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Centre-State relations

Constitution of India defines India as a Union of states. The structure is different from that of a centralized government (United Kingdom) as well as that of a federation of states (USA). This structure was necessitated by the conditions prevailing at time of framing of the Constitution. India is a vast and diverse nation with different caste, creeds, languages, culture and religion. Further, it was not even a single political entity and apart from the British Dominion comprised of a number of independent princely states. The diversities required a federal structure. However, history had showed the existence of fissiparous and separatist tendencies and partition had just taken place. This led the Constituent Assembly to go for a structure which though comprising of different government and legislatures at the Union and the State level, was tilted in favour of the Union. Some of the important Constitutional provisions regarding centre state relations are as under:

Important Constitutional provisions

  1. Article 1 defines India as a Union of states.
  2. Article 2 and 3 empower the Parliament to admit new states or establish new states by uniting territories of two states or changing the boundaries or names of states. However, the bill to alter name, boundary and territory of any state shall not be introduced in the Parliament unless the same has been sent to the concerned state legislature for expressing its views.
  3. Article 153-155 provide that there shall be a Governor in each state who shall be appointed by the President. The executive power of the Government shall vest in the Governor.
  4. Article 169 empowers the Parliament to create or abolish Legislative Councils in a State if the Legislative Assembly of the State passes a resolution to that effect by a majority of the total membership of the Assembly and by a majority of not less than two-thirds of the members of the Assembly present and voting.
  5. Article 200 provides that any bill, which in the opinion of the Governor would endanger the position of High Court provided by the Constitution, shall be sent to the President for his assent.
  6. Article 246 provides that Parliament can make laws on the subjects under the Union List and Concurrent List. Similarly, state legislature can legislate on the subjects in the State list and Concurrent List.
  7. Article 249-250 empower the Parliament to legislate on the subjects enumerated in the State list in certain specific circumstances and during the period of national emergency. Laws passed by the Parliament under these laws will prevail if there is any inconsistency between these laws and any law passed by the State Legislature on the subject.
  8. Article 252 also provides that if legislatures of two or more states ask the Parliament to make a law on such matters over which it does not have any power to legislate, the Parliament can legislate on such subject but such law will be effective only if the legislature of such states pass resolutions for adopting the same.
  9. Under Article 253, the Parliament can pass laws for implementation of an international treaty or agreement.
  10. If there is an inconsistency between the law passed by the Parliament and that by a State legislature on a subject enumerated in the Concurrent list, law passed by the Parliament will prevail.
  11. Article 256 and 257 provide that the States shall exercise their executive powers in accordance with the laws made by the Parliament and the Union shall have the power to give necessary directions to the States on subject it may consider necessary including those for the construction and maintenance of means of communication and railways. However, any sum incurred in this regard will have to be paid by the Union.
  12. As per Article 258 and 258A, the Union can confer certain powers on states while states can transfer some of its functions to Union by mutual consent.
  13.  Article 262 provides that Parliament can make laws for adjudication of disputes relating to inter state rivers or river valleys.
  14. Article 263 empowers the President to set up an inter state Council.
  15. Article 268 provides for certain duties to be levied by the Union but collected and appropriated by the States, while Article 269 provides for certain taxes levied and collected by the Union but assigned to the states. Article 270 provides for certain taxes levied and to be distributed between the Union and the States.
  16. Article 275 provides for such grant-in-aids to the states as the Parliament may determine.
  17. Article 280 provides for setting up a Finance Commission every five years to decide the modalities of revenue sharing between the Union and the States. Recommendations of Finance Commission shall be laid before the Parliament.
  18.  Article 312 provides for establishment of All India services while Article 315 provides for establishment of Union and State Public Service Commissions.
  19. Article 352-355 empower the Government to proclaim emergency in times of threat to the country by war, external aggression or armed rebellion. During this period, the Union will have powers to give directions to the State or make appropriate legislations.
  20. Article 356 empowers the President to take up the functions of the State Government and authorize the Parliament to take up the functions of state legislature.

Dynamics of centre state relations

First few decades after independence were signified by the concentration of powers at the centre. This was because of political domination of the Congress both at the level of the Centre and the Sates as well as some other factors like centralized planning.  The situation changed in 1967 when non Congress parties formed Government in some of the states. Most of these parties had regional strongholds and these were always suspicious of the intentions of the Union Government. The political scenario in the next few decades saw the different political parties ruling at the Union and the State levels. This was the starting of conflict between the Union and the States. However, as a single party i.e the Congress ruled during the country during this period, the states were in no position to influence the centre. The period during and after 1990s saw one party rule being replaced by alliances in which the regional and state based parties played an important role. Now the states increased their prominence in politics and are in a position to influence the policies at the central level. 

First Commission on Centre State Relations : Sarkaria Commission

In 1983, the Government of India appointed a Commission under the Chairmanship of Justice R.S.Sarkaria to examine the working of centre state relations. The Commission submitted its report in 1988. Some of the important recommendations made by the Commission are as under:

  1. Commission recommended that Constitution be amended to provide for consultation with the Chief Minister while appointing the Governor. The Government has accepted the recommendations for amendment in the Constitution but has agreed that consultation with the Chief Minister should be retained as convention.
  2. The Commission also recommended that an interstate Council to be called Inter Governmental Council be set up. This recommendation has been accepted by the Government and in interstate Council has been set up.
  3. Local Self Governments should be strengthened. This has been accepted and implemented through 73rd and 74th constitutional amendments.
  4. There should be prior consultation with the States in respect of overlapping and concurrent jurisdictions except in emergent cases, though it may not be necessary to make such consultation a matter of constitutional obligation.
  5. On a concurrent subject, the Union should occupy only that much field of a subject on which uniformity of policy and action is essential in the larger interest of the Nation leaving the details for action by the States within the broader framework of the policy laid down in the Union law.

Inter State Council

As per Article 263 of the Constitution, the President is empowered to form an Inter State Council. The Council was formed on 28 May 1990. The Council is a recommendatory body for discussing and investigating matters of common interest of some or all states or states and the Union. The Council is chaired by the Prime Minister and includes Chief Ministers or Heads of Government of State and Union Territories and six Cabinet Ministers nominated by the Chairman as members. Standing Committee of the Council was constituted in the year 1996 for continuous consultation and processing of matters for the consideration of the Council. Standing Council is chaired by the Union Home Minister and has five Union Cabinet Ministers and nine Chief Ministers as members. Inter State Council has held ten meetings so far in which view has been taken on all the 247 recommendations of the Sarkaria Commission out of which 180 have been implemented, 2 are in process of implementation and 65 have not been accepted. Further the Council has also taken up matters of important policy issues like Contract labour and contract appointment, Action Plan for good governance, disaster management and atrocities on SC/ST.

S.R.Bommai case: Observations of the Supreme Court

Case was filed in the Supreme Court against dismissal of elected State Government in Karnataka under Article 356 of the Constitution. The Supreme Court in judgment dated 11th March, 1994, examined the issue of applicability of Article 356 in detail and laid down certain principles for use of the provision, some of which are as under:

  1. Action under Article 356 has to be on basis of basis of satisfaction of the President that a situation has arisen where the Government cannot be run in accordance with the constitution. The satisfaction contemplated is subjective.
  2. Power under Article 356 is a conditioned power. The satisfaction must be based on some relevant material.
  3. Proclamation under the article should be issued only when such situation exists.
  4. Proclamation under Article 356 is not immune from judicial review.
  5. If the Court strikes down the proclamation it has the power to restore the dismissed Government to office and revive the Legislative Assembly.

Punchi Commission: Second Commission on Central State Relations

 In 2007, the Government of India appointed the second Commission on Centre State Relations. The Commission submitted its report in 2010. Some of the important recommendations made by the Commission are as under:

  • Union should restrain itself in asserting Parliamentary supremacy in matters assigned to States who should also be consulted before framing legislation in the concurrent list.
  • Bills referred by the Governor for assent of the President should be returned within a period of six months.
  • Qualifications should be prescribed for appointment to the post of Governor who should be given fixed tenure of five years with proper procedure being prescribed for their removal. Guidelines should also be framed for proper discharge of their functions.
  • A constitutional or legal framework should be provided for exercising powers for dismissal of state governments.
  • Federal balance of power needs to be maintained and the Inter-State Council should be strengthened.
  • Financially, the Commission recommended that there should be higher transfer of funds to the backward states.
  • Additional liabilities on states on account of implementing central legislations should be borne by the Centre.
  • Conditions specified in the terms of reference of the Finance Commission should be even handed between the Centre and the States, and the States should also be involved in the finalization of these terms of reference.
  • Dual GST at the centre as well as the states should be implemented.
  • Panchayati Raj institutions need to be strengthened through devolution of more powers and transfer of funds.

The report has been circulated to all stake holders including state governments/UT administrations and Union Government ministries and departments.

Finance Commission

Article 280 of the Constitution provides for setting up of a Finance Commission every five years which shall comprise of a Chairman and four members. 13th Finance Commission was set up on 13th November, 2007 for making recommendations for distribution of tax proceeds between the Union and the States, the principles which should govern grant-in-aid and the measures needed to augment the Consolidated Fund of the State for next five years commencing from 1st April, 2010. The Commission submitted its report in December, 2009. Among other things the Commission recommended that State share in the net proceeds of shareable central taxes shall be 32%. Apart from this the Commission also recommended grant-in-aid to various states amounting to Rs.3,18,581 crores.


Institution of the Governor, use of Article 356 and sharing of finances have been the three important issues between the Centre and States. However, n the recent past there has been no major trouble between the Centre and the States. This could be due to the evolution of machinery for consultation with states in matters of their interest. Politically, one of the reasons for this is the end the domination of one political party at the Centre and the increasing importance of regional parties who have their main stakes in their respective states. These parties would naturally want more power and resources to be allocated to the States and would oppose any move to restrict powers of the State Governments. The relations between the Centre and the States are now at a more even level indicating better cooperation between these two levels of Governments.

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