Centre and State Relations

Various types of relations between the central and state governments of India.

1. Dr. L. Mothilal, Pondicherry University, India, Jan -2016 – [email protected]
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CENTRE – STATE RELATIONS






Indian constitution defines the power distribution between the federal government (the
Centre) and the States in India. This part is divided between legislative and administrative
powers. The legislative section is divided into three lists: Union list, States list and Concurrent
list (Wikipedia, 2011).

The power of the states and the Centre are defined by the constitution and the legislative
powers are divided into three lists.

Union List
Union list consists of 99 items on which the parliament has exclusive power to legislate with
including: defense, armed forces, arms and ammunition, atomic energy, foreign affairs, war
and peace, citizenship, extradition, railways, shipping and navigation, airways, posts and
telegraphs, telephones, wireless and broadcasting, currency, foreign trade, inter-state trade
and commerce, banking, insurance, control of industries, regulation and development of
mines, mineral and oil resources, elections, audit of Government accounts, constitution and
organization of the Supreme Court, High Courts and union public service commission, income
tax, custom duties and export duties, duties of excise, corporation tax, taxes on capital value
of assets, estate duty, terminal taxes. (Wikipedia, 2013)

2. Dr. L. Mothilal, Pondicherry University, India, Jan -2016 – [email protected]
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State List
The state list consists of 61 items and individual states have exclusive authority to legislate on
items included in this list: Public order, police, administration of justice, prisons, local
government, public health and sanitation, agriculture, animal husbandry, water supplies and
irrigation, land rights, forests, fisheries, money lending, state public services and state Public
Service Commission, land revenue, taxes on agricultural income, taxes on lands on buildings,
estate duty, taxes on electricity, taxes on vehicles, taxes on luxuries. (Wikipedia, 2013)

Concurrent List
Concurrent list consists of 52 items. Uniformity is desirable but not essential on items in this
list: Marriage and divorce, transfer of property other than agricultural land, education,
contracts, bankruptcy and insolvency, trustees and trusts, civil procedure, contempt of court,
adulteration of foodstuffs, drugs and poisons, economic and social planning, trade unions,
labour welfare, electricity, newspapers, books and printing press, stamp duties. (Wikipedia,
2013)

Exceptions
Though states have exclusive powers to legislate with regards to items on the states list,
articles 249, 250, 252, and 253 state situations in which the federal government can legislate
on these items.[2]

Administrative Powers
The Union and states have independent executive staffs fully controlled by respected
governments and executive power of the states and the Centre are extended on issues they
are empowered to legislate.

Union Control Over States
According to the Article 356 of the Constitution of India, states must exercise their executive
power in compliance with the laws made by the Central government. Article 357 calls upon
every state not to impede on the executive power of the Union within the states. Articles 352
to 360 contain provisions which empower the Centre to take over the executive of the states
on issues of national security or on the breakdown of constitutional machinery. Governors
are appointed by the Central government to oversee states. The president can dissolve the
state assembly under the recommendation of the council of ministers by invoking Article 356
if and when states fail to comply with directives given by the Centre


Centre – State Relations:
1. Legislative Relations
2. Administrative Relations
3. Financial Relations
4. Planning and Centre-State Relations

3. Dr. L. Mothilal, Pondicherry University, India, Jan -2016 – [email protected]
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1. Legislative Relations (Articles 245 – 254 in the Constitution of India)
 Exclusive jurisdiction of Union Govt. to make laws for whole India on Union List
 States will have exclusive jurisdiction of for State List Subjects
 Both the Union and State Govt. can make laws on Concurrent List
 In case of clash between the Governments, Union Laws will prevail
 Residuary Power of the Union Govt. (powers not enumerated in any of the three
lists)

Exceptions to the State List: Special Circumstances:
1) Legislation in National Interest (Art. 249): If Rajya Sabha declares a resolution by not less
than 2/3
rd
majority, Union Govt. Can makes laws on State List
 Resolution remains in force for one year which can be extended by subsequent
resolution

2) Legislation by consent of States (Art. 252)
 If two or more states request by passing a resolutions in both the houses of each
state, Union Govt. can make laws to apply for them
 Parliament has right to amend or repeal such Act.
Examples:
1) Damador Valley Corporation to control floods for –West Bengal & Bihar
2) Urban Land Ceiling Act. 1976 – (11 legislatures requested)
3) Legislation to implement International Treaties (Art 253)
 Only Union Govt. Can make laws for whole country to implement international
treaty, agreement, convention made at any international conference, association
or other body.

4) Legislation under proclamation of emergency (Art. 352)
 State list is automatically converted into Concurrent List
 Emergency in India was between 1962-68 & 1971-1977.
 In the US, Canada or Australia, the above provision is not there

5) Legislation due to failure of Constitutional Machinery in the State (Art. 356)
 President’s rule is imposed on the report of a Governor
 The powers of state legislature are under the Parliament
 This power is used more than 100 times in almost all states

6) Reservation of Bills for the consideration of the President (Art.200)
 Bills which endanger the position of High Courts, should be reserved for President
 Inter-state River or River Valley bills (Art. 288)
 Some bills on Concurrent List may be reserved

4. Dr. L. Mothilal, Pondicherry University, India, Jan -2016 – [email protected]
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7) Legislative Relations and Courts – “Incidental Powers”
 Legislature is given plenary power to make on laws a particular subject and also
implied power to make laws incidental to the exercise of such power.
 Example: Make law to establish special factory – plenary power; rules for
functioning special factory – incidental powers

Conclusion:
 Tendency towards high degree of centralization
 Different political parties may have different political programs leading to
conflicts
 Reservation of bills for the President by State Governor may lead to conflict
center-state relations




2. Administrative Relations (Articles 245 – 254 in the Constitution of India)
Administrative Relations serve two purposes:
1) Effective federal Executive Control
2) Minimize the conflicts between Centre and States

I) Governor as Agent of Centre
 Governor works as the representative of the President of India
 Governor is appointed, transferred and dismissed by the President
 Governor’s role is dual – (Firstly, representative of Union Govt. And
Secondly, Constitutional head of the State)

II) Implementation of Central Laws (Art.256):
 Executive powers of every state shall be so exercised as to ensure compliance
with laws made by Parliament.
 Executive power of Union Govt. to give directions to State
 Not to impede of prejudice the executive power of union in the State
 With respect to military, railways or such other areas of national importance,
center will direct the State
 Entrust the Officers of the State certain functions of the Union
Govt.(Expenditure, if any incurred shall be borne by the Centre)
 Centre can give directions on the welfare of Scheduled Tribes in the State.

III) States to entrust functions to the Union Govt. (Art. 258A):

5. Dr. L. Mothilal, Pondicherry University, India, Jan -2016 – [email protected]
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IV) All India Services:
a. Common to both the Centre and States (Art.312 gives more powers to center
to create such services):
b. Recruitment to the above services is made by UPSC-Central Personnel Agency
c. These services are regulated by central rules and regulations
d. These services give cohesions to the federal structure

V) Power of Adjudication:
 Parliament can adjudicate on inter-state water or River issues

VI) Inter-State Comity
 Recognition of Public Acts, judicial settlements or disputes
 Freedom of Trade & Commerce
 Full faith and credit shall be given to the Judicial proceedings, acts, records,
of States and Union Govt. throughout the country
 States are no way connected with the appointment or removal of Judges of
the Supreme Court and High Courts

VII) Inquiry Commissions against State Chief Ministers:
 Central Govt. Is empowered to appoint commissions of inquiry against any
Chief minister on the charges of corruption and malpractices
 Examples - (Commissions appointed against):
i) Punjab, CM, Sardar Pratap Singh Kairon in 1963 (Das Commission)
ii) Tamilnadu, Karunanidhi in 1976 (Sarkaria Commission)
iii) A.P. Vengal Rao
iv) Dev Raj Urs in Karnataka
v) Bansilal in 1978 & Bhajanlal of Haryana (Jaswant Singh
Commission)

VIII) Constitutional Bodies / Instructional arrangement for consultation:
 National Development Council – an important body for consultation
between the Centre and States
 Its organization members includes:
1) Chief Ministers of States
2) Heads of UTs
3) Union Cabinet Ministers
4) Prime Minister (Chairman of the Council)

IX) Planning Commission:
 PM is the ex-officio Chairman
 Involves Centre and States

6. Dr. L. Mothilal, Pondicherry University, India, Jan -2016 – [email protected]
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X) Consultations through Conferences:
Network of consultations between the Centre and States through:
1. National Development Council
2. The CMs conference
3. Conference of Ministers of different departments
4. Chief Secretaries
5. Director General of Police etc.



XI) Conclusion: (Assessment of Constitutional Provisions)
 The Constitution establishes supremacy of the Centre over the States
 The Govt. Of India appointed Sarkaria Commission in 1983 to review the
Centre-State Relations which submitted its report in 1988.


3. Financial Relations (Articles 245 – 254 in the Constitution of India)
 Constitution does not give clear distinction between the Centre and States to
distribute financial resources and leaves much scope to the centre to decide.
 Financial relationship is probably the most complex in Centre-State Relations.
 There is Constitutional provision to appoint Finance Commission by the President
every five years to solve various financial disputes between Centre and the States
Scheme of distribution of Sources of Revenue:
i) Taxes exclusively assigned to the Union Govt. by the Constitution.
 Income from Customs, Export & Import Duties, Income Tax, Excise Duties
on Tobacco, Jute, Cotton etc.,
 Corporation Tax,
 Income from Railways & Postal Departments

ii) Taxes exclusively assigned to States:
 Income from Land Revenue
 Stamp Duty,
 Taxes on goods and passengers on road or inland water ways
 Vehicles tax,
 Toll taxes on lands and buildings
 Professional tax,
 Taxes on luxuries, entertainment, amusement parks, betting and
gambling

7. Dr. L. Mothilal, Pondicherry University, India, Jan -2016 – [email protected]
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iii) Taxes levied by the Union Govt. but collected and appropriated by the States:
 Stamp duties on Bills of Exchange, Cheques, Promissory Notes, Bills of
Lading, Letters of Credit,
 Policies of Insurance,
 Transfer of Shares

iv) Taxes levied and collected by the Union Govt. but assigned to States:
 Duties on succession of property
 Taxes on railway freight and fares
 Taxes on transaction in stock exchanges and commodity market
 Newspapers, advertisements

v) Taxes levied and collected by the Union Govt. but shared with States:


Grants-in-Aid:
 Article 275 empowers the Parliament to give financial assistance to states:
 Grants are classified as
i) Plan – These grants are determined by the Planning Commission
ii) Non Plan – Finance Commission determines these
iii) Grants on Adhoc – are given by the Central Govt. For unforeseen
situations.

Power of Borrowing:
 Union Govt. Can borrow within and outside upon the security of revenues
 States can borrow within the country

Financial emergency:
 During financial emergencies, the president can suspend the the provision of
division of financial resources between the Union and States and Grantsin-Aid to
States
 The Union Govt. Acquires right to issue directions to States on
- Reduction of Salary and Allowances, including High Court Judges
- Reserve all money Bills passed by State Legislatures

Control by the Comptroller and Auditor General of India:
 Comptroller and Auditor General of India appointed by the President
 Shall maintain and audit the accounts of the Union and States
 Can direct States to keep records in a particular manner

8. Dr. L. Mothilal, Pondicherry University, India, Jan -2016 – [email protected]
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Areas of Conflict:
 Many States complain untimely release of funds
 Release of funds depends on the audit of accounts which is dependent on central
Govt.
 Central assistance for central schemes is communicated late – leads to delay in
implementation of schemes
 Centrally sponsored schemes impose conditions – some are difficult ones
 Procedural requirements delay release of funds



4. Planning and Centre-State Relations (Articles 245 – 254 in the Constitution of India)
 India adopted Economic Planning after Independence to achieve maximum
development
 Planning Commission plays important role in Centre-State Relations
 Almost in every activity of States, Planning Commission involves for State Plans
(including State List Subjects)
 Planning Commission:
i) fixes the size & priorities for the State Plans
ii) mobilizes the physical and financial resources
iii) reduces inter-state disparities in development
iv) ensures uniform rate of economic growth and social development in States





References:
1. Hoshiar Singh, (2003), “Indian Administration”, Kitab Mahal, Allahabad, India.


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