President like that of his American prototype
is to preside over the Council of States. He is its ex officio Chairman.
• The Vice-President is elected by the members of both House of Parliament
at joint meeting. The election is conducted in accordance with the system
of proportional representation by means of the single transferable vote.
The voting is by secret ballot.
• The Vice-President takes over the office of the President normally, under
four situations: death of the President, resignation of the President,
removal of the President

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• During the period when the Vice-President is acting for the President, he
will have all the powers and immunities of the President. He is also entitled
for such salary and allowances and privileges as may be determined by
Parliament by law for the purpose. At present, according to the Second
Schedule of the Constitution, the Vice-President is entitled to the same
emoluments, allowances and privileges as the President while he discharges
the functions of, or is acting as the President.
List of vice presidents in India :

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(see from down to top)

List of vice presidents who became president of India later:
Lok Sabha:
Lok Sabha is composed of representatives of the people chosen by direct
election on the basis of the adult suffrage. The maximum strength of the House
envisaged by the Constitution is 552, which is made up by election of upto 530
members to represent the States, upto 20 members to represent the Union
Territories and not more than two members of the Anglo-Indian Community to
be nominated by the Hon'ble President, if, in his/her opinion, that community
is not adequately represented in the House. The total elective membership is
distributed among the States in such a way that the ratio between the number
of seats allotted to each State and the population of the State is, so far as
practicable, the same for all States.
The election of the members of Lok Sabha is out of the pre- divided
constituencies and while demarcating them the two guide lines have been
followed, i.e. there is uniformity of representation between the States and
between the different constituencies in the State. With this regard, the States
have been allotted seats and its population is, as far as practical the same for all
States. Also the number of people residing in one constituency, as far as
possible, hold similar within a State. The forty-second Amendment has laid
down that 1971 census will serve as the basis of allocation of seats to each State
and this will remain so till 2000 A.D. Recently, the Union Cabinet has extended
this cap upto 2025 AD by the 84th Constitutional Amendment Act taking the
1971 Census as base year.
Qualifications to become member of parliament(lok sabha) :
• Article 84 (under Part V. — The Union) of Indian Constitution sets
qualifications for being a member of Lok Sabha, which are as follows:
• He / She should be a citizen of India, and must subscribe before the Election
Commission of India an oath or affirmation according to the form set out for
the purpose in the Third Schedule of Indian Constitution.
• He / She should not be less than 25 years of age.
• He / She possesses such other qualifications as may be prescribed in that
behalf by or under any law made by Parliament.
• He / She should not be proclaimed criminal i.e. they should not be a convict,
a confirmed debtor or otherwise disqualified by law; and
• He / She should have his/her name in the electoral rolls in any part of the
country.
• A member can be disqualified of being a member of Parliament:
• If he / she holds office of profit;

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• If he / she is of unsound mind and stands so declared by a competent court

• If he / she is an undischarged insolvent;
• If he / she is not a citizen of India, or has voluntarily acquired the citizenship
of a foreign State, or is under any acknowledgment of allegiance or
adherence to a foreign State;
• If he / she is violating party discipline (as per Tenth schedule of the
constitution); disqualified under Representation of People Act.
• A seat in the Lok Sabha will become vacant in the following circumstances
(during normal functioning of the House):
• When the holder of the seat, by writing to the speaker, resigns.
• When the holder of the seat is absent from 60 consecutive days of
proceedings of the House, without prior permission of the Speaker.
• When the holder of the seat is subject to any disqualifications mentioned in
the Constitution or any law enacted by Parliament. Defection Law'.
• A seat may also be vacated when the holder stands disqualified under the
'Anti-defection law.
Joint Sitting of the Parliament
Article 108 provides for a joint sitting of the two Houses of Parliament in certain
cases. A joint sitting can be convened by the President of India when one house
has either rejected a bill passed by the other house, has not taken any action on
a bill transmitted to it by the other house for six months, or has disagreed to the
amendments proposed by the Lok Sabha on a bill passed by it. Considering that
the numerical strength of Lok Sabha is more than twice that of Rajya Sabha, Lok
Sabha tends to have a greater influence in a joint sitting of Parliament. A joint
session is chaired by the Speaker of Lok Sabha. Also, because the joint session is
convened by the President on advice of the government, which already has a
majority in Lok Sabha, the joint session is usually convened to get bills passed
through a Rajya Sabha in which the government has a minority.
Joint sessions of Parliament are a rarity, and have been convened three times in
last 71 years, for the purpose of passage of a specific legislative act, the latest
time being in 2002:

1961: Dowry Prohibition Act, 1958

1978: Banking Services Commission (Repeal) Act, 1977

2002: Prevention of Terrorism Act, 2002

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Powers of loksabha:
• The Lok Sabha has certain powers that make it more powerful than the Rajya
Sabha.
• Motions of no confidence against the government can be introduced and
passed in the Lok Sabha. If passed by a majority vote, the Prime Minister and
the Council of Ministers resign collectively. The Rajya Sabha has no power
over such a motion, and hence has no real power over the executive. This is
because the Constitution of India has only made the Union Council of
ministers responsible to the Lok Sabha, not to the Rajya Sabha.
• Money bills can only be introduced in the Lok Sabha, and upon being passed,
are sent to the Rajya Sabha, where it can be deliberated on for up to 14 days.
If not rejected by the Rajya Sabha, or 14 days lapse from the introduction of
the bill in the Rajya Sabha without any action by the House, or
recommendations made by the Rajya Sabha are not accepted by the Lok
Sabha, the bill is considered passed. The budget is presented in the Lok Sabha
by the Finance Minister in the name of the President of India.
• In matters pertaining to non-financial (ordinary) bills, after the bill has been
passed by the House where it was originally tabled (Lok Sabha or Rajya
Sabha), it is sent to the other house, where it may be kept for a maximum
period of 6 months. If the other House rejects the bill or a period of 6 months
elapses without any action by that House, or the House that originally tabled
the bill does not accept the recommendations made by the members of the
other house, it results in a deadlock. This is resolved by a joint session of both
Houses, presided over by the speaker of the Lok Sabha and decided by
a simple majority. Though the Constitution has placed both houses on the
same footing in this regard, in reality it is the Lok Sabha's opinions that mostly
prevails—due to its bigger numerical strength.
• Equal Powers with the Rajya Sabha in initiating and passing any Bill for
Constitutional Amendment (by a majority of the total membership of the
House and at least two-thirds majority of the members present and voting).
• Equal Powers with the Rajya Sabha in initiating and passing a motion for
the impeachment of the President (by two-thirds of the membership of the
House).
• Equal Powers with the Rajya Sabha in impeachment process (initiating and
passing a motion for the removal) of the judges of the Supreme Court and
the state High Courts (by a majority of the membership of the House and at
least two-thirds majority of the members present and voting), who then can
be removed by the President of India.

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• Equal Powers with the Rajya Sabha in initiating and passing a resolution
declaring war or national emergency (by two-thirds majority) or
constitutional emergency (by simple majority) in a state.
• If the Lok Sabha is dissolved before or after the declaration of a National
Emergency, the Rajya Sabha becomes the sole Parliament. It cannot be
dissolved. This is a limitation on the Lok Sabha. But there is a possibility that
president can exceed the term to not more than 1 year under the
proclamation of emergency and the same would be lowered down to six-
month if the said proclamation ceases to operate.
Sessions and Time of Sittings
Three sessions of Lok Sabha take place in a year:

• Budget session: February to May.

• Monsoon session: July to September.
• Winter session: November to mid December.
When in session, Lok Sabha holds its sittings usually from 11 A.M. to 1 P.M.
and from 2 P.M. to 6 P.M. On some days the sittings are continuously held
without observing lunch break and are also extended beyond 6 P.M.
depending upon the business before the House. Lok Sabha does not
ordinarily sit on Saturdays and Sundays and other closed holidays
Question Hour
The first hour of every sitting is called Question Hour. Asking questions in
Parliament is the free and unfettered right of members, and during Question
Hour they may ask questions of ministers on different aspects of administration
and government policy in the national and international spheres. Every minister
whose turn it is to answer to questions has to stand up and answer for his
department's acts of omission or commission.
Questions are of three types—Starred, Unstarred and Short Notice.
• A Starred Question is one to which a member desires an oral answer in the
House and which is distinguished by an asterisk mark.
• An unstarred Question is one which is not called for oral answer in the house
and on which no supplementary questions can consequently be asked. An
answer to such a question is given in writing. Minimum period of notice for
starred/ unstarred question is 10 clear days.
• If the questions given notice of are admitted by the Speaker, they are listed
and printed for answer on the dates allotted to the Ministries to which the
subject matter of the question pertains.

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• The normal period of notice does not apply to short notice questions which
relate to matters of urgent public importance. However, a Short Notice
Question may be answered only on short notice if so permitted by the
Speaker and the Minister concerned is prepared to answer it at shorter
notice. A short notice question is taken up for answer immediately after the
Question Hour, popularly known as Zero Hour.
Zero Hour
The time immediately following the Question Hour has come to be known as
"Zero Hour". It starts at around 12 noon (hence the name) and members can,
with prior notice to the Speaker, raise issues of importance during this time.
Typically, discussions on important Bills, the Budget, and other issues of national
importance take place from 2 pm onwards.
Bills in Indian parliament:
What is a Bill

A Bill is a draft statute which becomes law after it is passed by both the Houses
of Parliament and assented to by the President. All legislative proposals are
brought before Parliament in the forms of Bills.
Bills may be broadly classified into Government Bills and Private Members’
Bills depending upon their initiation in the House by a Minister or a Private
Member.

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Public member bill is that which is introduced by a minister in ruling party.

Private member bill is something which is introduced by a MP who is not a
minister. It must be noted that if a bill is introduced by MP from ruling party is
also considered as private member bills.
Private member bills are introduced only on Friday
There are three types of bills that can be introduced in Indian parliament ie
• Ordinary bill
• Money bill
• Constitutional amendment bill
A Bill undergoes three readings in each House of Parliament. The First Reading
consists of the Introduction of a Bill. The Bill is introduced after adoption of a
motion for leave to introduce a Bill in either of the House. With the setting up
of the Department-related Parliamentary Standing Committees, invariably all
Bills, barring Ordinance replacing Bills; Bills of innocuous nature and Money Bills,
are referred to the these Committees for examination and report within three
months.
The next stage on a Bill i.e., second reading start only after the Committee
submits its report on the Bill to the Houses. The Second Reading consists of two
stages: the ‘first stage’ consists of discussion on the principles of the Bill and its
provisions generally on any of the following motions: that the Bill be taken into
consideration; that the Bill be referred to a Select Committee of the Rajya Sabha
; that the Bill be referred to a Joint Committee of the Houses with the
concurrence of the Lok Sabha; that it be circulated for the purpose of eliciting
opinion thereon; and the ‘second stage’ signifies the clause-by clause
consideration of the Bill as introduced or as reported by the Select/Joint
Committee. Amendments given by members to various clauses are moved at
this stage.
The Third Reading refers to the discussion on the motion that the Bill (or the Bill
as amended) be passed or returned (to the Lok Sabha, in the case of a Money
Bill) wherein the arguments are based against or in favour of the Bill. After a Bill
has been passed by one House, it is sent to the other House where it goes
through the same procedure. However the Bill is not again introduced in the
other House, it is laid on the Table of the other House which constitutes its first
reading there.
Ordinary bill : The scope of ordinary bill is no where mentioned in the
constitution. A bill which usually does not include money matters and which
does not amend the constitution is known as ordinary bill.

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• It can be introduced in either house.

• It can be introduced both by Goverment minister and private member.
• It is passed by Simple Majority by members present and voting
Either house of the parliament can reject the ordinary bill for a maximum period
of 6 months. After 6months the bill becomes a deadlock and to eliminate the
deadlock the president of india calls for the joint sitting.
The Parliament of India is bicameral. The concurrence of both houses is required
to pass any bill. However, the authors of the Constitution of India visualized
situations of deadlock between the upper house i.e. Rajya Sabha and the lower
house i.e. Lok Sabha.
Therefore, the Constitution of India provides for Joint sittings of both the Houses
to break this deadlock. The joint sitting of the Parliament is called by the
President and is presided over by the Speaker or, in his absence, by the Deputy
Speaker of the Lok Sabha or in his absence, the Deputy-Chairman of the Rajya
Sabha.
As of now there have been 4 joint session in Parliament of India. However, only
3 bills have been passed.
1. Dowry prohibition Act, 1961
2. The Banking service commission Act(Repeal), 1978
3. Prevention of terrorism Act(POTA), 2002.
4. Women Reservation, 2008 (no bill passed)
Article 108: Article 108 of the Indian Constitution of India provides for Joint
sitting of both the Houses. The joint sitting of the Parliament is called by the
President and is presided over by the Speaker or, in his absence, by the Deputy
Speaker of the Lok Sabha or in his absence, the Deputy-Chairman of the Rajya
Sabha.
Note : The Chairman doesn't preside over the joint session at any means/cost.
Examples of ordinary bill
• MGNREGA(mahatma Gandhi national rural employment guarantee act)2005
• RTI(Right to information act) 2005
• Nirbhaya act 2013
• POCSO(protection of child from sexual offences act)2015
• Telangana state formation act 2014
Money bill :
Under article 110(1) of the Constitution, a Bill is deemed to be a Money Bill if it
contains only provisions dealing with all or any of the following matters, namely:
the imposition, abolition, remission, alteration or regulation of any tax;
the regulation of the borrowing of money or the giving of any guarantee by the
Government of India, or the amendment of the law with respect to any financial
obligations undertaken or to be undertaken by the Government of India;

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the custody of the Consolidated Fund or the Contingency Fund of India, the
payment of moneys into or the withdrawal of moneys from any such fund;
the appropriation of moneys out of the Consolidated Fund of India;
the declaring of any expenditure to be expenditure charged on the Consolidated
Fund of India or the increasing of the amount of any such expenditure;
the receipt of money on account of the Consolidated Fund of India or the public
account of India or the custody or issue of such money or the audit of the
accounts of the Union or of a State; or
any matter incidental to any of the matters specified in sub-clauses (a) to (f).

Note : A Bill is not deemed to be Money Bill by reason only that it provides for
the imposition of fines or other pecuniary penalties, or for the demand or
payment of fees for licences or fees for services rendered, or by reason that it
provides for the imposition, abolition, remission, alteration or regulation of any
tax by any local authority or body for local purposes.

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A Money Bill can be introduced in Lok Sabha only. If any question arises
whether a Bill is a Money Bill or not,
the decision of Speaker thereon is final. The Speaker is under no obligation to
consult any one in coming to a decision or in giving certificate that a Bill is a
Money Bill. The certificate of the Speaker to the effect that a Bill is a Money
Bill, is to be endorsed and signed by the Speaker when it is transmitted to
Rajya Sabha and also when it is presented to the President for assent.
The Speaker’s certificate on a Money Bill once given is final and cannot be
challenged.
A Money Bill cannot be referred to a Joint Committee of the Houses
Financial Bills can be divided into two categories. In the first category are Bills
which inter-alia contain provisions attracting article 110(1) (a) to (f) of the
Constitution. They are categorised as Financial Bills under article 117(1) of the
Constitution. Like Money Bills, they can be introduced only in Lok Sabha on the
recommendation of the President. However, other restrictions in regard to
Money Bills do not apply to this category of Bills. Financial Bill under article
117(1) of the Constitution can be referred to a Joint Committee of the Houses.
In the second category are those Bills which inter-alia contain provisions which
would on enactment involve expenditure from the Consolidated Fund of India.
Such Bills are categorised as Financial Bills under article 117 (3) of the
Constitution. Such Bills can be introduced in either House of Parliament.
However, recommendation of the President is essential for consideration of
these Bills by either House and unless such recommendation is received,
neither House can pass the Bill.
Note : A Constitution Amendment Bill is not treated as a Money Bill even if all
its provisions attract article 110(1) for the reason that such amendments are
governed by article 368 which over-rides the provisions regarding Money Bills.
Finance Bill : Finance Bill is a secret bill introduced in Lok Sabha every year
immediately after the presentation of the General Budget to give effect to the
financial proposals of the Government of India for the following financial year.
Finance Bills are treated as Money Bills as they substantially deal with
amendments to various tax laws. Appropriation Bill : An Appropriation Bill is
introduced in Lok Sabha immediately after adoption of the relevant demands
for grants. Such Bills are categorised as Money Bills as they seek to authorise
appropriation from the Consolidated Fund of India, of all moneys required to
meet the grants made by the House and the expenditure charged on the
Consolidated Fund of India.
Note :
Rajya Sabha is required to return a Money Bill passed and transmitted by Lok
Sabha within a period of fourteen days from the date of its receipt. The period

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of fourteen days is computed from the date of receipt of the Bill in the Rajya
Sabha Secretariat and not from the date on which it is laid on the Table of
Rajya Sabha
Lok Sabha Secretariat is responsible for obtaining assent of all Money Bills after
they have been passed or are deemed to have been passed by the Houses of
Parliament.
The President may either give or withhold assent to a Money Bill. Under the
Constitution, a Money Bill cannot be returned to the House by the President
for reconsideration.
Which one of the following is the correct sequence of different stages a
budget has to go through in the Parliament ?
1. Presentation of the Budget
2. Scrutiny by Departmental Commit tees
3. Passing of Finance Bill
4. Passing of Appropriation Bill
Select the correct answer using the code given below :
(a) 1 - 2 – 4-
(b) 1 - 3 - 2
(c) 2 - 1 - 3 - 4
(d) 4 - 3 - 2 - 1

BUDGET : Article 112( Annual financial statement)

The President shall in respect of every financial year cause to be laid before
both the Houses of Parliament a statement of the estimated receipts and
expenditure of the Government of India for that year, in this Part referred to as
the annual financial statement which is also known as budget.
In India, the Union Budget is prepared by the Department of Economic Affairs
of Ministry of Finance.
In parliament, the budget goes through 5 stages
• Presentation of budget with Finance Minister’s speech
• General discussion of the budget. After this, there is an adjournment of
houses so that standing committees scrutinises the demand for grants for a
month.
• Voting on demand for grants in Lok Sabha
• Passing of appropriation bills
• Passing of Finance bills.
The budget is presented to the parliament on the date fixed by the President.
Generally, it was presented on the last working day of February, a month
before the commencement of the financial year but this 92 years old practices
of presenting budget has been changed now. During general elections, the

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budget is presented twice, first to secure a vote on account for 4 months and
later completely. Budget speech of finance minister is in two parts, Part A
constitute a general economic condition of the country while part B relates to
taxation proposals.
Then the discussion is done in two stages. In the first stage, broad outlines of
the budget, principle and policies underlying it are to be discussed in general
discussion of the budget which lasts for about 4-5 days. In second stage
discussion is held based on reports of concerned Departments/Ministries
standing committees, which is usually done after a month of a general
discussion of the budget. Standing committees submit reports to the house
which are persuasive in nature.
Vote on account budget: Since the passing of the budget takes almost 2
months, the Government requires the sanction of an amount to maintain itself
for this period. According to Art 116, a special provision called 'Vote on
Account' is created by which vote of parliament is obtained by the government
for a sum sufficient generally for 2 months to incur expenditure. During the
election year a vote on an account may exceed from 2-4 months expenditure.
Discussion and Voting on Demand for Grants
After standing committee reports are presented to the house, the house
proceeds with a Ministry wise discussion of committee reports and voting on
demand for grants. The time for discussion and voting on demand for grants is
allocated by the speaker in consultation with the leader of the house
The guillotine is passing the Demand for Grants without discussion. On the last
day of the period allotted by speaker due to the paucity of time, speaker puts
all the outstanding Demands for grants to vote of the house. It is a device used
for want of time.
Categories of Cut motions
Economy cut
Economy cut motion demands reduction of a specified amount from the
demand for Grant representing the welfare of the economy.
Policy cut
According to policy cut motion, the demand for a grant is reduced to Re.1
representing the disapproval of the policy underlying the demand. A member
giving such notice should indicate precise terms, the particulars of the policy
which he proposes to discuss. It is open to the member to advocate alternative
policy.
Token cut
Token cut motion is used to voice a grievance. In token cut, the amount of the
Demand for Grant is reduced by Rs.100 in order to express a specific grievance.
Types of Expenditure

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Charged expenditure
It includes expenditure specified in the constitution. There is no voting on
charged expenditure. It includes emoluments of the president and the salaries
and allowances of the chairman and deputy chairman of the Rajya Sabha,
speaker and deputy speaker of Lok Sabha, Judges of the Supreme Court, CAG,
and certain other bodies/agencies specified in the constitution.
Non-Charged Expenditure
It is the votable expenditure. It is the sum required to meet other expenditure
proposed to be made from the consolidated fund of India. In other words
amount of expenditure incurred through Demand for Grants.
Additional Grant
It is the grant made by the parliament for expenditure on new service not
contemplated in the annual financial statement that year.
Token grant
Spending money sanctioned for one head on another head within the same
ministry with the permission of finance ministry is done through a token grant.
In the token grant, it seeks a token sum of Rs.1 from Lok Sabha to spend on a
new service.
Exceptional Grant
Through exceptional grant money is sought for service that is not part of the
current service of any financial year.
Article 112 Annual financial statement
Article 113 Procedure in Parliament with respect to estimates.
Article 114 Appropriation Bills"
Article 115: Supplementary, additional or excess grants
Article 116 : vote on accounts
Article 117 : finance bills

Constitutional amendment bill – article 368 :

Amending the Constitution of India is the process of making changes to the
nation's fundamental law or supreme law. The procedure of amendment in the
constitution is laid down in Part XX (Article 368) of the Constitution of India.
This procedure ensures the sanctity of the Constitution of India and keeps a
check on arbitrary power of the Parliament of India.
1.Bills that are not deemed as Constitution Amendment Bills 2. Bills for
amendment of the following provisions of the Constitution are passed by both
Houses of Parliament by a simple majority of members present and voting :
Admission or establishment of new States, formation of new States, and
alteration of areas, boundaries or names of existing States (articles 2, 3 and 4);
Creation or abolition of Legislative Councils in the States (article 169)

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Administration and control of Scheduled Areas and Scheduled Tribes (para 7 of

the Fifth Schedule); and
Administration of Tribal Areas in the States of Assam, Meghalaya, Tripura and
Mizoram (para 21 of the Sixth Schedule).
• Use of English language in parliament
• Delimitation of constituencies
• Official language
• Union territories
• Second schedule of constitution.
Amendment by special majority of parliament
It is a majority of more than 50% of strength present in voting and the voting
takes place with 2/3rd majority in both the houses of parliament.
Examples:
Fundamental rights
Directive principles of state policy
Amendment by special majority and consent of states
It is special majority in both the houses of parliament and also requires the
ascent of the 50% of state assemblies in India.
It means that at least 14 state assemblies have to give the ascent to such bills(
considering the total states in India be 28)
• Supreme court and high courts
• Presidential election
• Distribution of legislative procedures between centre and states
• Goods and services tax (GST)
• Any of the subjects in seventh schedule
• Representation of states in parliament
• Procedure laid down to amend the constitution (article 368itself)

Bills seeking to amend all other provisions of the Constitution including those
enumerated in the proviso to article 368(2) are called by the title ‘Constitution
Amendment Bills’. These Bills can be introduced in either House of Parliament.
If sponsored by a Private Member, the Bill has to be examined in the first
instance and recommended for introduction by the Committee on Private
Members’ Bills and Resolutions before it is included for introduction in the List
of Business. Motions for introduction of the Bills are decided by simple
majority.
Constitution Amendment Bills have to be passed in each House of Parliament
by a special majority i.e. by a majority of the total membership of that House
and by a majority of not less than two-thirds of the members of the House
“present and voting”. The expression “total membership” means the total

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number of members comprising the House irrespective of whether there are

vacancies or absentees on any account. The expression “present and voting”,
means members who vote for “ayes” or for “noes”. Members who are present
in the House and vote “abstention” either through the electronic vote recorder
or on a voting slip or in any other manner, are not treated as “present and
voting.”

Ratification by the State Legislatures

A Constitution Amendment Bill which seeks to make any change in articles
relating to:— the election of the President, or the extent of the executive
power of the Union and the States, or the Supreme Court and the High Courts,
or distribution of legislative powers between the Union and States, or
representation of States in Parliament, or the very procedure for amendment
as laid down in article 368 of the Constitution.
Joint Sitting
In case of any disagreement between the two Houses of Parliament on a
Constitution Amendment Bill, there cannot be a joint sitting of the Houses of
Parliament on the Bill as article 368 of the Constitution requires each House to
pass the Bill by the prescribed special majority.
Constitution Amendment Bills passed by Parliament by the prescribed special
majority and, where necessary, ratified by the requisite number of State
Legislatures are presented to the President under article 368 of the
Constitution under which the President is bound to give assent to such Bills.

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Berubari Union case (1960): (Parliament's power to make amendments under

Article 3 and Article 368)
In this case, conflict arose regarding the power of the parliament to transfer
the territory of Berubari to Pakistan. The detailed examination of article 3 was
done by the Supreme Court on a reference made by the President in 1960. The
Supreme Court held that the Parliament of India is not competent to make a
law under article 3 for the implementation of the Nehru-Noon Agreement.
This was followed by an amendment of the constitution by parliament using
the power of Article 368. The result was the Constitution (9th Amendment) Act
1960. The Supreme Court gave a very narrow judgement that the preamble
was not an integral part of the constitution and therefore it is not enforceable
in a court of law.
Basic structure doctrine:
• The constitution empowers the Parliament and the State Legislatures to
make laws within their respective jurisdiction. Bills to amend the
constitution can only be introduced in the Parliament, but this power is not
absolute. If the Supreme Court finds any law made by the Parliament
inconsistent with the constitution, it has the power to declare that law to
be invalid. Thus, to preserve the ideals and philosophy of the original
constitution, the Supreme Court has laid down the basic structure doctrine.
According to the doctrine, the Parliament cannot destroy or alter the basic
structure of the doctrine.
• The word "Basic Structure" is not mentioned in the constitution of India.
The concept developed gradually with the interference of the judiciary from
time to time to protect the basic rights of the people and the ideals and the
philosophy of the constitution.
• The First Constitution Amendment Act, 1951 was challenged in the Shankari
Prasad vs. Union of India case. The amendment was challenged on the
ground that it violates the Part-III of the constitution and therefore, should
be considered invalid. The Supreme Court held that the Parliament, under
Article 368, has the power to amend any part of the constitution including
fundamental rights. The Court gave the same ruling in Sajjan Singh Vs State
of Rajasthan case in 1965.
• The Parliament, in 1971, passed the 24th Constitution Amendment Act. The
act gave the absolute power to the parliament to make any changes in the
constitution including the fundamental rights. It also made it obligatory for
the President to give his assent on all the Constitution Amendment bills
sent to him.
Minerva mills case (1980): (Basic Structure which includes Parliament's
power to amend and the power of Judicial Review)

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In this case, the validity of the 42nd amendment act was challenged on the
ground that they are violative of the ‘basic structure’ of the Constitution. The
Supreme Court struck down clauses (4) and (5) of the article 368 and it was
ruled by the court that a limited amending power itself is a basic feature of the
Constitution. The court held that the amendment made to Article 31C is invalid
on the ground that they violate two basic features of the Constitution that are
the limited nature of the parliament of the power to amend and the power of
judicial review.
The Judgement of the Supreme Court thus makes it clear that the Constitution
is the Supreme, not the Parliament. Parliament cannot have unlimited
amending power so as to damage or destroy the Constitution to which it owes
its existence and also derives its power from.
Waman Rao Case (1981): (Validity of 9th Schedule and demarcarting the date
of 24th april 1973)
Supreme Court in Waman Rao case once again reiterated and applied the
doctrine of the basic features of the Constitution. In this case, the implications
of the basic structure doctrine for Article31-B were re-examined. The Court
drew a line of demarcation on April 24th, 1973 (the date of Kesavananda
Bharti’s decision) and held it should not be applied retrospectively to reopen
the validity of any amendment to the Constitution, which took place prior to
24-04-1973. It meant all the amendments which added to the Ninth Schedule
before that date were valid.
The basic features of the Constitution are as follows:
• The majority had differing opinions on what the "basic structure" of the
Constitution comprised.
• Chief Justice Sarv Mittra Sikri, writing for the majority, indicated that the
basic structure consists of the following:
• The supremacy of the constitution.
• A republican and democratic form of government.
• The secular character of the Constitution.
• Maintenance of the separation of powers.
• The federal character of the Constitution.
Justices Shelat and Grover in their opinion added three features to the Chief
Justice's list:
• The mandate to build a welfare state contained in the Directive Principles of
State Policy.
• Maintenance of the unity and integrity of India.
• The sovereignty of the country.

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Justices Hegde and Mukherjee, in their opinion, provided a separate and

shorter list:
• The sovereignty of India.
• The democratic character of the polity.
• The unity of the country.
• Essential features of individual freedoms.
• The mandate to build a welfare state.

Parliamentary committees:

There are different types of parliamentary committees which can be classified

as follows:

• Consultative committees for different ministries which provide a forum for

discussion on the policies and the working of the ministry.
• The Select or Joint select Committees on individual bills for investigation or
inquiry.
• The Parliament may appoint a committee for specific purpose of studying a
particular subject matter for example, a committee for the welfare of
Scheduled caste and scheduled tribes.
• There are committees to inquire into the various matters like the Committee
of Petitions and the Committee of Privileges, the Committee to Scrutinize or

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the Committee of Government assurance and Committee on Subordinate

Legislation.
• There are also committees of administrative character relating to the
business of House such as Committee on absence of Members from the
sittings of the House, Business Advisory Committee and Rules Committee. A
few committees are concerned with the facilities of a Member of Parliament
like the House Committee and Library committee.
• However, one of the most important committees include the financial
committees such as Estimates committee, Public Accounts Committee and
the Committee on Public Undertakings.
• Ad hoc committees are those which are non permanent in nature. Usually
according to the requirement of the government these committees are
formed.

Financial committees :

Public Accounts Committee.—(i) Public Accounts Committee is constituted

under the provisions of Rules 308 and 309. Its function is to examine the
accounts showing the appropriation of the sums granted by the House to meet
the expenditure of the Government of India, the annual Finance Accounts of the
Government of India and such other accounts laid before the House as the
Committee may think fit except those relating to such Public Undertakings as
are allotted to the Committee on Public Undertakings. Apart from the Reports
of Comptroller and Auditor General of India on Appropriation Accounts of the
Union Government, the Committee examines the various Audit Reports of the
Comptroller and Auditor General on revenue receipts, expenditure by various
Ministries/Departments of Government and accounts of autonomous bodies.

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The Committee consists of 22 members comprising 15 Members of Lok Sabha

elected by Lok Sabha from amongst its members according to the principle of
proportional representation by means of the single transferable vote for a term
not exceeding one year and not more than seven members of Rajya Sabha to be
nominated by the House for being associated with the Committee. The
Chairperson of the Committee is appointed by the Speaker from amongst the
members of Lok Sabha elected to the Committee. A Minister is not eligible to be
elected as a member of the Committee, and if a member after her/his election
to the Committee is appointed to hold such an office she/he ceases to be
member of the Committee from the date of such appointment. Whenever the
Chairperson or any member of the Committee is invited to accept membership
of any Committee constituted by Government, the matter has to be placed
before the Speaker before the appointment is accepted

Estimates Committee.—(i) The Estimates Committee is constituted under

provisions of Rule 310 for examination of the estimates as may seem fit to the
Committee or are specifically referred to it by the House or the Speaker. Its
functions are (a) to report what economies, improvements in organisation,
efficiency or administrative reform, consistent with the policy underlying the
estimates, may be effected; (b) to suggest alternative policies in order to bring
about efficiency and economy in administration; (c) to examine whether the
money is well laid out within the limits of the policy implied in the estimates;
and (d) to suggest the form in which the estimates shall be presented to
Parliament.

The Committee consists of 30 members elected annually by the Lok Sabha from
amongst its members according to the principle of proportional representation
by means of the single transferable vote. The Chairperson of the Committee is
appointed by the Speaker from amongst the Members of the Committee. A
Minister is not eligible to be elected as a member of the Committee. If a member
after election to the Committee is appointed as a Minister, such member ceases
to be a member of the Committee from the date of such appointment.

Committee on Public Undertakings.—(i) The Committee on Public Undertakings

is constituted under Rule 312B. The Committee consists of not more than 22
members comprising 15 members elected by Lok Sabha from amongst its
members according to the principle of proportional representation by means of
single transferable vote and not more than 7 members from Rajya Sabha to be
nominated by that House for being associated with the Committee. The term of
office of members of the Committee is not to exceed one year.

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The Chairperson of the Committee is appointed by the Speaker from amongst

the members of the Committee. A Minister is not eligible to be elected as a
member of the Committee and if a member after election to the Committee is
appointed a Minister, such member ceases to be a member of the Committee
from the date of such appointment. As in the case of the Estimates Committee
and the Public Accounts Committee whenever the Chairperson or any Member
of the Committee on Public Undertakings is invited to accept membership of any
Committee constituted by Government, the matter has to be placed before the
Speaker before the appointment is accepted. In case a Member who is already
a Member of a Committee constituted by Government is elected to the
Committee on Public Undertakings, the matter has to be placed promptly before
the Speaker for deciding whether the Member should be permitted to continue
the membership of the former Committee.
Committees on administrative setup :
Business Advisory Committee
The committee of Lok Sabha and Rajya Sabha consist of 15 and 11 members
respectively. The speaker of Lok Sabha acts as the chairman of committee of
Lok Sabha and the Chairman of Rajya Sabha is the ex-officio chairman of the
committee of Rajya Sabha
The function of the Committee is to recommend to the government to bring
forward particular subjects for discussion in the House and recommend
allocation of time for such discussions.
Committee on Private Members’ Bills and Resolutions
The function of the Committee is to allot time to bills and resolutions
introduced by private members. The committee only exists in Lok Sabha and
consists of 15 members with Deputy Speaker is its Chairman. The Committee
holds office for a term not exceeding one year.
Committee on Government Assurances
This committee scrutinizes the assurances, promises, undertakings etc. given
by ministers from time to time and to report to the respective house and to
see whether such implementation has taken place within the minimum time
necessary for the purpose. The committee consists of 15 members in Lok
Sabha and 10 members in Rajya Sabha.
Committee on Subordinate Legislation
The Committee scrutinizes and reports to the House to know whether the
powers are making regulations, rules, sub -rules, by-laws etc. conferred by the
constitution or delegated by the parliament are being properly exercised by
the executive within the scope of such delegation. The committee in both the
houses consists of 15 members.

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Committee on Welfare of SCs and STs

The committee consists of 30 members that include 20 members from the Lok
Sabha and 10 members from the Rajya Sabha. The main function of the
Committee is to consider all matters concerning the welfare of the scheduled
castes and scheduled tribes, falling within the purview of the union
government and the union territories

Rules Committee
It considers matters of procedure and conduct of business in the House and
recommends any amendments or additions to the Rules of Procedure and
Conduct of Business in the House. The Lok Sabha committee consists of 15
members including the Speaker who is the ex-officio Chairman. The Rajya
Sabha committee consists of 16 members including the Chairman as its ex-
officio Chairman.
Committee of Privileges
The function of the committee is to examine case involving breach of privilege
of the House or of the members of any committee referred to it by the House
or by the Speaker and to make suitable recommendations in its report. The Lok
Sabha committee and the Rajya Sabha committee consist of 15 and 10
members respectively.
Committee on Petitions
It considers and reports on petitions on bills and on matters of public
importance presented to the House The Lok Sabha committee and the Rajya
Sabha committee consist of 15 and 10 members respectively.
Joint Committee on Offices of Profit
It examines the composition and character of the committees appointed by
the central and state governments and to recommend whether a person
holding these offices should be disqualified from being elected as a member of
parliament, under article 102 of the Constitution. It consists of 15 members, 10
from Lok Sabha and 5 from Rajya Sabha.
Committee on Empowerment of Women
The committee consists of 30 members that include 20 members from the Lok
Sabha and 10 members from the Rajya Sabha. The main function of the
committee is to review and monitor the measures taken by the union
government for securing women equality, status and dignity in all fields
Prime Minister and the Council of Ministers:
Article 74(1) states that there shall be a Council of Ministers with a Prime
Minister at the head to aid and advise the President. Thus, in India the
Constitution itself recognizes a Council of Ministers. The Prime Minister is

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selected by the President. He necessarily appoints a person as the Prime

Minister who is either the leader of the party which holds majority of seats in
the Lok Sabha or is a person who is able to win the confidence of the Lok Sabha
by gaining support of other political parties. All other ministers are appointed
by the President on the advice of the Prime Minister.
In Relation to Council of Ministers
Since the prime minister stands at the head of the council of ministers, the other
ministers cannot function when the prime minister resigns or dies. In other
words, the resignation or death of an incumbent prime minister automatically
dissolves the council of ministers and thereby generates a vacuum. The
resignation or death of any other minister, on the other hand, merely creates a
vacancy. The prime minister enjoys the following powers as head of the Union
council of ministers: 1. He recommends persons who can be appointed as
ministers by the president. The president can appoint only those persons as
ministers who are recommended by the prime minister. 2. He presides over the
meeting of council of ministers and influences its decisions. 3. He can ask a
minister to resign or advise the president to dismiss him in case of difference of
opinion. 4. He allocates and reshuffles various portfolios among the ministers.
5. He guides, directs, controls, and coordinates the activities of all the ministers.
6. He can bring about the collapse of the council of ministers by resigning from
office.
In Relation to the President
• The prime minister enjoys the following powers in relation to the president:
• He is the principal channel of communication between the president and the
council of ministers.
• He advises the president with regard to the appointment of important
officials like attorney general of India, comptroller and auditor general of
India, chairman and members of the UPSC, election commissioners,
chairman and members of the finance commission and so on.
In Relation to Parliament
• The prime minister is the leader of the Lower House. In this capacity, he
enjoys the following powers:
• He advises the president with regard to summoning and proroguing of the
sessions of the Parliament.
• He can recommend dissolution of the Lok Sabha to president at any time.
• He announces government policies on floor of the House.
Other Powers & Functions
• In addition to the above-mentioned three major roles, the prime minister has
various other roles. These are:

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• He is the chairman of the Planning Com-mission, National Development

Council, National Integration Council and Inter-State Council.
• He plays a significant role in shaping the foreign policy of the country.
• He is the chief spokesman of the Union government.
• As a leader of the nation, he meets various sections of people in different
states and receives memoranda from them regarding their problems, and so
on.
• He is the crisis manager-in-chief at the political level during emergencies. He
is leader of the party in power and the political head of the services.

Distinction between Council of Ministers and Cabinet

Council of ministers

• It is a wider body consisting of 60 to 70 ministers.

• It includes all the three categories of ministers, that is, cabinet ministers,
ministers of state, and deputy ministers.
• It does not meet, as a body, to transact government business. It has no
collective functions.
• It is vested with all powers but in theory.
• Its functions are determined by the cabinet.
• It is a constitutional body, dealt in detail by the Articles 74 and 75 of the
Constitution. Its size is determined by the prime minister according to the
exigencies of the time and requirements of the situation.
• It is collectively responsible to the Lower House of the Parliament.
Cabinet

• It is a smaller body consisting of 15 to 20 ministers.

• It includes the cabinet ministers only. Thus, it is a part of the council of
ministers.
• It meets, as a body, frequently and usually once in a week to deliberate and
take decisions regarding the transaction of government business. Thus, it has
collective functions.
• It exercises, in practice, the powers of the council of ministers and thus, acts
for the latter.
• It directs the council of ministers by taking policy decisions which are binding-
on all ministers.
• It was inserted in Article 352 of the Constitution in 1978 by the 44th
Constitutional Amendment Act. Thus, it did not find a place in the original
text of the Constitution.

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• It enforces the collective responsibility of the council of ministers to the

Lower House of Parliament.
List of PM s in INDIA:
S.N. Name Born- Term of office Remark
Dead
1. Jawahar Lal (1889– 5 August 1947- First prime
Nehru 1964) 27 May 1964 minister of
16 years, 286 India and
days longest
serving PM of
India, first to
die in office.
2. Gulzarilal (1898– 27 May,1964 to First acting
Nanda 1998) 9 June 1964, PM of India
13 days
3. Lal (1904– 9 June, 1964 to He given
Bahadur 1966) 11 January slogan of 'Jai
Shastri 1966 Jawan Jai
1 year, 216 Kisan' during
days Indo-Pak war
of 1965
4. Indira (1917– 24 January First lady
Gandhi 1984) 1966 to 24 Prime
March 1977 Minister of
11 years, 59 India
days
5. Morarji (1896– 24 March 1977 Oldest to
Desai 1995) – 28 July 1979 become PM
2 year, 116 @ 81 and
days first to resign
from office
6. Charan (1902– 28 July, 1979 to Only PM who
Singh 1987) 14 Jan. 1980 did not face
170 days the
Parliament
7. Indira (1917– 14 Jan.1980 to First lady who
Gandhi 1984) 31 Oct. 1984 served as PM

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4 years, 291 for second

days term
8. Rajiv (1944– 31 Oct, 1984 to Youngest to
Gandhi 1991) 2 Dec. 1989 become PM
5 years, 32 days @ 40 year
9. V. P. Singh (1931– 2 Dec. 1989 to First PM to
2008) 10 Nov. 1990 step down
343 days after vote of
no
confidence
10. Chandra (1927– 10 He belongs
Shekhar 2007) November,1990 to Samajwadi
to 21 June 1991 Janata Party
223 days
11. P. V. (1921– 21 June 1991 to First PM from
Narasimha 2004) 16 May 1996 south India
Rao 4 years, 330
days
12. Atal Bihari (born 16 May, 1996 PM for
Vajpayee 1924) to 1 June 1996 shortest
16 days tenure
13. H. D. Deve (born 1 June, 1996 to He belongs
Gowda 1933) 21 April 1997 to Janata Dal
324 days
14. Inder (1919– 21 April 1997 to ------
Kumar 2012) 19 March,
Gujral 1998 332 days
15. Atal Bihari (born 19 March, 1998 First non
Vajpayee 1924) to 22 May congress PM
2004 who
6 years, 64 days completed
full term as
PM
16. Manmohan (born 22 May 2004 to First Sikh PM
Singh 1932) 26 May 2014

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10 years, 4 May
2 days
17. Narendra (born 26 May 2014, 4th Prime
Modi 1950) Incumbent Minister of
India who
served two
consecutive
tenures

Note : The Union Council of Ministers exercises executive authority in

the Republic of India. It consists of senior ministers, called 'cabinet ministers',
junior ministers, called 'ministers of state' and, rarely, deputy ministers known
as minister of state with independent charge.
It is led by the Prime Minister. A smaller executive body called the Union
Cabinet is the supreme decision-making body in India. Only the prime minister
and ministers of the rank of cabinet minister are members of Union Cabinet in
accordance with Article 75.
Kitchen Cabinet
The cabinet, a small body consisting of the prime minister as its head and some
15 to 20 most important ministers, is the highest decision-making body in the
formal sense. However, a still smaller body called the inner Cabinet or Kitchen
Cabinet has become real centre of power. It advises the prime minister on
important political and administrative issues and assists him in ma-king crucial
decisions This informal body consists of the prime minister and two to four
influential colleagues in whom he has faith and with whom he can discuss every
problem. It is composed of not only cabinet ministers but also outsiders like
friends and family members of the prime minister:
Merits:
1. It being a small unit, is much more efficient decision-making body than a large
cabinet.
2. It can meet more often and deal with business much more expeditiously than
the large cabinet.
3. It helps the prime minister in maintaining secrecy in making decisions on
important political issues.
Demerits: It reduces the authority and status of the cabinet as the highest
decision-making body. It circumvents the legal process by allowing outside
persons to play an influential role in the government functioning

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Shadow Cabinet or Shadow Ministry is a feature of the Westminster system of

government. It consists of a senior group of opposition spokespeople who,
under the leadership of the Leader of the Opposition, form an
alternative cabinet to that of the government, and whose members shadow or
mirror the positions of each individual member of the Cabinet. It is the Shadow
Cabinet's responsibility to scrutinise the policies and actions of the
government, as well as to offer an alternative program. The Shadow Cabinet
makes up the majority of the Official Opposition frontbench.
Tools of parliamentary system :
Question hour : It is during the Question Hour that the members can ask
questions on every aspect of administration and Governmental activity.
member gives notice in writing addressed to the Secretary-General, Lok Sabha,
intimating his intention to ask a question. Besides the text of the question, the
notice states clearly thenofficial designation of the Minister to whom the
question is addressed as also the date on which the question is desired to be
placed on the list of questions for answer as also the order of preference.
Starred, Unstarred, Short Notice Questions and Questions addressed to private
Members.
1. A Starred Question is one to which a member desires an oral answer in the
House and which is distinguished by an asterisk mark. When a question is
answered orally, supplementary questions can be asked thereon. Only 20
questions can be listed for oral answer on a day.
2.An Unstarred Question is one which is not called for oral answer in the House
and on which no supplementary questions can consequently be asked. To such
a question, a written answer is deemed to have been laid on the Table after
the Question Hour by the Minister to whom it is addressed. It is printed in the
official report of the sitting of the House for which it is put down. Only 230
questions can be listed for written answer on a day. In addition to this, 25
more questions can also be included in the Unstarred List relating to the States
under Presidential Rule and the total number of questions in the list of
Unstarred Questions for a day may not exceed 255 in relaxation of normal limit
of 230 questions.
3. A Short Notice Question is one which relates to a matter of urgent public
importance and can be asked with shorter notice than the period of notice
prescribed for an ordinary question. Like a starred question, it is answered
orally followed by supplementary questions.
The Question to a Private Member is addressed to the Member himself/herself
and it is asked when the subject matter of it pertains to any Bill, Resolution or
any matter relating to the Business of the House for which that Member is
responsible. For such Questions, the same procedure is followed as in the case

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of Questions addressed to a Minister with such variations as the Speaker may

consider necessary or convenient.
Whip
• The concept of the whip was inherited from colonial British rule. It is used in
parliamentary parlance often for floor management by political parties in
the legislature.
• A whip is a written order that political party issue to its members for being
present for an important vote, or that they vote only in a particular way.
The term is derived from the old British practice of “whipping in” lawmakers
to follow the party line.
• They are vital in maintaining the links between the internal organisation of
the party inside the Parliament. A whip is also an important office-bearer of
the party in the Parliament.
• In India, all parties can issue a whip to their members. Parties appoint a
senior member from among their House contingents to issue whips. This
member is called a Chief Whip, and he/she is assisted by additional Whips.
Constitutional status: The office of ‘whip’, is mentioned neither in the
Constitution of India nor in the Rules of the House nor in a Parliamentary
Statute. It is based on the conventions of the parliamentary government.
Non-applicability of Whip: There are some cases such as Presidential
elections where whips cannot direct a Member of Parliament (MP) or Member
of Legislative Assembly (MLA) on whom to vote.

Types of Whips
The One-line whip to inform the members about a vote. It allows a member to
abstain in case they decide not to follow the party line.
The Two-line whip is issued to direct the members to be present in the House
at the time of voting. No special instructions are given on the pattern of voting.
The Three-line whip is issued to members directing them to vote as per the
party line. It is the strictest of all the whip.
Functions of Whip
• The whip plays a crucial role in ensuring the smooth and efficient
conduct of business on the floor of the House.
• He is charged with the responsibility of ensuring the attendance of his
party members in large numbers and securing their support in favour of
or against a particular issue.
• He ensures discipline among party members in the House.
• He identifies the signs of discontent among MPs and informs the
respective leaders of their party.

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• He or she acts as a binding force in the party and responsible for

maintaining the internal party organisation in the Parliament and.

Lame duck session :

A lame duck session is conducted after election of new members but before
they are installed. Hence, in such a session participants vote for the last time
as elected officials because of their failure to get re-elected or because they
are retiring voluntarily.
No confidence motion :

Historical Background
• It is important to understand the purpose and impact of a “No Confidence
Motion” against a Government, and also what leads to the adoption of such
a motion.
• The Telegu Desam Party and the YSR Congress had given a notice in the Lok
Sabha for a “No Confidence Motion” against the NDA Government.
• Enjoying an absolute majority in Parliament, the Government needs 272
MP’s to prove its majority in the Lok Sabha. While the BJP alone has enough
MP’s to win the “No Confidence Motion”, the support of its allies will allow
it to sail through the motion without any problem.
• A “No Confidence Motion” becomes a vehicle on its own by virtue of which
a unity gets established in the opposition. Secondly, for a particular period,
the nation’s gaze appears to switch towards the omissions and commissions
of the Government of the day.
• The first Lok Sabha was formed on April 17th, 1952. Parliament saw the first
ever “No Confidence Motion” against the then Prime Minister Jawaharlal
Nehru’s government in August 1963. This motion was brought in August
1963, by Acharya JB Kripalani who gathered only 62 votes in favour and 347
votes were cast against the motion.
• The procedure is specified under rule 198 of the Lok Sabha. The Constitution
of India does not mention about either a Confidence or a No Confidence
Motion.
• Although, Article 75 does specify that the Council of Ministers shall be
collectively responsible to the Lok Sabha.
• A motion of No Confidence can be introduced only in the Lok Sabha and by
the opposition. It can be admitted when a minimum of 50 members, support
the motion in the house.

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Facts :

• Indira Gandhi has faced the No Confidence Motion 15 times, which is the
highest till date.
• CPI(M) leader, Jyoti Basu proposed the No Confidence Motion at least 4
times.
• Atal Bihari Vajpayee lost power in 1999. He himself presented the No
Confidence Motion twice.
• It was Morarji Desai’s Government that became the first to the lose the No
Confidence Motion. The No Confidence Motion was moved twice against his
Government in the Lok Sabha. It was saved the first time, but the second time
in 1978, he lost the majority.
• However, Morarji Desai resigned before the vote.
• In 1979, the No Confidence Motion was presented against Chaudhary Charan
Singh’s government. Fully aware of the proposal, Chaudhary Charan Singh
recommended the dissolution of the Lok Sabha after handing over his
resignation to the President. In 1989, VP Singh’s Government was dissolved
after the BJP withdrew support.
• In 1993, a No Confidence Motion was filed against the government of
Narasimha Rao, but he managed to save his government. In 1997, the
Congress withdrew its support to the United Front Government and the then
Prime Minister HD Deve Gowda had to resign as the Prime Minister.
• In March 1998, I.K. Gujral’s United Front Government had to resign failed to
prove majority.
• In 1999, the Government led by Atal Bihari Vajpayee missed winning the No
Confidence Motion by just a single vote and forced Atal Bihari Vajpayee to
resign.
• Before this, in 1996, Atal Bihari Vajpayee had to resign 13 days ahead of the
No Confidence Motion.
• In July 2008, the Congress Government had to face a No Confidence Motion
on the issue of the nuclear deal with the U.S. However, the then Prime
Minister Manmohan Singh proved his majority in the Lok Sabha with a
marginal difference and survived the No Confidence Motion.
Adjournment Motion: As per Rule 56 of the Lok Sabha, an adjournment motion
is brought to draw the attention of the house to a matter of urgent public
importance, having serious consequences. In order to discuss the adjournment
motion, the regular proceedings of the house are postponed.
The Adjournment motion is allowed only in the Lok Sabha, and not in the Rajya
Sabha.
The adjournment motion needs the support of at least 50 members.

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Discussion on the adjournment motion usually begins at 4 in the evening. If an

adjournment motion is passed, it is considered as a criticism of the Government
policy on the issue. However, the adjournment motion does not pose any threat
to the stability of the Government.
Calling Attention Notice:

• A calling attention notice is when a member of Parliament with the

permission of the Speaker of the Lok Sabha or the Chairman of the Rajya
Sabha draws the attention of a minister to a matter of urgent public
importance.
• Notice must be given before 10 AM on the day of the sitting for calling
attention. The Minister then presents his statement on the issue on the floor
of the house. Clarificatory questions can be asked after the Minister’s
statement to which he/she has to reply. Calling Attention falls under Rule 197
of the Lok Sabha and Rule 180 of the Rajya Sabha. There is no discussion or
voting in Calling Attention Notice. This motion too does not pose a threat to
the Government.
Short Duration Discussion:

• Under the provision of a Short Duration Discussion, any member of

Parliament (MP) can raise a discussion on a matter of urgent public
importance. The Discussion is held under Rule 193 of the Lok Sabha and Rule
176 of the Rajya Sabha.
• The member needs to give notice to the Secretary-General specifying clearly
the matter to be raised and the reasons for doing so. The notice needs to be
supported by the signatures of at least two other members.
• The Speaker in the Lok Sabha or the Chairman in the Rajya Sabha may allot
two sittings in a week on which such matters may be taken up for discussion.
The Minister-in-charge responds at the end of the discussion. There is no
voting in Short Duration Discussion.

Disqualification of member of parliament :

• He must not have been convicted by a court of any offence and sentenced
to imprisonment for a period of more than two years.
• He must not have been found guilty by a court or on election tribunal of
certain election or corrupt practices in the elections.
• He must not have been dismissed for corruption or disloyalty from
government services.
• He must not have failed to lodge on his election expenses within time and
in a manner prescribed by law.

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• He must not have any interest in government contracts, execution of

government work or services.
• He must not be a director or managing agent nor hold an office of profit
under any corporation in which the government has any financial interest.
(i) He holds any office of profit under the Government of India or of any state,
other than an office declared by a law of Parliament not to disqualify its
holder.
(ii) He is of unsound mind and stand so declared by a competent court.
(iii) He is an undischarged insolvent.
(iv) He is not a citizen of India or has voluntarily acquired the citizenship of a
foreign state, or is under any acknowledgement or allegiance or adherence to
a foreign state, and
(v) It is he so disqualified by or under any law of Parliament. It applies to the
case of 'defection' as prescribed in tenth schedule.

Note :
Double membership isn’t allowed so if a person is elected to both houses
he must tell which house he wants to serve otherwise his seat in RS
becomes vacant.
If a member of one house is elected to second house his seat in first house
becomes vacant. If a person is elected to two seats in the house he must
resign from one or else his both seats become vacant.
A person if elected to parliament and state legislature then he must decide
in 14 days where to serve else his seat in parliament is vacated.
An MP can resign in writing anytime to the chairman of RS or speaker of LS
depending on his membership. Matters regarding election of disqualified
persons to parliament are handled by the H.C.

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A person is liable for a penalty of Rs.500 per day if he sits and votes in
house proceeding without taking an oath.

Articles related to parliament :

ARTICLE CONTENT

79 Composition of parliament
80 Composition of council of states(Rajya sabha)

81 Composition of house of people(Lok Sabha)

82 Readjustment after each census

83 Duration of houses of parliament

84 Qualifications of members of parliament

85 Session of parliament(prorogue and dissolution)

86 Right of president to address and send messages to the
houses
87 Special address by the president

88 Right of minister and attorney general to sit in either

houses of parliament

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Article 89 Vice President of India shall be Ex-officio Chairman of

the Rajya Sabha and the Rajya Sabha members will
choose a “Deputy Chairman”

Article 89 to article 98: Deal with the officers of the parliament such as
Chairman of Rajya Sabha (89), Deputy Chairman (90,91,92), Speaker and
Deputy Speaker of Lok Sabha (93, 94, 95, 96), Salaries of the Chairman, Deputy
Chairman, Speaker, Deputy Speaker (97) and Secretariat of the Parliament
(98).

Article 99 & 100 : Conduct of parliament Business such as Oath by the MPs,
Voting in Houses etc.

Article 101, 102, 103, 104 : Disqualification of the members.

Article 105, 106: Powers, Privileges, salaries , Allowances etc. of the MPs.

Article 107, 108, 109, 110, 111: Procedure of introduction and passing of the
Bills, Joint sittings in some cases, Money Bill, Assent to Bills etc.

Article 112, 113, 114, 115, 116, 117: Financial matters such as Budget,
Appropriation Bills, Grants etc.

Article 118 to 122: General procedures of the Parliament.

Article 123 gives the president the power to promulgate the Ordinance

Important terms :

• Secret ballot: A system of voting in which one’s choice of candidate is kept

secret.
• Rule of law: It is a doctrine that holds that no individual is above the law
and every one regardless of their social status is equal before law.
• Republic: A state in which power is held by the people and their elected
representatives and which has an elected president as head of state rather
than a monarch.
• Quorum: The minimum number of members of an organization (e.g.
Parliament) needed to conduct business.
• Oligarchy: A form of government where political power effectively rests
with a small elitesegment of society

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• First-Past-the-Post system: An electoral system in which the one who

receives more votes than any other candidate gets elected
• Ballot paper: A paper handed to each voter on election day to be marked,
showing the names of the candidates (and sometimes the parties) who are
standing for election.
• Bicameral: Government with two house of legislature. Like in india we have
loksabha and Rajya Sabha.
• Unicameral: Government with one house of legislature. Like in Punjab there
is only legislative assembly .so it is Unicameral.
• Crossing the floor: An MP crossing the floor of Parliament to vote with
his/her opposition.
• Adjournment Sine Die: When House is suspended without fixing any time
period.
• Prorogation : End of the whole session of the house.
• Question Hour: First hour of every sitting of the house. This hour is devoted
to ask questions by the members of house.
• Adjournment Motion: If House wanted to discuss very important topic then
adjournment motion is moved to discuss that topic
• Zero Hour: Immediately starts after the Question hour. It is used to raise
matters without any prior notice.
• Censure Motion: Moved by house to stop any minister for specific policies
and actions.
• No Confidence Motion: Moved against the entire council of minister in Lok
Sabha. This is moved to asked govt to prove their majority.

Practise questions ( president , vice president and parliament)

1.Who participates in Assembly participate in the
the Presidential election? presidential election.
(A) Elected members of both (B) The Union Executive includes
Houses of Parliament the President, Vice President, Prime
(B) Elected and nominated Minister, Attorney General of India
members of the State Legislative (C) Impeachment may be initiated
Assembly against the President for 'breach of
(C) Members of all Union Territories constitution'
(D) All of the above (D) Article 56 envisages the tenure
of the President
2. Which of the following
statements is wrong? 3.Consider the following
(A) Elected and nominated 1. The election of President takes in
members of the State Legislative accordance with the principle of
first past the post system (FPTP)

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2. The President is elected by the total member of the

elected MLAs and MPs only house.
Select the correct statement/s c. Such resolution should be
a) 1 only produced after 7 days of
b) 2 only issuing of written notice to
c) Both the President.
d) None d. Such resolution must be
passed by minimum of two
4. Which article of Indian third majority of total
constitution envisages that there members
shall be an Attorney General of 7. The President is
India? a. Is not a part of the
(A) Article 78 Parliament.
(B) Article 76 b. Is a part of the Parliament.
(C) Article 67 c. Is a part of the Parliament
(D) Article 113 and sits in the Parliament.
d. President can vote in the
5. Which of the following
Parliament.
statements is not correct?
(A) President is the head of military 8)Consider the following
forces of India
Statements :
(B)President can appoint a
commission to investigate into the 1.Parliament can reduce or abolish a
conditions of SCs and STs. tax but cannot increase it.
(C) Parliament can declare and 2.The budget shall distinguish
alter any area as scheduled area expenditure on revenue account
(D) President of India chooses the from other expenditure.
chairman of the Finance 3.There is no legal or Constitutional
Commission obligation on the ruling party to
launch an interim budget during
6. In case of impeachment on the election year. It is only a
President for violation of the convention.
constitution of India, which of the a) 1 and 2 only
following is not correct? b) 2 and 3 only
c) 1 and 3 only
a. Any one of both houses of the d) All
parliament can charge sheet.
b. Resolution of proposal to 9. Consider the following
charge sheet should be signed Statements:
by minimum one fourth of

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1.The Prime Minister has to resig 11. For which of the following
n if he loses majority in the Low Committees , the Chairman is
er House- This is just a rule of the invariably from the Ruling Party?
Parliament but not mentioned in a) Estimates Committee
the Constitution. b) Public Accounts Committee
2.In the event of both the Presid c) Committee on Public
ent and the Vice- Undertakings
President demitting office simulta d) None
neously before the end of their t
enure the Speaker of the Lower 12. For which of the following
House of the Parliament will Committees, Speaker of Lok Sabha
officiate as the President. acts as Chairman?
a) 1 only 1. Rules Committee
b) 2 only 2. Committee on Private Members’
c) Both Bills and Resolutions
d) None 3. Business Advisory Committee
10. Which of the following are 4. General Purposes Committee
CORRECT with respect to Rajya a) 1 and 3 only
Sabha? b) 1, 3 and 4 only
c) 2 and 4 only
1. As per the Indian Constitution, d) 1 only
Candidate Contesting an election
to the Rajya Sabha from a 13. Which of the following
particular State need not be an statements are INCORRECT with
elector in that Particular State. respect to the Office of Vice
2. The Constitution has not fixed President?
the term of Office of a member
of the Rajya Sabha as six years. It 1. The only valid ground for the
is decided by the Rules of the removal of Vice President
Rajya Sabha. provided by the Indian
3. The question of disqualification Constitution is proved
under the Tenth Schedule is misbehavior or incapacity.
decided by the Chairman in the 2. When a vacancy occurs in the
case of Rajya Sabha. Office of the President due to
A.1 and 2 only resignation, the Vice-President
B. All can only act as President for a
C.3 only maximum period of six months
D.1 and 3 only with in which a new President
has to be elected.
3. Deputy Chairman of Rajya Sabha
is responsible to the Vice-

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President in Rajya Sabha as he is 1. A candidate contesting for the

ex-officio Chairman of Rajya election of Vice – President should
Sabha. have completed 25 years of age.
a) 1 and 2 only 2. He must be qualified to become a
b) 2 and 3 only member of Lok Sabha.
c) 1 and 3 only 3. The electoral college of Vice
d) None President includes the elected
14.What is the “Kitchen Cabinet” in members of Lok Sabha, Rajya sabha
Indian Political System? and MLAs and MLCs of states.
a) It is Group consisting most Which of the above statements are
influential cabinet ministers and the correct?
Prime Minister a) 1 and 2
b) It is Group of opposition leaders b) 2 and 3
to monitor working of the Cabinet c) 2 only
Ministers d) None of the above
c) It is group of ministers including 18. Consider the following
Cabinet ministers and their deputy statements:
ministers 1.For the items listed in State List,
d) It is group of ministers including the Union government can ask the
Cabinet Ministers, Minister of States state for making the law as per its
and deputy ministers recommendations.
15. Which of the following 2.For the items mentioned in
personalities has referred to Article Concurrent List, if the laws made by
32 as ‘Heart And Soul of Indian Union and State Governments
Constitution’ . ? conflict with each other, the law
a) Pt Jawaharlal Nehru made by the Union Government only
b) Dr. B R Ambedkar prevails.
c) Granville Austin Which of the above statements
d) Subhash Kashyap is/are correct?
16. ) Which of the following Articles a)1 only
deal with the Amendment b)2 only
Procedure of The Indian c)Both 1 and 2
Constitution? d)Neither 1 nor 2
a) 112 19. A Coalition form of the
b) 368 government is one in which the
c) 111 power is:
d) 371 a)Shared among different
17. ) Consider the following organs of government
statements: b)Shared by two or more
political parties.

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c)Shared among governments at 23. The President appoints the Pro

different levels. tem Speaker to preside over the
d)Shared by two persons of two first sitting of the Lok Sabha after
parties the General Elections. Who is the
20. What will happen when one of person who administers the oath
the Houses of the Parliament does for Pro Tem Speaker?
not agree to pass the Constitutional a. The President.
Amendment bill? b. The Chief Justice of India.
a)Joint session will be called c. Speaker of the last Lok Sabha.
b)Speakers decision will prevail d. Conventionally Pro Tem Speaker
c)The President will give final verdict. does not take any oath as it is a
d)The bill will be lapsed temporary office.
21. Which of the following is true in 24. Consider the following
a situation where the Prime statements:
Minister is a member of the Rajya 1. A no-confidence motion need not
Sabha? state the reasons on which it is
a) He will not be able to vote in his based, unlike a censure motion.
favour in the event of a no- 2. There is no mention of a No-
confidence motion Confidence Motion in the
b) He will not be able to speak on Constitution of India.
the budget in the Lower House 3. The minimum strength required
c) He can make statements only in to introduce no confidence motion
the Upper House is 50 members in Lok sabha.
d) He has to become a member of 4. A No-Confidence Motion is
the Lower House within six months moved only against the Council of
after being sworn in as the Prime Ministers
Minister Choose the correct statement/s
22. Who amongst the following is from the code below.
NOT included in the Council of 1) 1 and 3 only
Ministers? 2) 2, 3 and 4
1. Cabinet Ministers 3) 1, 2 and 3
2. Minister of State with 4) 1, 2 and 4
independent charge 25. . the speaker of Lok Sabha will
3. Parliamentary Secretaries submit the resignation to
Select the correct answer using the a) president
codes given below: b) prime minister
a) 1 only c) Lok Sabha secretary
b) 1 and 3 only d) deputy speaker
c) 3 only
d) 1, 2 and 3

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26. With reference to Vote on the items that came up after the
Account, consider the following constitution was formed?
statements: a)The Parliament
1. It is passed after general b)The Union Government
discussion of the Budget is over. c)The State Government
2. It is passed before the discussion d)The President
on demands for grants is taken up 29. Consider the following
3. Parliament is authorised to make statements:
any grant in advance in with regard 1. A candidate contesting for the
to Vote on Account election of Vice – President should
Choose the correct statement/s have completed 25 years of age.
from the code below. 2. He must be qualified to become a
a. 1 and 3 only. member of Lok Sabha.
b. 1 and 2 only. 3. The electoral college of Vice
c. 2 and 3only. President includes the elected
d. 1, 2 and 3 members of Lok Sabha, Rajya sabha
27. . Vacancy in the office of the and MLAs and MLCs of states.
Vice President of India contains Which of the above statements are
certain peculiar provisions in the correct?
Constitution. In this context, which a) 1 and 2
among the following provisions is b) 2 and 3
not correct? c) 2 only
(a) The procedure for the removal d) None of the above
of the Vice President can be 30. Tenth Schedule was added by
initiated in the Rajya Sabha. the......
(b) When a vacancy is created in the a) 50 th Amendment Act
office of the Vice President, then b) 52 nd Amendment Act
the functions of the Vice-President c) 53 rd Amendment Act
are performed by such person as d) 54 th Amendment Act
designated by the President of 31. Consider the following
India. statements about the legislative
(c) The Vice President submits his power of the Centre
resignation to the President of 1. The parliament can make laws for
India. whole or any territory of India but
(d) A formal impeachment is not excluding Union
required for the removal of the Vice territories
President . 2. Only president can direct that a
28.Who among the following is particular act of parliament is not
empowered to frame a law for the applicable to a
items do not fall in any of the lists or scheduled area in the state

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3. Centre can make laws about the a) 1 and 2

subjects enumerated in union and b) 1 and 3
concurrent lists only c) 2 and 3
Which of the above statements are d) 2 and 4
correct? 35. According to the Constitution,
a) 1 and 2 which is regarded as the "balancing
b) 2 and 3 wheel of the fiscal
c) 1 and 3 federalism in India"?
d) none of the above a) Finance commission
32. . Which of the below articles b) RBI
empowers the parliament to c) Parliament
impose president's rule if any state d) CAG
has failed to comply with the 36. . Which of the following are the
directions given by centre? features of Parliamentary form of
a) Article 365 Government in India?
b) Article 356 1. There is strict separation of
c) Artcile 366 powers and executive is not a part
d) Article 360 of legislature.
33. Consider the given statements 2. Prime Minister is the true head of
about public service commissions the executive.
1. The Chairman of the State PSC is 3. The Government is collectively
appointed by the President but can responsible to the Parliament in
be removed only by general and Lok Sabha in
the governor of the state. Particular.
2. The Chairman and members of Select the code from following:
the JSPSC are appointed by the a) 1 and 2
president. b) 2 and 3
Which of the above are correct? c) 1 and 3
a) 1 only d) All of the above
b) 2 only 37. . Which of the following
c) Both statements are correct regarding
d) None proclamation of National
34. . Who does the President Emergency?
consult while appointing the judges 1. It is proclaimed by the Prime
of State high court? Minister on the advice of the
1. Governor Cabinet.
2. Chief justice of India 2. Proclamation of National
3. Chief Minister Emergency can be challenged in
4. Home minister Supreme Court
Select the code from following:

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3. Proclamation of Emergency c) 1 and 3

should be approved by both the d) All of the above
houses of Parliament within 40. . In the President is indirectly
one month of issue. elected. The electoral college of
Select the code from following: President consists of –
a) 1 and 2 1. All member of Lok Sabha and
b) 2 and 3 Rajya Sabha
c) 1 and 3 2. All members of State Legislative
d) All of the above Assemblies and Legislative Councils
38. Consider the following 3. All members of Legislative
statement: Assemblies of Delhi and Pondicherry
1. The President must revoke a Select the code from below:
proclamation if the Lok Sabha a) 1,2 and 3
passes a resolution b) 1 and 2
disapproving its continuation. c) 2 and 3
2. The President can revoke the d) None of the above
proclamation of National 41. Under the constitution of India,
Emergency at any time and does which of the following is a part of
not need Parliamentary approval for Indian Parliament?
that. 1. President
Which of the above statements are 2. Lok Sabha
correct? 3. Rajya Sabha
a) 1 only Select the code from following:
b) 2 only a) 1 and 2
c) Both 1 and 2 b) 2 and 3
d) Neither 1 nor 2 c) 1 and 3
39. Which of the following d) All of the above
statements are correct regarding 42. Rajya Sabha or the Upper
Financial Emergency in India? House of Parliament gets the
1. Article 360 of the Constitution representation of States. Which of
empowers President to declare a the following statements are
Financial Emergency. correct regarding membership of
2. Once approved by the Parliament Rajya Sabha ?
there is no maximum time 1. The representatives of States are
prescribed for its operation. elected by the elected members of
3. Repeated Parliamentary approval State legislative
is not required for its continuation. Assemblies.
Select the code from following: 2. The seats are allotted to the
a) 1 and 2 states in Rajya Sabha on the basis of
b) 2 and 3 population.

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3. At least 5 seats are allotted to 2. A member of scheduled castes

states to provide optimum and scheduled tribes is barred from
representation to the small contesting a general
states. (non-reserved) seat.
Select the code from following: Select the code from below:
a) 1 and 2 a) 1 only
b) 2 and 3 b) 2 only
c) 1 and 3 c) Both 1 and 2
d) All of the above d) Neither 1 nor 2
43. Consider the statements 45. Consider the following
regarding the provisions for Anglo statements:
Indians under the Constitution 1. Rajya Sabha is a permanent
of India. house and is not subjected to
1. President has to mandatorily dissolution.
nominate 2 members of the Anglo 2. One third of the members of
Indian community to the Rajya Sabha retire every second
Lok Sabha . year.
2. Governor of a State can nominate 3. According to Constitution, the
one member of the Anglo Indian term of office of a member of Rajya
community to the Sabha is six years.
state legislative assembly, if the Which of the above statements are
community is not adequately correct?
represented. a) 1 and 2
Which of the above statements are b) 2 and 3
correct? c) 1 and 3
a) 1 only d) All of the above
b) 2 only 46. . If a person is elected to both
c) Both 1 and 2 the Houses of Parliament, he must
d) Neither 1 nor 2 intimate within 10 days in
44. Indian Constitution provides which House he desires to serve. If
reservation for Scheduled Castes such intimation is not given then,
(SC) and Scheduled Tribes a) Both his seats will be vacant
(ST) in Lok Sabha seats. Which of b) His seat in Rajya Sabha becomes
the following statements are NOT vacant
correct regarding the c) His seat in Lok Sabha becomes
election for reserved seats? vacant
1. Reserved seats are elected only d) He will be given dual membership
by the voters of the community of of the houses
SC and ST
respectively.

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47. Chairman of Rajya Sabha is the Select the code from following:
presiding officer of the house. a) 1 and 2
Which of the following b) 2 and 3
statements are correct about the c) 1 and 3
Chairman of Rajya Sabha ? d) All of the above
1. Chairman should be the member 49. . Which of the following
of Rajya Sabha , like Speaker should sessions of Lok Sabha is referred as
be the member of ‘Lame Duck’ session?
Lok Sabha . a) It is the last session of the existing
2. Chairman is the final authority to Lok Sabha .
decide whether a bill is money bill b) It is the first session of the new
or not in Rajya Sabh Lok Sabha .
a. c) It is referred to a session which is
Select the code from below: adjourned without any business.
a) 1 only d) It is referred to a session in which
b) 2 only quorum is not present
c) Both 1 and 2 50. . What happens when a
d) Neither 1 nor 2 presiding officer declares the house
48. Based on the conventions of adjournment sine die?
Parliamentary government, we a) The sitting of a house is
have an office of ‘Whip’ in terminated for indefinite period
Indian parliament. Every political b) The sitting of a house is
party has its own whip. What is the terminated for one day
function of a ‘whip’? c) It suspends the work in a sitting
1. He is responsible for ensuring the for a specified time, which may be
attendance of his political party hours, days or
members. weeks.
2. He decides the agenda of his d) It ends the very life of the existing
party on the floor of the parliament. House, and a new House is
3. He ensures the support of his constituted after general
party members in favour or against elections are held
a particular issue.
.

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STATE LEGISLATURE
The state legislature comprises of legislative assembly, legislative council and
governor(in case of bicameral legislature) and it consists of governor and
assembly( in case of unicameral legislature).

India is a Union of States. It means that there is one Union Government and
several State Govermments, It also means that Union (Centre) is more powerful
than States. At present there are 28 States in the Indian Union and each one of
them has a Legislature. The State Legislature is a law making body at state level.
In this you will read about the composition of State Legislature, qualifications
and election of their members, powers and functions of the Legislature, and
comparison of the powers of two Houses of the Lagislature.

Governor :

The origin of the office of the Governor in India, as we know it today, can be
traced to the advent of the“East India Company”to India. The word “Governor”
is historically also associated to the Portuguese “Afonso de Albuqerque” who
held the position of Governor and Captain General in India in the year 1509.

In a 5 Judge Bench, the Supreme Court of India has held in BP Singhal v. Union
of India ((2010) 6 SCC 331) that the role of the Governor of a State is to function
as a vital link or bridge between the Union Government and the State
Government. He is required to discharge the functions relate to his different
roles harmoniously, assessing the scope and ambit of each role properly.

ARTICLE 153: GOVERNORS OF STATES

There shall be a Governor for each State:
Provided that nothing in this article shall prevent the appointment of the same
person as Governor for two or more States.
Each state shall have a governor who is appointed by the president of India after
the recommendations of Prime Minister. The office of governor is like the
president at the centre. He/she is not considered as the central government
employment as said by supreme court in 1979.
Qualifications to become governor of a state :

• be a citizen of India.
• be at least 35 years of age.
• not be a member of the either house of the parliament or house of the state
legislature.

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• not hold any office of profit

Note : 7th constitutional amendment act of 1956 had announced that the two or
more states can have a common governor.

Governor cannot be a basic resident of the same state to which he is becoming

a governor.

Disqualification of governor :
The term of governor's office is normally 5 years but it can be terminated earlier
by:

Dismissal by the president (usually on the advice of the prime minister of the
country) at whose pleasure the governor holds office. Dismissal of Governors
without valid reason is not permitted. However, it is the duty of the President to
dismiss a Governor whose acts are upheld by courts as unconstitutional and
malafide

Resignation by the governor

There is no provision for impeachment, as it happens for the president.
Note : Article 361 of Indian constitution provides that governor cannot be taken
into custody while in office.
Powers of governor :
The Governor summons and prorogues the sessions of the State Legislature. The
convention is that it is always done on Ministerial advice. Six months should not
intervene between the last sitting in one session and the first sitting in the next
session. The Governor is also empowered to dissolve the Legislative Assembly
The Governor has the power to nominate one member of the Anglo-Indian
Community to the Assembly in case; he is of opinion that the community needs
representation. He has the power to nominate one-sixth of the members of the
Legislative Council from among persons having special knowledge or experience
in respect of such matters as literature, science, art, co-operative movement and
social service.
The Governor addresses the Legislative Assembly or both Houses assembled
together at the commencement of the first Session after each General Election
and at the commencement of the First session each year.
His address is prepared by the Council of Ministers. The Governor’s address
being a policy statement of the Government is discussed in the House or the
Houses as the case may be

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When a Bill has been passed by the State Legislature, it must be presented to
the Governor. The Governor may then take one of the following steps; (a) he
may assent to the Bill; (b) he may withhold his assent; (c) he may reserve the Bill
for the consideration of the President; or (d) he may return the Bill to the House
or Houses, if it is not a Money Bill, with the request that the Bill may be
considered again.
It shall be the duty of the Houses to reconsider the Bill. If it is again passed by
the Legislature, with or without amendment, the Governor cannot withhold
assent there-from. As per Article 200, the Constitution confers the Governor
with the power to assent, withhold assent, return for reconsideration, or reserve
for President’s consideration any Bill. But should the Vidhan Sabha send back a
returned Bill to the Governor the second time, then he has to sign it.
Comparison of Veto Power with regard to Ordinary Bill
# President - Every ordinary bill, after being passed by Lok Sabha and Rajya
Sabha is presented to the President for his assent and he can take three steps –
• He may give his assent to the bill, the bill then becomes an act.
• He may withhold his assent to the bill, the bill then ends and does not
become an act(Absolute Veto).
• He may return the bill for reconsideration of the Houses. If the bill is passed
by both the Houses again with or without amendments and presented to the
President for his assent, the president must give his assent to the bill. Thus
the president enjoys only a ‘suspensive veto’.

Governor - Every ordinary bill, after it is passed by the legislative assembly in

case of a unicameral legislature or by both the Legislative Assembly and
Legislative Council in case of a bicameral legislature, is presented to the
governor for his assent. In this case Governor has four alternatives -

• He may give his assent to the bill, the bill then becomes an act.
• He may withhold his assent to the bill, the bill then ends and does not
become an act(Absolute Veto).
• He may return the bill for reconsideration of the House or Houses. If the bill
is passed by the House or Houses again with or without amendments and
presented to the governor for his assent, the governor must give his assent
to the bill. Thus, the governor enjoys only a ‘suspensive veto’.
• He may reserve the bill for the consideration of the President.

President - When a state bill is reserved by the governor for the consideration
of the President, the President has three options -
• He may give his assent to the bill, the bill then becomes an act.

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• He may withhold his assent to the bill, the bill then ends and does not
become an Act.
• He may return the bill for reconsideration of the House or Houses of the state
legislature. When a bill is so returned, the House or Houses have to
reconsider it within six months. If the bill is passed by LA or LA&LC again with
or without amendments and presented to the president for his assent, the
president is not bound to give his assent to the bill. He may give his assent to
such a bill or withhold his assent.

Governor - When the governor reserves a bill for the consideration of the
President, he will not have any further role in the enactment of the bill and now
the power of consideration of the Bill rests solely with the President and
Governor has nothing to do with it. Even if President sends it for the
reconsideration of the SLA, after being reconsidered the Bill will directly be
placed in front of the President and not the Governor.
Financial Powers:
• The Governor of the State has similar financial powers as the President. No
money bill can be introduced in the Assembly without prior permission of the
Governor. The Legislature may reduce the grants sought by the Governor but
cannot increase.
• The Finance Minister submits to the Legislature a financial Statement or
Budget showing estimated, receipts and expenditure for the next financial
year in the name of the Governor.
• No demand for grant may be made except on the recommendations of the
Governor. He is the custodian of Contingency Fund of the State wherefrom
he can make payments in emergency without prior sanction of the State
Legislature.
Judicial powers:
• The Governor determines the questions of, appointments, postings and
promotions of District Judges and other judicial officers in the State. The
President consults the Governor of the State in making appointments of the
judges of the High Court.
• The Governor has the power to pardon, commute or suspend sentence of
any person convicted of any offence against any law relating to matters to
which the executive power of the State extends.
• This power of the Governor is similar as the President of India, Queen of
Great Britain or President of the United States of America has. He can
exercise this power either before trial or during trial or even after trial.
• In contrast to Article 74, even though Article163similarly provides that the
Governor of a State is to exercise his functions in consonance with the aid

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and advice tendered to him by the council of Ministers with the Chief
Minister as the head, yet Article 163(2) confers discretionary powers with the
Governor when it is so expressly mandated by or under the Constitution.
• To a limited extent Article 163(2) authorizes Governor to act in his own
discretion and in that sense there is a clear distinction between the power
vested in the President and the power vested in the Governor.
• As per Article 164, the Governor has the powerto appoint the Chief Minister
of the State, and upon the Chief Minister’srecommendation, the
appointment of other ministers
• As per Article 213 the Constitution of India confers the Governor the power
to promulgate an ordinance when the Legislative Assembly of the State is not
in session. Notwithstanding theimmediateeffect of thelaw, it must be
presented in the next session in the State Legislature, and unless approved,
remains active for a six-week period.
Note : PARDONING POWER OF PRESIDENT AND GOVERNOR:
Power of pardon under Article 73 and 161 by the Constitution is different from
judicial power as the governor or the President can grant pardon or reduce the
sentence of the court even if a minimum is prescribed.
DIFFERENCE BETWEEN PARDONING POWERS OF PRESIDENT AND GOVERNOR:
• The scope of the pardoning power of the President under Article 72 is wider
than the pardoning power of the Governor under Article 161. The power
differs in the following two ways:
• The power of the President to grant pardon extends in cases where the
punishment or sentence is by a Court Martial but Article 161 does not provide
any such power to the Governor.
• The President can grant pardon in all cases where the sentence given is
sentence of death but pardoning power of Governor does not extend to
death sentence cases.
Articles associated with governor:
Article 153 {Governors of States}
Article 154 {Executive power of State}
Article 155 {Appointment of Governor}
Article 156 {Term of office of Governor}
Article 157 {Qualifications for appointment as Governor}
Article 158 {Conditions of Governor's office}
Article 159 {Oath or affirmation by the Governor}
Article 160 {Discharge of the functions of the Governor in certain contingencies}
Article 161 {Power of Governor to grant pardons, etc., and to suspend, remit or
commute sentences in certain cases}
Article 162 {Extent of executive power of State}

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Article 163 {Council of Ministers to aid and advise Governor}

Article 164 {Other provisions as to Ministers}
Article 165 {Advocate-General for the State}
Article 166 {Conduct of business of the Government of a State}
Article 167 : duties of chief minister as respect to governor.
State legislative assembly :

COMPOSITION OF THE HOUSES LEGISLATIVE ASSEMBLY

The Legislative Assembly is the popularly elected chamber and is the real Centre
of power in a State. The maximum strength of an assembly must not exceed 500
or its minimum strength fall below 60. But some of the States have been allowed
to have smaller Legislative Assemblies, e.g. Sikkim, Arunachal Pradesh, Goa, etc.
Delimitation of constituencies:
Delimitation literally means the act or process of fixing limits or boundaries of
territorial constituencies in a country or a province having a legislative body. The
job of delimitation is assigned to a high power body. Such a body is known as
Delimitation Commission or a Boundary Commission. In India, such Delimitation
Commissions have been constituted 4 times – in 1952 under the Delimitation

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Commission Act, 1952, in 1963 under Delimitation Commission Act, 1962, in

1973 under Delimitation Act, 1972 and in 2002 under Delimitation Act, 2002.
The Delimitation Commission in India is a high power body whose orders have
the force of law and cannot be called in question before any court. These orders
come into force on a date to be specified by the President of India in this behalf.
The copies of its orders are laid before the House of the People and the State
Legislative Assembly concerned, but no modifications are permissible therein by
them.
The most recent delimitation commission was set up on 12 July 2002 after
the 2001 census with Justice Kuldip Singh, a retired Judge of the Supreme
Court as its Chairperson. The Commission has submitted its recommendations.
On December 2007, the Supreme Court on a petition issued notice to the central
government asking reasons for non implementation. On 4 January 2008, the
Cabinet Committee on Political Affairs (CCPA) decided to implement the order
from the Delimitation Commission. The recommendations of the Commission
was approved by President Pratibha Patil on 19 February. This means that all
future elections in India for states covered by the commission will be held under
the newly formed constituencies.
The present delimitation of parliamentary constituencies has been done on the
basis of 2001 census figures under the provisions of Delimitation Act, 2002.
However, the Constitution of India was specifically amended in 2002 not to have
delimitation of constituencies till the first census after 2026. Thus, the present
constituencies carved out on the basis of 2001 census shall continue to be in
operation till the first census after 2026. The assembly election in Karnataka,
conducted in three phases in May 2008, was the first to use the new boundaries
as drawn by the 2002 delimitation commission
The 84th amendment act of 2002 suggested that the total number of seats in lok
sabha and states assembly will not be altered till the year 2026.
QUALIFICATIONS AND DISQUALIFICATIONS FOR MEMBERSHIP OF THE STATE
LEGISLATURE
A person shall not be qualified to be selected to occupy a seat in the Legislature
of a State unless he/she
(a) is an Indian citizen;
(b) is 25 years or above for Legislative Assembly, and is 30 or above for
Legislative Council; and
(c) possess such other qualifications as may be prescribed by the Parliament.
Thus, the Representation of the People Act, 1951, has provided that a person
shall not be elected either to the Legislative Assembly or the Council, unless he
is himself an elector for any Legislative Assembly constituency in that State. A

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person can be disqualified for being selected as and for being a member of the
Legislative Assembly or Legislative Council of a State if he/she
Speaker of legislative assembly :
• Under Article 178 of the Indian Constitution every Legislative Assembly of a
State shall, choose one of its Members as Speaker.
• The powers and duties of the Speaker have been laid down in the rules of the
Legislative Assembly and to some extent in the Constitution. The Speaker is
the principal spokesman of the House. He represents its collective voice and
is its sole representative to the world. Communications from the Governor
to the House are made through the Speaker. Similarly communications to the
Governor are made through the Speaker in the form of a formal address after
a motion has been made and carried by the House.
• It is the Speaker who determines what matters are ‘money' matters as these
fall within the exclusive jurisdiction of the Legislative Assembly. If the Speaker
certifies a Bill as a Money Bill, his decision is final. Under the Constitution, the
Speaker exercises only a casting vote in the case of equality of votes in any
matter.
• The Speaker holds the Office from the date of his election till immediately
before the first meeting of the Legislative Assembly after the dissolution of
the one to which he was elected, unless he ceases to be a member by any of
the reasons specified in Article 179 of the Indian Constitution.
• He decides the Rules of Business in consultation with the Chief Minister and
the Leader of Opposition. He appoints the Chairman of different House
Committees. As per tradition if the Deputy Speaker happens to be a member
of any committee, he automatically becomes the chairman of the committee.
The Speaker is of the Legislative Assembly is comparable with the Speaker of
Lok Sabha in all matters of power, authority, diquity, importance, privileges
and immunities.
Legislative council :
Which one of the following articles of the Constitution of India contains
provisions for the abolition and creation of Legislative Councils?(CAPF 2016)
(a) Article-171
(b) Article-169
(c) Article-356
(d) Article-182

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It was already revealed that every state in india does not have the concept of
legislative council.
The Legislative Council or the Vidhan Parishad is the Upper Chamber of the
State Legislature. Union Parliament has the power’ to create or abolish the
Legislative Council in various states on the basis of resolutions adopted by
special majority in the Assemblies. It must be noted that in a state the
legislative council can be created and abolished any number of times.
According to the constitution the total membership of the Legislative Council
shall not be less than forty and more than one third of the total number of
members of the Legislative Assembly of the concerned state.
All the members of the Legislative Council are either indirectly elected or
nominated by the Governor.
Original text of constitution says,

169.Abolition or creation of Legislative Councils in States.-

• Notwithstanding anything in Article 168, Parliament may by law provide for

the abolition of the Legislative Council of a State having such a Council or for
the creation of such a Council in a State having no such Council, if the
Legislative Assembly of the State passes a resolution to that effect by a
majority of the total membership of the Assembly and by a majority of not
less than two-thirds of the members of the Assembly present and voting.
• Any law referred to in clause (1) shall contain such provisions for the
amendment of this Constitution as may be necessary to give effect to the
provisions of the law and may also contain such supplemental, incidental and
consequential provisions as Parliament may deem necessary.
• No such law as aforesaid shall be deemed to be an amendment of this
Constitution for the purposes of Article 368

Qualifications :
Any Indian citizen who is 30 years of age or more having such other qualifications
as prescribed by the Parliament can become a member of the Vidhan Parishad.
Of course a person cannot simultaneously be a Member of Parliament and State
Legislature. The Legislative Council like the Council of States is a permanent
chamber, not subject to dissolution. The members are elected for a period of six
years and like Rajya Sabha one-third of members retire every second year.
There is no concept of vice governor like that of vice president to preside for
Rajya Sabha so the Legislative Council elects its Chairman and Deputy Chairman
from amongst its members.

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Note : As of today, Seven (out of twenty-eight) states have a Legislative Council:

Andhra Pradesh, Bihar, Jammu and Kashmir, Karnataka, Maharashtra, Uttar
Pradesh and Assam. Union Cabinet has cleared State of Assam to formed
‘Legislative Council’ in December 2013. In 2010 the Parliament of India passed
an Act to re-establish a Legislative Council for a seventh state, Tamil Nadu, but
implementation of the Act has been put on hold pending legal action; the state
government has also expressed its opposition to the council’s revival.
Election mechanism: Like Rajya Sabha not every member is elected with the
support of MLA but the members of council are elected in the following manner.

• One third are elected by members of local bodies such

as municipalities, gram sabhas/gram panchayats, panchayat
samitis and district councils.
• One third are elected by members of Legislative Assembly of the State from
among the persons who are not members of the State Legislative Assembly.
• One sixth are nominated by the governor from persons having knowledge or
practical experience in fields such as literature, science, arts, the co-
operative movement and social service.
• One twelfth are elected by persons who are graduates of three years'
standing residing in that state.
• One twelfth are elected by persons engaged for at least three years in
teaching in educational institutions within the state not lower
than secondary schools, including colleges and universities.

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Bills in state legislature:

Ordinary Bills
• The primary function of the State Legislature, like the Union Parliament, is
law-making. The State Legislature is empowered to make laws on State List
and Concurrent List.
• The Parliament and the Legislative Assemblies have the right to make the
laws on the subjects mentioned in the Concurrent List. But in case of
contradiction between the Union and State law on the subject the law made
by the Parliament shall prevail.
• Ordinary bills can be introduced in either of the Houses (if the State
Legislature is bicameral), but Money bill is first introduced in the Vidhan
Sabha.
• After the bill is passed by both Houses, it is sent to the Governor for his
assent. The Governor can send back the bill for reconsideration. When this
bill is passed again by the Legislature, the Governor has to give his assent.
You have read when the Parliament is not in session and if there is a necessity
of certain law, the President issues Ordinance.
• Similarly, the Governor can issue an Ordinance on the State subjects when
legislature is not in session. The Ordinances have the force of law. The
Ordinances issued are laid before the State Legislature when it reassembles.
It ceases to be in operation after the expirty of six weeks, unless rejected by
the Legislature earlier. The Legislature passes a regular bill, to become a law,
to replace the ordinance. This is usually done within six weeks after
reassembly of Legislature.
Note: There is no concept of joint sitting in a state legislature. When a bill which
has originated in the council and was sent to the assembly is rejected by the
assembly the bill ends and becomes dead. Thus, council has been given lesser
importance than rajya sabha. The governor like the president enjoys only
suspensive veto in case of ordinary bills.
The council is equal to the assembly in the following areas: introduction and
passage of ordinary bills, approval of ordinances issued by the governor,
selection of ministers, consideration of reports of the constitutional bodies like
state finance commission, state public service commission, comptroller and
auditor general of India.
The council differs or is of lesser degree in importance in all other aspects but
few worth mentioning are no role of council participation in election of
president and representatives of the state in upper house of parliament, no
effective say in the ratification of a constitutional amendment bill and
importantly the existence of council is in the hands of assembly.
Council is only a advisory or dilatory body unlike rajya sabha.

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Money bill : The State Legislature keeps control over the finances of the State.
A money bill is introduced first only in the Vidhan Sabha. The money bill includes
authorisation of the expenditure to be incurred by the government, imposition
or abolition of taxes, borrowing, etc.
• The bill is introduced by a Minister on the recommendations of the Governor.
The money bill cannot be introduced by a private member. The Speaker of
the Vidhan Sabha certifies that a particular bill is a money bill. After a money
bill is passed by the Vidhan Sabha, it is sent to the Vidhan Parishad.
• It has to return this bill within 14 days with, or without, its recommendations.
The Vidhan Sabha may either accept or reject its recommendations. The bill
is deemed to have been passed by both Houses. After this stage, the bill is
sent to the Governor for his assent. The Governor cannot withhold his assent,
as money bills are introduced with his prior approval.
• Note : Constitutional amendment bill(under article 368) cannot be
introduced in the state legislative assembly but if it is reserved for the
consideration of state assembly by parliament it can pass such a bill.
Articles associated :
168. Constitution of Legislatures in States.
169. Abolition or creation of Legislative Councils in States.
170. Composition of the Legislative Assemblies.
171. Composition of the Legislative Councils.
172. Duration of State Legislatures.
173. Qualification for membership of the State Legislature.
174. Sessions of the State Legislature, prorogation and dissolution.
175. Right of Governor to address and send messages to the House or Houses.
176. Special address by the Governor.
177. Rights of Ministers and Advocate-General as respects the Houses
Officers of the State Legislature
178. The Speaker and Deputy Speaker of the Legislative Assembly.
179. Vacation and resignation of, and removal from, the offices of Speaker and
Deputy Speaker.
180. Power of the Deputy Speaker or other person to perform the duties of the
office of, or to act as, Speaker.
181. The Speaker or the Deputy Speaker not to preside while a resolution for his
removal from office is under consideration.
182. The Chairman and Deputy Chairman of the Legislative Council.
183. Vacation and resignation of, and removal from, the offices of Chairman and
Deputy Chairman.
184. Power of the Deputy Chairman or other person to perform the duties of
the office of, or to act as, Chairman.

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185. The Chairman or the Deputy Chairman not to preside while a resolution for
his removal from office is under consideration.
State Executive
Art. 154. Executive power of State: (1) The executive power of the State shall
be vested in the Governor and shall be exercised by him either directly or
through officers subordinate to him in accordance with this Constitution.
Art. 164.: (1) The Chief Minister shall be appointed by the Governor and the
other Ministers shall be appointed by the Governor on the advice of the Chief
Minister, and the Ministers shall hold office during the pleasure of the Governor.
The Chief Minister is appointed by the Governor. The person who commands
the majority support in the State Legislative Assembly (Vidhan Sabha) is
appointed as the Chief Minister by the Governor. The other Ministers included
in the Council of Minister’s must belong to either House of the State legislature.
The portfolios to the members of the Council of Ministers are allocated by the
Governor on the advices of the Chief Minister.
The other provisions under article 164 includes:
1A) Provision for tribal ministers in some states: In the States of Chhattisgarh,
Jharkhand, Madhya Pradesh and Orissa (Bihar was omitted by 94th amendment
act, 2006), there shall be a Minister in charge of tribal welfare who may in
addition be in charge of the welfare of the Scheduled Castes and backward
classes or any other work.
1A) Strength of ministers: The total number of Ministers, including the Chief
Minister, in the Council of Minister in a State shall not exceed fifteen per cent of
the total number of members of the Legislative Assembly of that State. It also
says that the number of Ministers, including the Chief Minister in a State shall
not be less than twelve.
1B) Disqualification under 10th Schedule: A person who is disqualified for being
a member of Legislature under Tenth Schedule shall also be disqualified to be
appointed as a Minister; he will have to seek a fresh election in order to become
a minister again.
2) Collective responsibility: The Council of Ministers shall be collectively
responsible to the Legislative Assembly of the State.
3) Oath: Before a Minister enters upon his office, the Governor shall administer
to him the oaths of office and of secrecy according to the forms set out for the
purpose in the Third Schedule.
4) Condition of becoming a member of legislature: A Minister who for any
period of six consecutive months is not a member of the Legislature of the State
shall at the expiration of that period cease to be a Minister.
5) Salaries: The salaries and allowances of Ministers shall be such as the
Legislature of the State may from time to time by law determines and, until the

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Legislature of the State so determines, shall be as specified in the Second

Schedule.
Tenure : The Council of Ministers holds its office during the pleasure of the
Governor. It has no fixed term of office. The term of the Council of Ministers
depends on the support of the majority members of the Legislative Assembly. If
it loses majority support in the legislative Assembly, it has to resign. The
Governor may also remove a Minister from the council of Ministers on the
advice of the Chief Minister.
Chief Minister :
Chief Minister is the head of the Council of Ministers of his State. The
constitutional position of the Chief Minister is more or less similar to that of
the Prime Minister. The Chief Minister plays an important role in the
administration of the State. We can discuss his functions as follows:
Chief Minister is the real head of the State Government.
Ministers are appointed by the Governor on the advice of the Chief Minister.
The Governor allocates portfolios to the ministers on the advice of the Chief
Minister.
Chief Minister presides over the Cabinet meetings.
He/she coordinates the functioning of different ministers. He/she guides the
functioning of the Cabinet.
Chief Minister plays a key role in farming the laws and policies of the State
Government.
•
Bills are introduced by the ministers in the State legislature with his/her
approval. He/she is the chief spokesman of the policies of his government
both inside and outside the State legislature.
• The Constitution provides that the chief Minister shall communicate to the
Governor all decisions of the Council of Minister relating to the
administration and the affairs of the State and proposals for legislation.
• The Chief Minister furnishes such information relating to the administration
of the affairs of the State and proposals for legislation as the Governor may
call for.
• If the Governor so requires, the Chief Minister submits for consideration of
the Council of Ministers any matter on which a decision has been taken by a
minister but which has not been considered by the Cabinet.
• The Chief Minister is the sole link of communication between the Cabinet
and the Governor. The Governor has the right to be informed by the Chief
Minister about the decisions taken by the Council of Ministers.
• Chief minister is a member of NITI ayog, Inter state council, etc.

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• Chief minister becomes the chairman of zonal councils on rotating basis after
every year.
ZONAL COUNCIL
The idea of creation of Zonal Councils was mooted by the first Prime Minister of
India, Pandit Jawahar Lal Nehru in 1956 when during the course of debate on
the report of the States Re-organisation Commission, he suggested that the
States proposed to be reorganised may be grouped into four or five zones having
an Advisory Council 'to develop the habit of cooperative working” among these
States. This suggestion was made by Pandit Nehru at a time when linguistic
hostilities and bitterness as a result of re-organisation of the States on linguistic
pattern were threatening the very fabric of our nation. As an antidote to this
situation, it was suggested that a high level advisory forum should be set up to
minimise the impact of these hostilities and to create healthy inter-State and
Centre-State environment with a view to solving inter-State problems and
fostering balanced socio economic development of the respective zones
In the light of the vision of Pandit Nehru, five Zonal Councils were set up vide
Part-III of the States Re-organisation Act, 1956. The present composition of each
of these Zonal Councils is as under:
• The Northern Zonal Council, comprising the States of Haryana, Himachal
Pradesh, Jammu & Kashmir, Punjab, Rajasthan, National Capital Territory
of Delhi and Union Territory of Chandigarh;
• The Central Zonal Council, comprising the States of Chhattisgarh,
Uttarakhand, Uttar Pradesh and Madhya Pradesh;
• The Eastern Zonal Council, comprising the States of Bihar, Jharkhand,
Orissa, Sikkim and West Bengal;
• The Western Zonal Council, comprising the States of Goa, Gujarat,
Maharashtra and the Union Territories of Daman & Diu and Dadra &
Nagar Haveli;
• The Southern Zonal Council, comprising the States of Andhra Pradesh,
Karnataka, Kerala, Tamil Nadu and the Union Territory of Puducherry.
Note : The North Eastern States i.e. (i) Assam (ii) Arunachal Pradesh (iii)
Manipur (iv) Tripura (v) Mizoram (vi) Meghalaya and (vii) Nagaland are not
included in the Zonal Councils and their special problems are looked after by the
North Eastern Council, set up under the North Eastern Council Act, 1972. The
State of Sikkim has also been included in the North Eastern Council vide North
Eastern Council (Amendment) Act, 2002 notified on 23rd December 2002.
Consequently, action for exclusion of Sikkim as member of Eastern Zonal Council
has been initiated by Ministry of Home Affairs
The above functions show that the real authority is vested with the Council of
Ministers headed by the Chief Minister. The Council of Ministers is the real

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executive in the State. The position of the State Council of Ministers largely
depends upon the strength of the ruling party in the State Assembly and the
personality of the Chief Minister. The position of the Chief Minister is more
powerful when his party is in power in the Centre as well. As long as the Chief
Minister and his Council of Ministers enjoy the confidence of majority in the
Legislative Assembly, he exercises the real executive power in the State.
ORGANISATIONAL STRUCTURE OF ZONAL COUNCILS
Chairman - The Union Home Minister is the Chairman of each of these Councils.
Vice Chairman - The Chief Ministers of the States included in each zone act as
Vice-Chairman of the Zonal Council for that zone by rotation, each holding office
for a period of one year at a time.
Members- Chief Minister and two other Ministers as nominated by the
Governor from each of the States and two members from Union Territories
included in the zone.
Advisers- One person nominated by the Planning Commission for each of the
Zonal Councils, Chief Secretaries and another officer/Development
Commissioner nominated by each of the States included in the Zone

Note : The Governor is the head of the executive. Article 163 contemplates a
Council of Ministers to aid and advise the Governor in the exercise to act in
accordance with the advice of the Council of Ministers because in the
Parliamentary form of Government it is the norm. In the case of the President
Art. 74 expressly states that the President shall act in accordance with such
advice. We find no such provision in case of the Governor. On the other hand
Art. 163 lays down that if by or under the Constitution, the Governor is required
to exercise his functions in his discretion he will do so.
The 91st amendment act of 2003 suggests that the total strength of state council
of ministers cannot exceed 15% of strength of assembly. It is also announced
that the strength of council of ministers including the chief minister cannot be
less than 12.
Article 239AA suggests that the union territory of Delhi cannot have the strength
of council of ministers beyond 10% of the total strength of assembly.
Union Territories :
• India is a federal polity with two types of constituent units - states and union
territories. Together these comprise the current areal extent of the country.
There are 29 states and 7 union territories.
• The concept of territories administered by the Centre extends to the pre-
Independence era. In 1874, certain areas were constituted as scheduled
districts. These later came to be known as Chief Commissioners provinces

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that were essentially administered by a Chief Commissioner directly

responsible to the Governor General/Viceroy of India.
• When the country became independent, the various territories that came to
create the Union of India were divided into four categories - Part A, B, C and
D. There was no recognition of States and Union Territories as separate. Most
of the provinces under Part C and D were the erstwhile Chief Commissioners
provinces. These were later reconstituted under the Seventh Constitutional
Amendment Act, 1956 and States Reorganisation Act, 1956 as Union
territories.
• In 1956, there were six union territories - Andaman and Nicobar Islands,
Delhi, Himachal Pradesh, Manipur, Tripura and Laccadive, Minicoy and
Amindivi Islands. Note, the absence of various territories like Dadra and
Nagar Haveli, Daman and Diu and Puducherry. These regions gained
independence from their imperial powers later and were then added as
union territories. Also, note that present-day states like Himachal Pradesh,
Manipur and Tripura were earlier listed as Union Territories. These were
elevated to the status of states to provide for more democratic governance
by a government elected by the local populace.
The seven union territories in present-day India have been created due to a
number of reasons:
Strategic Importance - Andaman and Nicobar Islands, Lakshwadeep
Cultural Distinctiveness - Dadra and Nagar Haveli, Daman and Diu and
Puducherry
• Political and Administrative Reasons - Chandigarh and National Capital
Territory of Delhi
• The states of Manipur and Tripura had been made Union territories due to
the special treatment required for the people residing in these regions.
Today, parts of these states come under Schedule areas either in Schedule V
or VI.
• The Centre has powers to administer the Union territories. Hence, under
Article 239 the President appoints an administrator to act as the head the
union territory's executive. The administrator's position is quite distinct from
the position of a Governor of a State. He/ She does not have the discretion
accorded to the Governor, whose is an independent position under the
Constitution. The President can also appoint the Governor of a neighbouring
state as the administrator of a Union Territory. The administrator is either
called a Lieutenant Governor or Administrator in different union territories.
• Under Article 240, President has the power to make regulations for the
peace, progress and good governance of Andaman and Nicobar Islands,
Lakshwadeep, Dadra and Nagar Haveli, Daman and Diu and Puducherry. In

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case of Puducherry, the President can make a regulation to legislate only

when the assembly is suspended or dissolved.
• The Union territories, except Puducherry and Delhi, do not have any
legislatures of their own. Thus, the power to make laws on any of the subjects
under all lists mentioned in the Seventh Schedule resides with the
Parliament. This power also covers Puducherry and Delhi.
• The Ministry of Home Affairs at the Centre is the nodal ministry for all
matters related to Union Territories relating to legislation, finance and
budget, services and appointment of Administrators. All the five union
territories without a legislature have the forum of Home Minister's Advisory
Committee (HMAC) to discuss general issues related to social and economic
development.
• Under Article 239AB, in case of failure of Constitutional machinery in the case
of NCT of Delhi, the President can suspend the operation of any provision of
Article 239AA and make such provisions as are necessary. for administering
the NCT of Delhi under the Constitution. This is similar to Article 356 with
respect to states.
High Courts for Union territories
Parliament may by law constitute a High Court for a 1[Union territory] or declare
any court in any [such territory] to be a High Court for all or any of the purposes
of this Constitution.
The provisions of Chapter V of Part VI shall apply in relation to every High Court
referred to in clause (1) as they apply in relation to a High Court referred to in
article 214 subject to such modifications or exceptions as Parliament may by law
provide.
[(3) Subject to the provisions of this Constitution and to the provisions of any
law of the appropriate Legislature made by virtue of powers conferred on that
Legislature by or under this Constitution, every High Court exercising jurisdiction
immediately before the commencement of the Constitution (Seventh
Amendment) Act, 1956, in relation to any Union territory shall continue to
exercise such jurisdiction in relation to that territory after such commencement.
(4) Nothing in this article derogates from the power of Parliament to extend or
exclude the jurisdiction of a High Court for a State to, or from, any Union
territory or part thereof

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Special features to Delhi :

Article 239AA. Special provisions with respect to Delhi
As from the date of commencement of the Constitution (Sixty-ninth
Amendment) Act, 1991, the Union territory of Delhi shall be called the National
Capital Territory of Delhi (hereafter in this Part referred to as the National
Capital Territory) and the administrator thereof appointed under article 239
shall be designated as the Lieutenant Governor.
(2)(a) There shall be a Legislative Assembly for the National Capital Territory and
the seats in such Assembly shall be filled by members chosen by direct election
from territorial constituencies in the National Capital Territory.
The total number of seats in the Legislative Assembly, the number of seats
reserved for Scheduled Castes, the division of the National Capital Territory into
territorial constituencies (including the basis for such division) and all other
matters relating to the functioning of the Legislative Assembly shall be regulated
by law made by Parliament.
The provisions of articles 324 to 327 and 329 shall apply in relation to the
National Capital Territory, the Legislative Assembly of the National Capital
Territory and the members thereof as they apply, in relation to a State, the
Legislative Assembly of a State and the members thereof respectively; and any
reference in articles 326 and 329 to “appropriate Legislature” shall be deemed
to be a reference to Parliament.
(3) (a) Subject to the provisions of this Constitution, the Legislative Assembly
shall have power to make laws for the whole or any part of the National Capital
Territory with respect to any of the matters enumerated in the State List or in
the Concurrent List in so far as any such matter is applicable to Union territories
except matters with respect to Entries 1, 2 and 18 of the State List and Entries
64, 65 and 66 of that List in so far as they relate to the said Entries 1, 2 and 18.
(a) Nothing in sub-clause

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(b) shall derogate from the powers of Parliament under this Constitution to
make laws with respect to any matter for a Union territory or any part thereof.
(c) If any provision of a law made by the Legislative Assembly with respect to any
matter is repugnant to any provision of a law made by Parliament with respect
to that matter, whether passed before or after the law made by the Legislative
Assembly, or of an earlier law, other than a law made by the Legislative
Assembly, then, in either case, the law made by Parliament, or, as the case may
be, such earlier law, shall prevail and the law made by the Legislative Assembly
shall, to the extent of the repugnancy, be void:
Provided that if any such law made by the Legislative Assembly has been
reserved for the consideration of the President and has received his assent, such
law shall prevail in the National Capital Territory:
Provided further that nothing in this sub-clause shall prevent Parliament from
enacting at any time any law with respect to the same matter including a law
adding to, amending, varying or repealing the law so made by the Legislative
Assembly.
(4) There shall be a Council of Ministers consisting of not more than ten per cent.
of the total number of members in the Legislative Assembly, with the Chief
Minister at the head to aid and advise the Lieutenant Governor in the exercise
of his functions in relation to matters with respect to which the Legislative
Assembly has power to make laws, except in so far as he is, by or under any law,
required to act in his discretion:
Provided that in the case of difference of opinion between the Lieutenant
Governor and his Ministers on any matter, the Lieutenant Governor shall refer
it to the President for decision and act according to the decision given thereon
by the President and pending such decision it shall be competent for the
Lieutenant Governor in any case where the matter, in his opinion, is so urgent
that it is necessary for him to take immediate action, to take such action or to
give such direction in the matter as he deems necessary.
(5) The Chief Minister shall be appointed by the President and other Ministers
shall be appointed by the President on the advice of the Chief Minister and the
Ministers shall hold office during the pleasure of the President.
(6) The Council of Ministers shall be collectively responsible to the Legislative
Assembly.
(7) (a) Parliament may, by law, make provisions for giving effect to, or
supplementing the provisions contained in the foregoing clauses and for all
matters incidental or consequential thereto.
(b) Any such law as is referred to in sub-clause (a) shall not be deemed to be an
amendment of this Constitution for the purposes of article 368 notwithstanding

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that it contains any provision which amends or has the effect of amending, this
Constitution.
(8) The provisions of article 239B shall, so far as may be, apply in relation to the
National Capital Territory, the Lieutenant Governor and the Legislative
Assembly, as they apply in relation to the Union territory of Pondicherry, the
administrator and its Legislature, respectively; and any reference in that article
to “clause (1) of article 239A” shall be deemed to be a reference to this article
or article 239AB, as the case may be.

Revoking of Article 370 (Jammu & Kashmir)

History :
• Two months after independence, on 20 October 1947, Kashmir was attacked
by a large number of armed tribesmen, forcing Hari Singh, the ruler of
Kashmir to write to Governor General, Lord Mountbatten, asking India to
provide military aid. Attached to this letter asking for aid was the instrument
of accession to India, which was signed by Singh. Mountbatten signed the
instrument on 27 October 1947. As per the document, however, only
defence, external affairs and communications would be handed over to the
government of India, while control over all other sectors was to be retained
by ruler, under the Jammu and Kashmir Constitution Act 1939. These
conditions were peculiar to Kashmir’s accession to India, unlike the 565
native states that had chosen to integrate fully with India. Article 370 was
therefore introduced in the constitution to preserve the specific terms under
which Kashmir had agreed to accede to India.
• In March 1948, Hari Singh made a proclamation by which his council of
ministers were to convene a National Assembly based on adult franchise, to
work out a new constitution for Jammu and Kashmir. In June 1949, he

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conferred all his powers as ruler to Yuvraj Karan Singh Bahadur, to be

exercised by Bahadur in Singh’s absence. The terms of Kashmir’s accession
was worked out in the period between October 1947 and 26 November 1949,
when the Constituent Assembly was drafting the Constitution of India.
Agarwala writes that “Article 370 was necessitated to accommodate the then
prevailing legal status of the Jammu and Kashmir state in the body of the
Constitution of India.”
Article 370 :
Article 370 was the legal provision with which Kashmir was assured of
autonomy. Under Article 370, the President can, with the Constitution
(Application to Jammu and Kashmir) Order 1954, decide provisions of the
Indian Constitution which could be applied to Jammu and Kashmir with or
without modification. But as S P Sathe writes, this has to be done in
conference with authorities in Kashmir. The words “consultation” and
“concurrence” that were used in Article 370 demonstrate the intent and the
meticulousness of the drafters of the constitution in ensuring the retention
of Kashmiri autonomy. This order has been amended from time to time to
make more and more provisions of the Indian Constitution applicable to
Jammu and Kashmir.
The Article provides:
(I)The Union Parliament is to legislate on such matters in List I and List III of
the Seventh Schedule of the Constitution as correspond with those
mentioned in the Instrument of Accession signed by the king of Kashmir. The
president of India can identify subjects on Lists I and III which correspond
with broad subjects mentioned in the Instrument of Accession but the order
of the president specifying such subjects must be made in 'consultation' with
the state government.
(II) The president can extend the legislative power of Parliament in respect
of subjects in the union and Concurrent Lists of the Seventh Schedule not
included in the Instrument of Accession by an order, which can be made only
with the 'concurrence' of the state government.
(III) Article I of the Constitution of India, which defines the territories of India,
and article 370 itself apply to Kashmir ipso facto. All other articles of the
Constitution of India may be extended to Kashmir, by an order to be issued
by the president under Article 370, only in 'consultation' with the state
government of Jammu and Kashmir if it pertains to matters regarding
legislative power of Parliament, and with the 'concurrence' of the state
government if it pertains to matters other than those regarding the
legislative powers of Parliament.

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On 5th August 2019, President of India in the exercise of the powers conferred
by Clause (1) of Article 370 of the Constitution had issued the Constitution
(Application to Jammu and Kashmir) Order, 2019. Through this, Government of
India has made modifications in Article 370 itself (not revoked it).
With this, the Government of India has dramatically altered the relationship
between the state of Jammu and Kashmir and the Indian Union.
Background(more info)
• On October 17, 1949, Article 370 was added to the Indian constitution, as
a 'temporary provision', which exempted Jammu & Kashmir, permitting it to
draft its own Constitution and restricting the Indian Parliament's legislative
powers in the state.

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• It was introduced into the draft constitution by N Gopalaswami Ayyangar as

Article 306 A.
• Article 35A stems from Article 370 and was introduced through a Presidential
Order in 1954, on the recommendation of the J&K Constituent Assembly.

• Article 35A empowers the Jammu & Kashmir legislature to define

the permanent residents of the state, and their special rights and privileges.
• The special status provided to J&K under Article 370 will be abolished.

• Jammu & Kashmir will no longer have the separate constitution, flag or
anthem.
• The citizens of Jammu and Kashmir will not have dual citizenship.
• As the new union territory of Jammu and Kashmir will be subject to the Indian
Constitution, its citizens will now have the Fundamental Rights enshrined in
the Indian constitution.
• Article 360, which can be used to declare a Financial Emergency, will now
also be applicable.
• All laws passed by Parliament will be applicable in Jammu and Kashmir,
including the Right to Information Act and the Right to Education Act.
• The Indian Penal Code will replace the Ranbir Penal Code of Jammu and
Kashmir.
• Article 35A, which originates from the provisions of Article 370 stands null
and void.

• Since Presidential Order has extended all provisions of the Constitution to

Jammu and Kashmir, including the chapter on Fundamental Rights, the
discriminatory provisions under Article 35A will now be unconstitutional.

The Constitution of Jammu and Kashmir came into force on( CAPF 2016)
(a) August 15,1946
(b) August 15, 1947
(c) January 26, 1950
(d) January 26, 1957

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Special provisions to several states :

Which one of the following States does not find a mention in Article 371 of
the Constitution of India?(CAPF 2018)
(a) Maharashtra
(b) Madhya Pradesh
(c) Gujarati
(d) Karnataka

Article 371:

Special Provisions for 11 states

Part XXI of the Constitution, ‘Temporary, Transitional and Special Provisions’,

includes, apart from Article 370 (Temporary Provisions for J&K) Articles 371,
371A, 371B, 371C, 371D, 371E, 371F, 371G, 371H, and 371J, which define special
provisions with regard to other states of the Indian Union.

The existence of the provisions shows that other princely states, too, negotiated
the terms and conditions of their entry into the Union.
Article 371: Maharashtra and Gujarat:
The Governor has a “special responsibility” to establish “separate development
boards” for “Vidarbha, Marathwada, and the rest of Maharashtra”, and
Saurashtra and Kutch in Gujarat.
Nagaland (Article 371A, 13th Amendment Act, 1962)

No act of Parliament shall apply to the State of Nagaland in respect of the

religious or social practices of the Nagas, its customary law and procedure,
administration of civil and criminal justice involving decisions according to Naga
customary law and ownership and transfer of land and its resources.

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This provision was inserted in the Constitution after a 16-point agreement

between the Centre and the Naga People’s Convention in 1960, which led to the
creation of Nagaland in 1963.

Also, there is a provision for a 35-member Regional Council for Tuensang district,
which elects the Tuensang members in the Assembly.

A member from the Tuensang district is Minister for Tuensang Affairs.

The Governor has the final say on all Tuensang-related matters.

Assam (Article 371B, 22nd Amendment Act, 1969)

The President of India may provide for the constitution and functions of a
committee of the state Assembly consisting of members elected from the tribal
areas of the state.

Manipur (Article 371C, 27th Amendment Act, 1971)

President may provide for the constitution and functions of a committee of
elected members from the Hill areas of the state in the Assembly, and entrust
“special responsibility” to the Governor to ensure its proper functioning. The
Governor has to file a report every year on this subject to the President.
Andhra Pradesh and Telangana (Article 371D, 32nd Amendment Act, 1973;
substituted by the Andhra Pradesh Reorganisation Act, 2014)

The President must ensure “equitable opportunities and facilities” in “public

employment and education to people from different parts of the state”.

He may require the state government to organise “any class or classes of posts
in a civil service of, or any class or classes of civil posts under, the State into
different local cadres for different parts of the State”, and allot them.
Article 371E states that the Parliament may by law provide for the establishment
of a University in Andhra Pradesh.
Article 371F – Sikkim
Article 371F was incorporated into the Constitution in 1975. It states that the
Legislative Assembly shall consist of not less than 30 members. In order to
protect the rights and interests of the different sections of the population in the
state of Sikkim, seats in the assembly are provided to people of these different
sections.
Article 371G – Mizoram
The Legislative Assembly of the state of Mizoram must consist of not less than
40 members. In addition, following the same provisions as Nagaland, an act of

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Parliament would not apply to Mizoram in matters relating to religious or social

practices of Mizo, Mizo customary law and procedure, administration of civil or
criminal justice involving decisions according to Mizo customary law, ownership
and transfer of land and its resources.
Article 371H – Arunachal Pradesh
The Legislative Assembly of the state of Mizoram must consist of not less than
30 members. The governor will have special responsibility with respect to law
and order in the state.
Article 371I – Goa
The Legislative Assembly of the state of Goa must consist of not less than 30
members.
Article 371J
Article 371J grants special status to six backward districts of Hyderabad-
Karnataka region. The special provision requires that a separate development
board be established for these regions (similar to Maharashtra and Gujarat) and
also ensures local reservation in education and government jobs.

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Centre State Relations

India is a union of states. The constitution of India has divided the legislative,
executive and financial powers between the centre and the states, which gives
the constitution a federal character whereas judiciary is integrated in a
hierarchical structure.
The centre-state relations are divided into three parts, which are mentioned
below:
• Legislative Relations (Article 245-255)
• Administrative Relations (Article 256-263)
• Financial Relations (Article 268-293)

Legislative relations :
Articles 245 to 255 in Part XI deals with different aspects of legislative relations
between centre and states. These include:
(1) Territorial jurisdiction of laws made by the Parliament and by the Legislatures of
States.
(2) Distribution of legislative subjects
(3) Power of parliament to legislate with respect to a matter in the State List
(4) Centre's control state legislation
o Article 245 defines the extent of territorial jurisdiction of Parliament and
State Legislatures. It confers power on Parliament to legislate for the whole
or part of India and on State Legislatures to legislate for the whole or part of
a State. The legislative power so conferred by Article 245 is distributed by
Article 246 between the Union and the States with reference to the subjects
enumerated in the three lists of Schedule VII.
o Article 246 confers exclusive legislative power on Parliament with respect to
matters in List I. Likewise, the Legislature of a State has been invested with
exclusive power to make laws with respect to matters in List II. Parliament
and State Legislatures have concurrent powers with respect to matters
enumerated in List III.
The legislative subjects are divided into List I (the Union List), List II (the
Concurrent List) and List III (the State List).

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o At present, there are 100 subjects in the Union list which includes subjects
such as foreign affairs, defence, railway, postal services, banking, atomic
energy, communication, currency etc.
o At present, there are 61 subjects in the State list. The list includes subjects
such as police, public order, roadways, health, agriculture, local government,
drinking water facilities, sanitation etc.
o At present, there are 52 subjects in the concurrent list. The list includes
subjects such as education, forests, protection of wild animals and birds,
electricity, labour welfare, criminal law and procedure, civil procedure,
population control and family planning, drugs etc.
o Article 245 empowers the centre to give directions to the states in certain
cases in regards to the exercise of their executive powers.
Article 248 read with Entry 97 of List I gives exclusive power to Parliament to
make any law with respect to any matter not enumerated in the Concurrent List
of the State List.
Article 249 empowers the parliament to legislate with respect to a matter in the
State List in the national interest.
Under Article 250, the parliament becomes empowered to make laws on the
matters related to state list when national emergency (under Article 352) is in
operation.
Under Article 252, the parliament is empowered to legislate for two or more
States by their consent.

Administrative Relations
Article 256 to 263 deals with the administrative relations between the centre
and the states. Article 256 states that "the executive power of every State shall
be so exercised as to ensure compliance with the laws made by the parliament
and any existing laws which apply in that State, and the executive power of the
Union shall extend to the giving of such directions to a State as may appear to
the Government of India to be necessary for that purpose".
Cooperation Between the Centre and the States
The constitution lays down various provisions to secure cooperation and
coordination between the centre and the states. These include:
Article 261 states that "Full faith and credit shall be given throughout the
territory of India to public acts, records and judicial proceedings of the Union
and of every State".
(ii) According to Article 262, the parliament may by law provide for the
adjudication of any dispute or complaint with respect to the use, distribution or
control of the waters of, or in, any inter-State river or river valley.

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(iii) Article 263 empowers the President to establish an inter-State Council to

inquire into and advise upon disputes between states, to investigate and discuss
subjects in which some or all of the States, or the Union and one or more of the
States, have a common interest.
(iv) As per Article 307, Parliament may by law appoint such authority as it
considers appropriate for carrying out the purposes of the constitutional
provisions related to the inter-state freedom of trade and commerce.
Centre-State Relations during Emergency
During a national emergency (under Article 352), the state government become
subordinate to the central government. All the executive functions of the state
come under the control of the union government.
(ii) During a state emergency (under Article 356), the president can assume to
himself all or any of the functions of the Government of the State and all or any
of the powers vested in or exercisable by the Governor or authority in the State
other than the Legislature of the State.
(iii) During the operation of financial emergency (under Article 360), the Union
may give directions to any State to observe such canons of financial propriety as
may be specified in the directions, and to the giving of such other directions as
the President may deem necessary and adequate for the purpose.
Financial Relations
The Constitution deals with the centre-state financial relations in Article 268-
293 of Part XII.
Allocation of taxing powers
The Constitution has provided the union government and the state governments
with the independent sources of revenue. It allocates the powers to centre and
the states in the following way:
The parliament has exclusive power to levy taxes on the subjects mentioned in
the Union List.
(ii) The state legislatures has exclusive power to levy taxes on the subjects
mentioned in the State List
(iii) Both the parliament and the state legislature are empowered to levy taxes
on the subjects mentioned in the Concurrent List.
(iv) The parliament has exclusive power to levy taxes on the matters related to
the residuary subjects.
However, in case of tax revenue distribution,
article 268 states that duties are levied by the Union but are collected and
appropriated by the States;
Service tax levied by Union and collected and appropriated by the Union and the
States (Article 268-A);
Taxes levied and collected by the Union but assigned to the States (Article 269);

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Taxes levied and collected by the Union but distributed between the Union and
the States (Article 270).
Surcharge on certain duties and taxes for purposes of the Union (Article 271)
Under Article 275, the parliament is authorized to provide grants-in-aid to any
state as parliament may determine to be in need of assistance, and different
sums may be fixed for different States.
Under Article 282, 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.
Under Article 352, during the operation of national emergency, the distribution
of revenues between the centre and the states can be altered by the president.
Under Article 360, during the financial emergency, the executive authority of
the Union shall give directions to any State to observe such canons of financial
propriety as may be specified in the directions and to the give the directions as
the President may deem necessary and adequate for the purpose.

The important recommendations of the first administrative reforms commission

related to the centre-state relations are:

Establishment of an Inter-state council under Article 263

• Decentralization of powers to the states as much as possible
• More transfer of financial resources to the states
• Arrangements for devolution in such a way that the states can fulfil their
obligations

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• Advancement of loans to states should be related to as ‘the productive

principle’.
• Deployment of central armed forces in the states either on their request or
otherwise
• During state emergency, under Article 356, President's Rule can be imposed
in event of the failure of constitutional machinery in a state.

THE ADMINISTRATIVE REFORMS COMMISSION (1969) The Administrative

Reforms Commission (1969) made 22 recommendations to improve Centre
State relations. It ruled out any constitutional amendment and considered the
existing provisions as sufficient to regulate federal tensions. The important
recommendations are given out of 22 recommendations in the following:
• Establishment of an Inter-state council under Article 263 of the constitution
• Delegation of powers to the maximum extent to the states
• Augmenting financial resources of the states through fiscal transfers from the
centre
• Appointment of non-partisan persons having long experience in public life
and adminis¬tration as Governor of a state
• Chairman was Morarji desai and later replaced by hanumanthappayya
• Mc setalvad study team on some issues
• Rajmannar Commission, 1969
• In 1969, the Tamil Nadu government appointed Rajmannar Commission to
look into this aspect and it submitted its report in 1971. It demanded
readjustment of the VII schedule and residuary power to the states. Its other
important recommendations are given in the following:
• Setting of an Inter-State council immediately
• Finance commission to be made a permanent body
• Deletion of Articles 356, 357 and 365 which dealt with the President’s rule
• Abolition of All-India Services (lAS, IPS and IFS)
• Planning Commission to be replaced by a statutory body
The Central government completely ignored its recommendations
• Anandpur Sahib Resolution, 1973
• In 1978, the Akali Dal came out with a controversial resolution called the
Anandpur Sahib Resolution. It demanded greater autonomy for the States
seeking Centre’s authority to be confined to only Defence, Foreign relation,
Communications, Railways and Currency. It also demanded residuary powers
for the State. In the decade of 1980, as the regional parties became very
assertive, they put-forth the demand for State autonomy in an organized
manner. Their ‘conclaves’ were held at Vijaywada, Delhi and Srinagar which
raised the demand for redefining the Centre-States relations. Here also the

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Central government did not accept these recommendations. In 1973, the

Akali Dal adopted Anandpur Sahib resolution which demanded the
restriction of centre’s jurisdiction to only defence, foreign affairs,
communications and currency and vesting of residuary powers in the states.
It also called for equal authority and representation of the states at the
Centre. In December 1977, the Communist government in West Bengal
published a memorandum called the West Bengal memorandum which made
the following recommendations:
• The word ‘union’ in the constitution should be replaced by the word ‘federal’
• The centre’s jurisdiction to be restricted to only defence, foreign affairs,
communications and economic coordination
• Deletion of articles 356, 357 and 360
• Rajya Sabha to have equal powers with that of the Lok Sabha
• Abolition of All-India services
• 75 per cent of the revenue raised by the centre should be allocated to the
states
Sarkaria Commission
• The central government set up the Justice R S Sarkaria Commission in June
1983 to examine the relationship and balance of power between state and
central governments. The Commission, which dealt with the role of
Governors, suggested that in choosing a Chief Minister, the Governor should
be guided by the following principles:
• *The party or combination of parties that command the widest support in
the Legislative Assembly should be called to form the government.
• * The Governor’s task is to see that a government is formed — and not to try
to form a government that will pursue policies that he approves.
• * If no party has a majority, the Governor has to invite: a) a pre-poll alliance,
b) the largest single party that is able to gain majority support, c) a post-
election coalition that has the required members, d) a post-election coalition
in which partners are willing to extend outside support.
• The Commission recommended that the Chief Minister must seek a vote of
confidence in the Assembly within 30 days of taking over. It also said the
Governor should not risk determining the issue of majority support outside
the Assembly, and that the prudent course would be to have the claims
tested on the floor of the House.

NATIONAL COMMISSION TO REVIEW THE WORKING OF THE CONSTITUTION

(NCRWC)2000
• The National Commission to Review the Working of the Constitution
(NCRWC) too put forth its suggestions, many of which were a reiteration of

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Sarkaria Commission recommendations. Some of the novel

recommendations are enumerated in the following:
• A statutory body called Inter-State Trade and Commerce Commission should
be estab¬lished as given under Article 307.
• The Governor should be appointed by a committee comprising the Prime
Minister, Home Minister, Speaker of Lok Sabha and the Chief Minister of the
state concerned.
• Management of disasters and emergencies should be included in the
Concurrent List of the Seventh Schedule.
• In case of political breakdown in a state, before invoking Article 356, as far as
practicable, the state should be given an opportunity to explain its position
and redress the situation.
• The Inter-State Council order of 1990 should clearly specify the matters that
should form part of the consultations.
Punchi Commission in 2007
• The Central government constituted the Punchi Commission in 2007 to
examine centre-state relations along with the possibility of giving sweeping
powers to the centre for suo motu deploy¬ment of Central forces in states
and investigation of crimes affecting national security. It was chaired by the
former Chief Justice of India M.M. Punchi. It submitted its recommendation
in 2009. Some of its important recommendations are given in the following:
• It called for giving a fixed term of five years to the governors and their
removal by the pro¬cess of impeachment (similar to that of the President) by
the State Legislature.
• The governor should have the right to sanction prosecution of a minister
against the advice of the council of ministers.
• It called for an amendment of Articles 355 and 356 to enable centre to bring
specific trouble-torn areas under its rule for a limited period. Hence, it
proposed ‘localizing emer¬gency provisions’ under which either a district or
parts of a district can be brought under the central rule instead of the whole
state. Such an emergency should not be for more than 3 months.
• It proposed that Centre should have power to deploy its forces in case of
communal con¬flagration without state’s consent for a short period of a
week.

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Local Self Governments

Mahatma Gandhi pointing out to the city of Delhi and said* "This is not India#
you people are seeing Delhi. This is not India. Go to villages; that is India# therein
lives the soul of India".* In these words Mahatmaji emphasised that India is
essentially a land of villages. Rabindranath Tagore gave a poetic touch to the
same theme and said "villages are like women".
Manu distinguishes among three kinds of settlements - Village (Gram, town
(pura) and city (Nagara). But even according to him, the village was a
fundamental 2 unit of administration.
from the earliest vedic age the village administration was carried on under the
village headman who was called Gramini.
In olden days every village was a Republic. The village Government was by
Panchayat or village council. The expression Panchayat is now understood all
over India as an association of villagers selected for the purpose of village
administration including the administration of justice. According to Brihaspati
two# three or five persons shall be appointed to look after the welfare of the
association (the village) and an association of Five persons for this purpose may#
perhaps# have given rise to the expression "Panchayat* although there has been
no fixity at all at any time with regard to the number of persons to be appointed
to be incharge of village affairs
Gram panchayats during british :
• To use the phrase of Sir Henry Maine* the Indian Village Communities 7 were
"a living and not dead institutions".
• Dr, R.K. Mukerji has aptly described these bodies as "the shell of the tortoise"
in as much as they stood the test of time.
• "The village communities are little republics having nearly everything they
want within themselves and almost independent of 9 foreign relations".
• With the establishment of British rule in India all the powers and
responsibilities were withdrawn from the people of India and concentrated

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in the hands of the Governor General of India and ultimately in the British
Parliament.
• Jemes Bryce, a noted political philosopher says that “There was under Rome
and there Is in British India no room for popular institutions or popular
interference with the acts of rulers from the Viceroy down to a district
official".
Note : Municipal administrations were first Introduced in the towns of Madras#
Bombay and Calcutta on a statutory basis by the Charter Act of 1793.
The real development of villages# in the modern sense# started after the report
of the Royal Array Sanitary Commission In 1863.
LORD MAYO'S RESOLUTION OF 1870 Local Self-Government as a conscious
process of administrative devolution and political education may be said to
be.Initiated by the scheme of financial decentra12 lisation of Lord Mayo’s
Government. This seems to be the first attempt to develop Local Self-
Government in rural areas* By resolution of 14th December, 1870, the
Government of India declared. "But beyond all.this, there is greater and wider
object in view. Local interest, supervision and care necessary to success in the
management of funds devoted to education, sanitation, medical relief and local
public works. The operation of this resolution in its full meaning and integrity
will afford 1 opportunities for the development of Local Self-Government". In
1871 Acts were passed in respect of Local Self-Government for rural areas in the
provinces of Bombay, Bengal, Punjab and the North Western Province (U.P) as
a result of Mayo resolution. A similar legislation (Act of 1869) was already in
operation in the province of Bombay.
THE RIPON RESOLUTION OP 1882 The next important landmark in the sphere of
rural Local Self-Government was the famous Resolution of Lord Ripon of the
18th May, 1882. It was then not unnatural that some persons should have
preferred Government administration and opposed the Resolution on the
ground that Local Self-Government would lead to inefficiency; that people as a
whole were neither public spirited nor conscious of civic duties, and that
experiments in the sphere of Local Self-Government had not shown any
encouraging results.
THE DECENTRALISATION COMMISSION Viscount Moreley, the then Secretary of
State for India from 1901-1910 was alarmed at the stupendousgrowth of over
centralisation and he took a serious notice of it. Not only this# he went even
further and called it a great mischief and he attributed it to the widening gulf
between the officials and the people in India. Hence the Royal Commission was
appointed in December 1907 with Charles Hobhouse as its Chairman.
The Commission was strongly of the view that the Local Self-Government should
start from the village level Instead of from the district level. It says* "we consider

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as the Local Self-Government should commence in the villages with the

establishment of Gram Panchayats# so the next step be the Constitution of
Boards of areas of smaller size than a district# we desire# therefore, to see
subdistrict boards# universally established# as the Principal 15 agencies of rural
administration".
The Commission, therefore, recommended the following sources of income to
the Panchayats*
1) The assignment to it of a portion of the land cess levied for local board*s
purposes in the village*
2) Special grants for particular objects of Local improvements to be made by the
District Board of the Collector* 3) The receipts from village cattle pounds or
markets which may be entrusted to its management
4) Small fees on civil suits field before it.
The British Parliament passed the Government of India Act1919 by which Local
Self-Government was made one of the provincial transferred subjects under the
charge of a popular minister. This had a desired effect and Acts were passed in
eight provinces in British India for the establishment of Gram Panchayats. The
Acts were the following* 1) Bengal Local Self-Government Act of 1919. 2) Bihar
Local Self-Government Act of 1920. 3) Bombay Gram Panchayat Act of 1920. 4)
Central Provinces and Berar Panchayat Act 1920. 5) Madras Panchayat Act of
1920. 6} U.P. Gram Panchayat Act of 1920. 7) Punjab Panchayat Act of 1922. 19
8) Assam Local Self-Government Act of 1925.
ON THE EVE OF INDEPENDENCE After passing of the Government of India Act#
1935 the subject of Local Self-Government which was already a transferred
subject under the Government of India Act 1919# was included in the Provincial
Legislative List.
MAHATMAJI'S CONCEPT OF GRAM PANCHAYAT It will not be out of place here
to know the views of Mahatma Gandhi on Gram Panchayats# since he was the
architect of the Indian nation for more than 25 years before independence* His
whole attention was concentrated on getting freedom for India from 1920 to
1947 though from time to time he expressed his ideas about Gram Panchayats.
His concept of Gram Panchayat could not take concrete shape till India got
freedom.
After independence, as a development initiative, India had implemented the
Community Development Programmes (CDP) on the eve of Gandhi Jayanti, the
2nd October, 1952 under the major influence of the Etawah Project undertaken
by the American expert, Albert Mayer.
Etawah Pilot Project (1948) This project was started in 1948 by Mr. Albert Mayer
of USA who came to India as a warrior at a village called Mahewa in UP. A pilot
project for development of Etawah district in UP was formulated by him with

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the following objectives. 1. To know the degree of productive and social

improvements, through self confidence and cooperatives; 2. To find how quickly
these results could be attained; 3. To know whether the results remain
permanent even after the special pressure is withdrawn; and 4. To assess how
far the results were reproductive in other places

• It encompassed almost all activities of rural development which were to be

implemented with the help of village panchayats along with the participation of
people.
• In 1953, the National Extension Service was also introduced as a prologue to
CDP. The main intention was to make CDP extend to all the villages in India. Since
initially CDP was started only in 55 blocks . each block was headed by a BDO (
block development officer).
In 1957, the National Development Council constituted a committee headed by
Balwant Rai Mehta to look into the working of community development
programme.

• The team observed that the major reason for the failure of the CDP was
the lack of people’s participation.
• The committee suggested a three-tier PRIs, namely, Grama Panchayats (GPs)
at the village level, Panchayat Samiti (PSs) at the block level, and Zilla
Parishad (ZPs) at the district level

• As a result of this scheme of democratic decentralization was launched in

Rajasthan on October 2, 1959.
• In Andhra Pradesh, the scheme was introduced on 1st November, 1959 at
shamshabad region. The necessary legislation had also been passed and
implemented in Assam, Gujarat, Karnataka, Madhya Pradesh, Maharashtra,
Orissa, and Punjab etc.
Ashok Mehta Committee
In December 1977, the Janta Government appointed a committee on Panchayati
Raj institutions under the chairmanship of Ashok Mehta. It submitted its report

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in August 1978 and made 132 recommendations to revive and strengthen the
declining Panchayati Raj System in the country. Its main recommendations are:

1. The three-tier system of Panchayati Raj should be replaced by the two-

tier system, that is, Zila Parishad at the district level, and below it, the
Mandal Panchayat consisting of a group of villages covering a
population of the 15000 to 20000.
2. A district should be the first point for decentralization under popular
supervision below the state level.
3. Zila Parishads should be the executive body and made responsible for
planning at the district level.
4. There should be an official participation of political parties at all levels
of Panchayat elections.
5. The Panchayati Raj institutions should have compulsory powers of
taxation to mobilize their own financial resources.
6. There should be a regular social audit by a district level agency and by a
committee of legislators to check whether the funds allotted for the
vulnerable social and economic groups are actually spent on them.
7. The state government should not supersede the Panchayati Raj
institutions. In case of an imperative supersession, election should be
held within six months from the date of supersession.
8. The Chief Electoral Officer of state in consultation with Chief Election
Commissioner should organise and conduct the Panchayati Raj
elections.
9. Development functions should be transferred to the Zila Parishad and
all development staff should work under its control and supervision.
10.A minister for Panchayati Raj should be appointed in the state council
of ministers to look after the affairs of the Panchayati Raj institutions.
11.Seats for SC and ST should be reserved on the basis of their population

G.V.K. Rao Committee

The G.V.K. Rao Committee- was set up by the Planning Commission in 1985. It
recommended for the revival of Panctiayati Raj institutions and highlighted the
need to transfer powers to democratic bodies at the local level. The two
important suggestions that this committee made were:

1. That the ‘district’ should be the basic unit of planning and programme
implementation.
2. Zilla Parishads should become the principal body for the management
of all development programmes which can be handled at that level.

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3. Zila Parishads should to be given prime importance and all

developmental programs at that level to be handed to it.
4. Post of DDC (District Development Commissioner) to be created acting
as the chief executive officer of the Zila Parishad.
5. Regular elections to be held
6. He used the phrase grass without roots” if panchayats are not given a
proper powers.

The Report of L.M. Singhvi Committee in 1986 on Revitalization of Panchayati

Raj Institutions,

• Government of India, 1986, focuses on integrated vision of democracy,

ascent and ennui of Panchayati Raj momentum.
• The Committee takes the Indian villages and the Gram Sabha as the
republican base of our democratic nation. It considers the Gram Sabha as
the embodiment of direct democracy.
• It has recommendations on Nyaya Panchayats and integrated
administrative structures
• The most important recommendation was it announced for a
constitutional status to panchayats .

Though the 64th and 65th Constitutional Amendment bill was introduced in the
Lok Sabha in 1989 itself, the Rajya Sabha opposed it. 64th bill was related to gram
panchayats and 65th with the urban local bodies.

Later PV Narsimha Rao government in 1991 introduced 73rd and 74th

constitutional amendment bills which were passed and became an act in the
year 1992.

Note : the president if India during this time was Shankar Dayal Sharma .

From April 24th 1993 the three tier panchayat system came into force in India
and so is referred as panchayat raj divas .

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Salient Features of the Constitution 73rd and 74th Amendments

▪ These amendments added two new parts to the Constitution, namely,
added Part IX titled “The Panchayats” (added by 73rd Amendment) and Part
IXA titled “The Municipalities” (added by 74th Amendment).
▪ Basic units of democratic system-Gram Sabhas (villages) and Ward
Committees (Municipalities) comprising all the adult members registered as
voters.
▪ Three-tier system of panchayats at village, intermediate block/taluk/mandal
and district levels except in States with population is below 20 lakhs (Article
243B).
▪ Seats at all levels to be filled by direct elections Article 243C (2).
▪ Seats reserved for Scheduled Castes (SCs) and Scheduled Tribes (STs) and the
chairpersons of the Panchayats at all levels also shall be reserved for SCs and
STs in proportion to their population.
▪ One-third of the total number of seats to be reserved for women.
▪ One third of the seats reserved for SCs and STs also reserved for women.

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▪ One-third offices of chairpersons at all levels reserved for women (Article

243D).
▪ Uniform five year term and elections to constitute new bodies to be
completed before the expiry of the term.
▪ In the event of dissolution, elections compulsorily within six months (Article
243E).
▪ Independent Election Commission in each State for superintendence,
direction and control of the electoral rolls (Article 243K).
▪ Panchayats to prepare plans for economic development and social justice in
respect of subjects as devolved by law to the various levels of Panchayats
including the subjects as illustrated in Eleventh Schedule (Article 243G).
▪ 74th Amendment provides for a District Planning Committee to consolidate
the plans prepared by Panchayats and Municipalities (Article 243ZD).
▪ Budgetary allocation from State Governments, share of revenue of certain
taxes, collection and retention of the revenue it raises, Central Government
programmes and grants, Union Finance Commission grants (Article 243H).
▪ Establish a Finance Commission in each State to determine the principles on
the basis of which adequate financial resources would be ensured for
panchayats and municipalities (Article 243I).
▪ The Eleventh Scheduled of the Constitution places as many as 29 functions
within the purview of the Panchayati Raj bodies.
Qualifications :

• Minimum age : 21 years at all three levels

• Must be a registered voter in the village
• No criminal background
• Other qualifications can be decided by the state government according to
the population.
• Ex. Haryana and Rajasthan made 10th pass compulsory to contest in
panchayat elections
• Bihar made toilets compulsory in the household
• Andhra Pradesh made more than two kids for a person is not eligible for
the elections.
• Rajasthan made leprosy patients are not eligible for the election

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Responsibilities :

Note : article 243 to 243O deals with the panchayat system

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Urban local bodies :

74th Constitutional Amendment(Urban Local bodies)

This act added a new part IX-A to the Constitution entitled as ‘The
Municipalities’ and a new Twelfth Schedule containing 18 functional items for
municipalities. The main provisions of this Act can be grouped under two
categories–compulsory and voluntary. Some of the compulsory provisions
which are binding on all States are:
There are eight types of urban governments in India.

1. Municipal Corporation: Municipal corporations are created for the

administration of big cities like Delhi, Mumbai, Hyderabad and others. A
Municipal Corporation has three authorities namely, the council (legislative
wing of the corporation), the standing committee (to facilitate the working of
the council) and the commissioner (chief executive authority of the
corporation).The council consist of councillors directly elected by people and is
headed by a Mayor while the Commissioner is appointed by state government
and is generally an IAS officer.

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The first municipal corporation was established in 1687 at Madras

2. Municipality: The municipalities are established for the administration of

towns and smaller cities. They are known by various other names like
municipal council, municipal committee, municipal board, borough
municipality, city municipality and others. In composition they are quite similar
to municipal corporations except that head of council is called President
/chairman and in place of commissioner they have a chief executive
officer/chief municipal officer.
3. Notified Area Committee: A notified area committee is created for the
administration of two types of areas- a fast developing town due to
industrialisation, and a town which does not yet fulfill all the conditions
necessary for the constitution of a municipality, but which otherwise is
considered important by the state government. It is called so because it is
created by a notification and unlike the municipality it is an entirely nominated
body, i.e. all members, including the Chairman, are nominated by the state
government. Thus, it is neither a statutory body (created by law) nor an
elected body.
4. Town Area Committee: It is set up by a separate act of state legislature for the
administration of a small town. It is a semi-municipal authority entrusted with
limited number of civic functions. It may be wholly elected or wholly
nominated or partly elected and partly nominated as provided by state
government.
5. Cantonment Board: It is established for municipal administration for civilian
population in the cantonment areas (area where military forces and troops are
permanently stationed). It is set up under the provisions of the Cantonment
Act, 2006 by central government and works under Defence ministry of central
government. It is partly elected and partly nominated body having the Military
officer commanding the station as its ex-officio President. Vice president is
elected amongst by the elected members of board. The executive officer of the
cantonment board is appointed by the President of India.,
6. Township: It is established by large public enterprises to provide civic
amenities to its staff and workers, who live in the housing colonies built near
the plant. It is not an elected body and all members, including the town
administrator, is appointed by the enterprise itself.
7. Port Trust: The port trusts are established in the port areas like Mumbai,
Kolkata, Chennai and so on for two purposes: (a) to manage and protect the
ports; (b) to provide civic amenities. It is created by an Act of Parliament and it
consists of both elected and nominated members.
8. Special Purpose Agency: The states have set up certain agencies to undertake
designated activities or specific functions that legitimately belong to the

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domain of municipal corporations, municipalities or other local urban

governments. In other words, these are function based, not area based. They
are known as ‘single purpose’, ‘uni-purpose’ or ‘special purpose’ or ‘functional
local bodies’ like town improvement trust, housing boards, pollution control
boars etc. They are established as statutory bodies by an act of state
legislature or as departments by an executive resolution. They function as an
autonomous body and are not subordinate agencies to local municipal bodies.
Composition
The Municipal bodies are constituted of persons chosen by direct election from
the territorial constituencies (known as wards) in the municipal area.
However, the Legislature of a State may, by law, provide for the representation
in a municipal body of persons having special knowledge or experience of
municipal administration, the members of Rajya Sabha, Lok Sabha and the
members of Legislative Council and Legislative Assembly of the State,
representing constituencies, which comprise wholly or partly the Municipal
Area. The state legislature may also provide the manner of the election of the
Chairpersons of a municipality.
The state legislature may also provide the manner of the election of the
Chairpersons of a municipality.
Empowerment of weaker sections of society and women by reserving seats for
such groups is one of the important constitutional provisions of the
Constitutional Amendment.
The offices of chairperson are also reserved for SC/ST and women. Thus, at
least one year, out of five year duration of Municipal Corporation of Delhi, the
office of Mayor is reserved for a woman, and for one year is reserved for a
Councillor of Scheduled Caste. It gives a term of five years to the municipalities
and if any of them is to be dissolved, it must be given an opportunity of being
heard.

1. Constitution of Nagar panchayats, municipal councils and municipal

corporations in transitional areas (areas in transition from a rural area to
urban area), smaller urban areas and larger urban areas respectively;
2. Reservation of seats in urban local bodies for Scheduled Castes / Scheduled
Tribes roughly in proportion to their population;
3. Reservation of seats for women up to one-third seats;
4. The State Election Commission, constituted in order to conduct elections in
the panchayati raj bodies (see 73rd Amendment) will also conduct elections to
the urban local self- governing bodies;
5. The State Finance Commission, constituted to deal with financial affairs of the
Panchayati Raj bodies will also look into the financial affairs of the local urban
self governing bodies;

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6. Tenure of urban local self-governing bodies is fixed at five years and in case of
earlier dissolution fresh elections are to be held within six months;

Note : part 9 A of Indian constitution deals with municipalities. Article 243P to

243ZG deals with urban local bodies.
• PART IXA of CONSTITUTION OF INDIA
• THE MUNICIPALITIES
o 243P. Definitions.
o 243Q. Constitution of Municipalities.
o 243R. Composition of Municipalities.
o 243S. Constitution and composition of Wards Committees, etc.
o 243T. Reservation of seats.
o 243U. Duration of Municipalities, etc.
o 243V. Disqualifications for membership.
o 243W. Powers, authority and responsibilities of Municipalities, etc.
o 243X. Power to impose taxes by, and Funds of, the Municipalities.
o 243Y. Finance Commission.
o 243Z. Audit of accounts of Municipalities.
o 243ZA. Elections to the Municipalities.
o 243ZB. Application to Union territories.
o 243ZC. Part not to apply to certain areas.
o 243ZD. Committee for district planning.
o 243ZE. Committee for Metropolitan planning.
o 243ZF. Continuance of existing laws and Municipalities.
o 243ZG. Bar to interference by courts in electoral matters.

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Indian judiciary

SUPREME COURT OF INDIA

The Indian constitution under Article 124(1) states that there shall be a
Supreme Court of India consisting of a Chief justice of India (CJI) and 31
judges including the CJI. The Jurisdiction of the Supreme Court of India can
broadly be categorised into original jurisdiction, appellate jurisdiction and
advisory jurisdiction. However, there are other multiple powers of the
Supreme Court.
Supreme Court of India
• Supreme Court at the apex of Indian Judiciary is the highest authority to
uphold the constitution of India, to protect rights and liberties of citizens
and to uphold the values of rule of law. Hence it is known as the
guardian of our Constitution.
• The Indian constitution provides for a provision of Supreme Court under
Part 5 (The Union) and Chapter 6 titled The Union Judiciary. Indian
Constitution has provided an independent judiciary with a hierarchical
setup containing High Courts and Subordinate Courts under it.
• On the 28th of January, 1950, two days after India became a Sovereign
Democratic Republic, the Supreme Court came into being. The
inauguration took place in the Chamber of Princes in the Parliament
building which also housed India's Parliament, consisting of the Council
of States and the House of the People. It was here, in this Chamber of
Princes, that the Federal Court of India had sat for 12 years between

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1937 and 1950. This was to be the home of the Supreme Court for years
that were to follow until the Supreme Court acquired its own present
premises.
Appointment of Judges in Supreme Court:
Qualifications :
▪ A person to be appointed as a judge of the Supreme Court should have the
following qualifications:

o He should be a citizen of India.

o He should have been a judge of a High Court (or high courts in
succession) for five years; or
o He should have been an advocate of a High Court (or High Courts in
succession) for ten years; or
o He should be a distinguished jurist in the opinion of the president.
▪ The Constitution has not prescribed a minimum age for appointment as a
judge of the Supreme Court.
▪ Tenure of Judges
▪ The Constitution has not fixed the tenure of a judge of the Supreme Court.
However, it makes the following three provisions in this regard:

o He holds office until he attains the age of 65 years. Any question regarding
his age is to be determined by such authority and in such manner as
provided by Parliament.
o He can resign his office by writing to the President.
o He can be removed from his office by the President on the
recommendation of the Parliament.
▪ The judges are appointed by the president of India after the consultation
of chief justice and 4 senior judges in supreme court(after 3rd judges case
1998).

Note : In the S.P. Gupta case (the First Judges’ Case, 1981), the Supreme Court
held by a majority that among the opinion of the three constitutional
functionaries, the opinion of the Chief Justice of India did not enjoy primacy
over those of the other two in the matter of appointment of judges. This view
paid due regard to plain language; ‘consultation’ was not an ambiguous word
at all. It is also remarkable that this view was taken by the court just eight
years after Kesavananda Bharati. It was a restrained judiciary. It needs to be
noted that the judgment was delivered in December 1981 after Indira Gandhi
had returned to power with a decisive majority, after two short lived and weak
governments(chief justice consultation which is in the lines of exchange of
views)

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The Second Judges’ Case, i.e. Supreme Court Advocates on Record, was
decided in October 1993, in far less authoritarian times. It was the minority
government of Narasimha Rao which was in power. Now again by a majority,
the court rewrote the Constitution. ‘Consultation’ acquired a meaning which
those who gave us the English language and the tenets of constitutionalism
could not have contemplated – all in the name of independence of the
judiciary( chief justice + 2 senior judges consultation and recommendations are
binding)
In 1998, during the second of the three Vajpayee governments, a presidential
reference was made to the Supreme Court on issues arising out of the Second
Judges’ Case (this was the Third Judges’ Case). Significantly, the court recorded
at the outset the statement of the Attorney General that the Union of India
was not seeking a review or reconsideration of the judgment of the Second
Judges’ Case. The reference was mainly on the nitty-gritty of the collegium
system and how it was to be worked. Here was a respectful government not
wanting in any way to be seen as questioning the independence of the
judiciary. Among other things, the court decided to increase the size of one of
the collegia (for the appointment of the judges of the Supreme Court and for
transfer of the High Court chief justice or the High Court judges) from three to
five. A judicially created constitutional institution was redefined, this time in
the course of an advisory opinion to the President!( opinion of chief justice +4
senior judges is binding upon the president which is known as collegium)
NJAC(National Judicial appointment commission) act 2014
According to the bill the commission will consist of the following members:

▪ Chief Justice of India (Chairperson, ex officio)

▪ Two other senior judges of the Supreme Court next to the Chief Justice
of India – ex officio
▪ The Union Minister of Law and Justice, ex-officio
▪ Two eminent persons (to be nominated by a committee consisting of the
Chief Justice of India, Prime Minister of India and the Leader of
opposition in the Lok Sabha or where there is no such Leader of
Opposition, then, the Leader of single largest Opposition Party in Lok
Sabha), provided that of the two eminent persons, one person would be
from the Scheduled Castes or Scheduled Tribes or OBC or minority
communities or a woman. The eminent persons shall be nominated for a
period of three years and shall not be eligible for re-nomination.

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▪ For the first time in history of supreme court three women judges are
seen in supreme court as follows:

Removal of Judges
▪ A judge of the Supreme Court can be removed from his office by
an order of the President. The President can issue the removal order
only after an address by Parliament has been presented to him in the
same session for such removal.
▪ The address must be supported by a special majority of each House of
Parliament (ie, a majority of the total membership of that House and a

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majority of not less than two-thirds of the members of that House

present and voting). The grounds of removal are two—proved
misbehaviour or incapacity.
▪ The Judges Enquiry Act (1968) regulates the procedure relating to the
removal of a judge of the Supreme Court by the process of
impeachment:
Detailed method of removal of judges:
1. A removal motion signed by 100 members (in case of Lok Sabha) or 50
members (in case of Rajya Sabha) is to be given to the
Speaker/Chairman. (The removal motion can be introduced in any of
the two Houses of Parliament).
2. The Speaker/Chairman may admit and reject the motion.
3. If it is admitted, then the Speaker/Chairman is to constitute a three-
member committee to investigate into the charges. The Committee
should consist of the Chief Justice or a judge of the Supreme Court, a
chief justice of a high court and a distinguished jurist.
4. If the committee finds the judge to be guilty of the charges
(misbehaviour or incapacity), the House in which the motion was
introduced, can take up the consideration of the motion.
5. Once, the House in which removal motion was introduced passes it
with special majority, it goes to the second House which also has to
pass it with special majority.
6. After the motion is passed by each House of the Parliament by special
majority, an address is presented to the President for removal of the
judge.
7. Finally, the President passes an order removing the judge.

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o No judge of the Supreme Court has been impeached so far. Impeachment

motions of Justice V Ramaswami (1991–1993) and the Justice Dipak Misra
(2017-18) were defeated in the Parliament.
▪ Powers of supreme court :
Original jurisdiction :

Original Jurisdiction of the SC in India

Original jurisdiction of a court refers to a matter for which the particular court is
approached first. In the case of the Supreme Court in India, its original
jurisdiction is covered under Article 131. It involves the following cases:

1. Any dispute between the Indian Government and one or more States.
2. Any dispute between the Indian Government and one or more States on
one side and one or more States on the other side.
3. Any dispute between two or more States.
4. Article 32 of the Constitution provides original jurisdiction to the SC for
matters regarding the enforcement of Fundamental Rights.
5. The SC can issue writs, directions, or orders including writs in the nature
of mandamus, habeas corpus, quo warranto, prohibition and certiorari.
6. The SC also has the power to direct the transfer of a criminal or civil case
from the High Court in one State to the High Court in another State.

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7. It can also transfer cases from one subordinate court to another State
High Court
8. If the SC deems that cases involving the same questions of law are
pending before it and one or more High Courts, and that these are
significant questions of law, it can withdraw the cases before the High
Court or Courts and dispose off all these cases itself.
9. The Arbitration and Conciliation Act, 1996 gives the SC the authority to
initiate international commercial arbitration
Appellate jurisdiction :
Appeal lies with SC against high court in following 4 categories
1. Constitutional matters-if high court certifies that the case involves
substantial question of law that needs interpretation of constitution.
2. Civil matters- if case involves substantial question of law of general
importance
3. Criminal matters-if high court has on appeal reversed the order of acquittal
of an accused and sentenced him to death or has withdrawn for trial before
itself any case from subordinate court
4. Special leave to appeal is granted by SC if it is satisfied that the case does not
involve any question of law. However it cannot be passed in case of judgment
passed by a court or tribunal of armed forces.
However, under this jurisdiction SC can transfer to itself cases from one or
more high courts if it involves question of law in the interest of justice.

Advisory jurisdiction :
Article 143 of the Constitution confers Advisory Jurisdiction to the Supreme
Court of India. This provision finds its origin in Section 213 of the Government
of India Act, 1935, which conferred upon the Governor-General the discretion
to pose questions of public importance to the Federal Court. Similarly, as per
Article 143, the President has the power to address questions to the Supreme
Court, which he deems important for public welfare. The Supreme Court
“advises” the President by answering the query put before it. Till date, this
mechanism has been put to use only twelve times. However, it is pertinent to
note that this is not binding on the President, nor is it “law declared by the
Supreme Court”, hence not binding on subordinate courts.
Note : The first reference under Article 143 was made in the Delhi Laws case
(1951) SCR 747. There have been only 14 references under Article 143 made by
the President since independence. Chandrachud C.J. said that the question
whether the law laid down in the opinions was “law declared by the Supreme
Court.

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Judicial review :
• Judicial Review refers to the power of the judiciary to interpret the
constitution and to declare any such law or order of the legislature and
executive void, if it finds them in conflict the Constitution of India.
• The matter related to judicial review of administrative achievement, which
generally has complicated the foundation of common law doctrine such as
doctrine of proportionality, doctrine of legitimate expectation, , doctrine of
reasonableness and principle of natural justice. The Indian Constitution has
given influences to the state’s higher courts and to the S.C.I. to scrutinize
the legitimacy of administrative action and the statutes.
• Under Article thirty-two of the Constitution, the S.C.I. has the gear stick to
contrivance the indispensable rights. The inhabitants of India have the
rights under Article thirty-two to approach directly to the Indian Supreme
Court for on the lookout for cure in contrast to the destruction of the
essential rights. Nevertheless, the prerogative of the fundamental rights is
itself the portion of the essential right of the Indian publics.
• Judicial Review can be classified into three categories, 1) Reviews of
Legislative Actions, 2) Review of Judicial Decisions, and 3) Review of
Administrative Action.
• DoctrineofEclipse The law, which is unreliable through the essential right
assimilated in the Part III of the Indian Constitution, will be preserved as
dormant but not dead. Such law is not enforceable. However, it is not void.
The doctrine of eclipse refers to the law which has not been declared void is
not spread out totally from the book of statute. It is possible that in the
subsequent amendment in the Constitution of India the contradiction part,
which is unconstitutional will be removed in the future. Afterwards, such
law will be free from all frailty or imperfection and may become
enforceable.

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Court of record :
• Article 129 provides that the Supreme Court shall be a court of record and
shall have all the powers of such a court including the power to punish for
contempt of itself. Article 215 contains similar provision in respect of the
High Court. Both the Supreme Court as well as the High Courts are courts of
record having powers to punish for contempt including the power to punish
for contempt of itself. The Constitution does not defined. This expression is
well recognised in juridical world. The common law definition of act or
omission calculated to interfere with the due administration of justice.

Supreme court articles :

Articles from 124 to 147 in Part V of the constitution deal with the
organization, independence, jurisdiction, powers procedures of the Supreme
Court. At present Supreme Court has 34 judges including the Chief Justice of
India.
1. Article No.124
Subject matter:-Establishment and Constitution of Supreme Court
2. Article No.125
Subject matter:-Salaries, etc.,of Judges
3. Article No.126
Subject matter:-Appointment of acting Chief Justice
4. Article No. 127
Subject matter:-Appointment of ad hoc Judges
5. Article No. 128
Subject matter:-Attendance of retired Judges at sittings of the Supreme Court
6. Article No. 129
Subject matter:-Supreme Court to be a court of record
7. Article No. 130
Subject matter:-Seat of Supreme Court
8. Article No.131
Subject matter:-Original jurisdiction of the Supreme Court
9. Article No.131A
Subject matter:-Exclusive jurisdiction of the Supreme Court in regard to
questions as to
constitutional validity of Central Laws (Repealed)
10. Article No.132
Subject matter:-Appellate jurisdiction of Supreme Court in appeals from High
Courts in certain cases
11. Article No.133

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Subject matter:-Appellate jurisdiction of Supreme Court in appeals from High

Courts in regard to civil matters
12. Article No.134
Subject matter:-Appellate jurisdiction of Supreme Court in regard to criminal
matters
13. Article No. 134A
Subject matter:- Certificate for appeal to the Supreme Court
14. Article No.135
Subject matter:-Jurisdiction and powers of the Federal Court under existing law
to be exercisable by the Supreme Court
15. Article No.136
Subject matter:-Special leave to appeal by the Supreme Court
16. Article No.137
Subject matter:-Review of judgments or orders by the Supreme Court
17. Article No.138
Subject matter:-Enlargement of the jurisdiction of the Supreme Court
18. Article No.139
Subject matter:-Conferment on the Supreme Court of powers to issue certain writs
19. Article No.139A
Subject matter:-Transfer of certain cases
20. Article No.140
Subject matter:-Ancillary powers of Supreme Court
21. Article No.141
Subject matter:-Law declared by Supreme Court to be binding on all courts
22. Article No.142
Subject matter:-Enforcement of decrees and orders of Supreme Court and orders as to
discovery, etc.
23. Article No. 143
Subject matter:-Power of President to consult Supreme Court
24. Article No.144
Subject matter:-Civil and judicial authorities to act in aid of the Supreme Court
24. Article No. 144A
Subject matter:-Special provisions as to disposal of questions relating to constitutional
validity of laws (Repealed)
25. Article No. 145
Subject matter:-Rules of court, etc.
26. Article No. 146
Subject matter:-Officers and servants and the expenses of the Supreme Court
27. Article No. 147
Subject matter:-Interpretation

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HIGH COURTS
• THERE shall be a High Court in each State [Art. 214] but Parliament has the
power to establish a common High Court for two or more States. The High
Court stands at the head of the Judiciary in the State.

• Every High Court shall consist of a Chief Justice and such other Constitution
of Judges as the President of India may from time to time appoint
• As Sir Alladi Krishnaswami explained in the Constituent Assembly, while
ensuring the independence of the Judiciary, the Constitution placed the
High Courts under the control of the Union in certain important matters, In
order to keep them outside the range of 'provincial politics'.

• Thus, even though the High Court stands at the head of the State
Judiciary, it is not.

• So sharply separated Irom the federal Government as the highest Court

ofan American State (called the State Supreme Court) is.

The control of the Union over a High Court in India is exercised in the
following matters:

• Appointment (Art. 217), transfer from one High Court to another [Art. 222)
and removal Art. 217(1), and determination of dispute as to age [Art.
217(3)]. of Judges of High Courts.

• Now the power to transfer of the High Court Judges remains no more a
method of control over the High Court by the Union Government as the
Supreme Court has prescribed a procedure for the purpose in a Reference
made by the President of India in exercise of his powers under Art. 143.

• The Supreme Court opined that the Chief Justice of India should obtain the
views of the Chief justice of the High Court from which the proposed
transfer Is to be effected as also that of the Chief Justice of the High Court
to which the transfer is to be effected

• The Chief Justice of India should also take into account the views of one or
more Supreme Court Judges who are In position to provide material which
would assist in the process of deciding whether or not a proposed transfer
should take place.

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• These views should be expressed In writing and should be considered by CJI

and the four senior most Judges of the Supreme Court.

• These views and those of each of the four senior most Judges should be
conveyed to the Govt. of India with the proposal of transfer.
The first high court in India was established according to high courts act of
1861.

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High courts established after commencement of constitution:

Note : With the establishment of Andhra Pradesh high court the total no of
high courts in India are now entered into 25.
Appointment of judges of high court :
Appointment of the Judges: The Chief Justice of a High Court is appointed by
the President with the consultation of the Chief Justice of the Supreme Court
and the Governor of the State. The other judges are appointed by the will of
President, Governor and the Chief Justice of High Court.

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Qualifications for the Judges

(a) He should be a citizen of India.
(b) He should have been (I) a judge for 10 years of Subordinate court under the
Judicial Service of the State or (ii) an Advocate for 10 years in a High Courts in
India (Article 217).
Tenure: Originally the age of the retirement of the judges of the High Courts
was fixed at 60 but it was raised to 62 in 1963 according to the 15th
amendment of the Constitution.
Note : the consultation of collegium is similar to that of supreme court judges(
please read third judges case )

Powers and Functions of the High Court

The High Court is the highest court in a state in India. Articles 214 to 231 in the
Indian Constitution talk about the High Courts, their organisation and powers.
The Parliament can also provide for the establishment of one High Court for two
or more states.
For instance, Haryana, Punjab and the Union Territory of Chandigarh have a
common High Court. The northeastern states also have one common High Court.
In addition, Tamil Nadu shares a High Court with Puducherry.
Original Jurisdiction

• The High Courts of Calcutta, Bombay and Madras have original jurisdiction in
criminal and civil cases arising within these cities.
• An exclusive right enjoyed by these High Courts is that they are entitled to
hear civil cases which involve property worth over Rs.20000.
• Regarding Fundamental Rights: They are empowered to issue writs in order
to enforce fundamental rights.
• With respect to other cases: All High Courts have original jurisdiction in cases
that are related to will, divorce, contempt of court and admiralty.
• Election petitions can be heard by the High Courts.

Appellate Jurisdiction

• In civil cases: an appeal can be made to the High Court against a district
court’s decision.
• An appeal can also be made from the subordinate court directly, if the
dispute involves a value higher than Rs. 5000/- or on a question of fact or
law.

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• In criminal cases: it extends to cases decided by Sessions and Additional

Sessions Judges.
• If the sessions judge has awarded an imprisonment for 7 year or
more.
• If the sessions judge has awarded capital punishment.
• The jurisdiction of the High Court extends to all cases under the State or
federal laws.
• In constitutional cases: if the High Court certifies that a case involves a
substantial question of law.
As a Court of Record

• High Courts are also Courts of Record (like the Supreme Court).
• The records of the judgements of the High Courts can be used by
subordinate courts for deciding cases.
• All High Courts have the power to punish all cases of contempt by any
person or institution.

Administrative Powers

1. It superintends and controls all the subordinate courts.

2. It can ask for details of proceedings from subordinate courts.
3. It issues rules regarding the working of the subordinate courts.
4. It can transfer any case from one court to another and can also transfer the
case to itself and decide the same.
5. It can enquire into the records or other connected documents of any
subordinate court.
6. It can appoint its administration staff and determine their salaries and
allowances, and conditions of service.

Power of Judicial Review

High Courts have the power of judicial review. They have the power to declare
any law or ordinance unconstitutional if it is found to be against the Indian
Constitution.
Note : The removal mechanism of judges of high court is similar to that of
supreme court judges.

LOK ADALATS
• Towards fulfilling the constitutional promise of securing to all the citizens,
Justice – social, economic and political, Article 39 A of the Constitution of India
provides for free legal aid to the poor and weaker sections of the society, to
promote justice on the basis of equal opportunity.

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• Articles 14 and 22(1) of the Constitution also make it obligatory for the
State to ensure equality before law.
• In 1987, the Legal Services Authorities Act was enacted by the
Parliament, which came into force on 9th November, 1995 to establish a
nationwide uniform network for providing free and competent legal services to
the weaker sections of the society.
• The National Legal Services Authority (NALSA) has been constituted
under the Legal Services Authorities Act, 1987 to provide free Legal Services to
the weaker sections of the society.
Nature of Cases to be Referred to Lok Adalat
1. Any case pending before any court.
2. Any dispute which has not been brought before any court and is likely to be
filed before the court.
Provided that any matter relating to an offence not compoundable under the
law shall not be settled in Lok Adalat.
Which Lok Adalat to be Approached
As per section 18(1) of the Act, a Lok Adalat shall have jurisdiction to determine
and to arrive at a compromise or settlement between the parties to a dispute in
respect of -
(1) Any case pending before; or
(2) Any matter which is falling within the jurisdiction of, and is not brought
before, any court for which the Lok Adalat is organised.
Provided that the Lok Adalat shall have no jurisdiction in respect of matters
relating to divorce or matters relating to an offence not compoundable under
any law.
Levels and Composition of Lok Adalats:
At the State Authority Level -
• The Member Secretary of the State Legal Services Authority organizing the
Lok Adalat would constitute benches of the Lok Adalat, each bench
comprising of a sitting or retired judge of the High Court or a sitting or retired
judicial officer and any one or both of- a member from the legal profession;
a social worker engaged in the upliftment of the weaker sections and
interested in the implementation of legal services schemes or programmes.
At High Court Level -
• The Secretary of the High Court Legal Services Committee would constitute
benches of the Lok Adalat, each bench comprising of a sitting or retired judge
of the High Court and any one or both of- a member from the legal
profession; a social worker engaged in the upliftment of the weaker sections
and interested in the implementation of legal services schemes or
programmes.

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At District Level -
• The Secretary of the District Legal Services Authority organizing the Lok
Adalat would constitute benches of the Lok Adalat, each bench comprising
of a sitting or retired judicial officer and any one or both of either a member
from the legal profession; and/or a social worker engaged in the upliftment
of the weaker sections and interested in the implementation of legal services
schemes or programmes or a person engaged in para-legal activities of the
area, preferably a woman.
At Taluk Level -
• The Secretary of the Taluk Legal Services Committee organizing the Lok
Adalat would constitute benches of the Lok Adalat, each bench comprising
of a sitting or retired judicial officer and any one or both of either a member
from the legal profession; and/or a social worker engaged in the upliftment
of the weaker sections and interested in the implementation of legal services
schemes or programmes or a person engaged in para-legal activities of the
area, preferably a woman.
National Lok Adalat
• National Level Lok Adalats are held for at regular intervals where on a single
day Lok Adalats are held throughout the country, in all the courts right from
the Supreme Court till the Taluk Levels wherein cases are disposed off in huge
numbers.
Permanent Lok Adalat:-
• The other type of Lok Adalat is the Permanent Lok Adalat, organized
under Section 22-B of The Legal Services Authorities Act, 1987.
• Permanent Lok Adalats have been set up as permanent bodies with a
Chairman and two members for providing compulsory pre-litigative
mechanism for conciliation and settlement of cases relating to Public Utility
Services like transport, postal, telegraph etc.
• Here, even if the parties fail to reach to a settlement, the Permanent Lok
Adalat gets jurisdiction to decide the dispute, provided, the dispute does not
relate to any offence.
• Further, the Award of the Permanent Lok Adalat is final and binding on
all the parties.
• The jurisdiction of the Permanent Lok Adalats is upto Rs. Ten Lakhs.
• Here if the parties fail to reach to a settlement, the Permanent Lok
Adalat has the jurisdiction to decide the case.
• The award of the Permanent Lok Adalat is final and binding upon the
parties.
• The Lok Adalat may conduct the proceedings in such a manner as it
considers appropriate, taking into account the circumstances of the case,

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wishes of the parties like requests to hear oral statements, speedy settlement
of dispute etc.

Constitutional and non constitutional bodies :

Constitutional Bodies are those bodies which are mentioned in the Indian
Constitution to run the government properly. There is an article mentioned
associated with it.
Ex. CAG , Election Commision etc.
On the other hand some Non-Constitutional Bodies are established by the
government after passing act in the Parliament; these bodies are termed as
Non-Constitutional Bodies (NCB) in India. They are also referred as statutory
bodies.
Example. Lok pal , Lok Ayukta etc.
Non statutory bodies are those which are created by an executive resolution
not by an act of parliament.
Ex. CBI, NITI AAYog, Planing commission etc.
Constitutional bodies :
Attorney general ( Article 76) :
He is appointed by the president of India.
• The AG receives such remuneration as the president may determine. The
constitution has not fixed the remuneration of the AG.
• Duties and Functions
• Below are the duties and functions of the AG:
• (1) He gives advice to the Government of India upon such legal matters,
which are referred or assigned to him by the president.
• (2) He performs such other duties of a legal character that are referred or
assigned to him by the president.
• (3) He discharges the functions conferred on him by or under the
Constitution or any other law.
• He holds office during the pleasure of the president. This means that he
may be removed by the President at any time.
• Note : The tenure is not fixed by the constitution
Solicitor General
• The Solicitor General of India is below the Attorney General for India, who is
the Indian government’s chief legal advisor, and its primary lawyer in
the Supreme Court of India.
• The Solicitor General of India is appointed for the period of 3 years. The
Solicitor General of India is the secondary law officer of the country, assists
the Attorney General, and is himself assisted by several Additional Solicitors
General of India.

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Like the Attorney General for India, the Solicitor General and the Additional
Solicitors General advise the Government and appear on behalf of the Union of
India in terms of the Law Officers (Terms and Conditions) Rules, 1972.

It should be noted that the AG is not debarred from private legal practice. He
is not a government servant as he is not paid fixed salary and his remuneration
is decided by the president. He can also take over the private clients provided
that the other party must not be a state or government.
CAG ( Comptroller and Auditor GENERAL): Article 148 to 151
He / she is the person responsible for the auditing of accounts of central ,
state governments and also the public sector units .
Role of CAG in India
The role of this office is to uphold the provisions of the Indian Constitution and
laws enacted by the Parliament in the field of financial administration. The
accountability of the executive (i.e., the council of ministers) to the Parliament
in the sphere of financial administration is secured through CAG reports. The
office is responsible to and is an agent of the Parliament and conducts audits
of expenditure on its behalf.
Note : The tenure of CAG is 6years or 65years whichever is earlier

• The CAG has ‘to ascertain whether money shown in the accounts as having
been disbursed was legally available for and applicable to the service or the
purpose to which they have been applied or charged and whether the
expenditure conforms to the authority that governs it’.
• The office can perform a propriety audit, that is, it can look into the
‘wisdom, faithfulness and economy’ of government expenditure and
comment on the wastefulness of such expenditure. However, unlike the

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legal and regulatory audit, which is obligatory on the part of the CAG, the
propriety audit is discretionary.
• The secret service expenditure is a limitation on the auditing role of the
CAG. In this regard, the CAG cannot call for particulars of expenditure
incurred by the executive agencies but has to accept a certificate from the
competent administrative authority that the expenditure has been so
incurred under his authority.
Articles associated
▪ Article 148 broadly deals with the CAG appointment, oath and conditions of
service.
▪ Article 149 deals with Duties and Powers of the Comptroller and Auditor-
General of India.
▪ Article 150 says that the accounts of the Union and of the States shall be
kept in such form as the President may, on the advice of the CAG, prescribe.
▪ Article 151 says that the reports of the Comptroller and Auditor-General of
India relating to the accounts of the Union shall be submitted to the
president, who shall cause them to be laid before each House of Parliament.
▪ CAG also acts as a guide, friend and philosopher of the Public Accounts
Committee of the Parliament
▪ He submits his audit reports relating to the accounts of the Centre to the
President, who shall, in turn, place them before both the houses of
Parliament.
▪ He submits his audit reports relating to the accounts of a State to the
Governor, who shall, in turn, place them before the state legislature
CAG and Public Accounts Committee (PAC)
▪ PAC is a Parliamentary Standing Committee created under GOI Act,
1919.
▪ CAG audit reports are handed over to the PACs at the centre and at the
state.
▪ Three CAG reports i.e. audit report on appropriation accounts, audit
report on finance accounts and audit report on public sector
undertakings are examined by PAC.
▪ At the central level, these reports are submitted by CAG to president,
who makes them to be laid in parliament.
▪ CAG also assists the committee in its deliberations by preparing a list of
the most urgent matters which deserve the attention of the PAC.
▪ He also helps in making the actions of the committee clear to the
witnesses and in making the action of the government clear to the
committee.

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▪ CAG position is sometimes one of interpreter and translator, explaining

the officials’ views to the politicians and vice-versa.
▪ The responsibility of the CAG does not end here. He has to watch
whether the corrective action suggested by him has been taken or not.
In cases whether it has not been taken, he reports the matter to the PAC
which will take up the matter
Finance Commission Article 280 :
As per Article 280:

• The President shall, within two years from the commencement of this
Constitution and thereafter and at the expiration of every fifth year or at
such time earlier time as the President considers necessary, by order
constitute a Finance Commission which shall consist of a Chairman and
four other members to be appointed by the President.
• Parliament may by law determine the qualification which shall be
requisite for appointment as members of the Commission and the
manner in which they shall be selected.
• It shall be the duty of the Commission to make recommendations to the
President as to the distribution of the net proceeds of taxes which are to
be, or may be divided between them under this chapter and the allocation
between the States of the respective shares of such proceeds. It is also
the duty of the Finance Commission to define the financial relations
between the Union and the State and it also caters to the purpose of
devolution of non-plan revenue resources.
It comprises of chairman and 4 other members whose tenure is 5year, all are
appointed by president of India.
Powers, Functions and Responsibilities

• The Commission decides the basis for sharing the divisible taxes by the
centre and the states, and the principles that govern the grants-in-aid to
the states every five years.
• Any matter in the interest of sound finance may be referred to the
Commission by the President.
• The Commission’s recommendations along with an explanatory
memorandum with regard to the actions done by the government on
them are laid before the Houses of the Parliament.
• The FC evaluates the rise in the Consolidated Fund of a state in order to
affix the resources of the state Panchayats and Municipalities.
• The FC has sufficient powers to exercise its functions within its activity
domain.

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• As per the Code of Civil Procedure 1908, the FC has all the powers of a
Civil Court. It can call witnesses, ask for the production of a public
document or record from any office or court.
Functions of Finance Commission:
Major functions of finance Commission is to make recommendations to the
president of India on the following affairs:
• The distribution of the net proceeds of taxes to be shared between the
Centre and the states, and the allocation between the states of the
respective shares of such proceeds.
• The principles that should govern the grants-in-aid to the states by the
Centre (i.e., out of the consolidated fund of India).
• The measures needed to augment the consolidated fund of a state to
supplement the resources of the panchayats and the municipalities in
the state on the basis of the recommendations made by the state
finance commission.
• Any other matter referred to it by the president in the interests of sound
finance.
Till 1960, the commission also recommended the grants given to the States of
Assam Bihar Orissa and West Bengal in lieu of assignment of any share of the
net proceeds in each year of export duty on jute and jute products. These grants
were to be given for a transitory period of ten years from the commencement
of the Constitution.
The commission submits its report to the president. He lays it before both the
Houses of Parliament along with an explanatory memorandum as to the action
taken on its recommendations.

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Note : the chairman of next ie 15th finance commission will be NK Singh.

Union public service Commission:

The first Public Service Commission was set up on October 1st, 1926. However,
its limited advisory functions failed to satisfy the people’s aspirations and the
continued stress on this aspect by the leaders of our freedom movement
resulted in the setting up of the Federal Public Service Commission under the
Government of India Act 1935. Under this Act, for the first time, provision was
also made for the formation of Public Service Commission at the provincial
level. On 26th January, 1950, the Federal Public Service Commission was
accorded a constitutional status as an autonomous entity and given the title –
Union Public Service Commission.
Article 315 of the Indian Constitution deals with Public Service
Commissions for the Union and for the States. The UPSC is a constitutional
body.
Composition- Article 316 deals with the appointment and term of office of
members.
The UPSC comprises of a chairman and other members appointed by the
president. One half of the appointed members of the commission should have
held office for at least ten years either under the government of India or under
the government of a state.
The Duties and Functions of the UPSC are Mentioned Below:
(i) It conducts examinations for appointments to the services of the union,
which includes all India services, central services and public services of the
union territories.

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(ii) It assists states in framing and operating schemes of joint recruitment for
any services for which candidates possessing special qualifications are
required, if requested by any two or more states do so.
(iii) It is consulted on the following matters:
(a) All matters relating to methods of recruitment to civil services and for civil
posts.
(b) The principles to be followed in making appointments to civil services and
posts and in making transfers and promotions from one service to another and
on the suitability of the candidates for such appointments, transfers and
promotions.
(c) All disciplinary matters affecting a person serving under the Government of
India in a civil capacity, including memorials or petitions relating to such
matters.
(d) Any claim of costs incurred by a civil servant in defending legal proceedings
instituted against him in respect of acts done or purporting to be done in the
execution of his official duty.
(e) Any claim for the award of a pension in respect of injuries sustained by a
person while serving under the Government of India and any question as to
the amount of any such award.
(f) Any matter related to personnel management referred to it by the
president.
(g) It presents annually to the president a report as to the work done by the
commission
Note : The present chairman of UPSC is Aravind Saxena .

Election commission (Article 324 to 329)

Constitution says

• The Constitution has created an independent Election Commission of India in

which vests the superintendence, direction and control of the preparation of
electoral rolls for, and conduct of elections to, the offices of President and
Vice-President of India and Parliament and State Legislatures (Article 324). A
similar independent constitutional authority has been created to conduct
elections to municipalities, Panchayats and other local bodies (Articles 243 K
and 243 ZA).
• Article 324 to 329 of the constitution deals with powers, function, tenure,
eligibility, etc. of the commission and the member.
• Originally the commission had only one election commissioner, but after the
Election Commissioner Amendment Act 1989, it consists of one Chief Election
Commissioner and two Election Commissioners.

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• The Chief Election Commissioner and Election Commissioners appointed by

The President. They have a fixed tenure of six years, or up to the age of 65
years, whichever is earlier.
• The Chief Election Commissioner and Election Commissioners enjoy the same
status and receive salary and ammoluments as available to the Judges of the
Supreme Court of India.
• The Chief Election Commissioner can be removed from office only through a
process of removal similar to that of a Supreme Court judge for by Parliament.
But, the constitution is silent about the procedure for removal of the other
Election Commissioners. It only provides that they cannot be removed from
office except on the recommendation of the CEC.
• The Chief Election Commissioner of India can be removed from office as can be
a judge of the Supreme Court of India: a two-thirds majority resolution passed
by the Parliament of India (Lok Sabha and Rajya Sabha) outlining the grounds
of misbehavior or incapacity.
• A Chief Election Commissioner has yet to be impeached.
Power and Function

• The superintendence, direction and control of the preparation of the electoral

rolls for, and the conduct of, all elections to Parliament and to the Legislature
of every State and of elections to the offices of President and Vice-President
held under this Constitution shall be vested in the Election Commission.(Art-
324)
• All doubts and disputes relating to the elections to the office of President and
Vice-President are dealt with by the Supreme Court (Article 71), whereas the
initial jurisdiction to deal with all doubts and disputes relating to the elections
to Parliament and State Legislature vests in the High Court of the State
concerned, with a right of appeal to the Supreme Court (Article 329).
• According to Election Symbols (Reservation and Allotment) Order 1968, the
Election commission governs the matters relating to recognition of political
parties at the National and State level, reservation of election symbols for
them, and provide resolution of disputes for allotment of symbols to all
candidates at elections.
• The Commission has advisory jurisdiction in the matter of election
disqualification on the basis of of sitting members of Parliament and State
Legislatures.
• The Election Commission exercises its inherent powers under Article 324 of the
Constitution is the enforcement of the Model Code of Conduct for guidance of
political parties and candidates.
• EC determines the territorial areas of the electoral constituencies in the
country on the basis of the Delimitation Commission Act of Parliament.

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• EC has responsibility to declare the dates and schedules of elections and to

scrutinize nomination papers.

A registered party is recognised as a national party only if it fulfils any one of

the following three conditions:

1. A party wins 2% of seats in the Lok sabha from at least three different
states.
2. At a general election to Lok Sabha or Legislative Assembly, the party
polls 6% of votes in any four or more states and in addition it wins four
Lok Sabha seats.
3. A party gets recognition as a state party in four states.

Note : presently there are 7 political parties which are considered the national
parties

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State party :
Criteria
A party has to fulfill any of the following conditions for recognition as a state
party:

1. A party should win minimum three percent of the total number of seats
or a minimum of three seats in the Legislative Assembly.
2. A party should win at least one seat in the Lok Sabha for every 25 seats
or any fraction thereof allotted to that State.
3. A party should secure at least six percent of the total valid votes polled
during general election to a Lok Sabha or State Legislative Assembly and
should, in addition, win at least one Lok Sabha, and two Legislative
Assembly seats in that election,
4. Under the liberalized criteria, one more clause that it will be eligible for
recognition as state party if it secures 8% or more of the total valid
votes polled in the state, addition to one seat in any state.

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VVPAT
Voter Verified Paper Audit Trail
▪ VVPAT is an independent verification printer machine and is attached to
electronic voting machines. It allows voters to verify if their vote has gone to
the intended candidate.
▪ When a voter presses a button in the EVM, a paper slip is printed through
the VVPAT. The slip contains the poll symbol and name of the candidate. It
allows the voter to verify his/her choice.
▪ After being visible to the voter from a glass case in the VVPAT for seven
seconds, the ballot slip will be cut and dropped into the drop box in the
VVPAT machine and a beep will be heard.
▪ VVPAT machines can be accessed by polling officers only.

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Official language commission Article 344:

As defined in the Article-344 of the Constitution, it shall be the duty of the
Commission to make recommendations to the President as to:

1. the progressive use of the Hindi language for the official purposes of the
Union;
2. restrictions on the use of the English language for all or any of the
official purposes of the Union;
3. the language to be used for all or any of the purposes mentioned in
Article 348;
4. the form of numerals to be used for any one or more specified purposes
of the Union;
5. any other matter referred to the Commission by the President as
regards the official language of the Union and the language for
communication between the Union and a State or between one State
and another and their use.

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Statutory bodies
Lokpal and Lokayukta

• The term "Lokpal" was coined by Dr. L.M.Singhvi in 1963. The concept of a
constitutional ombudsman was first proposed in parliament by Law
Minister Ashoke Kumar Sen in the early 1960s. The first Jan Lokpal Bill was
proposed by Adv Shanti Bhushan in 1968 and passed in the 4th Lok
Sabha in 1969, but did not pass through the Rajya Sabha.
• 'lokpal bills' were introduced in 1971, 1977, 1985, again by Ashoke Kumar
Sen, while serving as Law Minister in the Rajiv Gandhi cabinet, and again in
1989, 1996, 1998, 2001, 2005 and in 2008, yet they were never passed

Lok pal committee comprises of chairman and not less than 8 members who
are appointed by a committee headed by Prime Minister.

• Lokpal will consist of a chairperson and a maximum of eight members, of

which 50% will be judicial members 50% members of Lokpal shall be
from SC/ST/OBCs, minorities and women.
• Selection of chairperson and members of Lokpal through a selection
committee consisting of PM, Speaker of Lok Sabha, leader of opposition
in Lok Sabha, eminent jurist appointed by president, Chief Justice of
India or a sitting Supreme Court judge nominated by CJI.

The Lokpal and Lokayuktas (Amendment) Bill, 2016

▪ This Bill was passed by Parliament in July 2016 and amended the Lokpal and
Lokayukta Act, 2013.

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▪ It enables the leader of the single largest opposition party in the Lok Sabha
to be a member of the selection committee in the absence of a recognized
Leader of Opposition.
▪ It also amended section 44 of the 2013 Act that deals with the provision of
furnishing of details of assets and liabilities of public servants within 30 days
of joining the government service.
▪ The Bill replaces the time limit of 30 days, now the public servants will make
a declaration of their assets and liabilities in the form and manner as
prescribed by the government.
▪ It also gives an extension of the time given to trustees and board members
to declare their assets and those of their spouses in case of these are
receiving government funds of more than Rs. 1 crore or foreign funding of
more than Rs. 10 lakh.
▪ Note : In 1809, the institution of ombudsman was inaugurated officially in
Sweden.
▪ In the 20th century, Ombudsman as an institution developed and grew most
significantly after the Second World War.
▪ New Zealand and Norway adopted this system in the year 1962 and it
proved to be of great significance in spreading the concept of the
ombudsman.
▪ In 1967, on the recommendations of the Whyatt Report of 1961, Great
Britain adopted the institution of the ombudsman and became the first
large nation in the democratic world to have such a system.
▪ The Lokayukta (also Lok Ayukta) (Sanskrit: लोकायु क्त lokāyukta, "civil
commissioner") is an anti-corruption ombudsman organization in the
Indian states. Once appointed, Lokayukta can not be dismissed nor
transferred by the government, and can only be removed by passing an
impeachment motion by the state assembly.
▪ The Administrative Reforms Commission (ARC) headed by Morarji
Desai submitted a special interim report on "Problems of Redressal of
Citizen's Grievances" in 1966. In this report, the ARC recommended the
setting up of two special authorities designated as 'Lokpal' and
'Lokayukta' for the redressal of citizens' grievances.
▪ Maharashtra was the first state to introduce the institution of Lokayukta
through The Lokayukta and Upa-Lokayuktas Act in 1971.
▪ Lokayukta also comprises of chairman and 8 other members who are
appointed by select committee headed by chief minister.

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National human rights commission :

NHRC of India is an independent statutory body established on 12 October,

1993 as per provisions of Protection of Human Rights Act, 1993, later amended
in 2006.
Structure of the Commission
▪ NHRC is a multi-member body which consists of a Chairman and seven other
members. Out of the seven members, three are ex-officio member.
▪ President appoints the Chairman and members of NHRC on
recommendation of high-powered committee headed by Prime Minister.
▪ The Chairperson and the members of the NHRC are appointed for 5 years or
till the age of 70 years, whichever is earlier.
▪ They can be removed only on the charges of proved misbehavior or
incapacity, if proved by an inquiry conducted by a Supreme Court Judge.
▪ Commission also has five Specialized Divisions i.e. Law Division, Investigation
Division, Policy Research & Programmes Division, Training Division and
Administration Division.
▪ The chairman and the members of State Commission are appointed by the
Governor in consultation with the Chief Minister, Home Minister, Speaker of

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Legislative Assembly and Leader of the Opposition in the State Legislative

Assembly.
Functions of NHRC
▪ NHRC investigates grievances regarding the violation of human rights either
suo moto or after receiving a petition.
▪ It has the power to interfere in any judicial proceedings involving any
allegation of violation of human rights.
▪ It can visit any jail or any other institution under the control of the State
Government to see the living conditions of the inmates and to make
recommendations thereon.
▪ It can review the safeguards provided under the constitution or any law for
the protection of the human rights and can recommend appropriate
remedial measures.
▪ NHRC undertakes and promotes research in the field of human rights.
▪ NHRC works to spread human rights literacy among various sections of
society and promotes awareness of the safeguards available for the
protection of these rights through publications, media, seminars and other
means.
▪ The Commission takes an independent stand while providing opinions for the
protection of human rights within the parlance of the Constitution or in law
for the time being enforced.
▪ It has the powers of a civil court and can grant interim relief.
▪ It also has the authority to recommend payment of compensation or
damages.
▪ NHRC credibility is duly reflected in large number of complaints received
every year and the trust reposed in it by the citizens.
▪ It can recommend to both the central and state governments to take suitable
steps to prevent the violation of Human Rights. It submits its annual report
to the President of India who causes it to be laid before each House of
Parliament.

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National Commission for Women

The National Commission for Women was set up in 1992 under the National
commission Act, 1990. This body was established to review the constitutional
and legal safeguards for women. This act extends across India, except for Jammu
and Kashmir. It recommends the remedial legislative measures, facilitates
redressal of grievances and advises the government on all policy matters
affecting the women. It enjoys all the powers of a civil court. The first
commission was constituted on 31st January 1992 as Jayanti Patnaik as the
chairperson. Ms. Lalitha Kumaramangalam is the present Chairperson of
National Commission for Women (NCW). Alok Rawat IAS is the first male
member of the National Commission for Women (NCW). His appointment filled
the 4th seat on the five-member body.

Composition of NCW
The commission shall consist of a chairperson, a member secretary, and other
five members.
Chairperson: The chairperson should be nominated by the central government.

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Five members: The five members are also to be nominated by the central
government from amongst the person of ability, integrity, and standing. They
should possess an experience in various fields like law or legislation, trade
unionism, management of industry potential of women, women’s voluntary
organization, education, administration, economic development and social
good-being.
Member secretary: Member secretary is also nominated by the central
government. He/ she should be either an expert in the field of management,
organization or an officer who is a member.
Chairman : Rekha Sharma
National commission for minorities :
The National Commission for Minorities (NCM) was established by the Union
Government under the National Commission for Minorities Act, 1992. National
Commission for Minorities was conceived in the determination presented by
the Ministry of Home Affairs, on the 12th of January, 1978.
Union Government included six religious communities such as Muslims,
Christians, Sikhs, Buddhists, Zoroastrians (Parsis) and Jains as minority
communities.
The Commission perform following functions:

1. Evaluate the progress of the development of Minorities under the Union and
States.
2. Observe the working of the safeguards provided in the Constitution and in
laws enacted by Parliament and the State Legislatures.
3. Make recommendations for the effective implementation of safeguards for
the protection of the interests of Minorities by the Central Government or
the State Governments.
4. Attend specific complaints regarding deprivation of rights and safeguards of
the Minorities and take up such matters with the appropriate authorities.
5. Cause studies to be undertaken into problems arising out of any
discrimination against Minorities and recommend measures for their
removal.
6. Conduct studies, research and analysis on the issues relating to socio-
economic and educational development of Minorities.
7. Recommend appropriate procedures in respect of any Minority to be
undertaken by the Central Government or the State Governments.
8. Make periodical or special reports to the Central Government on any matter
pertaining to Minorities and in particular the difficulties confronted by them.
Note : Syed Ghayorul Hasan Rizvi is the chairman for minorities commission.
Executive bodies :
CBI ( Central bureau of Investigation)

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The CBI was established as the Special Police Establishment in 1941, to enquire
into cases of corruption in the procurement during the Second World War.
With time the Santhanam Committee on Prevention of Corruption recommends
the establishment of CBI. The CBI was then established by a resolution of
the Ministry of Home Affairs. The Ministry of Personnel later on took over the
responsibility of CBI and now it plays the role of an attached office.
The CBI is the premier investigating agency of the Central Government. It is not
a statutory body; it derives its powers from the Delhi Special Police
Establishment Act, 1946.
The important role of CBI is prevention of corruption and maintaining integrity
in administration. It works under the overall supervision of Central Vigilance
Commission in matters related to the Prevention of Corruption Act, 1988.
The following broad categories of criminal cases are handled by the CBI:

1. Cases of corruption and fraud committed by public servants of all Central

Govt. Departments, Central Public Sector Undertakings and Central
Financial Institutions.
2. Economic crimes, including bank frauds, financial frauds, Import Export &
Foreign Exchange violations, large-scale smuggling of narcotics, antiques,
cultural property and smuggling of other contraband items etc.
3. Special Crimes, such as cases of terrorism, bomb blasts, sensational
homicides, kidnapping for ransom and crimes committed by the
mafia/the underworld.

Director : Rishi kumar Shukla

CBI director is appointed by a select committee comprising

• Prime Minister – chairperson

• Leader of Opposition of Loksabha – member
• Chief Justice of India or a Supreme Court Judge recommended by the
Chief Justice – member

CVC ( Central Vigilance Commission)

• The Central Vigilance Commission (CVC) was set up by the Government of

India in February, 1964 on the recommendations of the Committee on
Prevention of Corruption, headed by Shri K. Santhanam, to advise and
guide Central Government agencies in the field of vigilance. CVC is
conceived to be the apex vigilance institution, free of control from any
executive authority, monitoring all vigilance activity under the Central

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Government and advising various authorities in Central Government

organisations in planning, executing, reviewing and reforming their
vigilance work.
• Consequent upon promulgation of an Ordinance by the President, the
Central Vigilance Commission has been made a multi member
Commission with Statutory Status, with effect from 25 August, 1998.
• The CVC Bill was passed by both the houses of Parliament in 2003 and the
President gave his assent on 11th September 2003. Thus, the Central
Vigilance Commission Act 2003 (No 45 Of 2003) came into effect from that
date. Nittoor Srinivasa Rau became the first Chief Vigilance Commissioner
of India. The Commission shall consist of a Central Vigilance Commissioner
– Chairperson and not more than 2 Vigilance Commissioners – Members.

Powers and Functions of CVC

To exercise superintendence over the functioning of the Delhi Special Police
Establishment (DSPE) with respect to investigation under the Prevention of
Corruption Act, 1988; or offence under CRPC for certain categories of public
servants and to give directions to the DSPE for purpose of discharging this
responsibility;

• a) To review the progress of investigations conducted by the DSPE into

offences alleged to have been committed under the Prevention of
Corruption Act;
• b) To undertake an inquiry or cause an inquiry or investigation to be made
into any transaction in which a public servant working in any organisation,
to which the executive control of the Government of India extends, is
suspected or alleged to have acted for an improper purpose or in a
corrupt manner;
• c) To tender independent and impartial advice to the disciplinary and
other authorities in disciplinary cases, involving vigilance angle at
different stages i.e. investigation, inquiry, appeal, review etc.
• d) To exercise a general check and supervision over vigilance and anti-
corruption work in Ministries or Departments of the Govt. of India and
other organisations to which the executive power of the Union extends;
and
• e) To chair the Committee for selection of Director (CBI), Director
(Enforcement Directorate) and officers of the level of SP and above in
DSPE.
• f) To undertake or cause an inquiry into complaints received under the
Public Interest Disclosure and Protection of Informer and recommend
appropriate action.

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Sharad kumar is the present chairman of CVC

CVC chairman is appointed by a select committee comprising of

Prime Minister

Minister of home affairs

Leader of opposition in lok sabha

Note : The relationship between CBI and CVC is as such:
CVC exercise superintendence over the functioning of the Delhi Special Police
Establishment(CBI) insofar as it relates to the investigation of offences under
the Prevention of Corruption Act, 1988; or an offence under the Cr.PC for
certain categories of public servants – section 8(1)(a) of CVC Act, 2003
It also gives directions to the Delhi Special Police Establishment (CBI) for
superintendence insofar as it relates to the investigation of offences under the
Prevention of Corruption Act, 1988 – section 8(1)(b) of CVC Act, 2003
In simpler words, CBI works under the guidance of CVC when the matter is
related to public corruption. CVC doesn't have any control or oversight over
CBI as its officers are appointed, transferred and promoted by DoPT which
comes under PMO.
CBI investigates other high-profile cases other than the matters of public
corruption while CVC's role is only limited to matters of corruption and probity
in public life.

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NITI AAYOG :
Who among the following is not associated to the Governing Council of NITI
Aayog?(CAPF 2018)
(a) The Prime Minister
(b) The President
(c) The Chief Ministers of States
(d) The Chief Ministers of Union Territories

National institute for transforming India. It replaced the existing planning

commission in India .
Objectives
▪ To foster cooperative federalism through structured support initiatives and
mechanisms with the States on a continuous basis, recognizing that strong
States make a strong nation.

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▪ To develop mechanisms to formulate credible plans at the village level and

aggregate these progressively at higher levels of government.
▪ To ensure, on areas that are specifically referred to it, that the interests of
national security are incorporated in economic strategy and policy.
▪ To pay special attention to the sections of our society that may be at risk of
not benefitting adequately from economic progress.
▪ To provide advice and encourage partnerships between key stakeholders
and national and international like-minded Think Tanks, as well as
educational and policy research institutions.
▪ To create a knowledge, innovation and entrepreneurial support system
through a collaborative community of national and international experts,
practitioners and other partners.
▪ To offer a platform for resolution of inter-sectoral and inter-departmental
issues in order to accelerate the implementation of the development
agenda.
▪ To maintain a state-of-the-art Resource Centre, be a repository of research
on good governance and best practices in sustainable and equitable
development as well as help their dissemination to stake-holders
▪ Members :
▪ Chairperson: Prime Minister
▪ Vice-Chairperson: To be appointed by Prime-Minister
▪ Governing Council: Chief Ministers of all states and Lt. Governors of
Union Territories.
▪ Regional Council: To address specific regional issues, Comprising Chief
Ministers and Lt. Governors Chaired by Prime Minister or his nominee.
▪ Adhoc Membership: 2 member in ex-officio capacity from leading
Research institutions on rotational basis.
▪ Ex-Officio membership: Maximum four from Union council of ministers
to be nominated by Prime minister.
▪ Chief Executive Officer: Appointed by Prime-minister for a fixed tenure,
in rank of Secretary to Government of India.
▪ Special Invitees: Experts, Specialists with domain knowledge nominated
by Prime-minister.

List of constitutional amendments

Important Amendments of the Indian Constitution for UPSC

Article 368 of Indian Constitution provides for two types of amendments:
(a) Some provisions can be amended by a special majority of the Parliament, i.e., a two-third
majority of the members of each House present and voting, and a majority (that is, more than 50
per cent), of the total membership of each House.

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(b) Some other provisions can be amended by a special majority of the Parliament and with the
ratification by half of the total states.
Note: At the same time, some provisions of the Constitution can be amended by a simple
majority of the Parliament in the manner of ordinary legislative process. Notably, these
amendments do not come under Article 368.
IAS aspirants preparing for UPSC 2020, may also check the linked article to know more about
the upcoming examination and prepare for the civil services examination accordingly.
The table below mentions the list of important amendments in Indian Constitution with their
dates, articles-added and changes (if any) brought:

Important Amendment Acts Newly added, removed and Details of the Amendments
Amended
Articles/Scheduled/Parts
7th Amendment Act 1956 Article 1 Reorganisation of states on
Article 3 linguistic basis
Abolition of Class A, B, C
Article 49
and D states
Article 80
Introduction of Union
Article 81 Territories
Article 82
Article 131
Article 153
Article 158
Article 168
Article 170
Article 171
Article 216
Article 217
Article 220
Article 222
Article 224
Article 230
Article 231
Article 232
Part VIII
First, Second, Fourth and
Seventh Schedules of Indian
Constitution

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9th Amendment Act, 1960 Schedule 1 of Indian Adjustments to Indian

Constitution Territory as a result of an
agreement with Pakistan.
10th Amendment Act, 1961 Article 240 Dadra, Nagar, and Haveli
First Schedule incorporated in the Union of
Indian as a Union Territory
12th Amendment Act 1961 Article 240 Goa, Daman and Diu
First Schedule incorporated in the Indian
Union as a Union Territory
13th Amendment Act, 1963 Article 170 Nagaland was formed with
Added new article 371A special status under Article
371A
14th Amendment Act, 1962 Articles 81 and 240 Pondicherry incorporated
First and fourth Schedules into the Indian Union
Added Article 239A

21st Amendment Act, 1967 Eighth Schedule Sindhi language was

language into 8th Schedule
of Indian Constitution
26th Amendment Act 1971 Article 366 Privy Purse was abolished.
Added Article 363A
Removed Articles 291 and
362
36th Amendment Act Articles 80 and 81 Sikkim incorporated as an
40th Amendment Act 1975 First and fourth Schedules Indian state
Added Article 371F
Removed Article 2A

42nd Amendment Act 1976 Article 31 Fundamental Duties

Article 31C prescribed, India became
Socialist Secular Republic
Article 39
Article 55
Article 74
Article 77
Article 81
Article 82
Article 83
Article 100
Article 102

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Article 103
Article 105
Article 118
Article 145
Article 150
Article 166
Article 170
Article 172
Article 189
Article 191
Article 192
Article 194
Article 208
Article 217
Article 225
Article 226
Article 227
Article 228
Article 311
Article 312
Article 330
Article 352
Article 353
Article 356
Article 357
Article 358
Article 359
Article 366
Article 368
Article 371F
Seventh Schedule

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Added Articles 31D, 32A,

39A, 43A, 48A, 131A,
139A, 144A, 226A, 228A
and 257A

Added Parts IVA and XIVA

44th Amendment Act 1978 Article19 Right to Property removed

Article 22 from the list of fundamental
rights
Article 30
Article 31A
Article 31C
Article 38
Article 71
Article 74
Article 77
Article 83
Article 103
Article 105
Article 123
Article 132
Article 133
Article 134
Article 139A
Article 150
Article 166
Article 172
Article 192
Article 194
Article 213
Article 217
Article 225
Article 226

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Article 227
Article 239B
Article 329
Article 352
Article 356
Article 358
Article 359
Article 360
Article 371F

Ninth Schedule

Added Articles 134A and

361A

Deletion of Articles 31,

257A and 329A

61st Amendment Act 1989 Article 326 Voting age decreased from
21 to 18.
71st Amendment Act 1992 Article 332 Manipuri, Konkani, and
Nepali were added in the
8th Schedule of Indian
Constitution
73rd Amendment Act 1992 Added Part IX Introduction of Panchayat
Raj
Addition of Part IX to the
Indian Constitution
74th Amendment Act 1992 Article 280 Article 280 Introduction of
Added Part IXA Municipalities and
Nagarpalikas
86th Amendment Act 2002 Amended Articles 45 and Free and compulsory
51A education to children
Added Article 21A between 6 and 14 years
87th Amendment Act 2003 Eighth Schedule Santhali, Bodo, Dogri, and
Maithili in the 8th Schedule
of Indian Constitution
Service Tax introduced.

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INDIAN POLITY & INDIAN ECONOMY

95th Amendment Act 2010 Article 334 Extension of reservation of

seats for SC/ST
Nomination of Anglo-Indian
members in Parliament and
State Assemblies
96th Amendment Act 2011 Eighth Schedule Replaced Odia for Oriya in
the 8th Schedule to the
Indian Constitution
97th Amendment Act 2012 Articles 19 Introduction of Part IXB in
Added Part IXB the Constitution of India
relating to Co-operative
Societies
100th Amendment Act 2015 Amendment of First Exchange of some enclave
Schedule territories with Bangladesh
Conferment of citizenship
rights to citizens of
enclave’s resulting to
signing of Land Boundary
Agreement (LBA) Treaty
between India and
Bangladesh.
101st Amendment Act 2016 Article 248 Introduction of Goods and
Article 249 Services Tax (GST)
Article 250
Article 268
Article 269
Article 270
Article 271
Article 286
Article 366
Article 368
Amended Sixth Schedule
and Seventh Schedule
Deletion of Article 268A
102nd Amendment Act 2018 Addition of articles 338B, Constitutional Status
342A, and Added Clause 26C to National Commission for
Omitted Article 340 Backward Classes
Modification of articles 338,
366
103rd Amendment Act 2019 Amendment to Article 15, A maximum of 10%
added Clause 6 Reservation for
Amendment to Article 16, Economically Weaker
added Clause 6 Sections of citizens of

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INDIAN POLITY & INDIAN ECONOMY

classes other than the

classes mentioned in clauses
(4) and (5) of Article 15, i.e.
Classes other than socially
and educationally backward
classes of citizens or the
Scheduled Castes and the
Scheduled Tribes.

Practise questions :
1. As per Article 12 of Indian a) 2 and 3
Constitution, term “state” includes b) 1 and 2
which of the following c) 1 and 3
bodies: d) All of the above
1. Government and Parliament of 3. With reference to the Advocate
India general, consider the following
2. ONGC, SAIL statements:
3. Municipalities and Panchayats . 1. He is appointed by governor but
4. All state governments. removed by President.
Choose the appropriate option from 2. The remuneration of the
code given below advocate general is fixed by the
a) 1 and 4 only Constitution
b) 1, 3 and 4 only 3. He enjoys all the privileges and
c) 1 only immunities that are available to a
d) All of them member of the state
2. Article 368 of Indian Constitution legislature.
provides a provision for the Which of the statements given
amendment of the above is/are correct?
Constitution. What are different a) 1 and 2 only
ways in which different parts of b) 2 and 3 only
Indian Constitution can be c) 3 only
amended? d) 1, 2, and 3
1. Amendment by simple majority 4. Which of these is/ are
of the Parliament constitutional posts?
2. Amendment by special majority 1. Special officer for linguistic
of the Parliament minorities
3. Amendment by special majority 2. Advocate general
of the Parliament and the 3. Solicitor general
ratification of half of the state Select the correct answer using the
legislatures. codes given below.
Select the code from below: a) 1 and 2 only

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INDIAN POLITY & INDIAN ECONOMY

b) 1 and 3 only (a) 1 only (b) 2 only (c) Both 1 and 2

c) 2 and 3 only (d) Neither 1 nor 2
d) 1, 2 and 3 8. Consider the following
5. The functions of the National statements about Public Accounts
Commission for SCs include: Committee of the Parliament:
1. Investigation and monitoring of 1. This committee was fi rst set up
all matters relating to the in 1921 under the provisions of
constitutional and other legal government of India Act 1919.
safeguards for the SCs and 2. It has currently 22 members all
evaluating their working. from lower house, elected by the
2. It also discharges similar (above) parliament according to the
functions with regard to the other principle of proportional
backward classes representation
(OBCs) 3. The chairman of the committee
3. The commission presents an is invariably from the opposition.
annual report to the Parliament Which of the above statements
upon their working. is/are correct?
Select the correct answer from the (a) 1 only
codes given below: (b) 2 and 3 only
a) 2 and 3 only (c) 1 and 3 only
b) 3 only (d) 1, 2 and 3
c) 1 and 2 only 9. Consider the following
d) 1, 2 and 3 statements:
6. Which of the following articles 1. 86th Constitutional Amendment
ensure Abolition of Titles? Act limited the strength of council
a) Article 16 of ministers to 15% of the total
b) Article 17 strength of Lok Sabha.
c) Article 18 2. Union ministers are appointed by
d) Article 19 the President on the advice of Prime
7. Consider the following minister and they can be member of
statements about Estimates either house of the Parliament.
Committee of Indian parliament: 3. Union Ministers can attend the
1. It has 30 members 15 from Lok meetings of other house of
Sabha and another 15 from Rajya parliament of which he/ she is not a
Sabha. member. Which of the above
2. It is incumbent on the committee statements is/are correct?
to examine entire estimates of any (a) 1 only (b) 1 and 3 only (c) 3 only
one year. (d) 2 and 3 only
Which of the above statements
is/are correct?

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INDIAN POLITY & INDIAN ECONOMY

10. Which of the following 3. Which one of the following is

dignitaries take oath to defend the NOT true of the 10th schedule of
Constitution? the Constitution of India pertaining
1. The President of India 2. The to disqualification of members of
Prime Minister 3. Governor the Parliament and State
a)only1 and 2 b) 1 and 3 c) 2 and 3 legislatures?
d) none (a) The schedule lays down
that elected members may be
CAPF 2019 Questions : disqualified on the grounds of
1. Which one of the following defection
statements about the Attorney- (b) Disqualification on ground
General of India is NOT correct of defection does not apply in cases
(a) He shall have the right to speak of merger with another
in the Houses of Parliament political party
(b) He shall have a right of (c) Cases of dispute are decided
audience in all Courts in the by the speaker or Chairman of
territory of India in the performance the House concemed
of his official duties (d) The Supreme Court of India is
(c) He must have the same the final arbiter in cases which
qualifica tions as are required to be remain unresolved
a Judge of the Supreme Court 4. Which of the following pairs of
(d) He is a whole-time counsel for list and contents is/are correctly
the Govertiment matched
2. Consider the following 1. State list : Public health and
statements relating to short notice sanitation
questions asked in the Legislature : 2. Union list :
1. These relate to matters of Citizenship naturalisation and aliens
urgent public importance and can 3. Concurrent list : Legal,
be asked for oral answer at a notice medical and other professions
less than 10 days Select the correct answer using the
2. Short notice questions can code given below:
be admissible if the Minister (a) I only
concerned agrees to answer to it (b) 1, 2 and 3
3. Short notice questions are (c) 2 and 3 only
asked during question hour (d) 3 only
(a) 1, 2 and 3 5.The Voter Verifiable Paper Audit
(6) 1 and 2 only Trail (VVPAT) system was used for
(c) 2 and 3 only the first time by the Election
(d) 1 and 3 only Commission of India in
(a) North Paravur Assembly

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INDIAN POLITY & INDIAN ECONOMY

Con stituency, Kerala 1. Constitutional government

(b) Noksen Assembly based on formal, usually legal, rules
Constituency,Nagaland 2. Guarantees of civil liberties
(c) Mapusa Assembly and individual rights
Constituency,Goa 3. It invests political authority with
(d) Sitanshu Yashaschandra potentially unlimited power
6. Which of the following is NOT Select the correct answer using the
provided for under the Directive code given below :
Principles of State Policy? (a) 1 and 3 only
(a) Right to work, to education and (b) 1 and 2 only
to public assistance in certain cases (c) 2 and 3 only
(b) Uniform Civil Code for the citi (d) 1, 2 and 3
zens 9. Which one among the following
(c) Separation of Judiciary from is NOT the central feature of
executive Polyarchy
(d) Participation of workers in (a) Government is in the hands
the management of local-self of clected officials
government (b) Right to run for office is
7. Which one of the following restricted
statements regarding the Directive (c) Practically all adults have
Principles of State Policy is NOT the right to vote
correct ? (d) There is free expression and
(a) State shall follow the Directive a right to criticize and protest
Principles of State Policy both in the 10. Which one of the following
matter of administration as well as does NOT fall under the definition
in the making of laws of the Money Bill
(b) The Directive Principles of State (a) Amendment of law with respect
Policy embody the object of the to any financial obligations under
State under the taken by the Govemment of India
republican Constitution (b) The payment of money into
(c) The Directive Principles of State the Consolidated Fund of India
Policy have procedence over the (c) Any financial bill as per
Fundamental Rights in case require ments of Article 117
of conflict between the two (d) Appropriation of money out of
(d) The Directive Principles of State the Consolidated Fund of India
Policy are not enforceable in the 11. "To cherish and follow the
Courts noble ideas which inspired our
8. Which of the following are national struggle for freedom" is a
the defining features of liberal provision of which one of the
demo cracy ? following of the Constitu tion of

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INDIAN POLITY & INDIAN ECONOMY

India ? (c) the Constitution (35th

(a) Directive principles of the Amendment) Act, 1974
state policy (d) the Constitution (5th
(b) Fundamental duties Amendment) Act, 1955
(c) Fundamental rights 2. Which one of the following
(d) Preamble judgements is associated with the
12. Which one of the following primacy of the Chief Justice of India
authorities CANNOT organize "Lok and the Collegium of Judges in the
Adalats" appointment and transfer of the
(a) Panchayat Committees higher judiciary?
(6) Taluk Legal Services Committee (a) Kesavananda Bharati vs. State of
(c) District Authority Kerala
(d) High Court Legal Services (b) S. P. Gupta vs. President of
Com mittee India
13. Which of the following are (c) Maneka Gandhi vs. Union of
the essential requirements for a India
person to be appointed as a (d) S. R. Bommai vs. Union of India
member of Finance Commission ? 3. Which one of the following
1. A Supreme Court judge or Constitutional Amendments has
one qualified to be appointed as enormously strengthened the
such powers of the Speaker/Chairman
2. A person having wide of the Houses of the
experience in financial matters and Parliament/State Legislatures?
adininis tration (a) 61st Amendment which reduced
3. A person having special the voting age from 21 to 18 years
know ledge of economics (b) Anti-defection provisions of
Select the correct answer using the 52nd Amendment
code given below: (c) Repealing of many of the
(a) 1, 2 and 3 provisions of 42nd Amendment by
(b) 1 and 2 only 44th Amendment
(c) 2 and 3 only (d) 73rd Amendment that conferred
(d) 1 and 3 only extensive powers on Panchayat
Bodies
CAPF 2018 : 4. Which one of the following
1.Sikkim became an Associate State Committees of the Parliament has
of the Indian Union through no Members from the Rajya
(a) the Constitution (36th Sabha?
Amendment) Act, 1975 (a) Public Accounts Committee
(b) the Constitution (7th (b) Committee on Public
Amendment) Act, 1956 Undertakings

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INDIAN POLITY & INDIAN ECONOMY

(c) Estimates Committee (b) The drafts of the Constitution

(d) Departmentally Related Standing were discussed in public meetings.
Committee (DRSC) on Finance (c) It is the shortest document of a
5. Which one of the following Constitution in the world.
States does not find a mention in (d) It came fully into operation
Article 371 of the Constitution of immediately after the drafting was
India? completed in December 1949
(a) Maharashtra 9. The Provisions of the Panchayats
(b) Madhya Pradesh (Extension to the Scheduled Areas)
(c) Gujarati Act, 1996 (PESA)
(d) Karnataka (a) extends greater say to local tribal
6. Who among the following is not community over common resources
associated to the Governing (b) provides greater devolution of
Council of NITI Aayog? powers to Scheduled Tribes
(a) The Prime Minister (c) extends provisions of 73rd
(b) The President Amendment to Scheduled Areas
(c) The Chief Ministers of States (d) brings Scheduled Areas under
(d) The Chief Ministers of Union the better control of local
Territories Panchayats
7. Which of the following 10. Over which of the following,
statements about the Constitution the Lok Sabha and the Rajya Sabha
of India is/are correct? held joint sittings to resolve their
1. The Objectives Resolution' was differences?
moved by Sardar Vallabhbhai Patel. 1. The Dowry Prohibition Bill, 1959
2. Dr. B. R. Ambedkar served as the 2. The Banking Service Commission
Chairman of the Drafting (Repeal) Bill, 1978.
Committee in his capacity as the 3. The Prevention of Terrorism Bill,
Law Minister 2002
Select the correct answer using the 4. The Land Acquisition,
code given below. Rehabilitation and Resettlement
(a) 1 only Act, 2013
(b) 2 only Select the correct answer using the
(c) Both 1 and 2 code given below.
(d) Neither 1 nor 2 (a) 1, 2, 3 and 4
8. Which one of the following (b) 3 and 4 only
statements about the Constitution (c) 1, 2 and 3 only
of India is correct? (d) 2 and 4 only
(a) It was framed between 11. Which one of the following
December 1946 and December Commissions has not examined the
1949.

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INDIAN POLITY & INDIAN ECONOMY

issue of removal of the Governor of (c) Respect for the rich heritage of
a State? our composite culture
(a) Sarkaria Commission (d) Promotion of cooperative
(b) Thakkar Commission societies
(c) Venkatachaliah Commission 15. Which one of the following is
(d) Punchhi Commission not a part of the Directive
12. Which one of the following is Principles of State Policy?
the correct combination of (a) Uniform Civil Code for all citizens
languages included in the 8th (b) Separation of Judiciary from
Schedule of the Constitution of Executive
India? (c) Duty of the State to raise the
(a) Nepali, Konkani, Tulu and level of nutrition and standard of
Santhali living
(b) Santhali, Urdu, Konkani and (d) Promotion of scientific temper,
Maithili humanity and the spirit of inquiry
(c) Santhali, Konkani, Bhojpuri and and reform
Urdu 16. The power of the President of
(d) Dogri, Konkani, Bhojpuri and India to refer a matter back to the
Urdu Council of Ministers for
13. Which one of the following reconsideration was inserted in the
statements with regard to Constitution by
Panchayats is not correct? (a) 44th Amendment
(a) Members of Panchayats are (b) 42nd Amendment
elected directly by the Gram Sabha. (c) 43rd Amendment
(b) The elections to Panchayats are (d) 35th Amendment
conducted by the State Election 17. Ashok Mehta Committee was
Commission. constituted to make
(c) The Central Government may by recommendations on which one of
law authorize a Panchayat to levy the following issues?
taxes. (a) Division of tax revenues between
(d) Every Panchayat continues for Centre and States
five years from the date of (b) Panchayati Raj System
convening of its first meeting. (c) Appointment of Governors
14. Which one of the following (d) Presidential and Vice
concerns has found a place in both Presidential elections
Fundamental Duties and Directive
Principles of State Policy? CAPF 2017 :
(a) Safeguard of public property 1.The Central Vigilance Commission
(b) Protection and improvement of was set up on the recommendation
environment, forests and wildlife of

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INDIAN POLITY & INDIAN ECONOMY

(a) First Administrative Reforms (c) President of India

Commission (d) Chief Justice of India
(b) Gorwala Committee 6. Which of the following
(c) Kripalani Committee statements is/are correct?
(d) Santhanam Committee 1. Article 15 of the Constitution of
2. The Ninth Schedule was added India is available to both citizens of
to the Constitution of India by the India and the foreigners
(a) Fourteenth Amendment 2. Article 16 of the Constitution of
(b) First Amendment India is available to the citizens of
(c) Ninety-Third Amendment India only
(d) Ninety-Ninth Amendment 3. Article 21 of the Constitution of
3. Which one of the following India is available to both citizens of
cases in the Supreme Court of India India and the foreigners alike within
dealt with the issue of 'creamy the territory of India
layer' among the backward classes Select the correct answer using the
? code given below :
(a) K M Nanavati vs. State of (a) I only
Bombay (b) 2 and 3 only
(b) Indra Sawhney vs. Union of (c) 3 only
India (d) 1, 2 and 3
(c) Madhu Limaye vs. Ved Murti 7. Who among the following are
(d) Sajjan Singh vs. State of Punjab entitled to get the benefits of
4. Which one of the following equality before the law and the
judgments declared that the equal protection of the laws as
Parliament has NO power to enshrined under Article 14 of the
amend any of the provisions of Part Constitution of India ?
III of the Constitution of India ? 1. All Indian citizens living in India
(a) Kesavananda Bharati vs. State of 2. All Indian citizens living abroad
Kerala 3. Foreigners living within the
(b) Golak Nath vs. State of Punjab territory of India
(c) Champakam Dorairajan vs. State 4. All citizens born in India
of Madras
Select the correct answer using the
(d) Minerva Mills Ltd. vs.
code given below:
Government of India
(a) 1 and 2 only
5. Who among the following is
(b) 1, 2 and 3
empowered to establish Inter State
(c) 1 and 3 only
Council under Article 263 of the
(d) 4
Constitution of India ?
8. Which one of the following is the
(a) Parliament
correct sequence of different
(b) Council of Ministers

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INDIAN POLITY & INDIAN ECONOMY

stages a budget has to go through contains provisions for the

in the Parliament ? abolition and creation of Legislative
1. Presentation of the Budget Councils?
2. Scrutiny by Departmental Commit (a) Article-171
tees (b) Article-169
3. Passing of Finance Bill (c) Article-356
4. Passing of Appropriation Bill (d) Article-182
Select the correct answer using the 3. The provision under Article-5l A
code given below : of the Constitution of India relates
(a) 1 - 2 - 4 to the
(b) 1 - 3 - 2 (a) uniform civil code for the citizens
(c) 2 - 1 - 3 - 4 (b) organisation of village
(d) 4 - 3 - 2 - 1 panchayats
9. Which one of the following was (c) right to education
the mandate of the Dhar (d) fundamental duties
Commission (1948) ? 4.Parochial political culture is
(a) To study the classification of generally found in
States (a) developing societies
(b) To recommend whether the (b) societies having multi-party
States can be re-organized on system
linguistic basis (c) developed societies
(c) To study the Centre-State (d) monarchical societies
relations 5. The Constitution of Jammu and
(d) To examine whether Madras city Kashmir came into force on
can be transferred to Andhra (a) August 15,1946
(b) August 15, 1947
CAPF 2016 : (c) January 26, 1950
1. Which one of the following is a (d) January 26, 1957
characteristic of Presidential form 6.Who among the following may be
of government? the Chairman of the Zila Parishad?
(a) President is not a part of (a) Chief Minister
legislative body (b) District Collector
(b) It does not separate Legislative (c) Member of Parliament in the
and Executive functions District
(c) President follows the principle (d) Elected from its own members
of collective responsibility 7. What is meant by Social
(d) The tenure of the President Equality?
depends on the legislature (a) Each person should perform the
2. Which one of the following functions according to his status
articles of the Constitution of India (b) No effort should be made to

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INDIAN POLITY & INDIAN ECONOMY

modify the existing social system Houses to pass the Bill

(c) No person should be made to (b) Each House needs to pass the
suffer a position of relative Bill separately by a prescribed
inferiority in relation to other men special majority
due to caste, race or religion (c) The Bill can be introduced in
(d) Special effort to improve the lot either House of Parliament
of weaker section (d) The Bill can be sponsored by a
8. Which one of the following is not Private Member
a feature of Indian federalism? 12. 'Cut Motion' can be introduced
(a) Every State Government has after the presentation of
powers of its own (a) any Bill introduced in the
(b) Courts have the power to Parliament
interpret the constitution and the (b) the Railway and General
powers of different levels of Budgets
government (c) any Private Member's Bill
(c) States are subordinate to the (d) a Constitution Amendment Bill
Central Government
(d) Sources of revenue for each level CAPF 2015 :
of government are clearly specified 1.The setting up of the Inter-State
9. The 10th Schedule to the Council in 1990 was meant to
Constitution of India relates to (a) substitute the National
(a) the provisions relating to the Development Council
formation of District Councils
(b) strengthen the federal
(b) the land reforms
provisions of the Constitution
(c) the States and Union Territories
(d) the anti-defection law (c) be an institutional interface
10. The amending power of the between the· Judiciary and the
Parliament set forth in which one Government
of the following Articles of the (d) provide membership to local
Constitution of India? customary bodies
(a) Article-368 2. Which one of the following is not
(b) Article-360 a Central Paramilitary Force under
(c) Article-13(2) the Ministry of Home Affairs?
(d) Article-370 (a) Central Industrial Security Force
11. With regard to a Constitution
(b) Central Reserve Police Force
Amendment Bill, which one of the
following statements is not (c) Ladakh Scouts
correct? (d) Border Security Force
(a) The Speaker of the Lok Sabha
can call a joint sitting of both the

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INDIAN POLITY & INDIAN ECONOMY

3. The Comptroller and Auditor- (c) provision for providing facilities

General of India. can be removed for instruction in mother-tongue at
from office only by primary stage
(a) President on the advice of the (d) freedom of Minority-managed
Union Cabinet educational institutions from
(b) Chief Justice of the Supreme discrimination in the matter of
Court receiving aid from the State
7. Which of the following are
(c) President of India after an
provided in India by the Right to
address in both Houses of
Education Act?
Parliament
1. Right of children to free and
(d) President on the advice of Chief
compulsory education till
Justice of India
completion' of elementary
4. The Special Provisions in Article
education in a neighbourhood
371G of the Constitution of India
school.
relate to the state of
2. Prohibition of deployment of
(a) Jammu and Kashmir
teachers for non-educational works,
(b) Jharkhand other than decennial census,
(c) Mizoram elections to local authority like State
(d) Nagaland Legislatures, Parliament and
5. The Locus Standi rule to move disaster relief.
the court was liberalized by the 3. Right' of minorities to establish
case of and administer education
(a) SR Bornrnai vs Union of India institution.
(b) Minerva Mills vs Union of India 4. No citizen shall be denied
admission into any educational
(c) SP Gupta vs Union of India
institution maintained by the State
(d) Kesavananda Bharati vsState of or receiving aid out of State funds
Kerala on grounds only of religion, race,
6. The provision under Article 350A caste, language or any of them.
of the Constitution of India relates Select the correct answer using the
to the code given below.
(a) right of any section of the (a) 1, 2 and 4
citizens to preserve its distinct
(b) 1 and 3
Iqnguage and culture
(c)2 and 4
(b) right of the Sikh community to
carrying and wearing of kirpans (d) 1 and 2

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INDIAN POLITY & INDIAN ECONOMY

8. Under Article 355 of the 3. one member who is or has been

Constitution of India, it is the duty the Chief Justice of a High Court.
of the Union to 4. two members to be appointed
(a) protect States against external from amongst persons having
aggression and internal disturbance knowledge of or practical
(b) allow the extension of executive experience in matters relating to
powers of the Union to any State human rights.
Select the correct answer using the
(c) declare that the powers of the
code given below.
Legislature of a . State shall be
exercisable by or under' the (a) 1,2,3 and 4
authority of the Parliament (b) 1,2 and 3
(d) allow the Parliament to include (c) 1 and 4
or exclude any caste, race or tribe (d) 2,3 and 4
into the list of the Scheduled Castes 11.The Punchhi Commission report
or Scheduled Tribes was related to
9. The 2nd Administrative Reforms (a) Centre-State. relations
Commission has produced Reports (b) Electoral reforms
on. (c) Fiscal federalism
1. Ethics in Governance. (d) Creation of new States
2. Local Governance. 12. The 9th Schedule to the
Constitution of India was added by
3. Combating Terrorism.
the
4. Eradication of Corruption. (a) Third Amendment Act
Select the correct answer using the (b) Fourth Amendment Act
code given below. (c) First Amendment Act
(a) 1,3 and 4 (d) Sixth Amendment Act
(b) 2, 3 and 4 13. The Rajya Sabha can withhold
its consent to a Money Bill for
(c) 1 and 2
(a) 14 days
(d) 1, 2 and 3 (b) 15 days
10. The National Human Rights (c) 30 days
Commission has (d) 18 days
1. a Chairperson who has been a
Chief Justice of Supreme Court or a
High Court of India.
2. one member who is or has been a
Judge of Supreme Court.

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INDIAN POLITY & INDIAN ECONOMY

ECONOMY
List of contents:
1. Indian economy during independence
2. Basic terminologies - 265 ONWARDS
a) GDP
b) NDP
c) GNP
d) NNP
e) National Income
3. Inflation- 280
4. Economic growth and economic development-288
5. Economic planning- 296
6. Banking -302
7. Taxation system- 318 ONWARDS
8. Foreign exchange sector
9. Glimpses of Budget and Economic Survey-346
Economics : The branch which deals with consumption, production and
transfer of wealth.
• An economy refers to the way a nation makes economic choices about how the
nation will use its resources to produce and distribute goods and services. The
Indian Economy was called an underdeveloped economy but slowly become a
developing economy but is now referred to as the mixed economy.

• An economic system is defined by a way wherein the country’s resources are

utilized to produce goods and services in such a manner that these goods and
services are distributed for consumption. It is a system that involves
production, distribution, and consumption of goods and services between the
entities in a particular society.

• The economy of India stands as the world’s 12th largest according to

the market exchange rates and is also the 4th largest economy on the basis of
Purchasing Power Parity. The Indian Economic System was based on the basis
of Social Democratic policies from the year 1947 to 1991.

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INDIAN POLITY & INDIAN ECONOMY

• Wealth definition Adam Smith (1723 -90) defined economics as follows :

'Economics is the science of wealth'. He is the author of the famous book
'Wealth of Nations' (1776). He is known as the Father of Political Economy
because he was the first person who put all the economic ideas in a
systematic way. It is only after Adam Smith, we study economics as a
systematic science.
• The term 'wealth' has a special meaning in Economics. In the ordinary
language, by 'wealth', we mean money, but in economics, wealth refers to
those goods which satisfy human wants. But we should remember all goods
which satisfy human wants are not wealth. For example, air and sunlight are
essential for us. We cannot live without them. But they are not regarded as
wealth because they are available in abundance and unlimited in supply. We
consider only those goods which are relatively scarce and have money value
as wealth.

welfare definition Alfred Marshall (1842-1924) wrote a book Principles

of Economics in 1890. In it, he defined economics as 'a study of mankind in the
ordinary business of life'. An altered form of this definition is : 'Economics is a
study of man's actions in the ordinary business of life'.
• Marshall agrees that economics studies about wealth. But he does not accept
the view that economics studies about wealth alone. In the words of
Marshall, 'Economics is on the one side a study of wealth, and on the other
and more important side, a part of the study of man. Man is the centre of his
study. According to him, the study of man is more important than the study
of wealth

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Scarcity definition : “Economics is a science which studies human behaviour as

a relationship between ends and scarce means which have alternative uses.” –
Prof. Lionel Robbins. Human wants are unlimited in number. Whenever one
want is satisfied, then automatically several wants grow up.

Hence it is endless. With the progress in civilization and development science

and technology numerous wants are developed. Again several human wants are
reoccurring too. Hence, wants are ‘ever growing and never ending’

Growth definition : Science of dynamic growth and development. Although the

fundamental economic problem of scarcity in relation to needs is jjsi.ted it would
not be proper to think that economic resources – physical, human, financial are
fixed and cannot be increased by human ingenuity, exploration, exploitation and
development. A modern and somewhat modified definition is as follows

“Economics is the study of how men and society choose, with or without the use
of money, to employ scarce productive resources which could have alternative
uses, to produce various commodities over time and distribute them for
consumption now and in the future amongst various people and groups of
society”.

Historical evidences of Economy:

Capitalism:
This system emerged in the work of Adam Smith, Wealth of Nations (1776). It
became popular among the countries of America and Europe. The system had
the private sector deciding the questions like What to produce? How much to
produce? What price to sell it at? Adam Smith wanted free competition, non-
interference by state to ensure that the markets brought equilibrium.

Socialism: In this the state had a larger role in deciding the questions of
distribution and supply, it also believed in collective ownership over all assets
and means of production as was in USSR. The Communism philosophy believes
in state ownership over everything and absolute power to state for running the
economy (as in pre 1985 China). These philosophies saw their roots in Karl
Marx’s work.

Market economy:
• The great depression of 1929 saw a failure of the Smithsonian ideas of
Capitalism failing as the economies collapsed and large scale unemployment

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was seen. The new idea of economy was proposed by John Maynard Keynes.
He suggested that the capitalist economies absorb certain good qualities of
socialist economies like, production of basic goods and services.

• This would mean that the state can guarantee a basic standard of living for
the people and thus increase their purchasing power to create a demand for
market based goods. His ideas helped the depression hit economies come
out of the turmoil. The states now started producing the goods that were
absolutely essential for survival “public goods”. The market forces were now
focused on goods that were non-essential. This created a social sector.

• A second version was proposed for the socialist states. They were advised to
accept the self- correcting power of the market forces and move towards a
mixed economy. The suggestion was rejected by the communist and socialist
states and this would lead to their economic collapse as was seen in 1991
(USSR and most eastern European nations

• Bretton woods The Bretton Woods Institutions are the World Bank and the
International Monetary Fund (IMF). They were set up at a meeting of 43
countries in Bretton Woods, New Hampshire, USA in July 1944. Their aims
were to help rebuild the shattered postwar economy and to promote
international economic cooperation. The original Bretton Woods agreement
also included plans for an International Trade Organisation (ITO) but these
lay dormant until the World Trade Organisation (WTO) was created in the
early 1990s.
• The creation of the World Bank and the IMF came at the end of the Second
World War. They were based on the ideas of a trio of key experts – US
Treasury Secretary Henry Morganthau, his chief economic advisor Harry
Dexter White, and British economist John Maynard Keynes. They wanted to
establish a postwar economic order based on notions of consensual decision-
making and cooperation in the realm of trade and economic relations. It was
felt by leaders of the Allied countries, particularly the US and Britain, that a
multilateral framework was needed to overcome the destabilising effects of
the previous global economic depression and trade battles.
• In his opening speech at the Bretton Woods conference, Henry Morganthau
said the “bewilderment and bitterness” resulting from the Depression
became “the breeders of fascism, and finally, of war”. Proponents of the new
institutions felt that global economic interaction was necessary to maintain
international peace and security. The institutions would facilitate, in
Morganthau’s words, “[the] creation of a dynamic world community in which

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the peoples of every nation will be able to realise their potentialities in

peace.”
• The IMF would create a stable climate for international trade by harmonising
its members’ monetary policies, and maintaining exchange stability. It would
be able to provide temporary financial assistance to countries encountering
difficulties with their balance of payments. The World Bank, on the other
hand, would serve to improve the capacity of countries to trade by lending
money to war-ravaged and impoverished countries for reconstruction and
development projects.

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Principle bodies of World Bank Group :

Note : the headquarters of World Bank and IMF are located at Washington DC
in USA. The country which becomes a member of world bank will automatically
get the membership in IMF. In two of the brettenwoods twins there are 189
nations .
Nauru becomes the latest ie 189th country to become a member of world bank
and IMF.
Indian economy before Independence :
In the beginning, our country India was rich in economy, culture and polity. But
it was due to advent of foreigners that it gradually got pushed into
backwardness. This is what is believed by most of the Indian researchers.
However, the most British researchers attribute economic stagnation during the
British period to: over population, religion, caste, social attitude, value system
and other social institutions. This approach was called as colonial approach
(Knowles, 1928; Anstey, 1952). But the national scholars (Sarkar, 1985; Naoroji,
1901 and 1996; Chandra, 1981; Dutt, 1970; Ambedkar, 1925) rejected the
statements of British administrators and writers of colonial schools with regard
to India‟s economic underdevelopment, and strongly argued with suitable
explanations that the economic policies of the British rule in India were primarily
responsible for the country‟s bad economic conditions. According to them, the
British rulers of India consciously shattered the country‟s economy, appro-
priated her wealth and drained it out to England and created all possible working
to its development.
Land System Policy The growth of a new land system in India affected the India‟s
economy. In 1793, Lord Cornwallis introduced permanent settlement in Bengal
and neighboring states. By introducing this new Zamindari system, the peasants
lost their ownership right over the land which in the past belonged to them.
Since the Zamindars enjoyed the right to raise the rent they mercilessly
exploited the tenants. After some times, the British extended the settlement

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policy to other states and created Zamindars there too, but they changed it to
„temporary settlement‟ under which land revenue would be reassessed after a
period ranging between 25-40 years. By a different land system called Ryotwari
settlement was evolved for large parts of Bombay and Madras which
subsequently was extended to North-Eastern and North-Western India. By this
system, each peasant holding a plot of land was recognized as the landlord and
made directly responsible to the state for the annual land revenue payment. The
conditions of farmers under the Ryotwari system should not have been as bad
as under the Zamindari system. The greed of the Britishers was responsible for
the sad situations of farmers under this system. So in the both cases, the land
rents fixed were excessive and both the systems were instrumental in
destruction of the organic village community based on customs and traditions
(Datt and Sundharam, 2000). But the Zamindari system made the landlords the
master of the village communities, the Ryotwari system cut through the heart
of the village communities by making separate arrangements between each
peasant cultivators and the state (Thorner and Thorner, 1974). There was a built
in depressor and the economy move downwards. The exploitation of peasant
under the Mahalwari system, in which all villagers collectively deposit the land
revenue, was somewhat less practiced but this land tenure system was confined
only to small parts of the country.
• Drain of Wealth A famous Indian reformer Dadabhai Naoroji emphasized that
the drain of wealth and capital from the country was responsible for absence
of development of India. According to him, “The drain consist of two
elements – first, that arising from the remittance. According to him, the drain
amounted to L50 crores from 1835 to 1873. In his opinion the total drain
from 1834 to 1839 amounted to L85 crore. In his estimates, the profits
earned by the British capitalist from the capital invested in India have not
been included. K.T. Shah and K.J. Khambata presented estimates of drain in
the early decade of the twentieth century. In their opinion Britain
appropriated annually under one head or in the other over 10 per cent of
India‟s Gross National Income (Dutt, 1970). Due to inhuman and exploitative
British policies, the people were adversely affected. It effected more on the
life of poor and labor. It created devastating famine for their misery.
Extensive descriptions of poverty under the British rule have been presented
by the scholars such as Naoroji, Dutt, Ray etc. According to Naoroji: “India is
suffering seriously in several ways and is sinking in poverty” (Naoroji, 1901
and 1996) and that “masses of India do not get enough to provide the basic
necessities of Life”.
• R. K. Mukherjee, one of the famous sociologists in India, has constructed an
index of real wages for the United Provinces for various years during the

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period 1600 to 1938 on the basis of available historical material. According

to his estimates, the real wages of both skilled and unskilled workers steadily
declined during the British rule. The real wages of skilled workers in 1928
were roughly 50 per cent of what they were in 1807. The decline in real wages
of the unskilled workers was much more as they were not even 40 per cent
of the real wages in 1807 (Mukherjee, 1948).
• Some positive things did also happen during British period. The Railways you
see today was first introduced by the British government in 1850. Between
1850-1855 the first jute mill, the first cotton mill and the first coal mine were
established. In the later years the length of Railway lines and the number of
the above said mills kept increasing. The British government also established
telecommunication, telegraph, post offices in the country.
Important terminologies :
National income of a country can be defined as the total market value of goods
and services produced in the economy in a year.
The three-important measure of calculating National Income of a country are:

• The sum of the value of all final goods and services produced.
• The sum of all incomes accruing to factors of production, i.e., Rent, Interest,
Profit and Wages.
• The sum of consumer’s expenditure, net investment, and government
expenditure on goods and services.

Sectors of economy :

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Circular flow of income :

The circular flow indicates flow of national income in an economy among various
agents – households, business people and the government. For example, in a
simple two sector economy, the business entities employ laborers who are from
the household sector. These household spends their income in the goods and
services produced by business entities. Hence an income goes from business
firms to households in the form of wage payment whereas a return income flow
happens from the households to business entities in the form of payments to
goods and services.
Government Sector in the Circular Flow

• Government affects the economy in a number of ways. The main components

of government intervention are in the form of taxes, spending and borrowings.
• Government purchase goods and services just as household and firms do.
• Government financed its expenditure through taxes and borrowings.
• The money flow from Household and firms to the government is in the form of
taxes.
• The other form of money flow from Household and firms to government is in
the form of Borrowings through financial markets.

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• The Government pay back to household and firms in the form of provision of
public goods like health, education, Policing, National Defence etc

Saving and Investment in the Circular Flow

• Along with consumption, the household also saves part of their money.
• When Household saves, their expenditure on purchase of goods and services
decline. The decline in the purchase will result in a decline in money received by
firms. This will result in less money flow to the household as the firms will reduce
hiring and production operations. Thus, saving act as a leakage from the
economic system.
• But the important question to ask is, where will savings go in the economy?
• The savings in the economy does not lead to any reduction in aggregate
spending and income as the savings flows back into the economic system
through Financial Markets (Banks, Stock markets, insurance etc.)
• From Financial Markets, the savings flows back to the Business firms who
borrow them and invest it into new forms of investments.
• Thus, the saving which is a leakage in the system also flows back into the system
through investment by a firm which acts as injections.

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Difference Between GDP and GNP

National Income implies the ultimate outcome of various economic activities of

a country, conducted during given period, valued in monetary terms. It is the
supreme macroeconomic variable that helps to gauge the economic soundness
of the nation. Of different measures employed in the analysis of national income
GDP and GNP are greatly used. GDP or otherwise called as gross domestic
product delineates the sum total of the market value of all goods and services,
produced within the geographical boundary of the nation in a given year.

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On the other hand, Gross National Product or GNP is the aggregate market
value of all goods and services created or produced during a particular period
and net factor income from abroad.

There is a fight between the two measures, regarding which one is a better
indicator of economic strength. The significant differences between GDP and
GNP are discussed in this article excerpt. Have a look.

Content: GDP Vs GNP

1. Comparison Chart
2. Definition
3. Key Differences
4. Conclusion

Comparison Chart

BASIS FOR GDP GNP

COMPARISON

Meaning The worth of goods and The worth of goods and

services produced within the services produced by the
geographical limits of the country's citizens irrespective
country is known as Gross of the geographical location is
Domestic Product (GDP). known as Gross National
Product (GNP).

What is it? Production of products Production of products by the

within the country's enterprises owned by the
boundary. residents of the country.

Basis Location Citizenship

Calculation GDP = Consumption + GNP = GDP - NFIA

Investment + Government
Spending + Net Export

On which scale On a local scale On international scale

productivity is
measured?

Focus on Domestic production Production by nationals

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Outlines The strength of the country's How the residents are

domestic economy. contributing towards the
country's economy.

Definition of GDP

Gross Domestic Product or GDP, is the value of everything that is produced

within the country’s domestic territory in a particular financial year. During the
calculation of GDP, the primary focus is to capture the goods produced or
services rendered within the nation’s border, whether the output is produced
by the residents or non-residents of the country. The output produced outside
the geographical boundaries of the country are not included in GDP.

GDP is an indicator of the size of the economy. It reflects the aggregate of

consumption, investments, spending by the government and net export (export
– import). In general, the GDP is calculated for one year. However, it can also be
calculated for any term to forecast economic trends.

Definition of GNP

Gross National Product or GNP is the total market value of everything (i.e. goods
and services) produced by the residents of the country during a particular
accounting year.

GNP includes the income earned by the country’s nationals within and outside
the country, but it excludes the income earned by the foreign citizens and
companies within the country. You can understand the statement, through an
example: There are many enterprises which are operating outside the country.
Many citizens of a country work in another country. The income earned by all
these persons is known as factor income earned from abroad. Likewise, non-
residents render factor services within the domestic territory of the country for
which they earn income. When you deduct the factor income paid to non-
residents for rendering services from factor income received from abroad, the
result will be the Net Factor Income received from Abroad (NFIA).

To calculate GNP, you need, to sum up, GDP and NFIA (i.e. The income earned
by the residents abroad less non-residents within the country).

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Net National Product or National Income

• In the production of GNP of a year, a country uses some fixed assets or capital
goods like Machinery, Equipments and technology etc.
• The capital goods like machinery, building and equipment’s undergo regular
wear and tear during the production process, which reduces their value. This fall
in the value of capital assets due to regular wear and tear is called depreciation.
• When the Depreciation is deducted from the Gross National Product, then we
get Net National Product.
• It simply means to include all market value of goods and services produced in a
year after deducting depreciation.

NNPMP = GNP- Depreciation.

National Income at Factor Cost

• National Income from Factor Cost is also called National Income of a country.
• National Income means the sum of all incomes earned by the citizens in the form
of Rent, Wages, Interest and Profits.
• The difference between National Income at Factor Cost and National Income at
Market Price (NNPMP) arises from the fact that indirect taxes and subsidies
cause the market price to be different from the factor income received by the
citizens.
• Example, A mobile handset of Rs10,000 purchased by you includes a GST of 12%.
In this case, while the market price of RS 10,000 includes the GST. The factor of
production used to produce mobile handset will only get RS 8800. Thus, the
difference between market price and factor cost is the tax.
• Similarly, a subsidy results in the market price of a product to be less than the
factor cost.
• Therefore, while calculating National Income, we must deduct indirect taxes and
add subsidies into Net National Product at Market Price.
• NNPFC = NNPMP – Indirect Taxes + Subsidies.

Personal Income

• Personal Income includes the sum of all incomes actually received by all the
individuals or households during a given year.
• The individual pays income taxes, firms pay corporate taxes, individual also
contribute towards social securities in the form of Cess etc., and some
individuals receive social security benefits (transfer payments) like pension,
unemployment allowances from the government.

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• In order to move from National Income to Personal Income of individuals and

firms, we must deduct all forms of direct taxes and social security contribution
by the individuals and must add transfer payment received by the individuals.
• The basic idea here is to subtract all those income from National Income that is
earned by an individual but has not been received like taxes and add all those
incomes which are received by the individuals but has not been earned like Old
age Pensions.
• Personal Income= National Income – (Undistributed Corporate Profits+
Corporate Taxes + Social Security Contribution) + (Transfer Payments).

Supply and Demand

Consider a good that is being sold in many places across a nation. From the
perspective of a consumer, generally a higher price will mean fewer units of the
good are sold. Generally a lower price will mean that more units of the good are
sold. From the perspective of a producer however, the higher the price is, the
more they will want to produce of the good. Again, the opposite is generally true
as well; the lower the price, the less they will want to produce the good.
This can be represented by a graph, called a supply and demand curve. Here is
an example of a supply and demand curve from the Wikimedia commons.

Price is indicated on the vertical axis, denoted as “P”. Quantity is on the

horizontal axis, denoted as “Q”. The S curve is an example of a supply curve, and
the D1 and D2 curves are examples of two slightly different demand curves.
When looking at the supply curve, we can see that an increase in price will create
additional supply (the quantity goes up), while an increase in price stimulates a

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decrease in the amount demanded (the D curve). The point where the supply
and demand curves cross corresponds to a point known as equilibrium.
This is the point where producers and consumers exchange goods at a cost and
quantity that represents a balance between the consumer’s wish to pay less
money and the producer’s wish to make more money. Equilibrium is the point
where everybody willing to pay the market price has their demand satified, and
anybody willing to produce at the market price has a buyer for the good. At any
other point along either curve the market forces would drive supply and
demand toward equilibrium. For instance, at a lower price, demand would
outstrip supply. Unsatisfied consumers could offer to pay more to receive goods,
and the increased price is an incentive for a profit seeking producer to produce
more goods, causing supply to increase. In general, market forces will cause the
market to move towards the equilibrium point.

Capital
A useful definition of capital is anything that can enhance the ability to do
economically useful work1 . Economically useful essentially means anything that
has value to human beings. There are many ways to produce value, so it makes
sense that there are several types of capital that we can refer to.

Human Capital
Human beings who can perform useful work. This includes physical as well as
mental work and specialized skills. Investment in improving human capital is
generally through education and training. Accumulation of human capital could
also mean hiring people who are useful for doing work.

Financial Capital
Financial capital is essentially just money. It isn’t just money that is ‘in hand’
however. It refers to the ability to use money to acquire other forms of capital.
In this way the ability to take on debt by borrowing from someone else is a form
of financial capital. High value commodities such as gold are often considered as
being another form of financial capital.

Physical Capital
Factories, roads, buildings, and tools are all good examples of physical capital.
These are non-human, non-monetary objects that are useful for conducting
valuable work.

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Social Capital
A company that is well-regarded by the populace would have more ‘social
capital’ than a company that is poorly regarded, all else being equal. Social
capital refers to the power of social networks to accomplish work. This could be
due to enhanced communication abilities, or it could be simply customer loyalty.
There are many forms that social capital could take.

Natural Capital
Land, forests, rivers, rainfall, wind, sunlight, animals, and everything else that
comprises the natural world is regarded as natural capital. One could think of
this as the category that includes everything else other than the above forms of
capital.

Types of Market Structures

• A variety of market structures will characterize an economy. Such market

structures essentially refer to the degree of competition in a market.
• There are other determinants of market structures such as the nature of the
goods and products, the number of sellers, number of consumers, the nature
of the product or service, economies of scale etc. We will discuss the four basic
types of market structures in any economy.
• One thing to remember is that not all these types of market structures actually
exist. Some of them are just theoretical concepts. But they help us understand
the principles behind the classification of market structures.

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1] Perfect Competition

In a perfect competition market structure, there are a large number of buyers and
sellers. All the sellers of the market are small sellers in competition with each
other. There is no one big seller with any significant influence on the market. So all
the firms in such a market are price takers.

There are certain assumptions when discussing the perfect competition. This is the
reason a perfect competition market is pretty much a theoretical concept.
These assumptions are as follows,

• The products on the market are homogeneous, i.e. they are completely
identical
• All firms only have the motive of profit maximization
• There is free entry and exit from the market, i.e. there are no barriers
• And there is no concept of consumer preference

2] Monopolistic Competition

This is a more realistic scenario that actually occurs in the real world. In
monopolistic competition, there are still a large number of buyers as well as
sellers. But they all do not sell homogeneous products. The products are similar
but all sellers sell slightly differentiated products.

Now the consumers have the preference of choosing one product over another.
The sellers can also charge a marginally higher price since they may enjoy some
market power. So the sellers become the price setters to a certain extent.

For example, the market for cereals is a monopolistic competition. The products
are all similar but slightly differentiated in terms of taste and flavours. Another
such example is toothpaste.

3] Oligopoly

In an oligopoly, there are only a few firms in the market. While there is no clarity
about the number of firms, 3-5 dominant firms are considered the norm. So in the
case of an oligopoly, the buyers are far greater than the sellers.

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The firms in this case either compete with another to collaborate together, They
use their market influence to set the prices and in turn maximize their profits. So
the consumers become the price takers. In an oligopoly, there are various barriers
to entry in the market, and new firms find it difficult to establish themselves.

4] Monopoly

In a monopoly type of market structure, there is only one seller, so a single firm
will control the entire market. It can set any price it wishes since it has all the
market power. Consumers do not have any alternative and must pay the price set
by the seller.

Monopolies are extremely undesirable. Here the consumer loose all their power
and market forces become irrelevant. However, a pure monopoly is very rare in
reality.

Types of goods in Indian economy :

In economics, goods can be categorized in many different ways. One of the most
common distinctions is based on two characteristics: excludability and
rivalrousness. That means we categorize goods depending on whether people
can be prevented from consuming them (excludability) and whether individuals
can consume them without affecting their availability to other individuals
(rivalrousness).

Private Goods

Private Goods are products that are excludable and rival. They have to be
purchased before they can be consumed. Thus, anyone who cannot afford
private goods is excluded from their consumption. Likewise, the consumption of
private goods by an individual prevents other individuals from consuming the
same goods. Therefore, private goods are also considered rival goods. Examples
of private goods include ice cream, cheese, houses, cars, etc.

Public Goods

Public goods describe products that are non-excludable and non-rival. That
means, no one can be prevented from consuming them, and they can be used
by individuals without reducing their availability to other individuals. Examples

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of public goods include fresh air, knowledge, national defense, street lighting,
etc.

Common Resources

Common resources are defined as products or resources that are non-

excludable but rival. That means they can be used by virtually anyone. However,
if one individual consumes common resources, their availability to other
individuals is reduced. The combination of those two characteristics often
results in an overuse of common resources (see also the tragedy of the
commons). Examples of common resources include freshwater, fish, timber,
pasture, etc.

Club Goods

Club goods are products that are excludable but non-rival. Thus, individuals can
be prevented from consuming them, but their consumption does not reduce
their availability to other individuals (at least until a point of overuse or
congestion is reached). Club goods are sometimes also referred to as artificially
scarce resources. They are often provided by natural monopolies. Examples of
club goods include cable television, cinemas, wireless internet, toll roads, etc.

What Is Diminishing Marginal Utility?

The Law Of Diminishing Marginal Utility states that all else equal as consumption
increases the marginal utility derived from each additional unit declines.
Marginal utility is derived as the change in utility as an additional unit is
consumed. Utility is an economic term used to represent satisfaction or
happiness. Marginal utility is the incremental increase in utility that results from
consumption of one additional unit.

The law of diminishing marginal utility is comprehensively explained by Alfred

Marshall. According to his definition of the law of diminishing marginal utility,
the following happens:

“During the course of consumption, as more and more units of a commodity are
used, every successive unit gives utility with a diminishing rate, provided other
things remaining the same; although, the total utility increases.”

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The law of diminishing marginal returns states that, at some point, adding an
additional factor of production results in smaller increases in output. For
example, a factory employs workers to manufacture its products, and, at some
point, the company operates at an optimal level. With other production factors
constant, adding additional workers beyond this optimal level will result in less
efficient operations.

Price ceiling :

Price ceiling is a situation when the price charged is more than or less than the
equilibrium price determined by market forces of demand and supply. It has
been found that higher price ceilings are ineffective. Price ceiling has been found
to be of great importance in the house rent market.

Government imposes a price ceiling to control the maximum prices that can be
charged by suppliers for the commodity. This is done to make commodities
affordable to the general public. However, prolonged application of a price
ceiling can lead to black marketing and unrest in the supply side.

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Price elasticity:

Price elasticity of demand is an economic measure of the change in the quantity

demanded or purchased of a product in relation to its price change. Expressed
mathematically, it is:

Price Elasticity of Demand = % Change in Quantity Demanded / % Change in

Price

Price elasticity is used by economists to understand how supply or demand

changes given changes in price to understand the workings of the real economy.

Goods :In economics a goods is defined as any physical object, manmade, that
could command a price in the market and these are the materials that satisfy
human wants and provide utility

Consumption Goods : Those final goods which satisfy human wants directly. ex-
ice-cream and milk used by the households.

Capital Goods :Those final goods which help in production. These goods are
used for generating income. These goods are fixed assets of the producers.ex-
plant and machinery.

• Final Goods are those goods which are used either for final consumption or
for investment.
• Intermediate Goods refers to those goods and services which are used as a
raw material for further production or for resale in the same year.
• These goods do not fulfill needs of mankind directly.

Investment :Addition made to the physical stock of capital during a period of

time is called investment. It is also called capital formation.

capital formation:- Change in the stock of capital is also called capital formation.

Depreciation :means fall in value of fixed capital goods due to normal wear and
tear and expected obsolescence. It is also called consumption of fixed capital.

Gross Investment :Total addition made to physical stock of capital during a

period of time. It includes depreciation. OR Net Investment + Depreciation

Net Investment :Net addition made to the real stock of capital during a period
of time. It excludes depreciation.

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Net Investment = Gross investment – Depreciation.

Stocks :Variables whose magnitude is measured at a particular point of time are

called stock variables. Eg. National Wealth, Inventory etc.

Flows :Variables whose magnitude is measured over a period of time are called
flow variable. Eg. National income, change in stock etc.

Circular flow of income :It refers to continuous flow of goods and services and
money income among different sectors in the economy. It is circular in nature.
It has neither any end and nor any beginning point. It helps to know the
functioning of the economy.

Leakage :It is the amount of money which is withdrawn from circular flow of
income. For eg. Taxes, Savings and Import. It reduces aggregate demand and the
level of income.

Injection :It is the amount of money which is added to the circular flow of
income. For e.g. Govt. Exp., investment and exports. It increases the aggregate
demand and the level of income.

Economic Territory :Economic (or domestic) Territory is the geographical

territory administrated by a Government within which persons, goods, and
capital circulate freely.

Scope of Economic Territory :

(a) Political frontiers including territorial waters and airspace.

(b) Embassies, consulates, military bases etc. located abroad.

(c) Ships and aircraft operated by the residents between two or more countries.

(d) Fishing vessels, oil and natural gas rigs operated by residents in the
international waters.

Normal Resident of a country: is a person or an institution who normally resides

in a country and whose Centre of economic interest lies in that country.

Exceptions:- (a) Diplomats and officials of foreign embassy.

(b) Commercial travellers, tourists students etc.

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(c) People working in international organizations like WHO, IMF, UNESCO etc.
are treated as normal residents of the country to which they belong

Measures of National Income

For the purpose of measurement and analysis, national income can be viewed
as an aggregate of various component flows. The most comprehensive measure
of aggregate income which is widely known is Gross National Product at market
prices.

Gross and Net Concept

Gross emphasizes that no allowance for capital consumption has been made or
that depreciation has yet to be deducted. Net indicates that provision for
capital consumption has already been made or that depreciation has already
been deducted.

National and Domestic Concepts

The term national denotes that the aggregate under consideration represents
the total income which accrues to the normal residents of a country due to their
participation in world production during the current year.
It is also possible to measure the value of the total output or income originating
within the specified geographical boundary of a country known as domestic
territory. The resulting measure is called "domestic product".

Market Prices and Factor Costs

The valuation of the national product at market prices indicates the total
amount actually paid by the final buyers while the valuation of national product
at factor cost is a measure of the total amount earned by the factors of
production for their contribution to the final output.
GNP at market price = GNP at factor cost + indirect taxes - Subsidies.
NNP at market price = NNP at factor cost + indirect taxes - Subsidies

Gross National Product and Gross Domestic Product

For some purposes we need to find the total income generated from
production within the territorial boundaries of an economy irrespective of
whether it belongs to the inhabitants of that nation or not. Such an income is
known as Gross Domestic Product (GDP) and found as −

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GDP = GNP - Nnet Factor Income From Abroad

Net Factor Income from Abroad = Factor Income Received From Abroad - Factor
Income Paid Abroad

Net National Product

The NNP is an alternative and closely related measure of the national income.
It differs from GNP in only one respect. GNP is the sum of final products. It
includes consumption of goods, gross investment, government expenditures on
goods and services, and net exports.
GNP = NNP − Depreciation
NNP includes net private investment while GNP includes gross private domestic
investment.

Personal Income

Personal income is calculated by subtracting from national income those types

of incomes which are earned but not received and adding those types which
are received but not currently earned.
Personal Income = NNP at Factor Cost − Undistributed Profits − Corporate Taxes
+ Transfer Payments

Disposable Income

Disposable income is the total income that actually remains with individuals to
dispose off as they wish. It differs from personal income by the amount of direct
taxes paid by individuals.
Disposable Income = Personal Income − Personal taxes

Value Added

The concept of value added is a useful device to find out the exact amount that
is added at each stage of production to the value of the final product. Value
added can be defined as the difference between the value of output produced
by that firm and the total expenditure incurred by it on the materials and
intermediate products purchased from other business firms.
Methods of Measuring National Income
Let’s have a look at the following ways of measuring national income −

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Product Approach

In product approach, national income is measured as a flow of goods and

services. Value of money for all final goods and services is produced in an
economy during a year. Final goods are those goods which are directly
consumed and not used in further production process. In our economy product
approach benefits various sectors like forestry, agriculture, mining etc to
estimate gross and net value.

Income Approach

In income approach, national income is measured as a flow of factor incomes.

Income received by basic factors like labor, capital, land and entrepreneurship
are summed up. This approach is also called as income distributed approach.

Expenditure Approach

This method is known as the final product method. In this method, national
income is measured as a flow of expenditure incurred by the society in a
particular year. The expenditures are classified as personal consumption
expenditure, net domestic investment, government expenditure on goods and
services and net foreign investment.
These three approaches to the measurement of national income yield identical
results. They provide three alternative methods of measuring essentially the
same magnitude.

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Chapter 3 : Inflation
Inflation is a quantitative measure of the rate at which the average price level of
a basket of selected goods and services in an economy increases over a period
of time. It is the constant rise in the general level of prices where a unit of
currency buys less than it did in prior periods. Often expressed as a percentage,
inflation indicates a decrease in the purchasing power of a nation’s currency.

It is also referred as too much money in the market chasing too few goods.

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Causes of inflation :

Demand Pull Inflation arises when the aggregate demand goes up rapidly than
the aggregate supply in an economy. In simple terms, it is a type of inflation
which occurs when aggregate demand for products and services outruns
aggregate supply due to monetary factors and/or real factors.

• Demand-Pull Inflation due to monetary factors: One of the major cause of

inflation is; increase in money supply than the increase in the level of output.
The German inflation, in the year 1922-23 is the example of Demand-Pull
Inflation caused by monetary expansion.
• Demand-Pull Inflation due to real factors: When the inflation is due to any
one or more of the following reasons, it is said to be caused by real factors:
• The increase in government spending without the change in tax revenue.
• Fall in tax rates, with no change in government spending
• Increase in investments
• Decrease in savings
• Increase in exports
• Decrease in imports

Cost push inflation means the increase in the general price level caused by the
rise in prices of the factors of production, due to the shortage of inputs i.e.

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labour, raw material, capital, etc. It results in the decrease in the supply of
outputs which mainly use these inputs. So, the rise in prices of the goods
emerges from the supply side.

Moreover, cost-push inflation may also be caused by depletion of natural

resources, monopoly and so on. There are three kinds of cost-push inflation:

• Wage-push inflation: When the monopolistic groups of the society like

labour union exercise their monopoly power, to enhance their money
wages above the competitive level, which cause an increase in the cost of
production.
• Profit-push inflation: When the monopoly power is used by the firms
operating in the monopolistic and oligopolistic market to increase their
profit margin, leading to rise in the price of goods and services.
• Supply shock inflation: A type of inflation arising due to unexpected fall in
the supply of necessary consumer goods or major industrial inputs.

Types of inflation :

Creeping or mild inflation is when prices rise 3 percent a year or less. According
to the Federal Reserve, when prices increase 2 percent or less it
benefits economic growth. This kind of mild inflation makes consumers expect
that prices will keep going up. That boosts demand. Consumers buy now to beat
higher future prices. That's how mild inflation drives economic expansion.

Walking inflation : This type of strong, or pernicious, inflation is between 3-10

percent a year. It is harmful to the economy because it heats up economic
growth too fast. People start to buy more than they need, just to avoid
tomorrow's much higher prices. This drives demand even further so that
suppliers can't keep up. More important, neither can wages. As a result,
common goods and services are priced out of the reach of most people.

Galloping Inflation : When inflation rises to 10 percent or more, it wreaks

absolute havoc on the economy. Money loses value so fast that business and
employee income can't keep up with costs and prices. Foreign investors avoid
the country, depriving it of needed capital. The economy becomes unstable, and
government leaders lose credibility. Galloping inflation must be prevented at all
costs.

Hyperinflation is when prices skyrocket more than 50 percent a month. It is very

rare. In fact, most examples of hyperinflation have occurred only when
governments printed money to pay for wars. Examples of hyperinflation

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include Germany in the 1920s, Zimbabwe in the 2000s, and Venezuela in the
2010s. The last time America experienced hyperinflation was during its civil war.

The core inflation rate measures rising prices in everything except food and
energy. That's because gas prices tend to escalate every summer. Families use
more gas to go on vacation. Higher gas costs increase the price of food and
anything else that has large transportation costs.

Wage inflation is when workers' pay rises faster than the cost of living. This
occurs in three situations. First, is when there is a shortage of workers. Second,
is when labor unions negotiate ever-higher wages. Third is when workers
effectively control their own passiom

Asset inflation, occurs in one asset class. Good examples are housing, oil
and gold. It is often overlooked by the Federal Reserve and other inflation-
watchers when the overall rate of inflation is low. But the subprime mortgage
crisis and subsequent global financial crisis demonstrated how damaging
unchecked asset inflation can be.

Skewflation refers to the economic situation where prices of only a commodity

or a group of commodity rises, while the general price levels remain constant.

It is one of the newest terms coined in economics following the 2009 - 2011
skewflation pressures faced by India due to the ruse in the prices of a particular
commodity like onions and potatoes while the price of other commodities
remained unchanged.

Reflation refers to bring down the deflationary pressures through stimulating

the money supply in the economy by reducing the taxes to bring back the price
levels in a healthy situation (for long term trend).

Philips Curve :

The inverse relationship between unemployment rate and inflation when

graphically charted is called the Phillips curve. William Phillips pioneered the
concept first in his paper "The Relation between Unemployment and the Rate
of Change of Money Wage Rates in the United Kingdom, 1861-1957,' in 1958.
This theory is now proven for all major economies of the world.

Description: The theory states that the higher the rate of inflation, the lower the
unemployment and vice-versa. Thus, high levels of employment can be achieved
only at high levels of inflation. The policies to induce growth in an economy,

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increase in employment and sustained development are heavily dependent on

the findings of the Phillips curve.

However, the implications of Phillips curve have been found to be true only in
the short term. Phillips curve fails to justify the situations of stagflation, when
both inflation and unemployment are alarmingly high.

Measurement of Inflation in India

▪ Wholesale Price Index WPI

o It is the most widely used inflation indicator in India.

o Published by the Office of Economic Adviser, Ministry of Commerce and
Industry.
o All transactions at the first point of bulk sale in the domestic market are
included.
o Major criticism for this index is that the general public does not buy products
at wholesale price.
o The base year of All-India WPI has been revised from 2004-05 to 2011-12 in
2017.

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▪ Consumer Price Index CPI

o It measures price changes from the perspective of a retail buyer.
o It measures changes over time in the level of retail prices of selected goods
and services on which consumers of a defined group spend their incomes.
o Four types of CPI are as follows:

• CPI for Industrial Workers (IW).

• CPI for Agricultural Labourer (AL).
• CPI for Rural Labourer (RL).
• CPI (Rural/Urban/Combined).
• Of these, the first three are compiled by the Labour Bureau in the Ministry
of Labour and Employment. Fourth is compiled by the Central Statistical
Organisation (CSO) in the Ministry of Statistics and Programme
Implementation.
Inflation Targeting :

In general, a monetary policy framework provides a nominal anchor to the

economy. A nominal anchor is a variable policymakers can use to tie down the
price level. One nominal anchor central banks used in the past was a currency
peg—which linked the value of the domestic currency to the value of the
currency of a low-inflation country. But this approach meant that the country’s
monetary policy was essentially that of the country to which it pegged, and it
constrained the central bank’s ability to respond to such shocks as changes in
the terms of trade (the value of a country’s exports relative to that of its imports)
or changes in the real interest rate. As a result, many countries began to adopt
flexible exchange rates, which forced them to find a new anchor.

Many central banks then began targeting the growth of money supply to control
inflation. This approach works if the central bank can control the money supply
reasonably well and if money growth is stably related to inflation over time.
Ultimately, monetary targeting had limited success because the demand for
money became unstable—often because of innovations in the financial markets.
As a result, many countries with flexible exchange rates began to target inflation
more directly, based on their understanding of the links or “transmission
mechanism” from the central bank’s policy instruments (such as interest rates)
to inflation.

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Venezuela crisis :

• Venezuela is a country with more oil than Saudi Arabia.

• Earlier presidential regime of Venezuela was marked by an increasing

authoritarianism and a gross mismanagement of the country’s oil.

• It currently faces rapidly declining foreign exchange reserves, poverty and

hyperinflation.

• The inflation is projected to be 720% this year and 2069% in the next year,
according to the IMF.

• It has also been experiencing an acute shortage of food, medicine and

other vital supplies

Political affects :

• After the socialist leader, then President Hugo Chavez died in 2013,
Nicolas Maduro, also of the United Socialist Party (PSUV), was elected president
on a promise to continue Mr Chavez's policies.

• Chavistas, the name given to the followers of the socialist policies of the
late President.

• They praise the two men for using Venezuela's oil riches to markedly
reduce inequality and for lifting many Venezuelans out of poverty.

• But the opposition says that since the PSUV came to power in 1999, the
socialist party has eroded Venezuela's democratic institutions and mismanaged
its economy.

• Chavistas in turn accuse the opposition of being elitist and of exploiting

poor Venezuelans to increase their own riches

Economic Reason

o Venezuela has the highest proven oil reserves in the world. The economy of
Venezuela is mainly oil-based.
o During the early 2000s, when oil prices were high, the Venezuelan government
has used oil profits to reduce inequality and poverty, providing food subsidies.

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o When oil prices dropped in 2014, the government suddenly had to make lots
of cutbacks. This led many people to begin buying goods on the black market,
causing inflation to rise.
o Currently, the annual inflation rate in Venezuela has reached 1.3 million%. This
has led to the scarcity of basic items such as food and medicines and
demonstrations against the government.

Impact on India :

o Rise in global oil prices is not good for India as it is the world's third-largest oil
importer.
o Venezuela was also India's fourth-biggest crude supplier after Iraq, Saudi
Arabia, and Iran and accounts for about 12% of India's total oil imports. So
sanctions against Venezuela along with US sanctions on Iran will impact oil
availability in the country.
o Sanctions on Venezuela will also impact the payment of roughly $520 million
of backlog dividends that Venezuela’s state-run oil firm PDVSA owes to ONGC
Videsh Limited (OVL).

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Chapter 4 : Economic Growth and Economic Development

Economic Growth is the quantitative increase in the income of a country over a
period of time. It is generally measured as the change in the real GDP of a Nation
or the per capita income of a Nation over a period of time. Economic Growth in
itself cannot lead to economic development, however, economic development
is not possible without economic growth.
Economic development has been defined as the improvement in the social,
political, and economic well-being of a nation and its people. It is also
understood as a process through which simple, low-income economies are
transformed into sophisticated, modern industrial economies. It is a qualitative
phenomenon which focuses on improvement in the quality and standard of
living of the people.
Factors of economic growth :

1. Natural Resources
The discovery of more natural resources like oil, or mineral deposits may boost
economic growth as this shifts or increases the country’s Production Possibility
Curve. Other resources include land, water, forests and natural gas.
Realistically, it is difficult, if not impossible, to increase the number of natural
resources in a country. Countries must take care to balance the supply and
demand for scarce natural resources to avoid depleting them. Improved land
management may improve the quality of land and contribute to economic
growth.

For example, Saudi Arabia’s economy has historically been dependent on its oil
deposits.

2. Physical Capital or Infrastructure

Increased investment in physical capital, such as factories, machinery, and
roads, will lower the cost of economic activity. Better factories and machinery
are more productive than physical labor. This higher productivity can increase
output. For example, having a robust highway system can reduce inefficiencies
in moving raw materials or goods across the country, which can increase its GDP.

3. Population or Labor
A growing population means there is an increase in the availability of workers or
employees, which means a higher workforce. One downside of having a large
population is that it could lead to high unemployment.

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4. Technology
Another influential factor is the improvement of technology. The technology
could increase productivity with the same levels of labor, thus accelerating
growth and development. This increment means factories can be more
productive at lower costs. Technology is most likely to lead to sustained long-
run growth.

5. Law
An institutional framework which regulates economic activity such as rules and
laws. There is no specific set of institutions that promote growth.

Inclusive Growth :

Inclusive growth entails comprehensive growth, shared growth, and pro-poor

growth. It lessens the fast growth rate of poverty in a country and upsurges the
participation of people into the development of the country. Inclusive growth
infers an impartial allocation of resources with benefits incurred to every section
of the society. But the allocation of resources must be focused on the intended
short and long term benefits of the society such as availability of consumer
goods, people access, employment, standard of living etc.

The Twelfth Five Year Plan of the erstwhile Planning Commission highlighted the
desirability towards inclusive growth. The Plan highlights the objectives of
inclusive growth as the following: Inclusive growth should result in lower
incidence of poverty, broad-based and significant improvement in health
outcomes, universal access for children to school, increased access to higher
education and improved standards of education, including skill development. It
should also be reflected in better opportunities for both wage employment and
livelihood, and an improvement in the provision of basic amenities like water,
electricity, roads, sanitation, and housing. Particular attention needs to be paid
to the needs of the SC/ST and OBC population (Planning Commission 2011).

Need for Inclusive Growth in India

Inclusive growth as mentioned above is necessary for the sustainable and

holistic development of all sections of the society. For economic, social and
political empowerment of its citizens, Inclusive growth is indispensable to India.

The following highlight the need for India to focus more on inclusive growth:

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• India is the 7th major country by area and 2nd by population. Yet, India is far
away from development while our neighbour China is advancing at a faster
rate to become the largest economy of the world.
• Poverty in India is at 22% according to the Tendulkar committee report.
• Low agriculture growth, low-quality employment growth, low human
development, rural-urban divides, gender and social inequalities, and
regional disparities etc. are the problems for the nation.
• Protests like the recent ones of Jats in Haryana, Patels in Gujarat will only rise
if the issues of agriculture productivity, employment growth are not taken
care of.
• Labour productivity is very low due to informalisation and poor skill
development.
• Access to education and health is not the same for all sections of the
population. Females are treated to be subordinate to males and are
dependent on their families in all spheres. Inclusive growth is hence the key
to women empowerment.
• Regional inequalities are the cause for the rise in distress migration, either
intra-state or inter-state. Distress migration further creates problems of
housing, accommodation, safety, hygiene, and sanitation.
• Financial Inclusion is the key to transforming the informal economy into the
formal economy.
• Corruption is still rampant in the country and prevents inclusive growth.
• Political leadership plays a vital role in growth and development of the
country. But implementation of many schemes is poor due to lack of political
will.
• The importance of inclusive growth is indisputable for sustainable growth.
• Global warming and climate change affect poor more than the rich. Displaced
population further increases distress migration and stress on state s
resources.
• MDG report for India (2015) suggests that out of 18 indicators, India is on-
track only in four indicators. In the rest of the indicators, India is identified as
either off-track or moderately on-track . Achieving Sustainable Development
Goals is not possible without concentrating on inclusive growth.

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Steps taken by the government for Inclusive Growth

The government has realized the importance of inclusive growth and has taken
steps accordingly. Some of the steps taken by the government are:

• Sarva Shiksha Abhiyaan

• Right to Education
• Midday meal scheme
• MNREGA
• Housing for All
• Pradhan Mantri Gram Sadak Yojana
• Pradhan Mantri Jan Dhan Yojana
• National Social Assistance Programme
• National Health Mission
• Rashtriya Swasthya Suraksha Yojana
• Pradhan Mantri Jeevan Jyothi Bhima Yojana
• Skill India, Make in India and Digital India
• Right to Information
• Other initiatives like Payment Banks, Small Finance Banks.

Human development Index :

The Human Development Index (HDI) is a statistical tool used to measure a

country's overall achievement in its social and economic dimensions. The social
and economic dimensions of a country are based on the health of people, their
level of education attainment and their standard of living.

Pakistani economist Mahbub ul Haq created HDI in 1990 which was further used
to measure the country's development by the United Nations Development
Program (UNDP). Calculation of the index combines four major indicators: life
expectancy for health, expected years of schooling, mean of years of schooling
for education and Gross National Income per capita for standard of living.

Every year UNDP ranks countries based on the HDI report released in their
annual report. HDI is one of the best tools to keep track of the level of
development of a country, as it combines all major social and economic
indicators that are responsible for economic development.

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Norway, Switzerland, Australia, Ireland and Germany led the ranking, while
Niger, the Central African Republic, South Sudan, Chad and Burundi have the
lowest scores in the HDI's measurement of national achievements in health,
education and income

Measures of calculating HDI :

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IHDI( inequality adjusted human development Index)

The IHDI combines a country’s average achievements in health, education and

income with how those achievements are distributed among country’s
population by “discounting” each dimension’s average value according to its
level of inequality. Thus, the IHDI is distribution-sensitive average level of HD.
Two countries with different distributions of achievements can have the same
average HDI value. Under perfect equality the IHDI is equal to the HDI, but falls
below the HDI when inequality rises.

The difference between the IHDI and HDI is the human development cost of
inequality, also termed – the loss to human development due to inequality. The
IHDI allows a direct link to inequalities in dimensions, it can inform policies
towards inequality reduction, and leads to better understanding of inequalities
across population and their contribution to the overall human development
cost. A recent measure of inequality in the HDI, the Coefficient of human
inequality, is calculated as an average inequality across three dimensions.

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The Gini index or Gini coefficient is a statistical measure of distribution which

was developed by the Italian statistician Corrado Gini in 1912. It is used as a
gauge of economic inequality, measuring income distribution among a
population.

The coefficient ranges from 0 (or 0%) to 1 (or 100%), with 0 representing perfect
equality and 1 representing perfect inequality. Values over 1 are not practically
possible as we don’t take into account the negative incomes. (Income can be 0
at its lowest but not negative)

Lorenz curve : The Lorenz Curve, the actual distribution of income curve, is a
graphical distribution of wealth developed by Max Lorenz in 1906. The curve
shows the proportion of income earned by any given percentage of the
population. The line at the 45º angle shows perfectly equal income distribution,
while the other line shows the actual distribution of income. The further away
from the diagonal, the more unequal the size of the distribution of income

Status determination :

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Sustainable Development :

"Sustainable development is development that meets the needs of the present,

without compromising the ability of future generations to meet their own
needs."

The concept of sustainable development can be interpreted in many different

ways, but at its core is an approach to development that looks to balance
different, and often competing, needs against an awareness of the
environmental, social and economic limitations we face as a society.

All too often, development is driven by one particular need, without fully
considering the wider or future impacts. We are already seeing the damage this
kind of approach can cause, from large-scale financial crises caused by
irresponsible banking, to changes in global climate resulting from our
dependence on fossil fuel-based energy sources. The longer we pursue
unsustainable development, the more frequent and severe its consequences are
likely to become, which is why we need to take action now.

In 2015, the United Nations General Assembly adopted the 2030 Agenda for
Sustainable Development. 193 member countries, including India, got
committed to the 17 Sustainable Development Goals that require efforts to end
all forms of poverty, fight inequalities and tackle climate change while ensuring
that no one was left behind.

India played a significant role in making the declaration and its progress in
achieving these goals are crucial for the world as it is home to about 17% of the
world population. The SDG India index, released by the NITI Aayog and the
United Nations, shows that the nation has a score of 58, a little beyond halfway
mark in meeting the target set for 2030

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Chapter 5 – Economic Planning in India

Economic planning in India dates back to pre- Independence period when
leaders of the freedom movement and prominent industrialists and academics
got together to discuss the future of India after Independence which was soon
to come. Noted civil engineer and administrator M. Visvesvaraya is regarded as
a pioneer of economic planning in India. His book “Planned Economy for India”
published in 1934 suggested a ten year plan, with an outlay of Rs. 1000 crore
and a planned increase of 600% in industrial output per annum based on
economic conditions of the time.
The concept of economic planning in India is derived from the Russia (then
USSR). India has launched 12 five year plans so far. First five year plan was
launched in 1951. Now the present NDA government has stopped the formation
of five year plan. So 12th five year plan would be called the last five year plan of
India.
The concept of economic planning in India is derived from the Russia (then
USSR). India has launched 12 five year plans so far. First five year plan was
launched in 1951. Now the present NDA government has stopped the formation
of five year plan. So 12th five year plan would be called the last five year plan of
India.
The Industrial Policy Statement published just after independence in 1948
recommended setting up of a Planning Commission and following a mixed
economic model. Here are the major milestones related to economic planning
in India:

• Setting up of the Planning Commission: 15 March 1950

• First Five Year Plan: 1 April 1950
• Dissolution of the Planning Commission: 13 August 2014
• Setting up of NITI (National Institution for Transforming India) Aayog: 1
January 2015

Need for Planning in an Economy:

There is an immense need for economic planning as resources in a country are

limited whether natural resources or human resources. The shortage of
resources compels the need for proper management at production, distribution
and consumption ends.

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Objectives of economic planning:

• Economic Growth
• Reduction of Economic Inequalities
• Balanced Regional Development
• Modernization
• Reduction of Unemployment

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12th five year plan :

Its duration is from 2012 to 2017.

II. Its main theme is “Faster, More Inclusive and Sustainable Growth”.
III. Its growth rate target is 8%.

IV. It is the current five year plan of India.

Three-year action plan is document only provides a broad roadmap to the

government. The document does not detail any schemes or allocations as it has
no financial powers. Since it need not be approved by the Union Cabinet, its
recommendations are not binding on the government.

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NITI Aayog Evolution

The NITI Aayog was formed on January 1, 2015. In Sanskrit, the word “NITI”
means morality, behavior, guidance, etc. But, in the present context, it means
policy and the NITI stands for “National Institution for Transforming India”. It is
the country’s premier policy-making institution which is expected to bolster the
economic growth of the country. It aims to construct a strong state that will help
to create a dynamic and strong nation. This helps India to emerge as a major
economy in the world. The NITI Aayog’s creation has two hubs called “Team
India Hub” and “Knowledge and Innovation Hub”.

1. The Team India: It leads the participation of Indian states with the central
government.
2. The Knowledge and Innovation Hub: it builds institution’s think tank
capabilities.

NITI Aayog is additionally creating itself as a State of the Art Resource Center,
with the essential resources, knowledge, and skills that will empower it to act
with speed, advance research and innovation, bestow crucial policy vision to the
government and manage unforeseen issues. The reason for setting up the NITI
Aayog is that people had expectations for growth and development in the
administration through their participation. This required institutional changes in
administration and active strategy shifts that could seed and foster substantial
scale change.

Objectives of NITI Aayog

1. The active participation of States in the light of national objectives and to

provide a framework ‘national agenda’.
2. To promote cooperative federalism through well-ordered support
initiatives and mechanisms with the States on an uninterrupted basis.
3. To construct methods to formulate a reliable strategy at the village level
and aggregate these gradually at higher levels of government.
4. Economic policy that incorporates national security interests.
5. To pay special consideration to the sections of the society that may be at
risk of not profiting satisfactorily from economic progress.
6. To propose strategic and long-term policy and programme frameworks
and initiatives, and review their progress and their effectiveness.
7. To grant advice and encourage partnerships between important
stakeholders and national- international Think Tanks, as well as
educational and policy research institutions.

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8. To generate a knowledge, innovation and entrepreneurial support system

through a shared community of national and international experts, etc.
9. To provide a platform for resolution of inter-sectoral and inter-
departmental issues in order to speed up the accomplishment of the
progress agenda.
10.To preserve a state-of-the-art Resource Centre, be a repository of
research on good governance and best practices in sustainable and
equitable development as well as help their distribution to participants.
11.To effectively screen and assess the implementation of programmes and
initiatives, including the identification of the needed resources to
strengthen the likelihood of success.
12.To pay attention to technology improvement and capacity building for the
discharge of programs and initiatives.
13.To undertake other necessary activities in order to the implementation of
the national development agenda, and the objectives.

NITI Aayog Composition

The NITI Aayog will comprise the following:

1. Prime Minister of India is the Chairperson

2. Governing Council consists of the Chief Ministers of all the States and Lt.
Governors of Union Territories in India.
3. Regional Councils will be created to address particular issues and
possibilities affecting more than one state. These will be formed for a
fixed term. It will be summoned by the Prime Minister. It will consist of
the Chief Ministers of States and Lt. Governors of Union Territories. These
will be chaired by the Chairperson of the NITI Aayog or his nominee.
4. Special invitees: Eminent experts, specialists with relevant domain
knowledge, which will be nominated by the Prime Minister.
5. The full-time organizational framework will include, in addition to the
Prime Minister as the Chairperson:
1. Vice-Chairperson (appointed by the Prime Minister)
2. Members:
• Full-time

• Part-time members: Maximum of 2 members from foremost

universities, leading research organizations and other
innovative organizations in an ex-officio capacity. Part-time
members will be on a rotational basis.
3. Ex Officio members: Maximum of 4 members of the Council of
Ministers which is to be nominated by the Prime Minister.

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4. Chief Executive Officer: CEO will be appointed by the Prime

Minister for a fixed tenure. He will be in the rank of Secretary to the
Government of India.

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Chapter 6 : Banking
• The word bank is taken from Greek word called banco the meaning is heap
of money.
• Sheth ,shath ,shroffor, chettiar are known as bankers during the vedic
period.
• The evidence of banking can also be seen in medevial ages where the
loans are known as dastavez.

In India the concept of loans was satretd during vedic period

• Loans were called rnapatra or rnalekhya.

• Interest rates were different according to the verna system
• Brahmins- 24%
• kshatriyas- 36%
• Vaishyas-48%
• Shudras-60%

British era :

• In 1770 the first bank called Hindustan bank was established at Calcutta
• In 1786 general bank of india was established
• In 1865 the Allahabad bank was established at Calcutta. It is the oldest
and continuing bank in india.
• In the year 1895 lala lajpati rai founded Punjab national bank.
• Before that in 1881 oudh commercial bank was formed at Faizabad.

Presidency Banks :

After 1766, the East India Company’s Calcutta Administration was known as the
BENGAL PRESIDENCY. In fact the British India was than divided into three
Presidencies. The Presidency of Bengal, the Presidency of Bombay and the
Presidency of Madras. The Bank of Bengal was also known as the Presidency
bank of Bengal. One fifth of its capital was contributed by the state and
remaining by the East India Company.

• Presidency bank of Bengal was formed on June 2nd 1806. this war aimed
at funding the wars of lord wellesly against marathas and tipu sultan.
• Presidency bank of Bombay was setup on 15April 1840 .
• Presidency bank of madras was setup on july1st 1843 .

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• On 27January 1921 all the three presidency banks were merged into
imperial bank of india .
• On july1st 1955 imperial bank was renamed as the state bank of India.

RBI History :

• The Reserve Bank of India (RBI) is India’s central bank, also known as the
banker’s bank. The RBI controls monetary and other banking policies of
the Indian government. The Reserve Bank of India (RBI) was established
on April 1, 1935, in accordance with the Reserve Bank of India Act, 1934.
The Reserve Bank is permanently situated in Mumbai since 1937.
• The Bank began its operations by taking over from the Government the
functions so far being performed by the Controller of Currency and from
the Imperial Bank of India, the management of Government accounts and
public debt. The existing currency offices at Calcutta, Bombay, Madras,
Rangoon, Karachi, Lahore and Cawnpore (Kanpur) became branches of
the Issue Department. Offices of the Banking Department were
established in Calcutta, Bombay, Madras, Delhi and Rangoon.
• Burma (Myanmar) seceded from the Indian Union in 1937 but the Reserve
Bank continued to act as the Central Bank for Burma till Japanese
Occupation of Burma and later upto April, 1947. After the partition of
India, the Reserve Bank served as the central bank of Pakistan upto June
1948 when the State Bank of Pakistan commenced operations. The Bank,
which was originally set up as a shareholder's bank, was nationalised in
1949.
• An interesting feature of the Reserve Bank of India was that at its very
inception, the Bank was seen as playing a special role in the context of
development, especially Agriculture. When India commenced its plan
endeavours, the development role of the Bank came into focus, especially
in the sixties when the Reserve Bank, in many ways, pioneered the
concept and practise of using finance to catalyse development. The Bank
was also instrumental in institutional development and helped set up
insitutions like the Deposit Insurance and Credit Guarantee Corporation
of India, the Unit Trust of India, the Industrial Development Bank of India,
the National Bank of Agriculture and Rural Development, the Discount
and Finance House of India etc. to build the financial infrastructure of the
country.
• With liberalisation, the Bank's focus has shifted back to core central
banking functions like Monetary Policy, Bank Supervision and Regulation,

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and Overseeing the Payments System and onto developing the financial
markets.

Composition of RBI :

• Reserve Bank of India is controlled by a central board of directors. The

directors are appointed for a 4-year term by the Government of India in
keeping with the Reserve Bank of India Act.
• The Central Board consists of:
• Governor
• 4 Deputy Governors
• 2 Finance Ministry representatives
• 4 directors to represent local boards headquartered at Mumbai, Kolkata,
Chennai and New Delhi
• The executive head of RBI is Governor.
• The Governor is accompanied by 4 deputy governors.
• The First Governor of RBI was Sir Osborne Smith and the First Indian
Governor of RBI was CD Deshmukh.
• The First women deputy Governor of RBI was KJ Udeshi.
• The only Prime Minister who was the Governor of RBI was Manmohan
Singh.

Zonal centres of RBI :

• RBI has four zonal offices: New Delhi for North, Chennai for South, Kolkata
for East and Mumbai for West.
• The Reserve Bank of India has 19 regional offices and 11 sub-offices at
present.
• The bank has two training colleges for its officers:
• Reserve Bank Staff College at Chennai

• College of Agricultural Banking at Pune

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Functions of RBI :

Banker to government :

RBI lends money to the Central govt. As bankers’ bank, the RBI holds a part of
the cash reserves of banks, lends them funds for short periods, and provides
them with centralised clearing and cheap and quick remittance facilities. In the
early stages of the development of central banking, banks used to keep some of
their cash reserves voluntarily with a leading bank which gradually took over the
role of a central bank. The obvious advantage to individual banks was that of the
facility of centralised inter-bank clearing it automatically provided.

Reserve-holding banks could settle their daily mutual clearings by drawing upon
or crediting to their individual accounts with one bank, the central hank. Thus,
the mere entries in the books of the central bank can settle claims against each
other among banks without the actual transfer of cash.

Issue of section 7 RBI act :

▪ Under section 7 of the RBI Act, the central government may from time to time
give such directions to the RBI as it may, after consultation with the Governor

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of the Bank, consider necessary in the public interest. Moreover, there is no

legal act mandating autonomy of the RBI.
▪ Yet, RBI has always been looked upon as an autonomous body which has
under its umbrella all commercial banks, be it PSBs or private banks or foreign
banks.
▪ It is not only vested with the powers to formulate the monetary policy but also
to monitor the functioning of all banks.
▪ To play its role effectively, autonomy in its functioning is sine qua non for RBI.
▪ However, the independence of RBI has been challenged many times due to a
continued tug of war for wresting more power between the bank and the govt
▪ RBI’s failure to check the growth of Non Performing Assets.
▪ Reduced liquidity in the economy due to tight monetary policy followed
by RBI.
▪ Corrective measures taken by RBI to clean up the banking system
which are not seen very positively by the government
▪ Clash between short term populist agenda of the government and long
term view for price stability taken by RBI.
▪ Regulation of Public Sector Banks: One important limitation is that the
Reserve Bank is statutorily limited in undertaking the full scope of actions
against public sector banks (PSBs) – such as asset divestiture, replacement
of management and Board, license revocation, and resolution actions
such as mergers or sales –– all of which it can and does deploy effectively
in case of private banks.
▪ Erosion of statutory powers of the central bank through piece-meal
legislative amendments that directly or indirectly eat at separation of the
central bank from the government.
Issuer of currency :
RBI Note Mudran agency is the issuer of currency in India. All the notes in India
are printed by note mudran .
RBI have the highest power to print a note upto the denomination of Rs.2000.
The central government issues coins in India through a body named Securities
and minting corporation of India ltd.
Central govt have the highest power of Rs.1000 to issue a coin

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Demonetisation :
Demonetization of the notes of higher denomination has also been one of the
recent step of the Government to unearth black-money.

Demonetisation is a radical monetary step in which a currency unit is declared

as an invalid legal tender. This is usually done whenever there is a change in
the national currency of a nation.

On November 8, 2016 Prime Minister announced that Rs 500 and Rs 1000

denomination notes will become invalid and all notes in lower denomination of
Rs 100, Rs 50, Rs 20, Rs 10, Rs 5, Rs 2 and Re 1 and all coins will continue to be
a valid legal tender.

He also added that new notes of Rs 2,000 and Rs 500 will be introduced. There
was also no change effected in any other form of currency exchange like
cheque, Demand draft (DD), payments made through credit cards and debit
cards.
Main Motives of Demonetisation were:
1. To remove circulation of the counterfeit currency from the economy.
2. To finish the black money from the economy
3. To create fear among the tax evaders and corrupt officials

As per the data provided by the RBI, there are 16.5 billion (45% of currency stock
in 2014-15) ‘500 rupee’ note and 6.7 billion (39% of currency stock in 2014-15)
‘1000 rupee’ notes are in circulation at present. It has been pointed out that any
economic cost in printing these notes is likely to outweigh in terms of benefit it
would bring to India and Indian economy.
Currency notes were demonetized on three occasions in India:

• In 1946, when the RBI demonetized Rs, 1,000 and Rs, 10,000 notes
• In 1978, when the Government demonetized Rs, 1,000, Rs. 5,000, and Rs.
10,000 notes
• Finally in 2016, when the Government demonetized Rs. 500 and Rs. 1,000
notes.

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SHORT-RUN IMPACT
Many argues that demonetization move is replete with downside risks as
demonetization entail economic costs and it could potentially spiral into an
administrative nightmare as people struggle to offload their stock of soon to be
worthless banknotes. In fact, the first few months will be painful as short-term
liquidity squeeze could be severe and hence economic activity could suffer in
short run. Sectors like real estate where a major part of transactions are carried
out in cash will suffer and construction activity wills also slowdown in the short-
run. Demonetization will be painful for middle-class in short run. A day after the
demonetization, there is a situation of chaos and public mayhem as automated
teller machines were shut and banks were remained close on the next day for
general public. People are queuing to banks and ATMs to exchange their Rs 500
and 1000 notes. In the first few days, withdrawals will be limited to Rs. 2,000 per
day per card.

LONG TERM BENEFITS

The benefits of phasing out large paper currency are significant to an economy
and even more to a society such as India where corruption has become an
acceptable way of life. Following are some of the long term benefits associated
with demonetization:
• It would help in curbing finance of terrorism through fake Indian currency
notes and funding of espionage, smuggling of arms, drugs and other
contraband into India.
• The move will give boost to Jan Dhan Account's relevance for poor
people.
• Demonetization would have a deflationary impact in general and more
specifically on real estate prices which will make homes affordable.
• Government's move to demonetization has been dubbed as a decisive
move towards cashless economy.
• Better tax collection possibilities in the economy
• It will also help in unearthing huge volumes of black money which can
help bridge the fiscal gap as the government's revenue collections can go
up.
• It will give further boost to all formal channels of payment which would
lead to long term sustained economic growth.

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IMPACT ON CASHLESS ECONOMY

With phasing out of Rs. 500 and Rs.1000 currency notes, there is a projected
shift in the pattern of consumer spending behavior. Following will be the impact
of demonetization on cashless economy;
• Increase in transactions on debit cards: People will seek to reserve Rs 100
notes for smaller transactions and use debit cards to pay for higher value
transactions.
• Point of Sale (POS) Terminals usage will surge: With increase in cashless
transactions, POS terminal usage are expected to increase.
• Payment Banks and Online payment solutions like Paytm will see surge in
number of users.

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Description of new notes :

Note colour Size pictures Bleed lines
2000 Magenta 66*166mm Mangalyan (MOM) 7
500 Stone gray 66*150mm Red fort 5

200 Dark yellow 66*146mm Sanchi stupa

100 Lavender 66*142mm Rani ki vav

50 Sky blue 66*135mm Hampi stupa

20 Green 63*129mm Ellora caves

yellow

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10 Chocolate 63*123mm Konark sun temple

brown

Bankers Bank :

As bankers’ bank, the RBI holds a part of the cash reserves of banks, lends them
funds for short periods, and provides them with centralised clearing and cheap
and quick remittance facilities. In the early stages of the development of central
banking, banks used to keep some of their cash reserves voluntarily with a
leading bank which gradually took over the role of a central bank. The obvious
advantage to individual banks was that of the facility of centralised inter-bank
clearing it automatically provided.

Reserve-holding banks could settle their daily mutual clearings by drawing upon
or crediting to their individual accounts with one bank, the central hank. Thus,
the mere entries in the books of the central bank can settle claims against each
other among banks without the actual transfer of cash.

Monetary tools :

The tools can be divided into two types

1. Quantitative, general or indirect (CRR, SLR, Open Market Operations, Bank

Rate, Repo Rate, Reverse Repo Rate)
2. Qualitative, selective or direct (change in the margin money, direct action,
moral suasion)

Bank Rate Policy:

The bank rate is the minimum lending rate of the central bank at which it
rediscounts first class bills of exchange and government securities held by the
commercial banks. When the central bank finds that inflation has been
increasing continuously, it raises the bank rate so borrowing from the central
bank becomes costly and commercial banks borrow less money from it (RBI).

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Open Market Operations:

Open market operations refer to sale and purchase of securities in the money
market by the central bank of the country. When prices start rising and there is
need to control them, the central bank sells securities. The reserves of
commercial banks are reduced and they are not in a position to lend more to
the business community or general public.

Further investment is discouraged and the rise in prices is checked. Contrariwise,

when recessionary forces start in the economy, the central bank buys securities.
The reserves of commercial banks are raised so they lend more to business
community and general public. It further raises Investment, output,
employment, income and demand in the economy hence the fall in price is
checked

Cash Reserve Ratio (CRR): The average daily balance that a bank is required to
maintain with the Reserve Bank as a share of such percent of its Net demand
and time liabilities (NDTL) that the Reserve Bank may notify from time to time
in the Gazette of India.

Statutory Liquidity Ratio (SLR): The share of NDTL that a bank is required to
maintain in safe and liquid assets, such as unencumbered government
securities, cash and gold. Changes in SLR often influence the availability of
resources in the banking system for lending to the private sector.

Market Stabilisation Scheme (MSS): This instrument for monetary

management was introduced in 2004. Surplus liquidity of a more enduring
nature arising from large capital inflows is absorbed through the sale of short-
dated government securities and treasury bills. The cash so mobilised is held in
a separate government account with the Reserve Bank

Liquidity Adjustment Facility (LAF): The LAF consists of overnight as well as term
repo auctions. Progressively, the Reserve Bank has increased the proportion of
liquidity injected under fine-tuning variable rate repo auctions of a range of
tenors. The aim of term repo is to help develop the inter-bank term money
market, which in turn can set market-based benchmarks for pricing of loans and
deposits, and hence improve the transmission of monetary policy. The Reserve
Bank also conducts variable interest rate reverse repo auctions, as necessitated
under the market conditions.
Bank Nationalisation :
Nationalisation means the conversion of private banks into a public bank.

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▪ In 1955, India nationalized Imperial Bank of India with extensive banking

facilities on a large scale, especially in rural and semi-urban areas.
▪ It formed State Bank of India to act as the principal agent of RBI and to handle
banking transactions of the Union and State governments all over the country
▪ On 19th July 1969, a major process of nationalization was carried out and 14
major commercial banks in India were nationalized.
▪ The second phase of nationalization Indian Banking Sector Reform was carried
out in 1980 with six more banks.
▪ This step brought 80% of the banking segment in India under Government
ownership
▪ There were primarily two reasons why the ownership of these 14 banks was
transferred to the government.
▪ First, there were 361 private banks which failed across the country in the
period from 1947 to 1955, translating to an average of over 40 banks per
year.
▪ This has resulted in depositors losing all their money as they were not offered
any guarantee by their respective banks.
▪ Second, these commercial banks were seen as catering to the large industries
and businesses, ignoring the agricultural sector.
▪ In 1950, only 2.3% of the bank loans were channelled to farmers, with the
figure declining to 2.2% by 1967.
▪ Also, it was estimated that 14 major commercial private banks controlled
70% of the deposits in the country.
▪ Hence, the stated motive of this measure was to make credit availability easy
for the “priority sector” – constituting agriculture, small industries, traders
and entrepreneurs.
▪ Moreover, the focus was also on opening up of bank branches in the rural
and backward areas.
In 2019 India celebrated 50years of bank nationalisation
Banks which are nationalised in 1969 are :
• Allahabad Bank
• Andhra Bank
• Bank of Baroda
• Bank of India
• Bank of Maharashtra
• Canara Bank
• Central Bank of India

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• Corporation Bank
• Dena Bank
• Indian Bank
• Indian Overseas Bank
• Oriental Bank of Commerce
• Punjab & Sind Bank
• Punjab National Bank
• Syndicate Bank
• UCO Bank
• Union Bank of India
• United Bank of India
• Vijaya Bank

In 1980 six banks were nationalised:

• Andhra Bank
• Corporation Bank
• Oriental Bank of Commerce
• New Bank of India
• Vijaya Bank
• Punjab and Sind Bank

Bank merger :
The central government announced a merger of banks in the recent times
1. Punjab National Bank, Oriental Bank of Commerce and United Bank of
India to merge

2. Canara Bank and Syndicate Bank to amalgamate

3. Union Bank of India to acquire Andhra Bank and Corporation Bank

4. Indian Bank to merge with Allahabad Bank

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Benefits of Merger

▪ Competetive: The consolidation of PSBs helps in strengthening its presence

globally, nationally and regionally.

▪ Capital and Governance: The government's intention is not just to give capital
but also give good governance. Hence, post-consolidation, boards will be given
the flexibility to introduce the chief general manager level as per business
needs. They will also recruit chief risk officer at market-linked compensation
to attract the best talent.
▪ Efficiency: It has the potential to reduce operational costs due to the presence
of shared overlapping networks. And this enhanced operational efficiency will
reduce the lending costs of the banks.
▪ Technological Synergy: All merged banks in a particular bucket share
common Core Banking Solutions (CBS) platform synergizing them
technologically.

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Chapter 6 : Taxation system

Taxes are involuntary fees levied on individuals or corporations and enforced by
a government entity — whether local, regional or national — in order to finance
government activities. In economics, taxes fall on whomever pays the burden of
the tax, whether this is the entity being taxed, like a business, or the end
consumers of the business's goods.
Taxation Structure in India:

Direct taxes : they are those which are directly collected by the government.
Income Tax: According to Income Tax Act 1961, every person, who are an
assessee and whose total income exceeds the maximum exemption limit, shall
be chargeable to the income tax at the rate or rates prescribed in the Finance
Act. Such income tax shall be paid on the total income of the previous year in
the relevant assessment year.
• Corporate Tax: it is a tax imposed on the net income of the company.
Description: Companies, both private and public which are registered in India
under the Companies Act 1956, are liable to pay corporate tax. For the
assessment year 2014-15, domestic companies are taxed at the rate of 30%
Wealth Tax
Wealth tax, in India, is levied under Wealth-tax Act, 1957. Wealth tax is a tax on
the benefits derived from property ownership. The tax is to be paid year after
year on the same property on its market value, whether or not such property
yields any income. Under the Act, the tax is charged in respect of the wealth held
during the assessment year by the following persons:

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A company is a legal entity formed by a group of individuals to engage in and

operate a business—commercial or industrial—enterprise. A company may be
organized in various ways for tax and financial liability purposes depending on
the corporate law of its jurisdiction.

The line of business the company is in will generally determine which business
structure it chooses such as a partnership, proprietorship, or corporation. These
structures also denote the ownership structure of the company.

Company Types

• Partnerships: A formal arrangement in which two or more parties

cooperate to manage and operate a business
• Corporation: A legal entity that is separate and distinct from its owners
and provides the same rights and responsibilities as a person
• Association: A vague and often misunderstood legal entity based on any
group of individuals who join together for business, social, or other
purposes as a continuing entity (This may or may not be taxable
depending on structure and purpose.)
• Fund: A business engaged in the investing of pooled capital of investors
• Trust: A fiduciary arrangement in which a third party holds assets on
behalf of beneficiaries

Minimum alternate tax: The Minimum Alternate Tax is a measure to include all
companies in the income tax loop. The MAT ensures that no company with
healthy finances and substantial income can avoid paying income tax, even after
claiming exemptions

Fringe Benefit Tax (FBT) is fundamentally a tax that an employer has to pay in
lieu of the benefits that are given to his/her employees. It was an attempt to
comprehensively levy tax on those benefits, which evaded the taxman. The list
of benefits encompassed a wide range of privileges, services, facilities or
amenities which were directly or indirectly given by an employer to current or
former employees, be it something simple like telephone reimbursements, free
or concessional tickets or even
Dividend distribution tax :
A dividend is a return given by a company to its shareholders out of the profits
earned by the company in a particular year. Dividend constitutes income in the
hands of the shareholders which ideally should be subject to income tax.

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However, the income tax laws in India provide for an exemption of the dividend
income received from Indian companies by the investors by levying a tax called
the Dividend Distribution Tax (DDT) on the company paying the dividend.
Most corporate entities operate under the following laws in India:

• Companies Act(2013)
• Income Tax Act(1961)
• Finance Act(1996)

Indirect taxes : As the name suggests, Indirect tax is not directly levied on the
taxpayers. This tax is often levied on goods and services which results in their
higher prices.

1. Service tax

This tax is levied by entities for rendering services like consulting, legal,
and other such services. This tax is collected from the service recipients
and paid to the Central Government. From 1st June 2016,service tax was
14% with Swacch Bharat Cess (0.5%) and Krishi Kalyan Cess (0.5%)
bringing up the applicable rate to 15%. Small service providers with an
income of less than INR 10 lakh per annum are exempted from paying this
tax.

2. Excise duty

This duty is applicable on all goods that are manufactured in India. This
indirect tax is payable by the manufacturers and often passed on to the
customers. This indirect tax in India is levied by the Central Government
and works according to the provisions of the Central Excise Act, 1944.

3. VAT

Value Added Tax (VAT) is imposed on the sale of movable goods in the
nation. VAT is levied at all stages of the production and distribution
channel that include an instance of value addition. This tax is levied by the
State Governments under Entry 54 of the State List.

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4. Customs duty

It is one of those indirect taxes that are applicable for bringing imported
goods into the country. In certain instance, this duty may also be levied
on exported goods. The Customs Act, 1962 provides regulations on the
levy and collection of this duty, import and export procedures, penalties,
prohibitions, and offence.

5. Securities Transaction Tax (STT)

This indirect tax is imposed when stocks are sold or purchased through
any Indian stock exchange. STT was introduced in 2004 and is applicable
to shares, mutual funds, and future and options transactions. STT was
imposed to reduce the short-term capital gains tax and eliminate long-
term capital gains tax.

6. Stamp duty

This is an indirect tax charged by state governments on the transfer of

immovable property within their jurisdiction. In addition, stamp duty is
mandatory on all types of legal documents. Its rates vary from one state
to another.

7. Entertainment tax

The state governments charge such tax on every transaction related to

entertainment. Some examples are movie tickets, video game arcades,
stage shows, exhibitions, amusement parks, and sports-related activities.

GST ( Goods and Services tax) :

To understand the concept of GST let us first analyse the concept of FRBM act
2003

It is an act of the parliament that set targets for the Government of India to
establish financial discipline, improve the management of public funds,
strengthen the fiscal prudence and reduce its fiscal deficits.

• Introduction of a transparent system of fiscal management within the

country
• Ensuring equitable distribution of debt over the years

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• Ensuring fiscal stability in the long run

Targets and fiscal indicators as per the FRBM Act

The central government agreed to the following fiscal indicators and targets,
subsequent to the enactment of the FRBMA

• Revenue deficit to be eliminated by 31st of March 2009. A minimum

annual reduction of 0.5% of GDP.
• Fiscal Deficit to be brought down to at least 3% of GDP by 31st of March
2008. A minimum annual reduction – 0.3% of GDP.
• Total Debt to be reduced to 9% of the GDP (a target increased from the
original 6% requirement in 2004–05). An annual reduction of – 1% of GDP.
• The purchase of government bonds by RBI must cease from 1 April 2006

To review the existing FRBM act Vijay Kelkar committee was appointed in 2004
after which the same committee recommended for the setup of GST.

Historical evidences :

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• 1986: VishwanathPratap Singh, Finance Minister in Rajiv Gandhi’s

government, proposed in the Budget a major overhaul of the excise
taxation structure. This was similar to GST in a theoretical sense.
• 2000: Initiating discussions on GST, Vajpayee government appoints an
Empowered Committee headed by the then finance minister of West
Bengal Asim Gupta.
• 2004: Vijay Kelkar, then advisor to the Finance Ministry, recommends GST
to replace the existing tax regime.
• Feb 28, 2006: GST appears in the Budget speech for the first time. Finance
Minister Chidambaram sets an ambitious task of implementing GST by
April 1, 2010.
• Feb 28, 2007: Chidambaram said in his Budget speech that the Empowered
Committee of finance ministers will prepare a road map for GST.
• April 30, 2008: The Empowered Committee submits a report titled ‘A
Model and Roadmap Goods and Services Tax (GST) in India’ to the
government.
• Nov 10, 2009: Empowered Committee submits a discussion paper in the
public domain on GST welcoming debate.
• Feb 2010: Government launches project for computerisation of
commercial taxes. Finance Minister Pranab Mukherjee defers GST to April
1, 2011.
• March 22, 2011: Constitution Amendment Bill (115th) to GST introduced
in the LokSabha
• March 29, 2011: Bill referred to Standing Committee on Finance.
• Nov 2012: Finance minister and state ministers decide to resolve all issues
by Dec 31, 2012.
• Feb 2013: Declaring government’s resolve to introduce GST, the finance
minister makes provisions for compensation to states in the Budget.
• Aug 2013: The standing committee submits a report to
Parliament suggesting improvements. But the bill lapsed as the 15th
LokSabha was dissolved.
• Dec 18, 2014: Cabinet approval for the Constitution Amendment Bill
(122nd) to GST.
• Dec 19, 2014: The Amendment Bill (122nd) in the LokSabha
• May 6, 2015: The Amendment Bill (122nd) passed by the LokSabha.
• May 12, 2015: The Amendment Bill presented in the RajyaSabha
• May 14, 2015: The Bill forwarded to joint committee of RajyaSabha and
LokSabha
• Aug 2015: Government fails to win the support of Opposition to pass the
bill in the RajyaSabha where it lacks sufficient number.

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• Aug 3, 2016: RajyaSabha passes the Constitution Amendment Bill by a

two-thirds majority. Note: GST constitutional amendment bill needs
to passed by at least 50% of state legislatures to be implemented. Assam
is 1st State to pass GST bill.
• 1 July 2017: GST to be applicable across India.

GST Council

• It is the 1st Federal Institution of India, as per the Finance minister.

• It will approve all decision related to taxation in the country.
• It consists of Centre, 29 states, Delhi and Puducherry.
• Centre has 1/3rd voting rights and states have 2/3rd voting rights.
• Decisions are taken after a majority in the council.

The Parliament passed 4 bills to implement GST. These bills were:

• Central GST Bill, 2017

• Integrated GST Bill, 2017
• GST (Compensation to States) Bill, 2017
• Union Territory GST Bill, 2017
• The GST Constitutional (One Hundred & First Amendment) Act, 2016
contains provisions that are necessary to implement the GST regime. The
act replaces all indirect taxes levied on Goods and Services by the Central
and the State Governments. It is aimed at being comprehensive for most
goods and services. Before this amendment, the power to levy taxes was
split between the Centre and the States. The Amendment Act contains 20
amendments. To make the effort more comprehensive, the law also
created a GST council.
• The GST council is a key decision-making body for all GST related matters
• The GST council comprises of Union Finance Minister & representative
from each State Government
• In acting as a nodal agency of sorts, the Council can recommend many
things for example: the list of taxes that will be subsumed by the GST; the
Goods and Services that would be exempt from the levy of tax; the rates
at which tax shall be levied and so forth.

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The E-way Bill

• An important part of the GST is the E-way bill. The E-way bill in the country
is important when goods worth more than Rs. 50,000/- are transported
from one place to another.
• The bill will contain information from the seller about the contents that
are sold. The buyer in return will have to specify the details on the GSTN
portal the goods he has purchased or has rejected. If no answer is given,
then it will be assumed that No good has been purchased. The problem
of the E-way bill is that there are a lot of people who are outside the
realms of the GST- for example: handicraft producers, and they might
start difficulties in getting their goods across. This is because the truckers
might say, “If you don’t’ have an E-way bill, then I will not carry it”. To
send an item from one state to another, it is necessary for suppliers to
generate an E-bill. After the bill is generated, the duration of its use is
fixed.
• If the transit of goods is within 100 kilometers, the bill is valid for only a
day. For a validity of 3 days, the distance is between 100-300 kilometers.
For a validity of 5 days, the distance is 300-500 kilometers. For 10 days, it
is 500-1000 kilometers. For over a 1000 kilometers, the E-way bill is valid
for 15 days.
• During the transit, if the vehicle meets an accident, then the goods have
to be transferred to another vehicle. Thus, a new bill is generated with
new vehicle information.
• The E-way bill has complete information of GST applicable on goods.
• Tax officials will know whether the GST has been paid on the goods or not
• The entire system will help in curbing cases of tax evasion
• The government claims that through the E-way bill, all the issues related
to freight from one state to another will also be resolved

GST Slabs : GST slabs will be decided by the separate council headed by Finance
Minister .

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1. The Goods and Services Tax (GST) was first implemented in France.

2. India's GST is based on the Canadian model.

3. GST in India was made on the recommendation of Vijay Kelkar Committee.

4. GST in India was implemented on July 1, 2017

5. The first state which implemented the GST was Assam.

6. Amitabh Bachchan has been made the brand ambassador of GST.

7. GST has been implemented under Article 279 of the Indian constitution.

8. GST Council was formed by the President of India in September 2016.

9. At present Finance Minister Arun Jaitley is the Chairman of the GST

Council.

10. At present GST Council has 31 members.

11. GST has been implemented by the 101st Constitution Amendment Act,
2016.

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12. The GST was the 122nd constitutional amendment bill to be introduced in
the Parliament of India.

13. The President of India approved GST bill on 8th September 2016.

14. During passing of GST bill in parliament; 336 votes casted in the favour of
GST bill and 11 votes were against it.

15. There is a provision of 5 years imprisonment for those who do not pay GST.

16. There are 5 rates of taxes in GST i.e. 0%, 5%, 12%, 18% and 28%.
17. GST is an indirect tax in more broader terms it can be said a federal tax.

18. After the implementation of GST, sales tax, service tax, customs duty,
excise duty, VAT, Octroi tax etc. will not exist.

19. The biggest reason behind the implementation of the GST is to bring
uniformity in the tax system of the country.

20. After the implementation of GST, tradition of 'Tax upon Tax' will be
eliminated.

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Chapter 7 : financial markets( Capital and Money )

Capital and money markets are the platform where governments and numerous
corporations raise money from stakeholders in return for the promise of future
revenues.
Capital market: Capital market is the market where investment instruments like
bonds, equities and mortgages are traded. It is a market which deals in long-
term loans. It supplies industry with fixed and working capital and finances
medium-term and long-term borrowings of the central, state and local
governments. Major function of this market is to make investment from
stockholders who have excess funds to the ones who are running a scarcity. The
capital market provides both long term and overnight funds.
In financial literature, bulk of economists elaborated the term, capital market.
Gold Smith described "the capital market of a modern economy has two basic
functions; first the allocation of savings among users and investments; second
the facilitation of the transfer of the existing assets, tangible and intangible
among individual economic units." According to Grant, Capital market in a broad
sense as "a series of channels through which the savings of the community are
made available for industrial and commercial enterprises and for public
authorities. It embraces not only the system by which the public takes up long
term securities directly or through intermediary but also the elaborate network
of institutions responsible for short term and medium term lending."

Stock markets :

A stock exchange is an organization which provides a platform for trading

shares- either physical or virtual. The origin of the stock, market dates back to

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the year 1494, when the Amsterdam Stock Exchange was first set up. In a stock
exchange, investors through stock brokers buy and sell shares in a wide range of
listed companies. A given company may list in one or more exchanges by
meeting and maintaining the listing requirements of the stock exchange.
• The first company that issued shares was the VOC or Dutch East India Company
in. the early 17th century (1602). Since then we have come a long way. With
over 25m shareholders today, India has the third largest investor base in the
world after the USA and Japan. Over 9,000 companies are listed on the stock
exchanges, which are serviced by approximately 7,500 stockbrokers. The
Indian capital market is significant in terms of the degree of development,
volume of trading and its tremendous growth potential.
• Stock exchanges provide an organised market for transactions in securities and
other securities. There are 24 stock exchanges in the country, 21 of them being
regional ones with allocated areas
BSE

The Bombay Stock Exchange, or BSE) is the oldest stock exehange in Asia located
at Dalal Street in Mumbai, India. Established in the year 1875, it is the largest
securities exchange in India with more than 6,000 listed Indian companies. BSE
is also the fifth largest exchange in the world with market capitalization of US
$1.6 trillion (2011). About 5000 companies are listed on the BSE.
Sensex

Sensex or Sensitive Index is a value-weighted index composed of 30 companies

with the base 1978- 1979 = 100. It consists of the 30 largest and most actively
traded blue chip stocks, representative of various sectors, on the Bombay Stock
Exchange

SEBI : The capital markets in India are regulated by the Securities and Exchange
Board of India. (SEBI) It was established in 1988 and given a statutory basis in
1992 on the basis of the Parliamentary Act- SEBI Act 1992 to regulate and
develop capital market. SEBI regulates the working of stock exchanges and
intermediaries such as stock brokers and merchant bankers, accords approval
for mutual funds, and registers Foreign Institutional Investors who wish to trade
in Indian scrips

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FMC (Forward Market Commission)

• Forward Markets Commission (FMC) headquartered at Mumbai is a regulatory

authority, which is overseen by the Ministry of Consumer Affairs and Public
Distribution, Govt. of India. It is a statutory body set up in 1953 under the
Forward Contracts (Regulation) Act, 1952. The Commission consists of 2-4
members.
• It monitors and disciplines the working of the exchanges. It recognizes an
exchange or can withdraw such recognition. It collects and whenever the
Commission thinks it necessary publishes information regarding the trading
conditions in respect of goods
FIIs

• Foreign institutional investors are organizations which invest huge sums of

money in financial assets - debt and shares- of companies and in other
countries- a country different from the one where they are incorporated. They
include banks, insurance companies retirement or pension funds hedge funds
and mutual funds.
• Foreign individuals are not allowed to participate on their own but go through
FIIs.

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ADRs

• American depository receipts are like shares. They are issued to US retail
and institutional investors.
• They are entitled like the shares to bonus, stock split and dividend. They
are listed either on Nasdaq or NYSE
Participatory Notes

Participatory notes are instruments used for making investments in the stock
markets. In India, foreign institutional investors (FIIs) use these instruments for
facilitating the participation of overseas funds like hedge funds and others who
are not registered with the SEBI and thus are not directly eligible for investing in
Indian stocks.
Hedge Fund

A hedge fund is an investment fund open to only a limited range of investors.

They are mostly unregulated. The term- hedge funds, is used to distinguish them
from regulated investment funds such as mutual funds and pension funds, and
insurance companies. Hedge funds are not allowed into India as they do not
disclose data required by the SEBI.
Insider Trading

Insider trading occurs when any one with information related to strategic and
price-influencing information purchases or sells stocks so as to make speculative
profits.
• Mutual Fund: A mutual fund collects money from investors and invests
the money, on their behalf, in securities (debt, equity or both). It charges
a small fee for managing the money.
• Liquid Funds: These are debt mutual funds that invest in securities up to
a maturity of 91 days
• A mutual fund collects money from investors and invests the money on
their behalf. It charges a small fee for managing the money. Mutual funds
are an ideal investment vehicle for regular investors who do not know
much about investing. Investors can choose a mutual fund scheme based
on their financial goal and start investing to achieve the goal.

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The Securities and Exchange Board of India has categorised mutual fund in India
under four broad categories:

• Equity Mutual Funds

• Debt Mutual Funds
• Hybrid Mutual Funds
• Solution-oriented Mutual Funds

Equity funds
These funds invest in stocks. These funds aim to grow faster than money market
or fixed income funds, so there is usually a higher risk that you could lose money.
You can choose from different types of equity funds including those that
specialize in growth stocks (which don’t usually pay dividends), income funds
(which hold stocks that pay large dividends), value stocks, large-cap stocks, mid-
cap stocks, small-cap stocks, or combinations of these
Debt securities are also assigned a 'credit rating', which helps assess the ability
of the issuer of the securities / bonds to pay back their debt, over a certain
period of time. These ratings are issued by independent rating organisations
such as CARE, CRISIL, FITCH, Brickwork and ICRA. Ratings are one amongst
various criteria used by Fund houses to evaluate the credit worthiness of
issuers of fixed income securities.
Money market funds
These funds invest in short-term fixed income securities such as government
bonds, treasury bills, bankers’ acceptances, commercial paper and certificates
of deposit. They are generally a safer investment, but with a lower potential
return then other types of mutual funds. Canadian money market funds try to
keep their net asset value (NAV) stable at $10 per security.
Solution-oriented schemes include the schemes like childcare/gift or retirement
schemes. Earlier these schemes were considered as regular equity or balanced
schemes however with the recent circular these are classified under the
solution-oriented schemes. These are open-ended schemes which have a
minimum lock-in period of 5 years.

These types of schemes are particularly helpful for the investors who are willing
to create their retirement and children education or marriage corpus with
mutual funds but lack in selecting mutual funds and balancing investment. These
funds are more attractive in terms of returns and investment than that of the
plans offered by the insurance companies.

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Foreign Exchange Markets :

Forex Reserves
Forex reserves refer to the assets which are held by the central bank (for India
it is Reserve Bank of India) in foreign currencies, gold reserves, SDRs with IMF
etc. The forex Reserves apart from the foreign banknotes, also include foreign
treasury bills, foreign bank deposits, foreign government securities etc. Forex
reserves provide a buffer and act as hedging against challenging and difficult
times. These are also used for backing the liabilities on their own currencies and
it also influences the monetary policy. The foreign currencies which are held as
forex reserves include US dollar, Euro, British pound sterling, Japanese yen and
Chinese Yuan.

Types of foreign exchange market operations

• Spot market operations (current market): the market which handles the
spot transactions or current transactions of foreign currencies are
known as spot market. They handle only spot transactions and
transactions are of daily in nature.
• Forward Market (or derivative market): Forward Market deals with
future delivery of foreign exchange instruments. Forward Market
transactions determine the forward exchange rate at which the forward
transactions are honoured. It deals with instruments such as currency

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futures, currency swaps, foreign exchange forward, and currency options

etc.

• Exchange settlement and dealings: the settlement and billings of foreign

exchange are facilitated with the help of Nostro accounts and Vostro
accounts.

o Nostro account is a foreign currency demand deposit account

which is maintained by domestic banks in India with a bank in
abroad. The basic meaning of the Nostro account is that our
account is with you.
o Vostro account refers to the domestic currency denominated
demand deposit accounts maintained by the foreign banks which
domestic banks. The basic meaning of the Vostro account is that
your account is with us.
Though the structure of the foreign exchange market in India is similar to other
countries of the world but it is not as advanced as the other major foreign
exchange markets. The Indian foreign exchange market deals with a huge
volume of daily transactions and has seen a steady growth rate. However, the
volume of trade in the forex market is tilted towards particular assets as the
Indian forex market is not as developed as in the advanced economies. Though
the total value of the foreign exchange market is large in terms of assets but in
terms of the transaction rates, it is not as big.

Exchange rates
Exchange rate refers to the price of any currency in terms of another currency.
It has two components, the national currency, and the foreign currency. It can
be quoted directly in which the value of the unit foreign currency is expressed
in terms of the national currency. It can also be quoted indirectly in which the
value of the domestic currency is expressed in terms of US dollar or any other
foreign currency. The exchange rate of any two currency is determined by their
relative purchasing powers as per the purchasing power parity theory.

Categories of exchange rate regimes

Fixed exchange rate

• Under the fixed exchange rate regime, the government or the central
bank has complete intervention in the determination of the currency s

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exchange rate. This is achieved by linking the domestic currency to the

value of gold or with other major currencies such as US dollar etc.
• The government has the responsibility to intervene and maintain the
exchange rate equilibrium in case of any fluctuations due to any reason.
• The benefit of the fixed exchange rate regime is that it ensures stability in
the exchange rate of the domestic currency. It ensures that the domestic
currency does not appreciate or depreciate beyond the predetermined
level.
• Fixed exchange rate regime has the disadvantage that it puts a massive
burden on the government for maintenance of the exchange rate and the
government may have to infuse a large amount of money for the
maintenance of the exchange rates.
• The foreign investment can reduce under the fixed exchange rate regime
as investors may lose their confidence as they believe that the exchange
rate of the domestic currency does not represent the real value of the
economy.

Floating exchange rate

• Under the floating exchange rate regime, the market forces determine
the value of domestic currency on the basis of the forces of demand and
supply of the domestic currency.
• In this system, neither the government nor the central bank intervenes
and the market functions freely to determine the real value of domestic
currency.
• The floating exchange rate regime establishes trust among the foreign
investors which can help in the increase in foreign investment in the
domestic economy.
• This system ensures that a country can get easy access to loans from the
IMF and other international financial Institutions.

Managed floating exchange rate

Managed floating exchange rate regime lies between the fixed exchange rate
regime and the floating exchange rate regime. In the system, the exchange rate
of domestic currency is allowed to move freely based on the market forces of
demand and supply. However, during difficult circumstances, the central banks

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intervene to stabilize the exchange rate of the domestic currency. It can further
be categorised as following:

• Adjusted peg system: under this, the central bank tries to hold the
exchange rate of domestic currency until the foreign exchange reserves
of that country gets exhausted. After this, the central bank goes for the
devaluation of the domestic currency to move to another equilibrium of
the exchange rate.
• Crawling peg system: under this, the central bank keeps on adjusting
exchange rate based on the new demand and supply conditions of the
exchange rate market. It follows a system of regular checks and balances
and the central bank undertakes small devaluations based on the market
conditions.

• Clean floating: under this, the exchange rate of domestic currency is

based on the market forces of demand and supply without the
government intervention. This system is identical to the floating exchange
rate.
• Dirty floating: under this, the exchange rate is mainly determined by the
market forces of demand and supply but the central banks occasionally
intervened to remove excessive fluctuations from the foreign exchange
markets.

Exchange rate management in India

The exchange rate system in India has undergone a systematic change since
Independence. From the system of the pegged exchange rate to the present
form of market determined exchange rate after liberalisation in 1993.

• Par value system till 1971: under the system, the external value of rupee
was fixed by the government to the UK pound sterling and gold. In 1966,
the Indian Rupee was devalued by 36 %.

• Pegged regime (1971-1992): the value of Indian rupee was pegged to US

dollar (1971-1991) and to the pound sterling (1971-1975). After the
breakdown of brettonwoods system and the collapse of the pound
sterling, the value of Indian rupee was pegged on the basis of weighted
average of a basket of currencies of the major trading partners of India.
The RBI determined the exchange rate within a band of plus minus 5 % of
this weighted average.

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• Partial convertibility after 1991:partial convertibility of Indian rupee was

in operation till 1993 under the Liberalised Exchange Rate Management
System (LERMS). In this system, 40 % of the exchange rate was to be
converted on the basis of the official exchange rate, and the remaining 60
% was based on the market determined exchange rate.
• Market based exchange rate Regime since 1993: India adopted the
market based exchange rate since 1993, and the LERMS was removed in
the budget 1994. RBI intervenes in the market only to reduce volatility
and sudden appreciation or depreciation of Indian rupee.

Objectives of exchange rate management in India

• To ensure that the economic fundamentals of the Indian economy are

correctly reflected in the external value of Indian rupee.
• To reduce the volatility in exchange rates for ensuring that changes in the
exchange rates take place in a smooth and orderly manner.
• To maintain a sufficient level of foreign exchange reserves to deal with
any external currency shocks.
• To help in the elimination of market constraints for ensuring the growth
of a healthy foreign exchange market.
• To help in the prevention of the emergence of any destabilizing and
speculative activities in the foreign exchange market.

Factors affecting the exchange rate of India

The exchange rate of any currency is determined by the supply and demand for
the country's currency in the international foreign exchange market. For
example, the value of Indian rupee with respect to the dollar is determined by
the demand of dollar against the Indian rupee. If the demand for dollar
increases, its value increases, and dollar appreciate while Indian rupee
depreciates with respect to the dollar. The exchange rate of Indian rupee is also
affected by the following factors:

• Intervention of The Reserve Bank of India: during high volatility in the

exchange rate, RBI intervenes to prevent the exchange rate going out of
control. For example, the RBI sells dollars when Indian rupee depreciates
too much, while it purchases dollars when the Indian rupee appreciates
beyond a certain level.

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• Inflation rate: the increase in inflation rate can increase the demand for
foreign currency which can negatively impact the exchange rate of the
national currency. For example, an increase in the inflation level of
petroleum oil can increase the demand for foreign currency leading to the
depreciation of Indian rupee.

• Interest rate: interest rates on government securities and bonds,

corporate securities etc affect the outflow and inflow of foreign currency.
If the interest rates on government bonds are higher compared to other
country forex markets, it can increase the inflow of foreign currency,
while lower interest rates can lead to the outflow of foreign currency. This
affects the exchange rate of Indian rupee,.
• Exports and imports: exports and imports affect exchange rate as exports
earn of foreign currency while imports require payments in foreign
currency. Thus, if the overall exports increases, the national currency
appreciates, while increases in imports leads to the depreciation of the
national currency.
• Apart from these, the Indian foreign exchange market is also affected by
factors such as the receipts in the accounts of exports in invisibles in the
current account, inflow in the capital account such as FDI, external
commercial borrowings, foreign institutional investments, NRI deposits,
tourism activities etc.

Other important concepts related to exchange rate in India

Current account convertibility has been allowed in India, and India has achieved
the status of article VIII of IMF. However, the government retains some controls
on the current account such as on export proceeds, caps on money spent on the
purchase of services in foreign countries etc.Capital account convertibility of
Indian rupee has not been made fully convertible. RBI and the government
control the inflow and outflow of capital from India.RBI intervention

• Direct intervention: RBI undertakes open market operations for the

purchase and sale of international currency in the spot and forward
markets to remove volatility in the exchange rate of the Indian rupee.
• Indirect intervention: RBI prescribes reserve requirements, and interest
rates to smoothen the temporary mismatches of the exchange rate and
demand and supply of foreign currency.
FERA or the Foreign Exchange Regulation Act was a law passed in 1973. It
imposed severe restrictions on the types of payments and the transactions in

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foreign exchange and securities, and those transactions that impacted the
foreign exchange as well as currency import and export indirectly. The purpose
behind the FERA was to regulate payments and foreign exchange. It also
intended to conserve foreign exchange, better the usage of foreign exchange in
order to boost the country’s economic development. In 1998, the Indian
government repealed FERA and replaced it with the FEMA or the Foreign
Exchange Management Act. FEMA is more liberal and it eased foreign exchange
controls and lessened restrictions on foreign investment.
As per FERA, the RBI followed certain rules and regulations with respect to
foreign exchange and foreign reserves such as:

1. Restrictions on export and import of certain currencies

2. Restrictions on illegal payments
3. Restrictions in foreign exchange dealings
4. Rules for the payment of exported goods
5. Restrictions on the issue of bearer securities
6. Restriction on settlement in another country
7. Restriction on the holding of immovable property outside India
8. Restrictions on the appointment of certain persons and companies as
agents for dealing in foreign exchange
9. Permission required from RBI for foreign nationals for practicing
professions in India
10.Restriction on the acquisition, holding, etc., of immovable property in
India

Foreign Exchange Management Act (FEMA) – UPSC

FEMA is an acronym for the Foreign Exchange Management Act, 1999 and is an
act of the Indian parliament. It is the regulation relating to foreign exchange,
external trade and payments in the country. It replaced the earlier foreign
exchange regulation law known as the FERA (Foreign Exchange Regulation Act).
FERA was considered draconian while FEMA is more accommodating and
intended to facilitate external trade and payments rather than control it.
The FEMA in contrast to its predecessor, makes foreign exchange-related
offenses civil offenses instead of criminal. FERA had become unsuited for the
government of India’s pro-liberalization policies. FEMA allows the Reserve Bank
of India and the union government to pass laws and rules concerned with foreign
exchange in line with the country’s foreign trade policy.

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FCRA
Foreign Contribution Regulation Act (FCRA) is a consolidating act passed by the
Government of India in the year 2010. It seeks to regulate the foreign
contributions or donations and hospitality (air travel, hotel accommodation etc)
to Indian organizations and individuals and to stop such contributions which
might damage the national interest. It is an act passed for regulating and
prohibiting the acceptance and utilization of foreign contribution or foreign
hospitality by companies, associations or individuals for such activities that
could prove to be detrimental to the national interest and for matters connected
therewith or incidental thereto.
Since the Act is internal security legislation, despite being a law related to
financial legislation, it falls into the purview of Home Ministry and not the
Reserve Bank of India (RBI)

Salient features of FCRA 2010:

The FCRA was enacted in 1976 in order to maintain strict control over voluntary
organisations and political associations that received foreign fundings. In the
year 1984, an amendment was made to the act requiring all the Non
Governmental Organisations to register themselves with the Home Ministry. In
2010, the act was repealed and a new act with strict provisions was enacted.
Here is a brief introduction to the provisions of the FCRA 2010:

• A provision was made for the cancellation of registrations of NGOs if the

Home Ministry believes that the organisation is political and not neutral.
• The registration certificate granted to the NGOs under the 2010 act came
with a five year validity.
• A provision was inserted stating that the assets of the person who has
become defunct needs to be disposed off in a manner stated by the
government.
• A separate account needs to be maintained by the organisations to
deposit the Foreign Contributions received and no other funds except for
Foreign Contributions shall be deposited in that account.
• Every bank would be obligated to report to the prescribed authority, the
amount of foreign remittances received and other related details such as
the source, manner of receipt etc.

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Who are eligible to revieve foreign fundings?

Organizations working for definite cultural, social, economic, educational or
religious programs, if and only if they are

1. Registered with the Home Ministry

2. Maintaining a seperate account listing the donations received from
foreigners, getting it audited by a Chartered Accountant and submitting it
to the Home Ministry, every year.

Who are not eligible?

• Candidate contesting an election

• Cartoonist, editor, publishers of registered newspaper

• Judge

• Government servants or employee of any corporation

• Member of any legislature

• Political parties

Foreign direct investment: Foreign Direct Investment, briefly called or FDI, is a

form of investment that involves the inoculation of foreign funds into an
enterprise that operates in a different country of origin from the financier.
Foreign direct investment is vital part of an open and real international
economic system and a major promoter to development. Foreign direct
investment has developed radically as a major form of international capital
transfer since last many years. Between 1980 and 1990, world flows of FDI-
defined as cross-border expenditures to acquire or expand corporate control of
productive assets-have approximately tripled. Advantages of FDI do not increase
automatically and evenly across countries, sectors and local communities.
National strategies and the international investment architecture matter for
attracting FDI to huge number of developing countries and for reaping the full
benefits of FDI for development.
Determinants for FDI:

1. Policy framework for F.D.I.

2. Economic, political & social stability
3. Rules regarding entry & operations.
4. Standards of treatment of foreign affiliates.
5. Policies on functioning & structure of markets (esp. competition & merger
and acquisition [M&A] Policies
6. International agreements on FDI

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7. Privatization Policy.
8. Trade policy (barriers-tariff & non-tariff) and coherence of FDI and trade
policies

Classifications of Foreign Direct Investment

Foreign Direct Investment can be categorized as Inward FDI and Outward FDI,
depending on the direction of flow of money. Inward Foreign direct investment
occurs when foreign capital is invested in local resources. The factors pushing
the progression of inward FDI include tax breaks, low interest rates and grants.
Outward Foreign direct investment which, also referred to as "direct investment
abroad", is funded by the government against all related risk
Routes of FDI:
FDI in India comes in two routes namely :
Automatic route : it is without the prior permission of the government
Government route : it is by taking the prior permission of Government.
Defence-It is a strategic sector. The government has allowed FDI up to 100% and
this reform in this sector is the third major one in the last one year-the first was
government allowed FDI to the tune of 49%, followed by The Defence
Procurement Policy and third being the latest reform. Although the government
had introduced FDI up to 49% under automatic route (over 49% would be
allowed on case to case basis if the project allows access to the state-of-the-art
technology), many multinationals had shown interest in acquiring more hold
higher ownership. Another difficulty was that the government had not defined
“state-of-the-art” and the technology transfer.
b) Civil Aviation-The reforms come at a time when the domestic passenger
growth is healthy. Proposal-Reforms are broadly in two areas-Brownfield
airports and Domestic scheduled airlines.
a) 100% FDI allowed in Brownfield airport projects (earlier 74% allowed under
automatic route and over that through approval route)
b) 100% FDI in Domestic Scheduled Airlines(up to 49% through automatic route,
more than that through approval route
Brownfield-existing facilities requiring expansion
Greenfield-the projects are built from the beginning

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Pharmaceuticals-The government had introduced the Brownfield FDI policy in

pharmaceuticals in 2011.Now the government has allowed 74% FDI investment
in Brownfield projects through automatic route, with an objective of promoting
development in this sector (before this all the FDI proposals were cleared though
FIPB)

Participatory Notes
Participatory Notes, also called P-Notes or just PNs are instruments that are
issued by registered FIIs to overseas investors who want to invest in the stock
markets in India, without registering themselves with the market regulatory
authority SEBI. PNs are not used within India but by investors abroad. Hence,
they are also known as offshore derivative instruments. They are used by clients
of FIIs who do not wish to directly participate in the stock market in India, but
do it through the FIIs using PNs. They used to be very popular and in 2007, the
percentage of PNs in FIIs were almost 50%. So, SEBI put in norms curbing PNs.
FII registration itself was streamlined. The idea behind the move was that there
was no possibility of knowing the owners of the underlying securities acting via
PN.

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Government budgeting :
Fiscal Policy :
One of Keynes’s main ideas in The General Theory of Employment, Interest and
Money was that government fiscal policy should be used to stabilise the level of
output and employment. Through changes in its expenditure and taxes, the
government attempts to increase output and income and seeks to stabilise the
ups and downs in the economy.
Fiscal policy means the use of taxation and public expenditure by the
government for stabilization or growth of the economy. According to
Culbarston, “By fiscal policy we refer to government actions affecting its receipts
and expenditures which ordinarily as measured by the government’s receipts,
its surplus or deficit.” The government may change undesirable variations in
private consumption and investment by compensatory variations of public
expenditures and taxes.
Fiscal policy also feeds into economic trends and influences monetary
policy. When the government receives more than it spends, it has a surplus. If
the government spends more than it receives it runs a deficit. To meet the
additional expenditures, it needs to borrow from domestic or foreign sources,
draw upon its foreign exchange reserves or print an equivalent amount of
money. This tends to influence other economic variables
General objectives of Fiscal Policy are given below:
1. To maintain and achieve full employment.
2. To stabilize the price level.
3. To stabilize the growth rate of the economy.
4. To maintain equilibrium in the Balance of Payments.
5. To promote the economic development of underdeveloped countries.
The financial resources can be mobilised by:-
a. Taxation: Through effective fiscal policies, the government aims to mobilise
resources by way of direct taxes as well as indirect taxes because most
important source of resource mobilisation in India is taxation.
b. Public Savings: The resources can be mobilised through public savings by
reducing government expenditure and increasing surpluses of public sector
enterprises.
c. Private Savings: Through effective fiscal measures such as tax benefits, the
government can raise resources from private sector and households. Resources
can be mobilised through government borrowings by ways of treasury bills,
issuance of government bonds, etc., loans from domestic and foreign parties
and by deficit financing.

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Reduction in inequalities of Income and Wealth: Fiscal policy aims at achieving

equity or social justice by reducing income inequalities among different sections
of the society. The direct taxes such as income tax are charged more on the rich
people as compared to lower income groups. Indirect taxes are also more in the
case of semi-luxury and luxury items which are mostly consumed by the upper
middle class and the upper class. The government invests a significant
proportion of its tax revenue in the implementation of Poverty Alleviation
Programmes to improve the conditions of poor people in society
Balanced Regional Development: there are various projects like building up
dams on rivers, electricity, schools, roads, industrial projects etc run by the
government to mitigate the regional imbalances in the country. This is done with
the help of public expenditure
Reducing the Deficit in the Balance of Payment: some time government gives
export incentives to the exporters to boost up the export from the country. In
the same way import curbing measures are also adopted to check import. Hence
the combine impact of these measures is improvement in the balance of
payment of the country.
Note : BOP ( Balance of payments) means the difference between imports and
exports in a country.
Economic survey : Economic Survey is the flagship annual document of the
Ministry of finance. It gives a detailed account of the various sectors of the
economy and overall economic scenario of the country in the past years and
provides an outline for the year ahead. Increasingly it has also become a forum
for analysis and research on the economy, and hence also a source of policy
ideas. For the first time economic survey was presented for 1950-1951.
It is presented every year in the Parliment during the Budget Session. The
Economic Survey is presented normally a day before the presentation of the
Union Budget in the Parliment by the Finance Minister.

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Glimpses of budget 2019:

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Important terms associated with budget :

AnnualFinancialStatement
Article 112 of the Constitution requires the government to present to Parliament
a statement of estimated receipts and expenditure in respect of every financial
year - April 1 to March 31. This statement is the annual financial statement.

The annual financial statement is usually a white 10-page document. It is divided

into three parts, consolidated fund, contingency fund and public account. For
each of these funds, the government has .
ConsolidatedFund
This is the most important of all government funds. All revenues raised by the
government, money borrowed and receipts from loans given by the government
flow into the consolidated fund of India. All government expenditure is made
from this fund, except for exceptional items met from the Contingency Fund or
the Public Account. Importantly, no money can be withdrawn from this fund
without the Parliament's approval.
ContingencyFund
As the name suggests, any urgent or unforeseen expenditure is met from this
fund. The Rs 500-crore fund is at the disposal of the President. Any expenditure
incurred from this fund requires a subsequent approval from Parliament and the
amount withdrawn is returned to the fund from the consolidated fund.

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PublicAccount
This fund is to account for flows for those transactions where the government is
merely acting as a banker. For instance, provident funds, small savings and so
on. These funds do not belong to the government. They have to be paid back at
some time to their rightful owners. Because of this nature of the fund,
expenditure from it are not required to be approved by the Parliament.

Revenuereceipt/Expenditure
All receipts and expenditure that in general do not entail sale or creation of
assets are included under the revenue account. On the receipts side, taxes
would be the most important revenue receipt. On the expenditure side,
anything that does not result in creation of assets is treated as revenue
expenditure. Salaries, subsidies and interest payments are good examples of
revenue expenditure.

Capitalreceipt/Expenditure
All receipts and expenditure that liquidate or create an asset would in general
be under capital account. For instance, if the government sells shares
(disinvests) in public sector companies, like it did in the case of Maruti, it is in
effect selling an asset. The receipts from the sale would go under capital
account. On the other hand, if the government gives someone a loan from
which it expects to receive interest, that expenditure would go und ..
Corporation Tax: Tax on profits of companies.

Taxes on Income other than corporation tax: Income tax paid by non-
corporate assesses, individuals, for instance.

Fringe benefit tax (FBT):

The taxation of perquisites - or fringe benefits - provided by an employer to his
employees, in addition to the cash salary or wages paid, is fringe benefit tax. It
was introduced in Budget 2005-06. The government felt many companies ..

Securities transaction tax (STT):

Sale of any asset (shares, property) results in loss or profit. Depending on the
time the asset is held, such profits and losses are categorised as long-term or
short-term capital gain/loss. In Budget 2004-05, the government abolished

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long-term capital gains tax on shares (tax on profits made on sale of shares
held for more than a year) and replaced it with STT. It is a kind of turnover tax
where the investor has to pay a small tax on the .
Banking cash transaction tax (BCTT):
Introduced in Budget 2005-06, BCTT is a small tax on cash withdrawal from
bank exceeding a particular amount in a single day. The basic idea is to curb
the black economy and generate a record of big cash transactions

Customs:
Taxes imposed on imports. While revenue is an important consideration,
Customs duties may also be levied to protect the domestic industry or sector
(agriculture, for one), in retaliation against measures by other countries.

Union Excise Duty: Duties imposed on goods made in India.

Service Tax: It is a tax on services rendered. Telephone bill, for instance,

attracts a service tax.

While on taxes, let us take a look at an important classification: direct tax and
indirect tax.

Direct Tax
Traditionally, these are taxes where the burden of tax falls on the person on
whom it is levied. These are largely taxes on income or wealth. Income tax (on
corporates and individuals), FBT, STT and BCTT are direct taxes.

Indirect Tax
In case of indirect taxes, the incidence of tax is usually not on the person who
pays the tax. These are largely taxes on expenditure and include Customs,
excise and service tax.
Non-tax revenue
The most important receipts under this head are interest payments (received
on loans given by the government to states, railways and others) and dividends
and profits received from public sector companies.

Various services provided by the government - police and defence, social and

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community services such as medical services, and economic services such as

power and railways - also yield revenue for the government.

Though Railways are a separate department, all its receipts and expenditure
are routed through the consolidated fund

Grants-in-aid and contributions

The third receipt item in the revenue account is relatively small grants-in-aid
and contributions. These are in the nature of pure transfers to the government
without any repayment obligation.

We now look at the disbursements section of the revenue account of the

consolidated fund. It lists all the revenue expenditures of the government.
These include expense incurred on organs of state such as Parliament, judiciary
and elections. A substantial amount goes into administering fiscal services such
as tax collection. The biggest item is interest payment on loans taken by the
government. Defence and other services like police also get a sizeable share.
Having looked at receipts and expenditure on revenue account we come to an
important item, the difference between the two, the revenue deficit.
Revenue Deficit
The excess of disbursements over receipts on revenue account is called
revenue deficit. This is an important control indicator. All expenditure on
revenue account should ideally be met from receipts on revenue account; the
revenue deficit should be zero.

When revenue disbursement exceeds receipts, the government would have to

borrow. Such borrowing is considered regressive as it is for consumption and
not for creating assets. It results in a great . proportion of revenue receipts
going towards interest payment and eventually, a debt trap. The FRBM Act,
which we will take up later, requires the government to reduce fiscal deficit to
zero by 2008-09.

Receipts in the capital account of the consolidated fund are grouped under
three broad heads - public debt, recoveries of loans and advances, and
miscellaneous receipts.

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Public debt: Public debt receipts and public debt disbursals are borrowings and
repayments during the year, respectively. The difference is the net accretion to
the public debt. Public debt can be split into internal (money borrowed within
the country) and external (funds borrowed from non-Indian sources). Internal
debt comprises treasury bills, market stabilisation schemes, ways and means
advance, and securities against small savings.

Treasury bills (T-bills): These are bonds (debt securities) with maturity of less
than a year. These are issued to meet short-term mismatches in receipts and
expenditure. Bonds of longer maturity are called dated securities.

Market stabilisation scheme: The scheme was launched in April 2004 to

strengthen RBI's ability to conduct exchange rate and monetary management.
These securities are issued not to meet the government's expenditure but to
provide RBI with a stock of securities with which it can intervene in the market
for managing liquidity.

Ways and means advance (WMA): One of RBI's roles is to serve as banker to
both central and state governments. In this capacity, RBI provides temporary
support to tide over mismatches in their receipts and payments in the form of
ways and means advances.

Securities against small savings: The government meets a small part of its loan
requirement by appropriating small savings collection by issuing securities to
the fund.

Plan expenditure: This is essentially the budget support to the central plan and
the central assistance to state and union territory plans. Like all budget heads,
this is also split into revenue and capital components.

Non-plan expenditure: This is largely the revenue expenditure of the

government. The biggest items of expenditure are interest payments,
subsidies, salaries, defence and pension. The capital component of the non-
plan expenditure is relatively small with the largest allocation going to defence.
Defence expenditure is non-plan expenditure.

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Fiscal Deficit:
When the government's non-borrowed receipts fall short of its entire
expenditure, it has to borrow money from the public to meet the shortfall. The
excess of total expenditure over total non-borrowed receipts is called the fiscal
deficit.

Primary deficit:
The revenue expenditure includes interest payments on government's earlier
borrowings. The primary deficit is the fiscal deficit less interest payments. A
shrinking primary deficit indicates progress towards fiscal health. The Budget
document also mentions deficit as a percentage of GDP. This is to facilitate
comparison and also get a proper perspective. Prudent fiscal management
requires that government does not borrow to consume in the normal course

COUNTERVAILING DUTIES (CVD):

Countervailing duty is a tax imposed on imports, over and above the basic
import duty. CVD is at par with the excise duty paid by the domestic
manufacturers of similar goods. This ensures a levelplaying field between
imported goods and locally-produced ones. An exemption from CVD places the
domestic industry at disadvantage and over long run discourages investments
in affected sectors.

FINANCE BILL:
The proposals of government for levy of new taxes, modification of the existing
tax structure or continuance of the existing tax structure beyond the period
approved by Parliament are submitted to Parliament through this bill. It is the
key document as far as taxes are concerned.
SUBVENTION:
The term subvention finds a mention in almost every Budget. It refers to a
grant of money in aid or support, mostly by the government. In the Indian
context, for instance, the government sometimes asks institutions to provide
loans to farmers at below market rates. The loss is usually made good through
subventions.

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SURCHARGE:
As the name suggests, this is an additional charge or tax. A surcharge of 10%
on a tax rate of 30% effectively raises the combined tax burden to 33%. In the
case of individuals earning a taxable salary of more than Rs 10 lakh a surcharge
of 10% is levied on income in excess of Rs 10 lakh. Corporate income is levied a
flat surcharge of 10% in the case of domestic companies and 2.5% for foreign
companies. Companies with revenue less than Rs 1 crore do not have to pay
the surcharge.
CAPF 2019 questions : (c) In the long-run, a competitive
firm earns only normal profits
1.According to the Law of
Diminishing Returns, in a (d) In equilibrium, the Marginal Cost
production function when more Curve of the monopoly firm may be
and more units of the variable rising, falling or constant
factor are used, holding the
quantities of a fixed factor 3. Zero price elasticity of demand
constant, a point is reached beyond means
which (a) whatever the change in price,
(a) the marginal revenue will there is absolutely no change in
diminish demand

(b) the average revenue will (b) for a small change in price, there
diminish is a small change in demand

(c) the marginal product will (c) for a small change in price, there
diminish is a large change in demand

(d) the marginal product will (d) for a large change in price, there
increase is a small change in demand

2. Which one of the following is 4. Suppose that the price of a

NOT correct? commodity increases from Rs. 90
(a) The Average Revenue and to Rs. 110 and the demand curve
Marginal Revenue curves of a shows that the corresponding
perfectly competitive firm are reduction in quantity demanded is
perfectly elastic from 240 units to 160 units. Then,
the coefficient of the price
(b) The Marginal Revenue curve of elasticity of demand will be
the monopoly firm is above its (a) 1.0
Average Revenue curve

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(b) 2.4 (d) Minimum wages fixed by state

Governments
(c) 0.5
8. Which one of the following
(d) 2.0 statements is true with regard to
an economy which is on its
5. What is the real interest rate on production possibility frontier?
a Credit Card loan bearing 24% (a) The economy has to sacrifice
interest per year, if the rate of some production of one
inflation is 10%? commodity in order to increase the
(a) 240% production of another commodity
(b) 34% (b) There is no limit or constraint for
the economy in the production of
(c) 14% goods and services
(d) 4% (c) The economy can produce more
of one commodity up to a point
6.In a closed economy with no
without reducing the production of
taxes, if the marginal propensity to
any other commodity
consume is always 0.90, then the
value of the multiplier will be (d) Its production possibility frontier
(a) 10.00 is an upward sloping curve
(b) 1.00 9. Who coined the concept of
“Paradox of Thrift”?
(C) 0.90
(a) Adam Smith
(d) 0.10
(b) Alfred Marshall

(c) John Maynard Keynes.

7. Which one of the following is an
(d) Paul A. Samuelson
example of a price ceiling?
(a) Fares charged by Airlines in India CAPF 2018 :
(b) Price printed on biscuit packets
1. In National Income (NI)
(c) Minimum support price for cane accounts, Personal Income (PI) is
growers defined as
(a) NI - undistributed profits – net
interest payments made by

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households - corporate tax + 4. Crowding-in impact via higher

transfer payments to the credit availability as bank NPAs fall
households from the government Select the correct answer using the
and firms code given below.
(b) NI - undistributed profits -
(a) 1, 2 and 3 only
corporate tax + transfer payments
(b) 1, 2, 3 and 4
to the households from the
(c) 3 and 4 only
government and firms
(d) 1 and 2 only
(c) undistributed profits - net
4.The National Green Tribunal, set
interest payments made by
up to deal with the expeditious
households + transfer payments to
disposal of cases relating to
the households from the
environmental protection, was set
government and firms
up under the
(d) undistributed profits – net
(a) 12th Five-Year Plan
interest payments made by
(b) 11th Five-Year Plan
households - corporate tax
(c) 10th Five-Year Plan
2. The Reserve Bank of India
(d) 9th Five-Year Plan
defines narrow money as
5.Multipliers will be lower with
(a) CU (currency notes + coins) + DD
which one of the following?
(net demand deposits held by
(a) High marginal propensity to
commercial banks)
consume
(b) CU + DD + saving deposits with
(b) Low marginal propensity to
post office savings banks
consume
(c) CU + DD + net time deposits of
(c) High marginal propensity to
commercial banks
invest
(d) CU + DD + net time deposits of
(d) Low marginal propensity to save
commercial banks + total deposits
6.Suppose the price of mangoes
of post offices
increases from 50 per kg to 75 per
3. If farmers' loans are waived in
kg. Due to this, the demand for
India, how will it affect the
mangoes declines from 100 kg to
aggregate demand in the
50 kg. Which one of the following is
economy?
the price elasticity of demand for
1. Private consumption impact via
mangoes?
increase in private sector net wealth
(a)4
2. Public sector impact via changes
(b)3
in government expenditure/taxes
(c)2
3. Crowding-out impact via higher
(d) 1
borrowings by State Governments

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7. When was Startup India Hub (c)Udaan

operationalized to resolve queries (d) Nakshc
and handhold startups? 3. Which of the following most
(a)2015 suitably captures the meaning and
(b)2016 essence of globalization'?
(c)2017 1. It is about conducting external
(d) 2018 relations between two or more
8. Who among the following is not States of the world
associated to the Governing 2. It is a process of coming together
Council of NITI Aayog? of world-wide social relations
(a) The Prime Minister bypassing territories
(b) The President 3. It refers to thinking
(c) The Chief Ministers of States transterritorially about global risks
(d) The Chief Ministers of Union affecting people
Territories 4. It has a wishful vision of
suprastate governance
CAPF 2017 : Select the correct answer using the
1.Which one of the following code given below :
statements about Pradhan Mantri
(a)1and4only
Ujjwala Yojana is NOT correct ?
(b)2and3only
(a) It is a social welfare scheme to
(c)2,3and4only
provide LPG connections in BPL
(d) 1, 2, 3 and 4
households
4. Which one of the following
(b) The scheme was launched in the
countries has officially recognized
year2015
Bitcoin as a legal payment method
(c) The Government has set a target
since 1st April 2017 ?
of 5 crores LPG connections under
(a)Japan
theYojana
(b)China
(d) The objective of the scheme is to
(c)USA
safeguard the health of women and
(d) India
children by providing them with
5. To which of the following sectors
clean cooking fuel
of the economy, the activity of
2. Which one of the following
agriculture and services belong to ?
portals was launched on the 250th
(a) Primary and Tertiary
anniversary of Survey of India ?
respectively
(a)ServicePlus
(b) Primary and Secondary
(b)DigiMap
respectively
(c) Tertiary and Secondary

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respectively
(d) Secondary and Quaternary
respectively
6. Which of the following are the
reforms introduced in Budget 2017-
2018 ?
1. Presentation of Budget advanced
to 1st February to enable the
Ministries to operationalise all
activities from the commencement
of the financial year
2. Merger of Railway Budget with
General Budget to bring Railways to
the centre stage of Government's
Fiscal Policy
3. Removal of plan and non-plan
classification of expenditure to
facilitate a holistic view of
allocations for Sectors and
Ministries
Select the correct answer using the
code given below:
(a) 1 and 3 only
(b) 2 and 3 only
(c) 1, 2 and 3
(d) 1 and 2 only

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References
▪ NCERTS
▪ NIOS
▪ Original constitution of India
▪ Wikipedia
▪ PIB
▪ The Hindu news paper editorials.
▪ Subash Kashyap Indian polity
▪ Various government ministry websites.
▪ Ministry of finance
▪ ISCE Syllabus books
▪ NITI Ayog reports

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