Centre State Relations

Centre State Relations in Indian Federalism

1. Acharya Institute of Technology,
Soladevanahalli
DEPARTMENT OF HUMANITIES AND LAW
FEDERAL SYSTEM
CENTRE –STATE RELATIONS IN
INDIA
NAME : HANUMANTHE GOWDA N A

2. Introduction
Essential features of Federalism
TwosetsofGovernment-Union&State.
Divisionoflawmakingpowersb/wthem.
Letter&SpiritofConstitutionshallbe
followedbythem.
JudiciaryshallupholdtheConstitution&
settlethedisputesb/wthem.

3. Constitution Part XI & Part XII from Articles 245–
293deals with
Centre –State relations in India.
TheconstitutionunderPartXIdealswithlegislative
andadministrativerelations&PartXIIdealswith
Financialrelationsbetweenthetwolevelsof
governments.
Thus,ourconstitutionitselfhasclearlydividedand
distributedthelegislative,executive&financial
powersbetweentheCentre&States.

4. a. Legislative Relations
TheconstitutionofIndiahasdistributedthe
lawmakingpowerbetweenthetwo
governmentsintwodifferentways:
Withrespect to Territory(Territorial Jurisdiction)
With respect to Subject-matter.
1.TheUnionParliamentcanmakelawsforthe
wholeoranypartoftheIndianterritory.
TheStatelegislaturecanmakelawswhichare
applicablewithinitsterritoriallimitsonly.

5. 2.Jurisdictionregardingthesubject–matter:
TheUnionParliamenthasexclusivepowerof
legislationonallmatersenumeratedinthe
Union/Centrallist
TheStatelegislaturecanmakelawsonsubjects
mentionedintheStateList.
Regardingthesubjectsmentionedinthe
ConcurrentListbothhavethejurisdictionto
makelaws.

6. Incaseofaconflictbetweenthestate&central
laws,ultimatelythecentrallawwillprevail
overstatelaw.
InourFederalismResiduaryPowersaregiven
totheunionparliamenttobelegislated
(Art.248).Inotherfederationsresiduary
powersarevestedwiththestates.
FromArticle245to255oftheconstitution
dealswiththelegislativerelationsb/wthe
centreandthestates.

7. I.UnionParliamentsPowertoLegislateon
Statesubjects
Exceptional circumstances
1.Powertolegislateinthenational
interest(Art.249)
2.Powertolegislateduringtheperiodof
emergency(Art.250)

8. 3.Powertolegislatewiththeconsentof
theStates(Art.252)
4.Powertolegislatetogiveeffectto
InternationalTreaties&Agreements
(Art.253)
5.Powertolegislateincaseoffailureof
constitutionalmachineryinaState
(Art.356).

9. 1. Power to legislate in the National Interest
(Art. 249):
InthisdirectiontheRajyaSabhahasto
passaresolutionby2/3majorityand
authorizetheUnionParliamenttomakea
legislationonasubjectinthestatelistif
itassumesanynationalimportance.

10. 2.Powertolegislateduringtheperiodof
emergency(Art.250):
DuringNationalemergencytheUnion
Parliamentcanlegislateonanysubjectinall
thethreelists.Butsuchlawsceasestooperate
aftersixmonthsofexpirationofemergency.
3.Powertolegislatewiththeconsentofthe
states(Art.252)
Ifthelegislatureoftwoormorestatespassesa
resolutionauthorizingtheUnionParliament
topassalawonasubjectinthestatelist.

11. 4.Powertolegislatetogiveeffectto
Internationaltreaties&agreements(Art.253)
Parliamentisauthorizedtolegislateevenona
subjectinthestatelistifitisneededtogive
effectorimplementInternationaltreatiesor
agreementseffectively.
5.Powertolegislateincaseoffailureof
constitutionalmachineryinaState(Art.356):
Parliamentisauthorizedtopasslegislationon
anysubjectcomingunderthestatelistduring
thetimesofStateEmergency.

12. II. Union Governments control over State Legislation:
A.Theconsentofthecentreisamustforcertain
billstobepassedbythestatelegislatureon
certainsubjectslike-Astatelawprovidingfor
compulsoryacquisitionofprivateproperty
shallhavenoeffectunlessithasreceivedthe
consentofthePresident[Art.31(b)].
B.Governorofastatecanreserveabillpassed
bythestatelegislaturefortheconsideration
ofthePresident(ifitgoesagainstthe
independenceoftheHighCourt)[Art.200]

13. C. A state law is authorized to tax in
respect to wateror electricity but such a
law shall be valid only if it isreserved for
the consent of the president [Art. 288(2)].
D. Laws imposing reasonable restrictions
on the freedom of trade, commerce
cannot be introduced in the state
legislature without the previous sanction
of the President [Art. 304(b)]

14. Conclusions:
Presidentcanuseabsolutevetopowerover
statelegislations.
Abovevariousconstitutionalprovisionsclearly
illustratesthefactthatthecentrehas
overwhelminglegislativepowersthanthatof
thestate.

15. b. Administrative Relations
(Art.256-263)
TheIndianConstitutioncontainsdetailed
provisionsrelatingtotheadministrative
relationsbetweenthecentreandthestatesso
astopreventanyclashbetweenthetwointhis
regard.
Thecentralgovernmentisverypowerfuleven
intheadministrativespherealso.

16. Part XI chapter 2 of the constitution
deals with theadministrative relationship
between the centre and the states.
Administrative relations between the union
and the states of the federation may be
examined under two respects:
1. Techniques of Unioncontrol over States
2. Inter -State comity.

17. Control of Union Over States
EvenduringnormaltimesArt.256to263
provideforunioncontroloverthestatesinthe
followingways–
A.Directionstothestategovernments,
B.Delegationofunionfunctionstothestates,
C.AllIndiaServices
D.Grants-in-aid.

18. A. Direction by the Centre to the States:
Theuniongovernmentcanissuedirectionsto
thestatesforthefollowingcircumstances:
1.Thecentrecanissuedirectionstothestates
fortheproperexecutionofthelawspassed
bytheparliament(Art.256).
2.Astoinwhichwaythestateshouldexercise
itsexecutivepowerwithoutinanyway
impedingtheexerciseoftheexecutivepower
oftheunion(Ar.257).


19. 3.Astotheconstructionandmaintenanceofthe
meansofcommunicationwhichareofnational
andmilitaryimportance.
4.Regardingthemeasurestobetakenforthe
protectionofrailwayswithintheboundariesof
thestate.Theexpensesincurredbythestate
governmentsonthisaccountarepaidbythe
union.
5.Ifthestategovernmentfailstocarryoutanyof
thedirectionsoftheUnion,thepresidenthas
beenempoweredtoimposePresidentruleover
suchstateafterdismissingthestategovernment
concerned.

20. B. Delegation of Union Functions to the State:
1.TheParliamentmaywiththeconsentoftheState
Governmententrusteitherconditionallyor
unconditionallytothatgovernmentortoits
officers,functionsrelatingtoanymatterfalling
withintheexecutivepowersoftheunion.Thus,
thestatesmaybeconvertedintoagentsofthe
UnionGovernment.
2.However,anyextracostincurredbythestatefor
carryingoutsuchanobligationistobepaidbythe
Union.

21. C. All India Services:
1.TheIAS,IPSandotherofficersappointedby
theUPSCareexpectedtoservethestate
governments.
2.Theydrawtheirsalariesandallowancesfrom
thestategovernmentsbuttheirservice
mattersaredecidedbythecentre.
3.Thepresenceoftheseservicesmakesthe
authorityofthecentralgovernmentdominant
overthestates.

22. 4.Theseservicesareinstitutedtoensure
greaterinterstateco-ordinationand
implementationofthepoliciesofthe
centralgovernment.
5.Thisalsoenablesthecentralgovernment
toexercisecontroloverthestatein
mattersofexecutionofunionlaws.

23. D. Grants-in-aid:
Grants-in-aidgivenbytheuniongovernmentto
thestatesservetwopurposes.
1.Throughit,thecentralgovernmentexercises
astrictcontroloverthestates.
2.Itgeneratescentre-stateco-ordination&co-
operation.

24. Inter-State Comity:
Toachievecoordination&cooperationb/w
statesthefollowingbodiescanbesetup–
A.Inter-StateCouncil
B.Inter-StateCommerceCommission
C.Inter-StatewaterDisputeTribunal.

25. A. Inter-State Council (Art.263):
1.Inter-StateCouncil,tobringaboutcoordination
betweenstatesandtoservepublicinterest.
2.Itinquireintoandadviceupondisputeswhich
havearisenbetweenstates.
3.Itinvestigates&discusssubjectsinwhichsome
orallofthestatesorUnionandoneormorestates
haveacommoninterest.
4.Itcanmakerecommendationsonanysubjectfor
thebetterco-ordinationofpolicy&actionwith
respecttothesubject.

26. B. Inter-State Commerce Commission (Art.307):
1.TheparliamentcansetupInter-State
CommerceCommissionoranyothersuch
authoritywhichitconsidersappropriatefor
enforcingtheprovisionsoftheconstitution
withregardtointer-statetradeand
commerce.
2.Itcanassignsuchdutiestosucha
commissionasitdeemsfit.

27. C. Inter-State Water Disputes (Art.262):
1.TheParliamentisauthorizedtomakelawsfor
adjudicatinganydisputeoranycomplaintwith
respecttotheuses,distributionorcontrolof
watersofanyinter-staterivers&rivervalleys.
2.TheParliamentenactedtheRiverBoardAct,1956
andtheInter-StateWaterDisputesAct,1956.
3.TheWaterDisputesAct,1956empoweredthe
centralgovernmenttosetupatribunalfor
adjudicationofsuchdisputes.Thedecisionofthe
tribunalshallbefinal&bindingonthepartiesto
thedispute.

28. Full faith & Credit Clause (Art. 261):
1.AccordingtoArt.261,fullfaithandcreditshould
begiventhroughouttheterritoryofIndiatopublic
acts,recordsandjudicialproceedingsoftheunion
andeverystate.
2.Accordingtoclause(3),finaljudgmentororders
deliveredorpassedbycivilcourtsinanypartof
theterritoryofIndiacanbeexecutedanywherein
thecountryaccordingtolaw.

29. Emergency
1.UnderaNationalEmergency(Art352),theunion
executivecouldgivedirectionstoanystateastothe
mannerinwhichtheexecutivepowerwastobe
exercised.
2.UnderaFinancialEmergency(Art.360),the
executiveauthorityoftheunionextends“tothe
givingofdirectionstoanystatetoobservesuch
canonsoffinancialproprietary”asmightbe
“deemednecessaryandadequateforthepurpose”.
3.Article356oftheconstitutionempowersthe
presidenttoimposeemergencyinastateinthe
nameof“breakdownofconstitutionalmachinery”

30. 4.Itisexpectedthateverystateshallfollowthe
directionsandcomplywiththeinstructionssenttoit
bytheunion.
5.ByvirtueofArt.358,theuniongovernmentis
expectedtotakenecessarystepstoprotectevery
stateagainstexternalaggressionandinternal
disturbances,andtoensurethatthegovernmentof
everystateiscarriedoninaccordancewiththe
provisionsoftheconstitution.
6.TheUniongovernmentisresponsiblefor
maintainingpeaceandorderinthecountry.

31. Conclusions:
Thereforeco-operationandco-ordination
betweenthecentreandthestatesin
administrativemattersisverysignificant.

32. III. Financial relations between the Centre & the States
1.Theessenceoffederalismisnotjustthe
distributionoffunctionsbutalsothedistribution
ofresourcesnecessaryfortheadequateand
effectiveperformanceofthesefunctions.
2.Nosystemoffederationcanbesuccessfulunless
boththeunionandthestateshaveattheir
disposaladequatefinancialresourcestoenable
themtodischargetheirrespectiveresponsibilities
undertheconstitution(D.D.Basu).

33. ChapteroneofPartXII-Art.264to293provide
forUnion–StateFinancialRelations
Finance Commission:
1.TheconstitutionofIndiaprovidesforthe
appointmentofaFinancecommission-Art.280.
2.Thetermofthecommissionistobe5years.
3.Itistoconsistachairman&4othermembersto
beappointedbythepresident.

34. 1.Thedistributionbetweentheunion&thestatesof
thenetproceedsoftaxeswhicharetobedivided
betweenthemandtheallocationbetweenthe
statesoftherespectivesharesofsuchproceeds
2.Theprincipleswhichshouldgovernthegrants-in-
aidoftherevenuesofthestateoutofthe
ConsolidatedFundofIndiaand
3.Anyothermatterreferredtothecommissionby
thePresidentintheinterestofsoundfinance.

35. Allocation of Resources:
1.Thebasicprinciplethatguidetheallocationof
resourcesbetweenthecentreandthestatesare
efficiency,adequacy&suitability.
2.Thestatesareabsolutelyentitledtotheproceeds
oftaxesonthestatelist.
3.Theuniontakestheproceedsoftaxesintheunion
listandofanytaxnotmentionedinanylist.
4.Therearenotaxesontheconcurrentlist.

36. 5.Whiletheproceedsonthetaxeswithinthestate
listareentirelyretainedbythestates,theproceeds
ofsomeofthetaxesintheunionlistaretobe
assignedwhollyorpartlytothestates.
6.Theresiduarytaxingauthorityrestswiththe
union.
7.Theconstitutionrecognizesthefollowingcategories
oftaxeswhichareavailable,whollyorinparttothe
states.

37. A. Taxes and Duties Levied exclusively by the Centre:
1.Thetaxesenumeratedintheunionlistandany
othertaxnotenumeratedinthestatelisti.e.the
residuarytaxcouldbeleviedonlybytheunion
government.
Example:IncomeTax,Corporationtax,Dutiesof
Customsincludingexport,dutiesofExcise,estate
dutiesetc.,taxesonsaleorpurchaseofNewsPapers
andonadvertisementsandfeesinrespectofanyof
themattersintheunionlist.

38. B. Taxes and Duties levied exclusively by States:
1.Therearetaxeswhichonlythestatescouldlevy,
collectandutilize.
Theseincludelandrevenue,taxesonsuccessionto
agriculturalland,estatedutyinrespectof
agriculturalland,taxesonlandandbuildings,taxes
onmineralrights,excisedutyonalcoholicliquorfor
humanconsumptionandopiumetc.,taxon
electricity,vehicles,water,animals,entertainment,
betting,gamblingetc.,

39. Whilethetaxesleviedbythestateswereexclusively
utilizedbythem,thetaxesleviedbytheunionwere
tobesharedinvariousways.
Thefoundingfathersoftheconstitutionwereaware
ofthefactthatthefinancialresourcesraisedbythe
statesmaynotbesufficienttomeettheireconomic
development.Sotheymadeprovisionforsharing
therevenueoftheunionbythestatesinfollowing3
ways-
1.Dutiesleviedbytheunionbutcollectedand
appropriatedbythestates:(Art.268)
Stampduties&dutiesofexciseonmedicinal&
toiletpreparationsmentionedintheunionlist.

40. 2.Taxesleviedandcollectedbyunionbutassignedto
thestates(Art.269):
Dutiesinrespectofsuccessiontopropertyother
thanagriculturalland,estatedutyinrespectof
propertyotherthanagriculturalland,terminaltaxes
ongoodsorpassengerscarriedbyrailway,seaor
air,taxesonrailwayfares&freights,taxesonthe
sale&purchaseofnewspapers&onadvertisements
publishedtherein.
The net proceeds from these taxes were assigned to
the states.

41. 3.Taxesleviedandcollectedbytheunionbut
distributedb/wtheunion&thestates(Art.270):
Art.270providedforthecompulsorysharingofthe
netproceedsoftaxonincomeotherthanagricultural
income.
Inthiscasethetaxeswereleviedandcollectedby
theunionbutthenetproceedsweredistributed
betweentheunionandthestates.

42. Grants-in-aid
Theconstitutionprovidesfor3kindsofgrants-in-aid
tothestatesfromtheunionresources:
Grant-in-aidwillbegiventothestatesofAssam,
Bihar,OrissaandWestBengalinlieuofexport
dutyonthejuteproducts(Art.273).
Thesumsofsuchgrantsareprescribedbythe
presidentinconsultationwiththeFinance
commission.

43. Theconstitutionalsoprovidesforspecialgrants
giventothestateswhichundertakeschemesof
developmentforthepurposeofpromotingthe
welfareoftheSTsorraisingthelevelof
administrationofthescheduledarea(Art.275).
0
UnderArt.282,boththeunionandthestatesmake
grantforanypublicpurpose
Thecentralgovernmentcanmakegrantsto
hospitalsortoschools.

44. Borrowing Powers of Union and States
TheframersoftheIndianconstitutionrealizedthat
theunionandstategovernmentscouldnotget
sufficientfundsthroughtaxation.
Sotheframersmadeproperprovisionstoenable
themtoborrowonthesecurityoftheconsolidated
funds,subjecttothelimitationslaiddownbythe
ActsoftheParliament.

45. Exemption of union Property from State taxation
Art.285exemptedthepropertyoftheunionfrom
alltaxesimposedbyastateorbyanyauthority
withinastateunlessaparliamentbylawprovided
otherwise.
Inthesimilarway,underArt.289,propertyand
incomeofastatefromuniontaxation.
Butthisdidnotpreventtheunionfromimposing
anytaxinrespectofatradeorbusinessofanykind
carriedonbehalfofthegovernmentofastate.

46. The Comptroller and Auditor General
C&AGofIndiaappointedbythepresidentmay
entrusthimdutiesandsuchpowerinrelationtostate
accountsasitmaydeemproper.
Hemayprescribetheforminwhichstateaccounts
aretobemaintained.

47. Financial Emergency
DuringtheperiodofFinancialemergencyunderArt.
360,thecentremaydestroythefiscalautonomyof
thestatesaltogether.
Thepresidentshallhavethepowertogive
directionstothestatestoobservesuchcanonsof
financialproprietaryasmaybespecifiedinhis
communication.
Instructthestategovernmentsthatthesalaries&
allowancesofallpublicservantsbereduced.Also
directanystatetoreserveallmoneybillsor
financialbillsforhisconsideration.
These lead tofinancial dictatorship of the centre.

48. Conclusion:
Anexaminationofunion-staterelationshipin
financialmattersclearlyindicatesthestrong
positionofthecentre.
Theresourcesofthestategovernmentsarelimited
tosuchanextentthattheyneedtodependonthe
charitableassistanceofthecentre.
Theplanningcommissionhastakenawaymuchof
theautonomyofthestatesinrespectoffinance.

49. Thank you