Federal Nature of India
India is described as a "Union of States" (Article 1) — not a "federation of states." K.C. Wheare classified India as a "quasi-federation" — federal in normal times but unitary in emergencies. Granville Austin called it "cooperative federalism."
Features of Indian federalism: Written Constitution; Supremacy of Constitution; Division of powers (7th Schedule); Independent judiciary; Bicameral legislature. Unitary features: Single Citizenship; Integrated Judiciary; All India Services; Emergency provisions (can make India unitary); Rajya Sabha does not represent states equally; Parliament can change boundaries of States; Governors appointed by Centre.
7th Schedule — Three Lists
| List | Subjects | Who legislates |
|---|---|---|
| List I — Union List | Originally 97 entries. Defence, foreign affairs, atomic energy, railways, banking, insurance, inter-state trade, income tax, citizenship, currency, post and telegraph, census, immigration | Parliament only |
| List II — State List | Originally 66 entries. Public order, police, public health, agriculture, land, irrigation, electricity, local governments, state taxation, markets and fairs, prisons, betting and gambling | State Legislatures (normally) |
| List III — Concurrent List | 52 entries. Criminal law (IPC, CrPC), civil procedure, marriage and divorce, education (42nd Amendment moved it from State to Concurrent), forests (42nd Amendment), labour, population control, stamp duties, price control | Both Parliament and States; Central law prevails in conflict (Art. 254) |
Residuary Powers (Article 248): Powers not listed in any of the three lists vest in Parliament. In the USA, residuary powers vest in States — the opposite of India. The single largest influence on this provision was the Government of India Act 1935 and the Canadian Constitution model (residuary with Centre).
PYQ Trap: Education was originally in the STATE LIST. It was transferred to the CONCURRENT LIST by the 42nd Amendment 1976. Similarly, Forests and Administration of Justice were also moved from State to Concurrent by the 42nd Amendment. This is frequently tested.
Parliament Legislating on State List — Five Circumstances
| Article | Circumstance | Condition |
|---|---|---|
| Art. 249 | National interest (Rajya Sabha resolution) | RS 2/3 majority; valid 1 year (renewable); State's consent NOT needed |
| Art. 250 | National Emergency (Art. 352) | Automatically during Emergency; laws lapse 6 months after Emergency ends |
| Art. 252 | At States' request | Two or more States pass resolutions requesting Parliament to legislate for them; other States can adopt such law later |
| Art. 253 | International agreements | To implement any international treaty, agreement, or convention; no State consent needed |
| Art. 356 | President's Rule in State | Parliament assumes State Legislature's powers; can legislate on State List |
Administrative Relations (Articles 256–263)
The Centre has significant power to direct State administration under the Constitution:
Article 256: Every State's executive power must be exercised to ensure compliance with laws made by Parliament. The Union can give directions to States for this purpose. Article 257: Union can direct States regarding exercise of executive power to prevent obstruction to any law made by Parliament; communication, trade, and commerce routes (national/military importance).
Article 355: Duty of the Union to protect States against external aggression and internal disturbance and to ensure every State government is carried on in accordance with the Constitution — this is the constitutional basis for Article 356 (President's Rule).
All India Services (Articles 312, 315): IAS, IPS, and IFS officers serve both the Centre and States. This is a major unitary feature — States cannot control their senior bureaucracy fully.
Financial Relations (Articles 264–293)
The financial relationship between Centre and States is determined by the Constitution and Finance Commission recommendations.
| Tax | Levied and Collected by | Distributed to |
|---|---|---|
| Income Tax (other than agricultural) | Centre | Centre + States (as per FC formula) |
| Union excise duties (CENVAT — pre-GST) | Centre | Centre + States |
| GST (CGST portion) | Centre | Centre retains CGST; SGST goes to States; IGST split |
| Customs duties | Centre | Centre only (NOT shared with States) |
| Corporation Tax | Centre | Centre + States (shared as per FC) |
| Agricultural income tax | States | States only |
| Land Revenue | States | States only |
GST (101st Amendment 2016): Goods and Services Tax subsumed most indirect taxes. Article 246A inserted — both Parliament and States have concurrent power to levy GST (an exception to normal Concurrent List rules). The GST Council (Art. 279A) was created — chaired by Union Finance Minister; State Finance Ministers as members.
Finance Commission (Article 280)
The Finance Commission is a quasi-judicial constitutional body constituted by the President every 5 years. Its recommendations determine how taxes collected by the Centre are shared with States.
Key facts: First FC = 1951 (K.C. Neogy, Chairman); FC-14 (2015–20) recommended 42% devolution to States (historic high); FC-15 (2021–26) recommended 41% devolution (1% reduced after J&K and Ladakh became UTs). FC recommendations are advisory — NOT binding on the government. Finance Commission is different from NITI Aayog (which replaced the Planning Commission in 2015).
Inter-State Relations — Key Bodies
| Body | Constitutional Basis | Function |
|---|---|---|
| Inter-State Council | Article 263 | Investigates and recommends on inter-State disputes; coordinate policies; PM chairs; all CMs and Cabinet ministers are members |
| Zonal Councils | States Reorganisation Act 1956 (statutory, not constitutional) | Five Zonal Councils; advisory; Home Minister chairs all; promote cooperation |
| River Water Tribunals | Article 262 + Inter-State River Water Disputes Act 1956 | Adjudicate inter-state river water disputes; SC's jurisdiction excluded by Art. 262 |
| GST Council | Article 279A (101st Amendment 2016) | Recommend GST rates, exemptions, model legislation; Union FM chairs; 2/3 voting power with States |
PYQ Trap: Zonal Councils are NOT constitutional bodies — they are created by the States Reorganisation Act 1956 (a statutory/legislative act). The Inter-State Council IS a constitutional body under Article 263, but it was actually constituted only in 1990 (not immediately in 1950). SC does NOT have jurisdiction over inter-state river water disputes — Art. 262 specifically excludes it.
Governor — Pivot of Centre-State Relations
The Governor (Articles 153–162) is appointed by the President and acts as the constitutional head of a State. In practice, the Governor plays a key role in Centre-State relations:
Key roles: Submits reports to the President that can trigger President's Rule (Art. 356); Can reserve State bills for President's consideration (Art. 200); Discretionary powers when no party has clear majority; Appoints CM; Can summon/prorogue/dissolve State Assembly on CM's advice; Cannot act against CM with Lok Sabha confidence. The Sarkaria Commission and Punchhi Commission recommended limiting the Governor's discretionary powers and the misuse of Art. 356.
Sarkaria Commission (1983–88) — Key Recommendations
The Sarkaria Commission on Centre-State relations submitted its report in 1988. Key recommendations: Art. 356 should be used as a last resort; Rajya Sabha should not lose its character as a States' House; Inter-State Council should be activated; Three-language formula should be implemented; All India Services should be strengthened; Governor should be a person not involved in active politics; Governor should be appointed after consulting CM of the State.
PYQ Traps — Common UPSC Mistakes
| Wrong Notion | Correct Fact |
|---|---|
| Residuary powers vest in States | Residuary powers vest in PARLIAMENT (Union) — opposite of USA where they vest in States |
| Education was always in Concurrent List | Education was in STATE LIST originally; moved to Concurrent List by 42nd Amendment 1976 |
| Customs duties are shared with States | Customs duties are NOT shared with States — retained by Centre only |
| Zonal Councils are constitutional bodies | Zonal Councils are STATUTORY bodies under States Reorganisation Act 1956 — NOT constitutional |
| SC can adjudicate inter-state river water disputes | Art. 262 specifically EXCLUDES SC jurisdiction over inter-state river water disputes; handled by tribunals |
| Finance Commission recommendations are binding | Finance Commission recommendations are ADVISORY — not binding on the government |
| GST Council decisions are binding | GST Council makes recommendations — they are not legally binding; Parliament/State legislatures must enact them |
| State laws can override Central laws on Concurrent List | In conflict, CENTRAL LAW prevails (Art. 254) unless the State law received Presidential assent before the Central law |
Frequently Asked Questions
What are the three lists of the 7th Schedule and what do they contain?
The 7th Schedule has three lists: (1) Union List (97 subjects) — Parliament only legislates; includes defence, foreign affairs, banking, railways, income tax, citizenship. (2) State List (66 subjects) — States normally legislate; includes public order, police, agriculture, land, irrigation, local governments. (3) Concurrent List (52 subjects) — both can legislate; includes criminal law, marriage, education, forests, labour. In conflict on Concurrent List, central law prevails (Art. 254). Residuary powers vest with Parliament. Education was moved from State to Concurrent List by 42nd Amendment 1976.
Under what circumstances can Parliament legislate on State List subjects?
Parliament can legislate on State List under five circumstances: (1) Art. 249 — Rajya Sabha resolution (2/3 majority) declaring national interest; valid 1 year. (2) Art. 250 — During National Emergency automatically. (3) Art. 252 — Two or more States request Parliament to legislate for them. (4) Art. 253 — For implementing international treaties/agreements. (5) Art. 356 — During President's Rule, Parliament takes over State Legislature's functions.
What is the Finance Commission and what does it do?
Finance Commission (Art. 280) is constituted every 5 years by the President. It recommends: vertical devolution (how much of Centre's tax to share with States collectively) and horizontal devolution (how to distribute among States). FC-14 recommended 42% devolution; FC-15 recommended 41%. Its recommendations are advisory — not binding. It differs from NITI Aayog (replaced Planning Commission in 2015) which does not have constitutional status and doesn't handle tax devolution.