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Introduction

In the context of the Indian constitution, the division of legislative, executive, and financial powers occurs between the central government and the states. Unlike the other branches, the judiciary does not have a strict separation of powers because it is responsible for upholding both federal and state laws, ensuring legal harmony.

Overview: Centre-State Relations | Indian Polity for UPSC CSE

About Centre-State Relations

In the context of India, powers are categorized into legislative, executive, and financial domains, which are shared between the central government and the states. This delineation creates an interconnected system where the relationship between the Centre and states can be examined through three primary dimensions: legislative, administrative, and financial. While states possess significant decision-making autonomy across various issues, the central government retains the ability to impose limitations on them. This distribution of powers is clearly outlined in the State List, where certain subjects are exclusively under state jurisdiction, and the Union List, which earmarks matters for the central government's predominant authority. Furthermore, the Concurrent List delineates areas where both the center and states share decision-making responsibilities.

Types of Centre State Relations

Part XI of the Indian Constitution focuses on the relationship between the central government and state governments, covering legislative, administrative, and financial connections.

Overview: Centre-State Relations | Indian Polity for UPSC CSE

Legislative Relations

  • Articles 245-255 elaborate on the legislative connections between the Union (Parliament) and the states (state legislatures).
  • These articles define the extent of legislative powers, with Parliament holding superior authority.
  • The provisions address various aspects such as subjects for legislation, conflicts between state and national laws, and residual powers.
  • Schedule VII classifies subjects into the Union List, State List, and Concurrent List.

Administrative Relations

  • Articles 256-263 outline the administrative relationships between the Central government and state governments.
  • India, despite being federal in structure, exhibits unitary characteristics, necessitating states to comply with national laws.
  • Cooperative federalism, as advocated by the Sarkaria Commission, strives to enhance cooperation between the central and state levels of governance.

Financial Relations

  • Financial relations as per Articles 264-293 in Part XII regulate interactions between the Center and states in India.
  • Due to India's federal structure, the Center is responsible for dividing taxes and allocating funds to the states.
  • Schedule VII specifies the powers of taxation, rules on levies, grants, surcharges, and includes significant tax systems like the Goods and Services Tax (GST).

Financial Relations between Centre and State

  • The financial relations between the Centre and State are detailed in articles 268 to 293 within Part XII of the constitution.

Allocation of Taxing Powers between Centre and State

  • The division of taxing powers between the Centre and State is a crucial aspect of financial relations.
  • Parliament possesses the authority to levy taxes on items enumerated in the Union List comprising 13 subjects.
  • State legislatures have the ability to impose taxes on items specified in the State List consisting of 18 subjects.
  • Following the 101st Amendment Act of 2016, both Parliament and state legislatures can enact laws concerning the Goods and Services Tax (GST).
  • The residual power of taxation is vested in Parliament, covering taxes such as gift tax, wealth tax, and expenditure tax.
  • There are constraints on the taxing powers of the states, with specific limitations in place.
  • State legislatures can enforce taxes related to professions, trades, and employment, but the tax amount must not exceed INR 2500 annually.
  • State legislatures are prohibited from levying taxes on the supply of goods or services when the supply occurs outside the state or during import/export activities.
  • State legislatures can tax the consumption or sale of electricity, except for electricity consumed by the Centre, sold to the Centre, or utilized in railway maintenance.
  • Furthermore, state legislatures can impose water taxes, provided that the water in question is not distributed or sold by any authority established by Parliament.

Distribution of Tax Revenues

  • The 80th Amendment Act of 2000 was enacted to implement the recommendation of the tenth finance commission, stating that 29% of the total income obtained from certain Central taxes and duties should go to the states.
  • The 101st amendment introduced a new tax regime known as the Goods and Services Tax (GST).
  • Some taxes are levied by the Centre but collected and appropriated by the states, such as taxes on bill of exchange, cheque, promissory note, insurance policies, and shares.
  • Certain taxes are levied and collected by the Centre but assigned to the states, including the sale or purchase of goods in the course of interstate trade and the consignment of goods during interstate trade. This also includes the levy and collection of goods and services tax during interstate trade.

Distribution of Non Tax Revenues

  • Article 268 deals with duties imposed by the Union but managed by the States.
  • Article 269 focuses on taxes imposed and collected by the Union but allocated to the States.
  • Article 270 covers the distribution of taxes between the Union and the States, with provisions for surcharges.
  • Parliament is authorized to enact taxes and impose surcharges under Articles 269 and 270, with surcharge proceeds earmarked for the central government.

Grant-in-Aids to States

  • Statutory grants, as per Article 275, allow Parliament to provide financial aid to states in need, such as grants for the welfare of scheduled tribes in a state.
  • Discretionary grants, governed by Article 282, enable both the central and state governments to offer grants for public welfare initiatives.

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 Borrowing by Centre and States 

  • The Central Government has the authority to borrow funds either domestically or internationally, within limits set by parliament.
  • State governments, on the other hand, are permitted to borrow only within the country and solely from the central government.

Administrative Relations Between Centre and State

The administrative relations between the central and state governments are delineated in articles 256 to 263 in Part XI of the constitution. These relations can be examined from two perspectives - territorial extent and subjects.

Overview: Centre-State Relations | Indian Polity for UPSC CSE

 Based on territorial extent: 

  • The administrative authority of the center or Union is supreme across all of India, any State, or Union Territory.
  • Conversely, the administrative power of States is confined to their respective territories.

 Based on subjects 

  • The administrative jurisdiction of the center or Union extends to specific subjects that hold relevance nationwide.
  • State governments, on the other hand, wield authority over subjects pertinent to their individual states.

Centre-State Administrative Relations

  • Central officers (Union officials) are responsible for enforcing laws related to subjects in the Union List.
  • State officers are in charge of enforcing laws related to subjects in the State List.
  • State officers also enforce laws related to subjects in the Concurrent List.

Within the Centre-State administrative relationship, the Centre has the authority to issue directives to the states for the following purposes:

  • Article 257(1) - Ensuring no obstruction to Central execution power.
  • Article 257(2) - Maintenance of structures of national and military importance.
  • Article 257(3) - Protection of Railways.
  • Article 250(A) - Concerning the mother language.

If a state fails to comply with or follow these directives, Article 365 comes into play.

Article 356: Failure of Constitutional System

  • When there is a breakdown in the constitutional machinery of a state, it is considered a failure of the constitutional system. In such cases, the President is empowered under Article 356 to intervene and assume control of the state.

Centre-State Relations in Administration

  • Under executive/administrative relations between the Centre and the states, there are mechanisms through which power can be transferred for administration:
  • Governor's Request: The Governor can seek the Centre's assistance for administering the state.
  • President's Intervention: The President can also request to take charge of the state administration.

Mutual Delegation of Functions

The sharing of executive functions between the federal government and the states involves mutual delegation.

States may authorize the federal government to carry out certain functions. This distribution of executive power is a key aspect of cooperative federalism.

Delegation by Governor

  • The Governor, with the consent of the federal government, can transfer certain executive functions to the state.
  • This delegation can be either conditional or unconditional, depending on the circumstances.

Parliament's Role in Delegations

  • It is important to note that Parliament, not the President, is responsible for creating delegations of authority between the Union and the states.
  • States may be granted executive powers by the Union as per the provisions of the Constitution.

Cooperation Between Centre and States

  • Disputes regarding water resources in interstate rivers and valleys are resolved by Parliament.
  • The President can convene meetings of the inter-state council to address mutual concerns.
  • Actions, documents, and judicial processes of the central government and states are mutually recognized.
  • Parliament can assign agencies for duties related to interstate trade, commerce, and interaction.

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Legislative Relations Between Centre and State

Legislative relations between the Centre and states are detailed in articles 245 to 255 of Part 11 of the Indian Constitution. This section primarily focuses on the legislative relations between the central government and the state governments. These relations are categorized based on the territorial extent and the legislative subjects.

Based on the Territorial Extent - Article 245

  • Laws enacted by the Parliament are applicable throughout India and in matters concerning extraterritorial legislation.
  • However, there are exceptions where laws made by Parliament do not apply, such as in the case of five union territories including Andaman and Nicobar Islands, Lakshadweep, Dadra and Nagar Haveli, Daman and Diu, and Ladakh.
  • In these exceptional cases, only the President has the authority to issue regulations, amend, or repeal any parliamentary act for these territories.
  • The Governor has the power to direct that a particular parliamentary act does not apply to scheduled areas within the state.
  • For tribal areas, the Governor of Assam and the President have the authority to exempt certain parliamentary acts from application, with specific reference to Tribal areas in Meghalaya, Tripura, and Mizoram.
  • State laws are applicable only within the state's boundaries or territorial jurisdiction.

For further insights, you can explore the Schedules of the Indian Constitution to understand the distribution of powers between the Centre and the states.

Based on Legislative subjects

There are three types of lists provided in the seventh schedule of the constitution:

  • The Union List includes around 98 subjects such as Defence, Banking, and Atomic Energy. Only Parliament has the authority to legislate on these topics.
  • The State List comprises approximately 61 subjects like Politics, Fisheries, and Police. Only the state legislature can make laws regarding these subjects.
  • The Concurrent List consists of roughly 52 subjects including Population Control and Civil Procedure. Both Parliament and the state governments can legislate on these subjects. In case of conflicts, laws enacted by Parliament take precedence.

Residual subjects

Residual subjects are those that do not fall under the Union, State, or Concurrent Lists.

  • Residual subjects are those that are not specifically allocated to any level of government.
  • These subjects are not covered by the Union, State, or Concurrent Lists and can be legislated upon by either the Union or the States, depending on the situation.

Centre's Control Over State Legislation

The Constitution grants the central government the authority to exert control over state legislative matters:

  • Parliament can enact laws on residual subjects not included in any specific list.
  • The Governor holds the power to reserve a bill for the President's approval.
  • The President can either assent to or disapprove a bill reserved by the Governor.

The Centre's Authority to Legislate on State List

  • Under specific circumstances, the Centre can enact laws on subjects in the State List:

The Centre can make laws on a state list under 5 conditions:

  • If the Rajya Sabha passes a resolution with a 2/3rd majority of members present and voting (Article 249).
  • During a National Emergency situation (Article 250, stemming from Article 352).
  • Upon the request of two or more States, Parliament can legislate on subjects from the State List (Article 252).
  • To fulfill obligations arising from international agreements or treaties (Article 253).
  • In case of the imposition of President's Rule in any state (Article 356).

Parliamentary Legislation in the State Field

The following five extraordinary circumstances permit Parliament to enact laws on any topic falling under the state list:

  • In times of armed rebellion or external aggression affecting a state, Parliament can legislate on matters in the state list to handle the situation effectively.
  • To fulfill India's international treaty obligations, Parliament is authorized to pass laws on subjects listed in the state list.
  • When a state fails to comply with the directions of the central government to implement laws essential for national integrity, Parliament can intervene and legislate on state list subjects.
  • For matters concerning trade and commerce that extend beyond state boundaries and require uniform regulations, Parliament can enact laws on state list subjects.

Approval of Resolutions by Rajya Sabha

  • When a resolution in Rajya Sabha is supported by two-thirds of the members present and voting, it empowers Parliament to enact legislation on a state list matter deemed beneficial for the nation.
  • Such a resolution remains valid for a year and can be extended multiple times, each extension lasting a year.
  • Laws enacted under this resolution become ineffective six months after their passage.
  • In the case of a conflict between state and union laws, the latter prevails; however, states can also legislate on the same subject.

Enforcement of Declaration of National Emergency

  • During a national emergency, Parliament can legislate on any subject within the state list. These laws are effective for a limited period of six months.
  • While states can address the same issue through their laws, in case of a conflict, the union law takes precedence.

Parliamentary Request by State

  • When a state requests Parliament's intervention by passing a resolution, Parliament gains the authority to legislate on various topics. Once approved, the state relinquishes its jurisdiction over those matters.
  • Parliament can enact laws on any subject within the state list to implement international treaties, agreements, and conventions.

Imposition of President's Rule

  • Under President's Rule, the state legislature can legislate on any issue listed in the State List.

[Intext Question]

Understanding Parliamentary Procedures in India

  • The laws enacted under this provision have a limited duration of six months.
  • In case of a conflict, the supremacy of union law prevails over state law.

Overview: Centre-State Relations | Indian Polity for UPSC CSE

Parliamentary Request by State

  • When a state requests Parliament to address certain matters, Parliament can legislate on those issues by passing a resolution.
  • Once approved, the state relinquishes its authority on those matters.
  • Parliament can legislate on subjects from the state list to implement international agreements.

Imposition of President's Rule

  • During President's Rule, the state legislature can make laws on topics listed under the State List.

Dispute Between Centre and State

  • In India, there are several rivers that cross state boundaries, leading to conflicts regarding their management and development.
  • These disagreements primarily revolve around the utilization, governance, and allocation of water from inter-state rivers for activities such as irrigation and generating electricity.
  • According to the Indian Constitution, issues concerning water within a single state are categorized under the State List, while matters related to inter-state river waters are placed in the Union List.
  • Recognizing the persistent nature of these disputes, the framers of the Constitution specifically delegated the responsibility of addressing them to the Parliament.
  • Hence, Parliament holds the power to pass laws aimed at resolving disputes or grievances linked to the usage, distribution, or management of such waters.
  • In 1956, Parliament introduced the Inter-State Water Disputes Act, which established tribunals tasked with settling water disputes that are referred to them.

Punchhi Commission Recommendations

The Punchhi Commission put forth several suggestions regarding the relationship between the central and state governments. These recommendations are crucial for ensuring effective governance and cooperation between the two levels of administration. Here are the key points:

  • Both the central and state governments should reach a comprehensive agreement on laws related to the concurrent list.
  • The central government must adhere to the principle of subsidiarity, allowing states to handle matters autonomously unless they require central intervention.
  • Governors should be selected based on their non-partisan character and should remain apolitical in their conduct.
  • The tenure of Governors should be fixed at 5 years to provide stability and continuity in their role.
  • The process of impeaching the President should also be applicable to Governors, ensuring accountability and integrity in their actions.
  • Governors should not hold the position of chancellor in universities to maintain the separation of powers and roles.
  • Each state should have an equal representation in the Rajya Sabha, promoting equitable participation and decision-making.
  • Zonal councils should convene at least biannually to discuss and address regional issues effectively.
  • Establishing All India services for healthcare, education, and the judiciary can enhance the efficiency and quality of these critical sectors nationwide.

  • This era was characterized by central dominance, with the political party system playing a crucial role in the functioning of the federal political structure.
  • Under Nehru's influential leadership, the Congress party held sway over both the central and state governments at that time.
  • Disagreements between the central and state governments were typically resolved at the leadership level as an internal matter.
  • The Planning Commission and the National Development Council (NDC) were established through executive resolutions to reinforce the center's authority over the states.
  • The Planning Commission was responsible for managing various state-run social services, including education, healthcare, agriculture, social welfare, and industrial development.
  • During this initial phase of Indian Federalism, the central government exerted significant control over the states, with some states even ceding powers to the center.
  • The enactment of the States Reorganization Act led to the formation of Zonal Councils, advisory bodies aimed at fostering cooperative federalism and setting common policies on socioeconomic issues. However, these councils operated within a framework of central dominance over the states.

[Intext Question]

The document Overview: Centre-State Relations | Indian Polity for UPSC CSE is a part of the UPSC Course Indian Polity for UPSC CSE.
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FAQs on Overview: Centre-State Relations - Indian Polity for UPSC CSE

1. What is the significance of Centre-State Relations in Indian Polity?
Ans. Centre-State Relations in Indian Polity refer to the distribution of powers and responsibilities between the central government and the state governments. This relationship is crucial for maintaining unity and integrity in a federal system like India.
2. What are the key features of Centre-State Relations in Indian Polity?
Ans. The key features of Centre-State Relations in Indian Polity include federalism, division of powers, independence of judiciary, and a system of checks and balances to prevent any one level of government from becoming too powerful.
3. How do Centre-State Relations impact governance in India?
Ans. Centre-State Relations have a significant impact on governance in India as they determine the extent of authority and autonomy enjoyed by both the central government and the state governments. The balance of power between the two levels of government affects policy-making, administration, and decision-making processes.
4. What are the mechanisms in place to resolve disputes between the Centre and the States in India?
Ans. In India, disputes between the Centre and the States are resolved through mechanisms such as the Inter-State Council, the Finance Commission, and the National Development Council. These bodies facilitate dialogue and cooperation between the central government and state governments to address any conflicts or disagreements.
5. How do Centre-State Relations impact the implementation of policies and programs in India?
Ans. Centre-State Relations play a crucial role in the implementation of policies and programs in India as they determine the extent of cooperation and coordination between the central government and state governments. Effective coordination is essential for the successful implementation of national policies and programs at the grassroots level.
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