Laxmikanth Test: Centre - State Relations - UPSC MCQ

• The Parliament of India is competent to legislate on all matters that are enumerated in the Union List and the Concurrent List of the Constitution. 

• In the Concurrent List, the Parliament and the State Legislatures have joint jurisdiction. 

• However, in case of conflict over any law made under the Concurrent List, the Union Law will prevail upon the State Law provided the State Law has not received the earlier assent of the President. 

• Parliament alone has the power to make laws on matters not included in the state list or concurrent list.

1. Statement 1 is correct. The Finance Commission is indeed appointed by the President of India every five years or earlier, as needed, to recommend how the net proceeds of taxes should be distributed between the Centre and the States. This is a fundamental aspect of fiscal federalism in India enshrined under Article 280 of the Constitution.

2. Statement 2 is correct. During a national emergency declared under Article 352, the President of India has the power to modify the constitutional distribution of financial resources between the Centre and the States. This includes altering the sharing of taxes and grants, which remains effective throughout the financial year when the emergency is in operation.

3. Statement 3 is incorrect. The GST Council, established under Article 279-A, is a constitutional body responsible for making recommendations to the Union and States on issues related to GST, including tax rates, exemptions, and model GST laws. While it plays a role in the GST framework's functioning, its primary focus is not solely on revenue distribution but on creating a harmonized tax system across India.

Therefore, the correct statements are 1 and 2, making Option B the accurate choice.

• Statement-I: The Governor can indeed reserve a bill passed by the state legislature for the consideration of the President. This power of reservation allows the President to review and potentially withhold assent to a bill passed by the state legislature.
• Statement-II: The President does hold absolute veto power over a bill reserved by the Governor. This means that the President can refuse to give assent to a bill that has been reserved by the Governor, effectively vetoing the legislation.

Both statements are individually correct, but Statement-II does not directly explain or elaborate on Statement-I. The President's veto power over a bill reserved by the Governor is a separate aspect of the legislative process.

Statement-I accurately describes the role and functions of the Finance Commission, which is indeed a quasi-judicial entity established every five years by the President to make recommendations on various fiscal matters and the distribution of tax revenues between the Centre and states. On the other hand, Statement-II incorrectly describes the functions of the GST Council, as it primarily deals with matters related to the Goods and Services Tax (GST) regime, such as recommending tax integration, determining goods and services for GST, setting threshold turnover limits, and guiding principles for supply determination. The GST Council's responsibilities do not align with the functions attributed to it in Statement-II, making this statement incorrect.

1. Article 268 - Correctly matched. Article 268 relates to taxes that are levied by the Centre but collected and appropriated by the States. This includes stamp duties imposed on bills of exchange, cheques, promissory notes, etc.

2. Article 269 - Correctly matched. Article 269 deals with taxes on the sale or purchase of goods (except newspapers) during interstate trade or commerce and taxes on the consignment of goods during interstate trade.

3. Article 270 - Incorrectly matched. Article 270 pertains to taxes levied and collected by the Centre but distributed between the Centre and the States, excluding surcharges.

4. Article 271 - Incorrectly matched. Article 271 allows the Parliament to impose a surcharge on taxes and duties for purposes of the Centre, but it does not concern grants-in-aid.

Thus, only pairs 1 and 2 are correctly matched. Pairs 3 and 4 are incorrectly matched.

• Finance commission is a constitutional body.

• There is no council named Regional Development Council. However, several councils are regional in nature like North Eastern Council etc.

• National Advisory panel makes policies at the national level. States do not have a say in it.

• University Grant Commission (UGC) coordinates the centre and the states in matters of university education.

1. Goods and Services Tax Council - Established under Article 279-A: This pair is correctly matched. The GST Council was established under Article 279-A of the Constitution of India, which was introduced by the 101st Amendment Act of 2016.

2. Finance Commission - Recommends measures to supplement the resources of Panchayats: This pair is correctly matched. The Finance Commission, under Article 280, provides recommendations on the distribution of tax revenues between the Centre and the States, and it also suggests measures to augment the Consolidated Fund of a State to supplement the resources of Panchayats and Municipalities.

3. Sarkaria Commission - Recommended abolition of All-India Services: This pair is incorrectly matched. The Sarkaria Commission, which reviewed Centre-State relations, did not recommend the abolition of All-India Services. In fact, it emphasized the importance of these services for maintaining the unity and integrity of the nation.

4. Punchhi Commission - Suggested fixed tenure for Governors: This pair is correctly matched. The Punchhi Commission recommended that Governors should have a fixed tenure to ensure stability and neutrality in the post.

Thus, only pairs 1, 2, and 4 are correctly matched, leading to the correct answer being Option B.

1. Statement 1: Correct. During a national emergency, the Indian Constitution allows Parliament to legislate on subjects in the State List. This provision ensures that the national interest can be prioritized during emergencies, allowing the central government to enact laws that would normally fall within the jurisdiction of state legislatures.

2. Statement 2: Correct. The President of India has the power to establish regulations for Union Territories that carry the same force as parliamentary acts. These regulations can indeed modify or annul existing parliamentary acts concerning those territories, particularly when a Union Territory's legislative assembly is either suspended or dissolved.

3. Statement 3: Correct. The Constitution provides that the Governor of a state can issue directions that a parliamentary act does not apply to a scheduled area within the state, or that it applies with modifications and exceptions. This is part of the special provisions for the administration and governance of scheduled areas and tribes, highlighting the flexibility given to states in administering areas with distinct socio-cultural characteristics.

All three statements are correct, making Option D the right answer. This question tests the understanding of how legislative powers are distributed and exercised under special circumstances within the Indian federal structure.

• The matters of national importance and the matters which require uniformity of legislation nationwide are included in the Union List. 

• The matters of regional and local importance and the matters which permit diversity of interest are specified in legislation throughout the country is desirable but not essential are enumerated in the concurrent list. Thus, it permits diversity along with uniformity.