Centre-State Relations

India is described in Art 1 as a "Union of States", not a federation of States. The Constitution is federal in form with a strong unitary bias (K.C. Wheare called it "quasi-federal"). In S.R. Bommai (1994) the Supreme Court held that federalism is part of the basic structure.

Legislative relations (Part XI, Arts 245 to 255)

The Seventh Schedule divides subjects into three lists:

• Residuary subjects (Art 248) belong to Parliament. This follows Canada, unlike the USA and Australia.
• The 42nd Amendment (1976) moved five subjects from the State List to the Concurrent List: education, forests, weights and measures, protection of wild animals and birds, administration of justice.
• The 101st Amendment (2016) added Art 246A: both Parliament and States can make laws on goods and services tax.

Parliament can legislate on the State List when

1. The Rajya Sabha passes a resolution by a two-thirds majority that it is in the national interest (Art 249).
2. A National Emergency is in force (Art 250).
3. Two or more States request it (Art 252).
4. To implement a treaty or international agreement (Art 253).
5. President's Rule is in force in a State (Art 356).

Administrative relations (Arts 256 to 263)

• States must exercise their executive power so as not to impede Union laws, and the Union can give directions (Art 256 and 257).
• All-India Services (IAS, IPS, IFoS) are controlled by the Union but serve the States. A new one can be created under Art 312 by a Rajya Sabha resolution.
• Inter-State Council (Art 263): set up on the Sarkaria Commission's advice in 1990.
• Zonal Councils: statutory bodies set up under the States Reorganisation Act, 1956. There are five: Northern, Central, Eastern, Western, Southern. The Union Home Minister chairs each. The North Eastern Council is separate.
• Inter-State water disputes: Art 262, and the Inter-State Water Disputes Act, 1956 (Ravi-Beas, Cauvery, Krishna).
• Goods and Services Tax Council (Art 279A): a constitutional body chaired by the Union Finance Minister. The Union has one-third of the votes and the States together two-thirds. A decision needs three-fourths of the votes cast.

Financial relations (Arts 268 to 293)

• Taxes in the Union List (income tax except on agriculture, customs, corporation tax) go to the Centre. State List taxes (land revenue, tax on agricultural income, State excise, stamp duties) go to the States.
• Art 280: the Finance Commission is set up by the President every five years and recommends how the divisible pool of taxes is shared.
• Art 275: grants-in-aid to States in need. Art 282: discretionary grants.
• The 15th Finance Commission (chair N.K. Singh) covered 2021-22 to 2025-26 and fixed the States' share of the divisible pool at 41 per cent. The 16th Finance Commission is headed by Dr Arvind Panagariya and covers 2026-27 to 2030-31.
• The Planning Commission (extra-constitutional) was replaced by NITI Aayog on 1 January 2015.

Committees on Centre-State relations