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Federal Relations between the Centre and The State

Federalism is not about State's rights. It is about dividing power to protect individual liberty.- Elizabeth Price Foley

The administration of a Nation depends on the cooperative working mechanism of the government in collaboration with the lower hierarchical authorities. The parallel functioning of the Parliament in consonance with the State legislatures advances the country. Federalism is the structure of the government that exhibits the concept of dual government administering a region. Such a form of political organisation ensures the autonomy of governance at Centre as well as the State level.

The integrity of the nation is dependent on the form of government system that a Nation adopts. Federalism aims to maintain a balance between the different functionary tools of dominionship. In a Federal structure, the relation between Centre and State is hinged on the association between the two in leading the authority.

Before the formation of the States, India had a Single Central Government to administer the entire nation. The formation of states, emerged the idea of State Governments. For the cooperative mechanism between the Centre and the State Government, the Constitution of India lays down the structure of the government as a 'Federal Government'. The Federal form of government implies a two-level authority council with the Central government as the premiere dominion, while lower in the hierarchy is the State government.

The Union government is vested with the central powers while the State governments hold regional powers. The Central Government is the apex authority and even holds the jurisdiction of conducting officialdom over the State authority.

Indian Constitution- Is it Unitary or Federal?
The question of the nature of the constitution is a debatable question. The Indian Constitution is a blend of features of both the Unitary and Federal form of structure. There exists elements of federalism under the ambit of the Unitary model of government.

The Unitary features of the Constitution[1] denotes an aspect of centralisation wherein the Central Government plays a dominant role. All the powers at various levels of organisation are derived from the central government. The Central government is the driving force of the power authority. The Unitary structure insists on a single authority of administrative units that upholds the democracy of the nation. It is imbibed in Article 1 to Article 4 of the Indian Constitution which postulates the Unitary nature of the Indian Constitution.
  • Article 1 describes India that is Bharat as a 'Union of States'. It refers that India has not been established on the basis of the agreements between the states. The states are a part of the nation. The States constitute the nation and that they are the rock bottom basis for the unification of India. Furthermore, the article infers that the States do not possess the power to separate from the Union of India.
  • Article 2 stipulates that the apex authority which is the Parliament, has the power to form a new state or create a new state. The Central authority has the jurisdiction to add a new state in the 'Union of States' as it may deem fit necessary.
  • Article 3 mentions the competency of the Centre to alter a form of a new state out of the existing territorial states. The Union can separate the state and form two new states.
  • Article 4 emphasizes the potential of the Centre in bringing about changes in Article 2 and 3 in relation to the State authority.
Another important feature of the Unitary Constitution is the concept of a 'One Constitution'. It means that all the states in a nation are subject to a single constitution. The authorities and powers of the states and other administrative departments fall under the jurisdiction of a 'Single Constitution'.

The Federal features[2] of the constitution defines India as a Bicameral legislature with two authoritative structures. In a Federal structure the Centre and the State derive its power from a defined and coded legislation. Some essential features are:
  • The most essential feature being the dual governmental structure with Centre as the focal power authority while the States exercise the peripheral power pattern.
  • In a Federal Constitution the powers of the Centre and the States are divided and clearly specified to prevent the autocracy of two authorities. The formulation of a State and the Union list clearly demarcates the interest of both the Centre and the States. The Concurrent list provides the common interest of both the Centre and the States for mutual cooperation between the two functional authorities. The powers are also divided under the three lists of State, Union and Concurrent in Schedule VII.
  • The jurisdiction of the Constitution over all the authorities. A Federal Constitution directs the supremacy of the Constitution.
  • A Written Constitution is an essential element in determining the federal structure of the Constitution.
  • The Federal form of the Constitution establishes an independent judiciary. The Supreme Court is the uppermost judicial authority with subsequent lower level of judicial power structure.
  • The State government deals with the regional matters of regulating the territorial state while the Central government holds national importance in conducting the administration of the nation under a spectrum of aspects such as financial, foregin relations and defence.
However, the Centre is the supreme power authority. The States exist under the Constitutional power of the Centre. The States are subjugated under the rule of the Central governments and the Central government can interfere in the working of the States as and when it deems necessary. The State and Central governments exercise their powers under their own discretion.

The viability of a Federal or a Unitary Constitution was held in Kuldip Nayar v. Union of India, 2006[3]. The five Judge Bench of the Supreme Court held that the Federal features of the Constitution play a dominant role. The Constitution is driven by the Federal principles and 'federal principles is one of the basic features of the Constitution'. It even observed that India is a Federal state of its kind and holds the supremacy of the Federal Constitution.

Provisions for the relation of the Centre and the State

The Federal Relation between the Centre and the State is stipulated under the various provisions of the Constitution of India. The provisions[4] details the relation and the jurisdictional power of the Central and State governments. The Federal relation of the Centre and the State is highlighted through the below stated provisions.

Legislative Relations: Article 245-255 stated under Part XI- some of the important provisions are:
  • In territorial jurisdiction the Centre holds a wider importance. The authority of the State is limited to the territorial boundary. The State's power is confined within the circumscribing limit of the state territory. While, the Parliament holds 'extraterritorial legislative power' which extends upto subjects of Indian citizenship situated outside the national territory. The power of the Centre extends upto the entire nation and not only a particular limited territory. It even legislates the territories of particular states as and when required. This is explained under Article 245.
  • The Subjects of legislation have been adopted in a three-fold distributive power legislation. The Union List, the State List and the Concurrent List.
    • The Union List with 99 items enumerates the subjects under complete jurisdiction of the Centre
    • The State List with 61 subjects enlists the subjects under clear jurisdiction of the State Legislature.
    • The Concurrent List with 52 subjects details the common subjects of both Centre and the State.

      However, in the case of overlapping between the jurisdiction of the Union and the State list, the power of the Union Legislature shall prevail. This highlights the supreme power of the Centre as against the State jurisdiction as given under Article 246.
  • As per the Residuary powers- Article 248, the Parliament has the command to make legislations in consideration to the subjects not mentioned under the State or the Concurrent List.
  • The power of the Union over the administration of the State legislature also extends in cases of:
    • National Interest- Article 249
    • Emergency Proclamation- Article 250
    • Agreement between the States-Article 252
    • Legislation for International Agreements- Article 253.
  • The Administrative Relations between the Centre and the State are stipulated under Article 256-263. Certain important provisions laying down the relation between the Centre and the State are:
    • The dominion of the State executive depends upon its compliance over the laws made by the Parliament. On the other hand, the Central government has the obligation to direct the State government as when and necessary through laws and provisions as given in Article 256.
    • Article 258A postulates the power of the Governor of the State government to entrust certain functions to the Central Government. The power extends to any matter under the jurisdiction. The State Governor has the power to recommend the Central government under the consent of the Government of India. The provision of the State's power over the Union was thrusted in the constitution through Seventh Constitutional Amendment, 1956.
    • The power of the Union authority shall adjudicate in cases of water disputes between two states under Article 262. The Central Government shall adjudicate through the formation of a tribunal to determine the use and distribution of water between the two states. The power of the States to deal with the issues related to water dispute is enshrined in Entry 17, State List, Schedule VII. The power of the Centre in relation to the water disputes is vested in Entry 56, Union List, Schedule VII.

      In case of Tamil Nadu v. State of Karnataka, 1991[5], it was held that when the disputes between two states in concern to water distribution are recommended by the Central Government to a tribunal, in such cases the Supreme Court has no authoritative appeal. Through this the Central government finnlay resolved the long running Cauvery water dispute between the government of Tamil Nadu and the government of Karnataka.
    • The President may form an inter-state council to serve the public interest- Article 263.
      The Sarkaria Commission recommended and thereby laid the foundation of a permanent inter-state council in 1990. It comprises six union ministers of the Cabinet along with the Chief Ministers of all the states. The Council was reconstituted in 2019. The position of the chairperson of the Inter-State council was held by the Prime Minister of India.
  • Financial Relations- Article 264-281 deals with the distribution of the Revenue between the Centre and the State:
    • Certain duties collected and appropriated by the State but levied by the Union such as stamp duties- Article 268
    • There are certain taxes which are imposed on the States but are collected and appropriated by the Union such as estate duties on fares and freights.
    • The Union collects or levies certain duties. However, the same amount is shared between the Central and the State government- Article 270
    • The Centre has the autonomy to levy taxes from the subjects of the Union List
    • On the other hand, the State has the discretion to levy taxes from the subjects of the State List.
    • While, both the State and Centre has the power to levy taxes from the subjects mentioned in the Concurrent List.
    • Article 267(1) provides the Centre the power to establish a Contingency Fund which is known as “Contingency Fund of India”. Sums shall be deposited from time-to-time. The fund would be at the disposal of the President for its usage at times of unforeseen expenditure.
    • Article 267(2) provides the State legislature the power to form a Contingency Fund for the state. The same shall be at the disposal of the Governor of the State to meet the unforeseen expenditure and circumstances. Amount of money shall be paid in the fund to maintain a considerable amount of sum in the Fund.
    • The formation of a Finance Commission was laid down under Article 280 under Finance Commission (Miscellaneous Provisions) Act of 1951.
    • The role of the Finance Commission would be to recommend to the President the distribution of sources in relation to financial subjects between the Centre and the State as per Article 281. The commission shall be headed by a Chairman in assistance with four other members.

During the Emergency period, the power of the Centre is absolute. The Centre holds the definite power and regulates the functioning of the State governments to ensure stability of the working mechanism of the States. Thus, the Centre plays a higher role in federal structure in regulating the State governments.

Landmark Cases
Ganga Ram Moolchandani vs State Of Rajasthan And Ors on 17 July, 2001[6]- The two Judge Bench held that the Constitution of India is federal in nature and it also possesses the traditional federal characteristics. The components of the federal constitution establishing a relation between the Centre and the State are codified division of power between the Centre and the State, the acceptance of the supremacy of the Constitution and that the powers of the Centre are more dominant in terms of the State powers.

Rameshwar Oraon vs State Of Bihar And Ors. on 8 March, 1995[7]- A single Judge bench held that the State government is under due obligation to follow directions of the Central government and act accordingly. It laid emphasis on the administrative power of the State to comply with the orders of the Central government. As postulated in Article 268 defining the administrative relation between the Centre and the State- "The executive power of every State shall be so exercised as to ensure compliance with the laws made by Parliament and any existing laws which apply in that State, and the executive power of the Union shall extend to the giving of such directions to a State as may appear to the Government of India to be necessary for that purpose."

State of Karnataka vs. Union of India, 1977[8]- The Supreme Court Bench held defined the Constitutional power of the Central Government in issuing orders to the State governments. It observed and concluded that the Central government has the jurisdiction to issue orders to the State government not as a geographical or territorial unit but rather as a Constitutionally defined power and authority. The relation of the Centre and the State is constitutionally defined where the State government has to adhere to the orders and directives of the Centre government.

The Indian Constitution provides a federal structure of governance where the Centre and State work in consonance with each other. The Centre and State Relation depends upon the efficiency of both the authorities. The competency of the Centre to maintain its premiership and the autocracy of the State in acting under its own jurisdiction. The Constitution has evidently laid down the provisions in cases of overlapping of the power structure. The balance between the Centre government and the State government is maintained through mutual cooperation and collaboration of both the power authorities.

The Federal structure of the Constitution also lays down that the Centre cannot tamper the powers of the State government. The interference of the Central government is only legitimate when it deems necessary. By giving powers to the State governments, the Constitution aims at securing the integrity of the Nation. Thus, to keep an equilibrium of power structure the relation of Central government and State government is a Federal relation where the Centre plays a dominant role while the State has limited and territorial power.
  1. Heba Ali, 'Nature of the Indian Constitution- Federal or Unitary?', 2019.
  2. Deepshikha Gautam, 'The nature of the Indian Constitution', 2019.
  3. Kuldip Nayar v. Union of India, MANU/SC/3865/2006.
  4. Negi Mohita, 'Relation between the Centre and the State- Federalism', 2019.
  5. State of Tamil Nadu v. State of Karnataka, (1991) Supp 1 SCC 240.
  6. Ganga Ram Moolchandani vs State Of Rajasthan And Ors, 2001 SCC(L&S) 928
  7. Rameshwar Oraon vs State Of Bihar And Ors. AIR 1995 Pat 173
  8. State of Karnataka vs. Union of India, 19771978 SCR (2) 1

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