Centre-state relations

• The constitution of India divides all powers- legislative,

executive and financial between the centre and the states
• Maximum harmony and coordination centre and state is
essential for the effective operation of the federal system.
Thereby, the constitution incorporates several provisions to
ensure this.
• Centre-state relations can be better understood under the
following three heads:
◦ Legislative relations
◦ Administrative relations
◦ Financial relations

Legislative Relations

There are four aspects in the Centre-state legislative relations:

◦ Territorial extent of central and state legislation
◦ Distribution of legislative subjects
◦ Parliamentary legislation in the state field
◦ Centre’s control over state legislation

Territorial extent of central and state legislation

• Parliament can make law for the whole or any part of the
territory of India (territory includes union, state, UT)
• State legislature can make laws for the whole or any part of
the state. Laws made by the state are not applicable outside
the state, except when there is sufficient relation between the
state and object
• Parliament can alone make ‘extra-territorial’ legislation
• Instances when laws made by the Parliament are not
applicable:
• President can make regulations which has a same effect as
that of the law made by parliament for- Andaman and Nicobar
islands, Daman and Diu, Dadra and Nagar Haveli and
Lakshadweep
• Governor is empowered to direct that an act of parliament
 does not apply to a scheduled area in the state or apply with
specified modifications and exceptions
• Governor of Assam can likewise direct that an ac of
Parliament does not apply or apply with some modification.
The same power is vested in President in relation to
Meghalaya, Tripura and Mizoram

Distribution of Legislative subjects

• Constitution provides for three-fold classification- union list,
state list and concurrent list
• Parliament has exclusive powers vis-à-vis the union list
• State legislature in normal circumstances has exclusive
powers to make laws with matters enumerated in the state list
• Both state and centre can make laws on matters enumerated
in the concurrent list.

Remember: 42nd amendment act of 1976 transferred five

subjects to constitution
• Education
• Forests
• Weights and measures
• Protection of wild animals and birds
• Administration of justice; constitution and organization of all
courts except the supreme court and the high courts
• Power to make laws with residuary subject is vested in the
Parliament
• Union list has precedence over state list and concurrent list
has precedence over state list
• In case of conflict between central law and state law on a
subject enumerated in the concurrent list, the central law
prevails over the state law. However, if the state law has been
reserved for the consideration of the president and has
received his assent, then the state law prevails in the state.
Still, parliament can override the state law by subsequently
making a law on that matter
In USA, only powers concerning the federal government are
mentioned in the constitution and the other powers are left to the
states. In Canada, however, two lists are enumerated- centre and
the state and the residuary powers is vested with the centre
This scheme of enumeration of legislative subjects was borrowed
from Government of India act, 1935, except for the provision which
vested the residuary powers in the governor-general

Parliamentary legislation in state field

• Constitution empowers the Parliament to make laws on any
matter enumerated in the state list under the following five
extraordinary circumstances:
• If Rajya Sabha passes a resolution supported by a 2/3rd
members present and voting empowering parliament to make
a law on a matter enumerated in the state list in the best
interest of the country. Such a resolution stays in effect for a
year. Such a resolution can be renewed any number of times
but not for more than a year at a time. The laws made under
this cease to have an effect after expiration of six months of
the resolution. However, state can make a law on the same
subject, but if there is an inconsistency between state and
union law, the latter prevails
• When a proclamation of National emergency is in vogue then
the Parliament can legislative on a matter enumerated in state
list. The laws made under this cease to have an effect after
expiration of six months of national emergency. Here also, a
state law can make a law on the subject, however, the union
law would prevail if there is any inconsistency
• When states make a request for Parliament by passing a
resolution to that effect than Parliament becomes empowered
to legislate on matters enumerated in the resolution. Once this
resolution is passed, the state forfeits every right with regards
to that subject
• Parliament can enacts laws on matters enumerated in the
state list so as to enforce international agreements
• Parliament becomes empowered to enact a law on the state
matter during the time of operation of President’s rule. The law
made during this time would continue even after the expiration
of the president’s rule. However, the state can later pass an
 act to either modify, or nullify the act as it sees fit

Centre’s control over state legislation

• Constitution has empowered the centre to exercise control
over the state’s legislative matters in the following ways:
• Governor can reserve certain types of bills passed by state
legislature for the consideration of the president. The
president enjoys absolute veto over them
• Bills on certain matters enumerated in the state list can be
introduced in the state legislature only with prior
recommendation of the President. Ex: Inter-state trade and
commerce
During a financial emergency, president can call upon a state to
reserve money bills and other financial bills for his consideration.

Administrative Relations

• The executive power has been divided between the centre

and the states on the lines of distribution of legislative powers
• The power of the centre extends to the whole of India on
matters where it has exclusive jurisdiction (union list) and to
the exercise of rights, authority and jurisdiction conferred on it
by any treaty or agreement
• The jurisdiction of the state extends to those matters
enumerated in the state list
• In matters related to concurrent list, the executive power rests
with the states
• Obligation of states to the centre:
◦ State’s executive power has to be conducted in such a
way so as to ensure compliance with the laws made by
the Parliament
◦ And not to impede or prejudice the exercise of executive
power of the centre in a state
• These directions are coercive in nature (Article 365) since any
failure to abide by them could invite the use of Article 356
• Centre has been empowered to issue advice to states in the
 following instances:
◦ Construction and maintenance of means of
communication declared to be of national importance or
military importance by the state
◦ Measures to be taken for the protection of the railways
within the state
◦ Provision of adequate facilities for instruction in the
mother-tongue at the primary stage of education to
children belonging to linguistic minority groups
◦ The drawing up and execution of the specified schemes
for the welfare of the ST in the states
• The coercive sanction behind the central directions under
article 365 is also applicable in this case
• Mutual delegation of functions: The constitution provides
for inter-governmental delegation of executive functions in
order to mitigate the rigidity and avoid a situation of deadlock
◦ The president with the consent of the state government
may delegate the executive functions of the union to the
state
◦ The governor with the consent of the central government
may delegate the executive functions of the state to the
union
◦ This mutual delegation could be either conditional or
unconditional
◦ The constitution also provides for delegation of union
executive functions to the state without the consent of
the state. However, such delegation is made by
Parliament and not President. However, a state cannot
delegate its executive power in the same way
• Cooperation between the centre and the states: The
following provisions have been included to secure cooperation
and coordination between the centre and the states
◦ Parliament can provide for the adjudication of any
dispute or complaint with respect to the use, distribution
and control of waters of any inter-state river and river
valleys
◦ President can establish an Inter-state council to
investigate and discuss subject of common interest
 between the centre and the states.
◦ Full faith and credit is to be given throughout the territory
of India to public acts, records and judicial proceedings
of the centre and every state
◦ Parliament can appoint an appropriate authority to carry
out the purposes of the constitutional provisions relating
to the interstate freedom of trade, commerce and
intercourse

All-India services
• In 1947, the colonial Indian Civil Service (ICS) and Indian
Police (IP) was replaced by Indian Administrative Service
(IAS) and Indian Police Service (IPS) respectively
• In 1966, Indian forest service (IFS) was created as the third
All-India service
• Article 312 of the Indian constitution enables Parliament to
create an All-India service based on a resolution passed by
the Rajya Sabha to that effect
• These three form a single service with common rights and
status and uniform scales of pay throughout the country
• Importance of AIS:
• help in maintaining high standard of administration in the
centre as well in the states
• help to ensure uniformity of the administrative system
throughout the country
• they further liaison, cooperation, coordination and joint action
on the issues of common interest between the centre and the
states

Public Service Commission

• In this field, the centre-state relations is as follows:
• Chairman and members of the state public service
commission are appointed by the governor, however, they can
only be dismissed the President
• Parliament can appoint a joint public service commission if
two or more states request for it, in such cases, President
 appoints the chairman and members of the state public
service commission
• UPSC can serve the needs of the state public service
commission on the request of the governor and the approval
of the President
• UPSC assists the states in framing and operating schemes of
joint recruitment for any services for which candidates
possessing special qualifications are required

Integrated Judicial system

• An integrated judicial system has been setup even though
India has a dual polity
• This single system of court enforces both the central as well
as the state laws
• The judges of a high court are appointed by the President of
India in consultation with the Chief Justice of India and
governor of the state. They can also be removed or
transferred by the President
• Parliament has been authorized to setup common high courts
for two or more states

Relations during emergency

• During National emergency, the centre can issue directions to
a state on any matter
• During President’s rule, the president can assume to himself
the functions of the state government and powers vested in
the governor or any other executive authority in the state
• During financial emergency, the centre can direct the states to
observe canons of financial propriety and the President can
give other necessary directions including the reduction of
salaries of persons serving in the state and the high court
judges

Other provisions related to centre-state relations in the

executive sphere
 • Article 355 imposes two duties in the centre:
◦ To protect every state against external aggression and
internal disturbance
◦ To ensure that the government of every state is carried
in accordance with provisions of the constitution
• The governor of state is appointed by the president. He holds
office during the pleasure of the President.
• The state election commissioner though appointed by the
governor of the state, can be removed only by the President
• Apart from the above, there are various extra-constitutional
methods to seek centre-state cooperation. Ex: Forums such
as National Integration council, chief minister’s conference
etc.

FINANCIAL RELATIONS

Allocation of taxing powers

• Parliament has the exclusive power to levy taxes on subjects
enumerated in the Union list
• State legislature has the exclusive power to levy taxes on
subjects enumerated in the state list
• Both union and state can levy taxes on matters enumerated in
the concurrent list
• Residuary power of taxation is vested in the Parliament

Restriction placed by constitution on taxation power of the

state
• A state legislature can impose taxes on profession, trades,
callings and employments. But, the total amount payable by
any person should not exceed Rs 2500 per annum
• A state can impose taxes on sale or purchase of goods (other
than newspaper). But, this power of state to impose sales tax
is subjected to four restrictions:
◦ No tax can be imposed n the sale or purchase of taking
place outside the states
 ◦ No tax can be imposed on the sale or purchase taking
place in the course of import or export
◦ No tax can be imposed on the sale or purchase taking
place in the course of inter-state trade and commerce
◦ A tax imposed on the sale or purchase of goods
declared by the Parliament to be of special importance in
inter-state trade and commerce is subject to the
restrictions and conditions specified by the Parliament
◦ State cannot impose tax on sale of electricity in the
following circumstances- consumed by the centre or sold
to the centre, consumed in the construction,
maintenance or operation of any railway by the centre or
sold to the railway company for the same purpose
◦ A state can impose tax on sale of water or electricity sold
to an authority established by Parliament for regulating
or developing Inter-state River. However, such
imposition can be undertaken through a law which has
received the assent of the President

Distribution of tax revenues

• Taxes are imposed by the centre but are collected and
appropriated by the state (Article 268). The proceeds under
this form part of the consolidated fund of the state. Ex: Stamps
duty, excise duty
• Taxes are levied and collected by the centre but assigned to
the states (article 269). Ex: Taxes on the sale or purchase of
goods (other than newspapers) in the course of inter-state
trade. The proceeds under this form part of the consolidated
fund of the state.
• Taxes are levied and collected by the centre but distributed
between the centre and the states (Article 270). This category
includes all taxes except those mentioned above, surcharges
and cess. The matter of distribution of these taxes is
prescribed by the President based on the recommendation of
the Finance Commission
• Parliament at any point can levy the surcharges on taxes and
duties referred to in Article 269 and article 270. Such
 proceeds from surcharges go exclusively to the centre
• Taxes levied and collected and retained by the states: These
are the taxes belonging to the states exclusively. They are
enumerated in the state list. Ex: Taxes on agriculture income,
excise duties on alcohol, taxes on professions, ceilings etc

Distribution of Non-tax revenues:

• The centre: The receipts from the following form the major
sources of non-tax revenues of the centre: i) posts and
telegraphs; ii) railways; iii) banking; iv) broadcasting; v)
coinage and currency; vi) central public sector enterprise; and
vii) escheat and lapse
• The states: The receipts from the following form the major
sources of non-tax revenues of the states: i) irrigation; ii)
forests; iii) fisheries; iv) state public sector enterprise and v)
escheat and lapse
• Grants-in-Aid to the states: Constitution provides for grants-
in-aid to the state from the central resources. There are two
types of grants-in-aid: statutory grants and discretionary
grants
• Statutory grants:
◦ Article 275 empowers the parliament to make grants to
the states which are in need of financial assistance and
not to every state
◦ These sums can be different for different states. These
sums are charged on the Consolidated Fund of India
every year
◦ These are given to the states based on the
recommendation of the Finance Commission
• Discretionary grants:
◦ Article 282 empowers both the centre and the states to
make any grants for any public purpose, even if it is not
within their legislative competence.
◦ The centre is under no obligation to give these grants
and the matter lies within its discretion
• Other grants:
◦ Constitution provided for a temporary grant for specific
 purpose. Ex: grants for the states of Assam, Bihar,
Odisha and West Bengal in lieu of export duties on jute
and jute products.
◦ These grants were to be given for a period of 10 years
from the commencement of the constitution based on the
recommendation of the Finance Commission.