Cheat Sheet: Centre-State Relations

1. Constitutional Framework

1.1 Distribution of Powers

1.2 Residuary Powers

• Article 248: Parliament has exclusive power to make laws on residuary matters not enumerated in any list
• Includes imposition of residuary taxes under Article 248 read with Entry 97 of Union List

1.3 Supremacy in Case of Conflict

• Article 246(1): Parliament can legislate exclusively on Union List
• Article 254(1): In case of repugnancy between Central and State law on Concurrent List, Central law prevails
• Article 254(2): State law can prevail if it receives Presidential assent, but Parliament can override it later

2. Legislative Relations

2.1 Parliament's Power over State Subjects

2.2 State Legislature's Power

• Article 246(3): State Legislature has exclusive power on State List except during emergency or under Articles 249, 250, 252, 253
• Cannot legislate on Union List subjects
• Can legislate on Concurrent List but Central law prevails in case of repugnancy

2.3 Doctrine of Occupied Field

• When Parliament has legislated exhaustively on a Concurrent List subject, State Legislature cannot make any law on it
• Leads to invalidity of State law even without direct conflict

3. Administrative Relations

3.1 Extent of Executive Power

3.2 Central Government's Directions to States

3.3 Delegation of Central Functions to States

• Article 258(1): President can entrust State executive with Central functions with State's consent
• Article 258A: Governor can entrust Central executive with State functions with President's consent (added by 7th Amendment, 1956)

3.4 All India Services

• Article 312: Rajya Sabha can create new All India Services by 2/3rd majority resolution
• Existing services: IAS, IPS, IFS (Indian Forest Service)
• Recruited and controlled by Centre but serve under State Governments
• Article 313: Chairman and members of UPSC and State PSCs

4. Financial Relations

4.1 Distribution of Taxing Powers

4.2 Distribution of Tax Revenues

• Article 270: All taxes and duties in Union List (except those in Articles 268, 269) shared between Centre and States
• GST distribution as per Article 270(1A): IGST revenue apportioned as per law made by Parliament on recommendation of GST Council
• Article 271: Parliament can levy surcharges on Union taxes; surcharges and cesses not shareable with States
• Article 275: Grants-in-aid from Centre to States in need; determined by Parliament on recommendation of Finance Commission
• Article 282: Both Centre and States can make grants for public purposes even outside their legislative competence

4.3 Finance Commission

• Article 280: Constituted by President every 5 years or earlier
• Chairman and 4 members
• Recommends distribution of net proceeds of shareable taxes, principles governing grants-in-aid, measures to augment State Consolidated Fund

4.4 Borrowing Powers

• Article 292: Centre can borrow on Consolidated Fund of India within limits fixed by Parliament
• Article 293(1): State can borrow on its Consolidated Fund within limits fixed by State Legislature
• Article 293(3): State cannot borrow without Central consent if it owes any debt to Centre or has Centre's guarantee outstanding

4.5 GST Council

• Article 279A: Inserted by 101st Amendment, 2016
• Composition: Union Finance Minister (Chairperson), Union MoS Finance, State Finance Ministers
• Recommends GST rates, exemptions, threshold limits, model GST laws
• Decisions by 3/4th majority; Centre has 1/3rd voting power, States have 2/3rd collectively

5. Inter-State Relations

5.1 Inter-State Water Disputes

• Article 262(1): Parliament can provide for adjudication of inter-state water disputes
• Article 262(2): Courts excluded from jurisdiction in such disputes
• Inter-State Water Disputes Act, 1956: Tribunal constituted for dispute resolution
• Amendment in 2002: Tribunal's award binding; 1 year time limit for report (extendable to 2 years)

5.2 Inter-State Trade and Commerce

• Article 301: Trade, commerce and intercourse throughout India is free
• Article 302: Parliament can impose restrictions on inter-state trade in public interest
• Article 303(1): Parliament and State Legislature cannot discriminate between states in making laws on trade and commerce
• Article 303(2): Exception for Parliament to deal with scarcity of goods in any part of India
• Article 304: State can impose reasonable restrictions on freedom of trade if it is in public interest (requires Presidential assent)

5.3 Inter-State Council

• Article 263: President can establish Inter-State Council for inquiring and advising on disputes, investigating subjects of common interest, making recommendations for better coordination
• Established in 1990 based on Sarkaria Commission recommendation
• Composition: Prime Minister (Chairman), Chief Ministers of all States and UTs with Legislatures, 6 Union Cabinet Ministers (including Home Minister)

5.4 Zonal Councils

• Established by States Reorganisation Act, 1956
• 5 Zones: Northern, Central, Eastern, Western, Southern
• Not constitutional bodies; advisory forums for inter-state cooperation

5.5 Full Faith and Credit

• Article 261(1): Full faith and credit to be given to public acts, records and judicial proceedings of Centre and States
• Article 261(2): Final judgments and orders of courts in one State enforceable anywhere in India

6. Cooperative Federalism Mechanisms

6.1 Constitutional Provisions Promoting Cooperation

6.2 Concurrent List Mechanism

• 47 subjects requiring coordination between Centre and States
• Includes criminal law, procedure, marriage, contracts, forests, economic planning, social security
• Enables both levels to address subjects of national and regional importance

6.3 National Development Council (NITI Aayog)

• NITI Aayog replaced Planning Commission in 2015
• Not a constitutional body; extra-constitutional mechanism
• Promotes cooperative federalism through participation of State Governments

7. Emergency Provisions and Centre-State Relations

7.1 National Emergency (Article 352)

• Grounds: War, external aggression, armed rebellion
• Effects: Parliament can legislate on State List (Article 250); President can issue directions on executive matters; Central executive power extends to directing any State
• Federal structure does not change but Centre becomes all-powerful

7.2 President's Rule (Article 356)

• S.R. Bommai v. Union of India (1994): President's Rule is justiciable; Centre must use it sparingly; Governor's report and Centre's decision subject to judicial review

7.3 Financial Emergency (Article 360)

• Ground: Financial stability or credit of India threatened
• Never invoked so far
• Effects: Centre can direct States on financial matters; reduction of State employees' salaries; reservation of money bills for Presidential consideration

8. Important Judgments

8.1 Legislative Relations

8.2 Administrative Relations

8.3 Financial Relations

9. Key Constitutional Amendments

9.1 Major Amendments Affecting Centre-State Relations

10. Sarkaria Commission Recommendations

10.1 Background

• Constituted in 1983 under Justice R.S. Sarkaria to examine Centre-State relations
• Submitted report in 1988 with 247 recommendations

10.2 Key Recommendations

• Article 356 should be used sparingly; only as last resort when all alternatives exhausted
• Warning should be given to State before imposing President's Rule
• Establish Inter-State Council under Article 263 (implemented in 1990)
• Residuary powers should continue with Centre
• No change required in distribution of legislative powers
• Governors should be eminent persons from outside the State; non-political appointments
• Governors should act as bridge between Centre and State, not as agent of Centre
• Deployment of Central armed forces in States should be with State's consent except in emergencies

10.3 Punchhi Commission

• Constituted in 2007 to review Sarkaria Commission recommendations in changed context
• Submitted report in 2010
• Recommended greater role for States in appointments; Article 356 reforms; financial autonomy for States

11. Role of Governor in Centre-State Relations

11.1 Constitutional Position

• Article 155: Governor appointed by President; holds office during President's pleasure
• Article 156: 5-year term but removable at any time
• Acts as link between Centre and State

11.2 Governor's Reports to President

• Article 356: Governor's report can trigger President's Rule
• Discretionary power to report on State's constitutional machinery failure
• S.R. Bommai case: Governor must have objective material; report subject to judicial review

11.3 Discretionary Powers

• Reservation of Bills for Presidential consideration (Article 200)
• Recommendation to impose President's Rule (Article 356)
• Appointment of Chief Minister when no party has clear majority

12. Disputes and Mechanisms for Resolution

12.1 Types of Disputes

12.2 Supreme Court's Original Jurisdiction

• Article 131: Exclusive jurisdiction in disputes between Centre and States or between States
• Does not include disputes where private parties involved or private rights at stake
• Covers disputes involving questions of legal rights