Centre-State Relations - Indian Polity UPSC Notes | EduRev

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Scheme of division of powers between the Centre and the States

In a federation there should be clear division of subjects so that the units and the Centre may enact and legislate within their spheres of activity without encroaching. The Indian Constitution too ensures a State List on which State are competent to exclusively enact, a Central List, on which Centre alone is competent to legislate, a Concurrent List on whose subjects Centre as well as the States are competent to legislate. However, there is a provision that when central and state laws contradict or conflict with each other, the former shall have preference over the latter; furthermore residuary powers shall vest with the Centre.

In the scheme of division of powers under our Constitution, it is doubtful whether the States have ‘autonomy’ in any matter if the term implies that the unit will be totally independent of the Central control in the exercise of power on the subjects which fall within its purview.

In India, the Centre has an effective say on all matters in the State List. What we have at issue really is granting more ‘powers’ to the States.

In recent years many States have been demanding more powers, particularly financial powers, as they feel they are burdened with a lot of responsibilities, without the necessary powers and financial resources.

This argument is proved by the fact that successive Finance Commissions have recommended transfer of more amounts from the Central pool to the States.
 Integrity need not be adversely affected by granting more powers to the States, unless subjects of national security interest are transferred to the States.
 It is only when there is continuous confrontation between the Centre and the States or among certain States that integrity can be affected.

However, it is likely that chances of such confrontation will increase if States are given more powers, especially with different political parties in power at Centre and the States. For promotion of economic development the present scheme of division of powers is quite appropriate. Centre controls the finances and the States implement the programmes with Central aid. Though this may hamper progress in some States it ensures the possibility of removing regional imbalances, for it is the Centre that can make things equal by transferring more resources to the backward States. Worked without political bias, the scheme of division of powers as it exists gives enough autonomy to States without endangering the national interest.

Answer of Part-IV 

The innumerable ways in which the Centre has unduly dominated the States are symptomatic of the Centre's attitude towards its “vassals”.

The criticism has been strident in recent years that the Union Government, by virtue of its predominant position in the economic sphere, has left the States high and dry, often forcing them to go before the Centre with a begging bowl.

The autonomy of the States having been eroded, many of them especially those governed by opposition parties, have been fighting hard to alter the picutre. While demanding a radical revision of the lop-sided financial relations that now subsist between the Centre and the States, they have been pleading for genuine autonomy.

The massive welfare activities of the States involving a huge outlay, coupled with recurring natural calamities, do call for an urgent revision of the financial provisions of the Constitution, in the light of the experience of forty-five years.

Distribution of Legislative and Execu-tive powers Under Different Circumstances

The makers of the Constitution had foreseen exceptional circumstances, too. Under such conditions either the normal distribution of powers stands suspended or the Union legislature gains a say over the state subjects. These extraordinary circumstances are :

(i) In the national interest. : Parliament is empowered to legislate on subjects in the State List for a temporary period. For this, the Upper House should ratify the resolution by its two-thirds members present and voting, that it is necessary in the national interest (Art. 249) that Parliament shall have power to legislate over such matters. Each such resolution will give a lease of one year to the law in question. Such a law will ceased to be in force.

(ii) Under proclamation of emergency. : While the proclamation of emergency is made by the President, Parliament has the power to legislate on state subjects. However such a law ceases to exist on the expiration of a period of six months after the proclamation has ceased to operate (Art. 250).

(iii) By agreement between state. : If the Legislatures of two or more states resolve that it shall be lawful for Parliament to make laws with respect to any matters in the State List, as far as those states are concerned, Parliament has such power as regards such states. It is open to any state legislature to adopt such resolution (Art. 252).

(iv) To implement treaties. Parliament has the power to legislate on any subject for implementing an international treaty, agreement or convention (Art. 253).

(v) Under a proclamation of failure of the constitutional machinery. : When such a proclamation is made by the President under Art. 356, the President may declare that the powers of the state legislature shall be exercisable by or under the authority of Parliament.

Distribution of executive powers

The distribution of executive powers between the Centre and states follow the distribution of legislative powers. Thus, the executive power of the state is coextensive with the territorial jurisdiction of its legislative power (Art. 162).

The Union has exclusive executive powers over matters enumerated in the Union List. The executive power of the Union may be extended by a treaty or agreement among two or more state (Art.73). On the other hand, the state has exclusive executive powers over the subjects of the State List (Art. 162).

In concurrent matters, state have an edge over the Union. The executive powers on concurrent matters generally remain with the state but subject to the provisions of the Constitution, conferring such functions expressly upon the Union. Thus the executive powers relating to concurrent subjects rest with the states, except: (i) where a law of Parliament relating to such subjects vests some executive function specifically upon the Union; or (ii) where provisions of the Constitution itself vests some executive functions upon the Union.

During a proclamation of an Emergency, the power of the Union to give directions about the manner in which the executive powers of the state are to be exercised, extends to all or some subjects. Under failure of the constitutional machinery, the President is entitled to assume all or any of the executive powers of the state.

State-Union Cooperation

Apart  from the agencies of federal control smooth working of both the Union and State governments is sought to be achieved through: (i) mutual delegation of functions; and (ii) immunity from mutual taxation.

For the delegation of Union functions, the President may, with the consent of the State Government and without any legislative sanction, entrust any executive function to that State [Art. 258 (1)]. Parliament may, while legislating with respect to Union subject, confer powers upon a State or its officers, relating to such subject [Art. 258 (2)]. Such delegation has in short, a statutory basis.

Conversely, the Governor of a State may, with the consent of the Government of India, entrust on the Union Government or its officer, functions relating to a State subject, so far as that State is concerned [Art. 258A].

Art. 258 provides that the property of the Union shall, save insofar as Parliament may by law otherwise provide, be exempt from all taxes imposed by a State or by any authority within a State.

Similarly the property of a State is immune from Union taxation [Art. 289 (1)]. The immunity, however, does not extend to all Union taxes, as held by our Supreme Court, but is confined only to such taxes as are levied on property. A State is, therefore not immune from customs duty which is imposed not on property, but on the act of import or export of goods. The 'income' of a State is also exempted from Union taxation. The immunity of the income of a State is, again, subject to an overriding power of Parliament as regards any income derived from a commercial activity. Thus:

(i) Ordinarily, the income derived by a State from commercial activities shall be immune from income-tax levied by the Union.
(ii) Parliament is, however, competent to tax the income of a State derived from a commercial activity.
(iii) If, however, Parliament declares any apparently trading functions as functions 'incidental to the ordinary functions of government', the income from such functions shall be no longer taxable, so long as such declaration stands.

Committees For Reforming The Relations

Setalvad Committee

An Administrative Reforms Commission (ARC), appointed by the government, constituted a Study Team under M.C. Setalvad in 1966 to examine the centre-state relations. The Study Team submitted its report in 1968 in which it recommended for greater autonomy of the States without amending the Constitution.

Rajamannar Committee

The Rajamannar Committee was constituted by the Tamil Nadu government in 1969, under the chairmanship of P.V. Rajamannar, a retired Chief Justice of Madras High Court. The terms of reference of the Committee were to examine the entire question regarding the relationship that should exist between the Centre and the States in a federal set-up and to suggest amendments to the Constitution so as to "secure utmost autonomy to the states." The committee presented its report on 29 May, 1971. Some of the important recommendations of the Committee were —

(i) The transfer of several subjects from the Union and Concurrent Lists to the State List;
(ii) The residuary power of legislation and taxation should be vested in the State Legislature;
(iii)  An Inter-State Council comprising Chief Ministers of all the states or their nominees with the Prime Minister as its chairman should be set up immediately;
(iv) The abolition of the existing Planning Commission and its replacement by a statutory body, consisting of scientific, technical, agricultural and economic experts, to advise the states which should have their own Planning Boards;
(v) Deletion of those articles of the Constitution empowering the Centre to issue directives to the states and to take over the administration in a state;
(vi) Article 312 should be so amended as to omit the provision for the creation of any new All-India cadre in future.
 The Central government rejected the Committee's recommendations.

Sarkaria Commission

The Sarkaria Commission was set up in March 1983 under the chairmanship of Justice R.S. Sarkaria, a retired Judge of the Supreme Court. It was constituted to examine and suggest reforms for an equitable distribution of powers between the Centre and the States. It submitted its report in January 1988.
 The Commission made 247 recommendations to improve centre-state relations, besides suggesting 12 amendments to the Constitution and 20 new legislations. The Commission recommends—

(i) Before issuing directions to a state under Articles 256 and 257, the Union should explore the possibilities of settling points of conflict by all other available means;
(ii)  The Governor of a state should be a nonpolitical person appointed with the concurrence of the Chief Minister;
(iii) Article 356 should be used very sparingly, in extreme cases, as a measure of last resort;
(iv) Before deploying Union armed and other forces in a state in aid of the civil power, it is desirable that the State Government should be consulted;
(v) By an appropriate amendment of the Constitution, the net proceeds of Corporation Tax may be made permissibly shareable with the states;
(vi) Art. 258 (the centre's right to confer authority to the states in certain matters) should be liberally used by the centre;
(vii) High Court Judges should not be transferred against their will (partially overriding a Supreme Court judgement);
(viii) Inter-state Council (without which interstate disputes are intractable) under Art. 263 should be set up as a permanent body to deal with subject other than socio-economic development;
(ix) The State's say in the Concurrent List should be strengthened and the Centre's hold on the Union List should be loosened.,

The Commission has completely ignored the Anandpur Sahib Resolution which advocates States autonomy. 

The Provisions of Art. 249

  • The Article deals with the power of Parliament to legislate with respect to a matter in the State List in the national interest. ­
  • The Article empowers the Parliament to take up for legislation by itself any matter enumerated in List II, whenever the Rajya Sabha resolves by a twothirds majority, the such legislation is ‘necessary or expedient in the national interest’. ­
  • In other words, whenever any such resolution is passed, Art. 246(3) eases to be a fetter on the power of Parliament to the extent of the resolution. This power is to be distinguished from the one conferred by Art. 250. ­
  • Under the present Article, no emergency is necessary for the assumption of the State power by Union Parliament. ‘National interest’ is a wide term to convey any matter which has incidence over the nation as a whole as distinct from nay particular area, locality or section of the people.


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