Federal Overreach
- Correspondent
- May 23, 2025
- 2 min read
India’s Enforcement Directorate (ED) has in recent years acquired a reputation as one of the most feared arms of the state. Empowered under the Prevention of Money Laundering Act (PMLA), it has gone after a long list of political opponents, business houses and state agencies. Yet in doing so, it has often invited criticism for its opaque methods, selective targeting and timing that suspiciously coincides with election cycles.
This week, the Supreme Court gave the agency a well-deserved rap on the knuckles. At the same time, it should be careful not to clip its wings entirely. The Court directed the ED to temporarily halt its investigations into the Tamil Nadu State Marketing Corporation (TASMAC), the state-run liquor distribution monopoly, and questioned its sweeping raids on liquor outlets and state offices. In a rebuke laden with constitutional undertones, the bench warned the agency against undermining federal governance.
The message from the judiciary was clear: the Centre must not weaponize national agencies to destabilise state governments. The ED had been investigating alleged corruption involving transport of liquor, bar licences and tender manipulation in collusion with private firms. It claimed to have unearthed unaccounted cash worth Rs. 1,000 crore and manipulated pricing data, but did not name TASMAC as an accused in the predicate offences, a legal prerequisite under the PMLA. The raids, then, seemed both premature and overbroad.
The ruling DMK, which runs Tamil Nadu, predictably cried vindication. It accused the BJP-led central government of unleashing the ED to malign the state’s image and erode public trust ahead of elections.
But this is where nuance is required. The ED is not by definition an instrument of vendetta. While it has certainly been misused for political ends, it also serves a necessary function in unearthing financial crimes that local enforcement bodies are either unwilling or unable to pursue. The Supreme Court, in safeguarding federalism, must also ensure it does not render the ED toothless. To stay investigations is one thing; to issue blanket indictments of the agency’s conduct is quite another.
A more reasoned approach is to insist on procedural rigour. The ED must register predicate offences properly and establish material links before initiating raids. Courts must hold the agency to these standards but not presume malice where there may be incompetence or overenthusiasm. Tamil Nadu’s Excise Minister called the entire operation a “political vendetta.” It may well be, but even vendettas can uncover inconvenient truths. The Supreme Court must continue to be a check on executive excess but it should also nudge the ED to introspect and professionalise. After all, financial malfeasance does not respect political colours, and states are not immune to corruption merely by virtue of opposing the Centre. The ED, if it wishes to retain credibility, must stop behaving like an arm of the ruling party. At the same time, the judiciary must avoid demoralising a crucial investigative agency with unmeasured censure. Balance, in a federal democracy, is not weakness but constitutional strength.



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