India’s federal structure, though tilted towards the Centre, is built on a carefully defined framework of Centre–State Relations. These relations determine how power and responsibilities are distributed and coordinated between the Union and the States.
The Constitution of India divides this relationship into three dimensions:
- Legislative Relations (Articles 245–255) in Part XI
- Administrative Relations (Articles 256–263) in Part XI
- Financial Relations (Articles 268–293) in Part XII
Together, these provisions aim to maintain a balance between national unity and regional autonomy, while ensuring cooperative federalism. However, tensions often arise due to overlapping jurisdictions, political dynamics, and differing priorities between the Centre and the States.
CONCEPT EXPLANATION
Why are Centre–State Relations important?
Because India has a federal structure, and to ensure smooth governance, there must be a clear understanding of who does what, who pays for what, and how they cooperate.
What are the three types of Centre–State Relations?
- Legislative Relations – Who has the power to make laws on different subjects.
- Administrative Relations – How work and duties are shared or coordinated.
- Financial Relations – How money is divided and allocated between the Centre and States.
Where are these relations mentioned in the Constitution?
- Part XI (Articles 245 to 263) deals with legislative and administrative relations.
- Part XII (Articles 268 to 293) deals with financial relations.
Who is more powerful — Centre or State?
The Centre is stronger, especially during emergencies. But under normal conditions, the Constitution provides a balanced structure with autonomy for states in many areas.
Are there any institutions to manage disputes?
Yes! The Supreme Court handles disputes (Article 131), and bodies like the Inter-State Council and Finance Commission help in coordination.
LEGISLATIVE RELATIONS :
Centre–State Legislative Relations (Articles 245–255)
The Constitution of India ensures a structured distribution of legislative powers between the Centre and the States. This is outlined in Part XI and specifically covered under Articles 245 to 255.
1. Territorial Jurisdiction (Article 245)
- Parliament can make laws for the entire territory of India or any part thereof. It can also enact extra-territorial legislation, applying to Indian citizens abroad.
- State legislatures can make laws only for their respective states.
2. Distribution of Legislative Subjects
The Constitution provides a three-fold distribution of legislative subjects in the Seventh Schedule (Article 246) :
- Union List (246(1)): Subjects of national importance – Parliament has exclusive power.
- State List (246(3)): Subjects of local or state-level importance – State Legislatures have exclusive power.
- Concurrent List (246(2)): Subjects of joint interest – Both Parliament and State Legislatures can legislate. However, in case of a conflict, central law prevails.
3. Residuary Powers
- Article 248 vests residuary powers (subjects not enumerated in any of the three lists) in the Parliament. This is a key feature that gives the Centre an overriding legislative edge.
4. Parliamentary Legislation in State Field
Parliament can legislate on matters in the State List under five special circumstances:
- Article 249: If Rajya Sabha passes a resolution by two-thirds majority, Parliament can make laws on State subjects in the national interest.
- Article 250: During a National Emergency, Parliament can legislate on State subjects. These laws become inoperative six months after the emergency ends.
- Article 252: If two or more State Legislatures pass resolutions requesting Parliament to legislate on a State subject, such laws apply only to those states.
- Article 253: Parliament can legislate to implement international treaties and agreements, even on matters in the State List.
- Article 356: During President’s Rule in a state, Parliament becomes empowered to make laws on any matter in the State List for that state.
5. Centre’s Control Over State Legislation
- Under Article 200, the Governor can reserve certain state bills for the President’s assent.
- This provision allows indirect central supervision over state legislation, especially on matters that might conflict with Union laws.
ADMINISTRATIVE RELATIONS
Centre–State Administrative Relations (Articles 256–263)
The Constitution ensures a cooperative federalism in administrative matters by defining how executive powers are shared and exercised.
1. Distribution of Executive Powers
- Union Government: Has executive power over matters on which Parliament can legislate, i.e., subjects in the Union List and Concurrent List.
- State Governments: Must exercise their executive power in conformity with laws made by Parliament, particularly on Concurrent List subjects.
2. Centre’s Directions to the States
- Article 256: States must comply with laws made by Parliament. The Centre can issue directions to ensure this.
- Article 257: Centre can direct states to avoid interference in the executive power of the Union, especially during infrastructural development or communication.
3. During Emergencies
- National Emergency (Article 352): The Centre assumes direct control over administrative functions of states and can issue executive directions.
- President’s Rule (Article 356): The President (Centre) can take over state executive powers entirely.
4. All-India Services (Article 312)
- Includes IAS, IPS, and IFS.
- These are jointly controlled by the Centre and the States, but the ultimate control lies with the Union Government.
- States manage day-to-day operations, but recruitment, promotion, and disciplinary actions are handled centrally.
5. Public Service Commissions
- State Public Service Commission (SPSC):
- Members appointed by the Governor.
- Can be removed only by the President, ensuring central oversight in state administration.
6. Other Administrative Provisions
- Article 355: It is the duty of the Union to:
- Protect states against external aggression and internal disturbance.
- Ensure governance in accordance with the Constitution.
- Governor’s Appointment:
- Appointed by the President (Article 155).
- Holds office during the pleasure of the President, strengthening central influence.
- State Election Commissioner (Article 243K) :
- Appointed by the Governor.
- Removed only by the President, ensuring neutrality and protection from state interference.
FINANCIAL RELATIONS :
Centre–State Financial Relations (Articles 268–293)
1. Division of Taxing Powers
- Union List: Parliament has exclusive power to levy taxes on subjects listed here (e.g., customs, income tax, excise duties).
- State List: State legislatures can impose taxes like land revenue, stamp duty, excise on alcohol.
- Concurrent powers: Not applicable for taxation—tax powers are strictly separated.
- Residuary Power: Parliament holds the authority to levy taxes on matters not enumerated in any list.
2. Goods and Services Tax (GST)
- Introduced by the 101st Constitutional Amendment Act, 2016.
- A dual GST model—both Centre and States empowered to levy GST.
- A GST Council (Article 279A) coordinates tax rates and implementation across India.
3. Grants-in-Aid
- Article 275(1): Statutory grants—Parliament may provide grants to states needing financial assistance, especially for promoting tribal welfare or meeting special obligations.
- Article 282: Discretionary grants—Both Centre and States can make grants for any public purpose (beyond legal obligations).
4. Role of Finance Commission (Article 280)
- A quasi-judicial constitutional body constituted every 5 years.
- Recommends:
- Distribution of net tax proceeds between Centre and States.
- Principles for grants-in-aid.
- Measures to augment the resources of states and panchayats/municipalities.
5. Borrowing Powers and Intergovernmental Loans
- Articles 292–293:
- Centre can borrow on the security of the Consolidated Fund of India.
- States can borrow within limits; however, Centre’s consent is required if states owe loans to the Centre.
KEY CHALLENGES IN THE CENTRE-STATE RELATIONS
Allocation of Resources
- Persistent friction over tax devolution and grant distribution.
- GST implementation centralized indirect taxation, yet delays in GST compensation and changing Finance Commission formulae have sparked discontent among states.
Challenging Central Laws
- States like Kerala (challenging CAA) and Chhattisgarh (challenging NIA Act) have moved the Supreme Court under Article 131, highlighting federal tensions in lawmaking.
- Raises questions about the limits of central legislation on state subjects.
Misuse of Article 356
- Accusations of politically motivated dismissals of elected state governments.
- SR Bommai case (1994) limited arbitrary use, yet incidents (e.g., Uttarakhand 2016, Arunachal Pradesh 2016) revive concerns over federal subversion.
Controversy Over Governor’s Role
- Governor is appointed by the Centre but exercises influence over key state decisions—often seen as politically biased.
- Examples include delayed assent to bills, frequent interference, and controversial use of Article 163 (discretionary power).
Over-centralization
- Increasing dominance of the Centre in subjects like education, agriculture, and health, especially during crises like COVID-19, creates a sense of erosion of state autonomy.
Political Divergence
- States ruled by opposition parties often allege discrimination in funding, policy priorities, or approvals.
- Lack of cooperative federalism during major policy shifts (e.g., farm laws) triggers protests and legislative standoffs.
Delayed Devolution to Local Bodies
- Though the 73rd and 74th Amendments recognize local governments, states often delay fund transfers, thereby weakening grassroots federalism.
KEY COMMISSIONS ON CENTRE-STATE RELATIONS
| Commission | Year | Key Recommendations |
| Administrative Reforms Commission (ARC) | 1966 | – Chaired initially by Morarji Desai, later K. Hanumanthayya – Establish Inter-State CouncilNon-partisan Governor appointmentsDevolution of more powers and financial resources to states |
| Rajamannar Committee (Set up by Tamil Nadu Government) | 1969 | Addressed rising centralisationMake Finance Commission a permanent bodyAbolish President’s Rule provisionAbolish All India Services – Vest residuary powers with states |
| Sarkaria Commission | 1983 | Set up by Union GovernmentPermanent Inter-State CouncilUse of President’s Rule only in rare casesStrengthen All India ServicesDeployment of armed forces without state consent allowedPromote Three-Language FormulaStates to be consulted on Concurrent List lawsResiduary powers to be placed in Concurrent ListGovernor to be outsider, not eligible for office of profit, and can be reappointed (UPSC Prelims 2018) |
| Punchhi Commission | 2007 | Built upon Sarkaria Commission and 2nd ARCEmphasized Cooperative FederalismGovernor appointment criteria per SarkariaGovernor should not be Chancellor of UniversitiesImpeachment of Governor similar to PresidentProposed new All India ServiceInter-State Trade & Commerce Commission to be set up |