Indian Federalism: Centre-State Relations Explained for UPSC SSC

Nature of Indian Federalism

India's Constitution establishes a federal system, but with a strong unitary bias. This means while powers are divided between the Centre and States, the Union government often holds a dominant position. Dr. B.R. Ambedkar described India's system as 'both unitary as well as federal according to the requirements of time and circumstances.' K.C. Wheare called India a 'quasi-federal' state. This unique structure allows for both regional autonomy and national unity, adapting to diverse needs across the country. The Seventh Schedule of the Constitution lists the subjects on which the Centre and States can legislate, ensuring a clear division of responsibilities.

The Constitution does not use the term 'federation' but refers to India as a 'Union of States' in Article 1. This implies that states have no right to secede from the Union. The federal features include a dual polity, written constitution, division of powers, supremacy of the constitution, independent judiciary, and bicameralism. The unitary features include a strong Centre, single constitution, single citizenship, integrated judiciary, appointment of governor by the Centre, All-India Services, and emergency provisions. These features collectively define the unique character of Indian federalism.

Legislative Relations

Articles 245 to 255 in Part XI of the Constitution deal with the legislative relations between the Centre and the States. The Seventh Schedule contains three lists: the Union List, State List, and Concurrent List. The Union List has 98 subjects (originally 97) on which Parliament has exclusive power to make laws, such as defence, foreign affairs, railways, and banking. The State List has 59 subjects (originally 66) on which state legislatures can exclusively make laws, including public order, police, public health, and agriculture. The Concurrent List has 52 subjects (originally 47) on which both Parliament and state legislatures can make laws, such as criminal law, marriage, education, and forests. In case of a conflict on Concurrent List subjects, Union law prevails over state law.

Parliament can also legislate on State List subjects under specific circumstances. These include when the Rajya Sabha passes a resolution (Article 249), during a National Emergency (Article 250), when states request it (Article 252), to implement international agreements (Article 253), and during President's Rule (Article 356). The residuary powers, i.e., powers to legislate on subjects not enumerated in any of the three lists, belong exclusively to the Parliament, as per Article 248. This further strengthens the Centre's legislative authority.

Administrative Relations

Articles 256 to 263 in Part XI of the Constitution govern the administrative relations between the Centre and the States. States must comply with Union laws and exercise their executive power to ensure this compliance (Article 256). The Union government can issue directions to states, especially regarding the construction and maintenance of means of communication of national or military importance (Article 257). The Centre can also entrust its executive functions to a state, with the state's consent (Article 258).

Inter-state cooperation is facilitated through various mechanisms. Article 262 provides for the adjudication of disputes relating to waters of inter-state rivers or river valleys. Parliament can establish an Inter-State Council under Article 263 to inquire into and advise upon disputes between states, investigate and discuss subjects of common interest, and make recommendations for better coordination of policy and action. The Sarkaria Commission (1983) and Punchhi Commission (2007) were set up to review Centre-State relations, including administrative aspects, and suggest reforms to improve cooperation and reduce friction.

Financial Relations

Articles 268 to 293 in Part XII of the Constitution deal with the financial relations between the Centre and the States. The Constitution provides for the distribution of taxing powers. Parliament has exclusive power to levy taxes on subjects in the Union List (e.g., customs duties, corporation tax). State legislatures have exclusive power to levy taxes on subjects in the State List (e.g., land revenue, excise on alcohol). Both can levy taxes on subjects in the Concurrent List, though this is rare in practice.

The Constitution also provides for the distribution of non-tax revenues and grants-in-aid. Article 275 provides for statutory grants to states, while Article 282 provides for discretionary grants. The Finance Commission, constituted every five years by the President under Article 280, recommends the distribution of net proceeds of taxes between the Union and the States, and the principles governing grants-in-aid. The Goods and Services Tax (GST), introduced by the 101st Constitutional Amendment Act, 2016, significantly altered the financial landscape by subsuming many indirect taxes and creating a unified tax system, with revenue sharing between the Centre and States.

Important Keywords Explained

Quasi-Federalconcept

A term used by K.C. Wheare to describe the Indian Constitution. It signifies a system that is federal in form but has a strong unitary bias, meaning the central government holds more power compared to typical federal systems. This allows for both decentralization and strong central authority.

Seventh Scheduleconcept

This Schedule of the Indian Constitution specifies the distribution of powers between the Union and State governments. It contains three lists: the Union List, State List, and Concurrent List, enumerating subjects on which each level of government can legislate, ensuring a clear division of responsibilities.

Finance Commissionorganization

A constitutional body established under Article 280 of the Indian Constitution. It is constituted by the President every five years to recommend the distribution of tax revenues between the Union and the States, and the principles governing grants-in-aid to the states, playing a crucial role in financial federalism.

Inter-State Councilorganization

A non-permanent constitutional body established under Article 263 of the Indian Constitution. Its purpose is to investigate and discuss subjects of common interest between the Union and the States, or among states, and to make recommendations for better coordination of policy and action, fostering cooperative federalism.

Additional Facts & Context

• The Union List originally had 97 subjects, now 98.
• The State List originally had 66 subjects, now 59.
• The Concurrent List originally had 47 subjects, now 52.
• Five subjects were transferred from the State List to the Concurrent List by the 42nd Amendment Act of 1976.
• The Sarkaria Commission submitted its report on Centre-State relations in 1987.