The Centre and Nagaland government have landed in a constitutional row over the state's right to independently exploit its natural resources, resulting in the Centre sending out a strong missive last week asking it to fall in line.

This, incidentally, is the second such letter, issued after a detailed legal review, the Governor's report and elaborate discussions at the highest levels, involving the Prime Minister's Office, Home Ministry, Law Ministry and Petroleum Ministry.

The issue at hand is the interpretation of Article 371A of the Constitution relating to Nagaland. The provocation was the state government's move to issue the Nagaland Petroleum and Natural Gas Regulations last year.

The Centre immediately objected saying that the state, under the Constitution, could not regulate mining of natural wealth under the ground as this was a Central subject. It argued that Article 371A only gives the state the right against implementing Central Acts in certain areas, and not to make new laws or regulations on these subjects.

The Naga People's Front government led by Chief Minister Neiphiu Rio, however, dug in its heels, insisting that Article 371A makes it clear that "no Act of Parliament in respect of Naga customary laws, administration of civil and criminal justice involving decisions according to customary law, ownership and transfer of land and its resources shall apply to the state of Nagaland unless the Legislative Assembly of Nagaland by a resolution so decides".

The controversial notification, quoting a 2010 Assembly resolution, reaffirmed this in the preambulary paragraph: "No Act of Parliament governing Petroleum and Natural Gas shall be applicable to the state of Nagaland and all such Acts shall be deemed to have become inapplicable to the state from the date of enactment of Article 371A (1) (a) of the Constitution of India regardless of previous acts of commissions and omissions."

To buttress its claims, the state government produced a Petroleum Ministry response to a Parliament question in March 2011 conceding that the Constitutional provision applied to the exploitation of natural resources.

However, admitting that this was a mistake, the ministry had pulled back the reply from Parliament last year and corrected its position. The ministry had then followed it up with a letter from Petroleum Minister Veerappa Moily in June to Rio, putting it on record that the notification on petroleum and natural gas regulations was "unconstitutional" and should be annulled.

The Nagaland CM, in turn, took the matter to the Assembly, held consultations, including with noted legal luminaries, and wrote back a strong rejection of this stand, accompanied by the Assembly resolution on the subject.

The Rio government then went ahead and invited expressions of interest from companies, telling them that they would be "special guests" of the state.

Three important conditions stood out  any product had to be prefixed "NAGA", 16 per cent of earnings had to be shared with the state government, and the company's activities, if any, in states having boundary issues with Nagaland would be a factor in the selection.

This took the Centre by complete surprise and concerns only increased when Nagaland Governor Ashwani Kumar, a former CBI director, sounded the alarm bells. It's believed that he told the Central government through several communications that the issue was turning serious and even had long-term security implications besides the Constitutional question.

With the matter becoming sensitive, hectic consultations began within the government. The Law Ministry was asked to conduct a thorough legal examination and the Home Ministry was tasked to begin a backchannel with the state government.

On the legal front, the Centre's interpretation of Article 371A is that it provides the state "negative power" as in the right to reject a Parliamentary Act in any of the areas mentioned in the provision. However, according to the Centre, it does not provide the state government the "positive power" to legislate or regulate aspects of the areas that may fall under Central control.

In other words, sources said, Nagaland can opt to retain status quo on any of the issues including mining but it cannot seek to change it on its own terms. If it seeks a change, the Centre's contention is that it has to do so as per the Constitution, just like in other states.

This has now been conveyed to the Rio government. Also, various backchannel options through special interlocutors and intelligence agencies are at work to ensure this time the state does not escalate matters further by sending back another rejection.

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