Part 10: Environmental & Financial Resources

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Article 10.1 Management of environmental resources
All resources, financial and environmental, belong to the people, the sovereign in democracy. The people first retain resources with local governments adequate to handle all local matters. They then devolve what they do not need at the local level to the state and national governments for (1) providing higher level infrastructure, (2) support to regions with inadequate resources, and (3) coordination. This postulates devolution of resources by the people upward and can be called the "Principle of Superdiarity".
The "Principle of Subsidiarity" stipulates that a function should be performed at the lowest level at which it can be best performed. Thus if a tax can be most efficiently and economically managed at the local level, it can be imposed at the state or national level depending upon its impact but assigned for management at the local level. The Constitution can provide for sharing of tax collected by the governments at the three levels depending upon their requirements.
The scheme in this Part has been developed on these principles.
Article 10.11 Local control over environmental resources
All environmental resources including land, soil, water systems, forests, minerals and air shall, subject to the stipulations herein under, be under the control and management of local governments.
Article 10.12 Control over village resources
The village parliament or gram sabha shall control all land, forests and local water systems within its jurisdiction including the land presently classified reserved or protected forests but excluding national reserves. The village parliament will assign land to individuals, families or companies on lease for specific use such as housing, agriculture, fodder, plantation, housing and industry with appropriate stipulations and conditions. In case of violation of any condition, the village parliament can terminate the lease and/or impose such penalty, as it considers appropriate. The village parliament will assist farming families in distress due to failure of crops or any other reason.
The village parliament will notify the type and quantity of forest produce for use of the community. It will scientifically manage the forests in a sustainable manner, for optimal benefit to society.
The village governments shall manage the natural resources under the overall coordination and technical guidance of the district government. The district and state governments will, through the processes of regional planning and negotiations, coordinate the sharing of water and other natural resources between the rural settlements, urban centres and the requirements of industry.
Article 10.13 Urban land management
Urban lands shall be under the management of city governments. The state and national governments shall have no jurisdiction over them. The city governments will prepare land-use plans with the participation of the people. While doing so, they shall coordinate the urban plan with the regional plans.
City governments will review the development proposals received from developers within the framework of city and regional plans, and after considering the objections, grant or refuse development approval.
City development shall be classified as (1) residential neighbourhoods, (2) nonresidential centres, and (3) mixed centres. After development, the land will be given on lease to the neighbourhood, nonresidential centre, or mixed centre, and subleased to individual owners. This will ensure proper management of urban lands with community vigilance to prevent misuse.
Article 10.14 Water management
Local governments shall be deemed to own all surface and ground water, subject to limiting its use and sharing with other governments through the processes of participative regional planning. The local governments will optimise the availability of ground and surface water and regulate its use and conservation for the benefit of the community. The state governments will, through the processes of participatory regional planning, coordinate the sharing of water between urban and rural areas within the state. The national government will coordinate sharing between states and with neighbouring nations.
Article 10.15 Management of minerals
Often, local governments bear the burden of damage to their land and pollution from the processes of extraction of minerals, while the state and national governments collect most of the revenue accruing from them. This needs to be corrected
All minerals shall belong to local governments. They will manage extraction of minerals exclusively within a local jurisdiction, state governments shall manage extraction from mineral belts cutting across local jurisdictions, and the national government shall manage extraction from those cutting across states. The revenues collected by them from royalty and other charges on minerals, net of expenses, shall be shared equally by the village, local, state and national governments.
Article 10.16 Air quality and noise pollution
Monitoring and regulating air quality and noise pollution shall ordinary be in the jurisdiction of local governments. The state and national governments will respectively monitor and regulate sources affecting air quality and noise pollution in more than one local jurisdiction or state.
Article 10.17 Sharing of revenue from natural resources
The local, state and national governments shall share the revenues net of expenses from natural resources as indicated below. The National Bank of India will automatically credit the revenues as they accrue to the respective governments.

Village  District  State  National
Land  80 per cent  20 per cent
Forests  80 per cent 20 per cent
Local water systems   80 per cent 20 per cent
Major water projects     25 per cent 25 per cent 25 per cent 25 per cent
Minor minerals  100 per cent
Major minerals     25 per cent 25 per cent 25 per cent 25 per cent

Note: The above percentages are indicative and can be refined after fully studying the implications.
Article 10.2 Management of tax resources
The principles on which jurisdiction to determine a tax, power to recover a tax, and the sharing of net tax revenue, are outlined below:
1 A local, state or national government shall have the power to determine a tax depending upon whether its impact is local, state or national.
2 A local, state or national government shall have the power to recover a tax depending upon which of them can do so most efficiently and economically. For example, local governments can control personal income tax and state governments, corporate income tax.
A local and state government shall retain share in taxes adequate to meet the local and state needs. If the balance left with the national government is more than the needs of national level infrastructure, the excess will go in national reserves. If it is less, the national government can borrow or resort to deficit financing. Such deficit financing shall have to be explained to the people who can question it. The Sovereign Rights Commissions assisted by the National Bank of India shall, based on the above principles, determine the jurisdictions for imposing a tax, power to recover the taxes and sharing of the taxes, and get it approved through referendum.
Article 10.21 State borrowing and disinvestment
During the past 50 years, the nation has indulged in indiscriminate state borrowing and deficit financing in the name of "development". Excessive overheads of a bloated bureaucracy, misuse of authority, wastage of resources, corruption and incomplete and delayed projects, have led to depletion of the value of the Indian currency in relation to global economy to approximately one-tenth during 50 years since independence. The nation is now heavily burdened with loans and has become heavily dependent upon foreign loans and direct investments trying to cover its expenses, much less meet the basic needs of the people. The financial base and health of the nation has thus been badly eroded.
Strict financial discipline is needed to make the nation self-reliant. The Sovereign Rights Commissions in consultation with the National Bank will ensure such disciple in areas such as:

1 All recruitment in the national and state governments in matters falling in local jurisdictions, except that needed for coordination through regional planning, shall be totally banned and incentives given to existing staff for taking early retirement.

2 National and state authorities on local matters such as state water boards, state housing boards, and urban development authorities shall be disbanded.
3 Complete and incomplete projects that ought to be in local jurisdictions shall be transferred to local governments and reappointment offered to state government officials through a selection process in local governments for managing these projects.
4 Vehicles for administrative staff shall be drastically reduced, and restrictions imposed on travel. All appointment of Class IV employees shall be banned.
5 Building government staff housing shall be totally banned and disinvestment of existing staff housing initiated. Employees should live in rented or own housing. Housing for elected representatives should be similarly reviewed based on practises in best democracies.
Article 10.22 Deficit financing
There has been widespread financial indiscipline in the matter of deficit financing by the national government and overdraft by state governments for covering unproductive expenditure. The National Bank of India being an independent constitutional authority shall impose ceiling on deficit financing by the national government and refuse overdraft to state governments except in very unusual circumstances.
Article 10.23 Rupee revaluation
Mismanagement of the economy during the past fifty years has led to fall in the value of the India rupee by a factor of ten. Valued at Rs 3.50 to a US dollar at independence, it is today over Rs 40 to a US dollar. Paise coins, even a rupee, now have hardly any value and yet have to be minted.

In a globalising economy, it will be desirable if national currencies are within a factor of 10 to a US dollar. Small valued currencies such as the Japanese yen are clumsy to handle. With a view to rationalise currency management, ten Indian rupees shall be replaced by one new rupee or naya rupiya. Management of the economy hereafter should ensure that such humiliating reduction in its value does not occur again.


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