Federalism & Centre–State Relations: Notes for UPSC, SSC & Railway Exams

What kind of federation is India?

The word "federation" does not appear in the Constitution. Article 1 says "India, that is Bharat, shall be a Union of States". Ambedkar explained that the Indian federation is not the result of an agreement among states, so no state can secede; the Union is indestructible, though the states themselves can be reorganised.

India has federal features (two sets of government, a written constitution, division of powers, an independent judiciary, a bicameral Parliament) and unitary features (strong Centre, single constitution and citizenship, Governors appointed by the Centre, emergency powers, integrated judiciary, all-India services, unequal representation of states in Rajya Sabha). K. C. Wheare called it quasi-federal; Granville Austin called it cooperative federalism. In S. R. Bommai (1994) the Supreme Court held federalism to be a basic feature.

Reorganising states (Articles 2–4)

• Article 2: Parliament can admit or establish new states that were not part of India.
• Article 3: Parliament can form new states and alter the area, boundaries or name of existing states by ordinary law. The bill needs the President's recommendation, and the President must first refer it to the affected state legislature for its views. The views are not binding.
• Article 4: such laws are not amendments under Article 368, so a simple majority is enough.
• The States Reorganisation Act, 1956 (based on the Fazl Ali Commission) reorganised states mainly on linguistic lines. Andhra State (1953) was the first state formed on a linguistic basis.

Legislative relations (Articles 245–255)

The Seventh Schedule divides subjects into the Union List (defence, foreign affairs, banking, railways and others), the State List (police, public order, public health, agriculture and others) and the Concurrent List (criminal law, marriage, education, forests and others). Residuary subjects — those in none of the lists — go to Parliament under Article 248. This follows Canada; in the USA and Australia residuary powers rest with the states.

The 42nd Amendment, 1976 shifted five subjects from the State List to the Concurrent List: education, forests, weights and measures, protection of wild animals and birds, and administration of justice (constitution of courts other than the Supreme Court and High Courts).

Article 254 deals with conflicts on Concurrent List subjects. The central law prevails. The exception: a state law that was reserved for the President and received his assent prevails in that state, though Parliament can later override it.

Administrative relations

• Articles 256–257: states must exercise their executive power so as to comply with Union laws and not impede the Union executive; the Centre can give directions.
• Article 365: if a state fails to follow such directions, the President may hold that its government cannot be carried on as per the Constitution.
• Article 312: new all-India services can be created if the Rajya Sabha passes a resolution by two-thirds of members present and voting.
• Article 262: Parliament may provide for adjudicating inter-state river water disputes and bar the Supreme Court and other courts from them (Inter-State River Water Disputes Act, 1956).
• Article 263: the President can set up an Inter-State Council. It was constituted in 1990 on the recommendation of the Sarkaria Commission; it is chaired by the Prime Minister.
• Zonal Councils (five) were created by the States Reorganisation Act, 1956, so they are statutory, not constitutional. The Union Home Minister chairs each. The North Eastern Council was set up by a separate Act of 1971.

Financial relations

• Taxes are divided between the Centre and states; the Finance Commission (Article 280) recommends how the divisible pool is shared.
• Grants: Article 275 provides statutory grants-in-aid to states in need; Article 282 allows discretionary grants for any public purpose.
• The 101st Amendment, 2016 introduced GST. Article 246A gives Parliament and state legislatures concurrent power to levy GST; Article 269A covers GST on inter-state supply.
• GST Council (Article 279A): chaired by the Union Finance Minister, with state finance ministers as members. Decisions need three-fourths of weighted votes of members present and voting; the Centre's vote carries one-third weight and the states together two-thirds.

Commissions on Centre–state relations