A union territory is a type of administrative division in the Republic of India. Unlike states, which have their own governments, union territories are ruled directly by the Union Government (central government), hence the name "union territory". Union territories in India qualify as federal territories.
When the Indian Constitution was adopted in 1949, there was only one union territory: Andaman and Nicobar Islands. NCT of Delhi, Chandigarh and Lakshadweep were formed by separating the territory from the erstwhile states. Dadra, Nagar Haveli, Daman, Diu and Puducherry (pondicherry) were formed from acquired territories.[clarification needed]
The Parliament of India can pass a law to amend the Constitution and provide a Legislature with elected Members and a Chief Minister for a Union Territory, as it has done for Delhi and Puducherry. In general, the President of India appoints an administrator or lieutenant-governor for each UT. There are seven union territories, including Chandigarh, the joint capital of Punjab and Haryana.
Delhi and Puducherry (Pondicherry) operate somewhat differently from the other five. Delhi and Puducherry were given partial statehood and Delhi was redefined as the National Capital Territory of Delhi (NCT) and Incorporated into a larger boundary known as the National capital Region (NCR). Delhi and Puducherry have their own elected legislative assemblies and the executive councils of ministers with partially state-like function.
Due to existence of Union territories, many critics have resolved India into a semi-federal nation as both the Central and state governments exist and each have their own domains and territories of legislation. Union territories of India have special rights and status due to their constitutional formation and development. The status of "Union Territory" may be assigned to an Indian sub-jurisdiction for reasons such as safeguarding the rights of indigenous cultures, averting political turmoil related to matters of governance, and so on. These union territories could be changed to states in the future for more efficient administrative control.
Constitution does not stipulate how the tax collections are to be devolved to the Union Territories (UTs) unlike for the states. The funds devolution to a Union Territories by the union government have no criteria where all the revenue goes to the union government. Some Union Territories are provided more funds whereas others are given less in arbitrary manner by the union government. As UTs are directly ruled by the Union government, some Union Territories get more funds from the Union government than entitled on per capita and backwardness basis when compared to states.
After the introduction of GST, UT-GST is applicable in UTs which are not having legislative assembly. UT-GST is levied at par with the applicable state GST in rest of the country which would eliminate the previous lower taxation in the UTs.
Article 1 (1) of the Indian constitution says that India (Bharat) shall be Union of States which are elaborated under Parts V (The Union) and VI (The States) of the constitution. Article 1 (3) says territories of India constitute territories of states, union territories and other acquired territories. The concept of union territory was not there from the beginning in the constitution and it was incorporated by the Constitution (Seventh Amendment) Act, 1956. In the constitution wherever it refers to Territories of India, it is applicable to whole country including union territories. Where it refers to only India, it is applicable to all states only but not to union territories. Thus, citizenship (part II), fundamental rights (part III), Directive Principles of State Policy (part IV), Judiciary role, the Union Territories (part VIII), Article 245, etc. are applicable to union territories as it refers specifically to Territories of India. The executive power of Union (i.e. union of states only) rests with President of India. President of India is also chief administrator of union territories per Article 239. Union public service commission role is not applicable to all territories of India as it refers to India only in Part XIV.
Per Article 240 (2), supreme power is accorded to the President in regulating the affairs of the all the union territories except Chandigarh, NCT and Puducherry, including powers to override the laws made by Parliament and the constitution of India.
Just two of the union territories have representation in the upper house of the Indian Parliament, the Rajya Sabha, Delhi and Puducherry which are also exceptional among union territories in that each has its own locally elected legislative assembly.
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