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Centre and State Relations in India

Learning Objectives​

By the end of this page, you should be able to:

  • Explain how the Seventh Schedule divides legislative power between the Union and the States through the Union, State, and Concurrent Lists.
  • Identify the circumstances (Articles 249, 250, 252, 253) in which Parliament can legislate on a State subject.
  • Describe the administrative relations between Centre and States under Articles 256-263, including the role of the Inter-State Council.
  • Explain the financial relations framework (Articles 268-293) and the role of the Finance Commission under Article 280.
  • Analyse the process and safeguards around President's Rule under Article 356, and how S.R. Bommai v. Union of India changed its application.
  • Distinguish cooperative federalism from a purely unitary or purely federal model, using Indian examples.

Quick Answer​

Centre-State relations in India are governed by Part XI (Articles 245-263) and Part XII (Articles 268-293) of the Constitution. They operate on three levels: legislative (who can make laws on what, distributed via the Union, State, and Concurrent Lists in the Seventh Schedule), administrative (how the Union and States cooperate and resolve disputes, Articles 256-263), and financial (how tax revenue and grants are shared, Articles 268-293, guided by the Finance Commission under Article 280). India is often called "quasi-federal" because, unlike the US, it has a single citizenship, an integrated judiciary, and emergency provisions like Article 356 that let the Union take over a State's administration. This design balances national unity with regional autonomy — and it matters because it determines who governs you on any given subject, from education to defence.

Overview​

India did not adopt a purely federal or purely unitary structure — it built something in between. The Constituent Assembly, wary of the partition-era instability and keen to keep the country together, gave the Union government a stronger hand than a textbook federation like the US or Australia would. K.C. Wheare famously called the Indian Constitution "quasi-federal" — federal in form but unitary in spirit, especially during emergencies.

Part XI of the Constitution (Articles 245-263) deals with legislative and administrative relations, while Part XII (Articles 268-293) covers financial relations. Together they answer three practical questions that come up constantly in governance: Who can legislate on this subject? Who administers it day to day? And who pays for it?

Getting this right matters because India has 28 states and 8 union territories, each with elected governments, alongside a Union government at the centre. Without a clear rulebook for dividing power and money, conflicts over jurisdiction and resources would be constant. The framework also includes safeguards — like judicial review of President's Rule — that stop the Union from swallowing State autonomy altogether, something the courts had to actively enforce after decades of misuse.

Core Concepts​

1. Legislative Relations and the Seventh Schedule (Articles 245-254)​

Definition: Legislative relations determine which legislature — Parliament or a State Legislature — has the authority to make laws on a given subject, and what happens when their laws conflict.

Explanation: Article 245 gives Parliament the power to make laws for the whole or any part of India, and State Legislatures the power to make laws for their State. Article 246 then splits subject matter using the Seventh Schedule, which has three lists:

  • Union List (List I) — 100 subjects (originally 97) where only Parliament can legislate: defence, foreign affairs, banking, currency, railways, atomic energy.
  • State List (List II) — 61 subjects (originally 66) exclusively for State Legislatures: police, public health, agriculture, local government.
  • Concurrent List (List III) — 52 subjects (originally 47) where both can legislate: education, marriage and divorce, forests, criminal law, electricity.

Article 254 resolves conflicts on Concurrent List subjects: if a State law is repugnant to a Union law, the Union law prevails and the State law is void to the extent of the repugnancy — unless the State law received Presidential assent under Article 254(2), in which case it prevails in that State (until Parliament legislates again on the same matter).

Parliament can also legislate on a State subject in specific situations: Article 249 (Rajya Sabha resolution by two-thirds majority declaring it necessary in the national interest, valid for one year at a time), Article 250 (during a national emergency), Article 252 (when two or more States consent to a central law on a State subject), and Article 253 (to implement international treaties and agreements).

Example: "Education" sits in the Concurrent List. Both Parliament and a State Legislature can pass laws on it — which is why India has both the central Right to Education Act and State-specific school education rules.

Real-World Example: When Parliament enacted the Citizenship (Amendment) Act, 2019, several States passed resolutions opposing it, but since "citizenship" is a Union List subject (Entry 17), those State resolutions had no legal effect on the law's applicability within their territory — a direct illustration of how the Seventh Schedule allocates exclusive power.

Why It Matters: This division is the backbone of Indian federalism. Every dispute over whether a State can regulate liquor sales, or whether the Centre can override a State on agricultural marketing (as happened with the 2020-21 farm laws, since "agriculture" is a State subject but "trade and commerce" falls partly in the Concurrent List), traces back to how these lists are interpreted.

Common Misunderstanding: Students often think the Concurrent List means "either government can legislate and whichever came first wins." That's wrong — Article 254 sets a clear repurpose rule: the Union law prevails over a repugnant State law, unless the State law has Presidential assent under Article 254(2).

2. Administrative Relations (Articles 256-263)​

Definition: Administrative relations govern how the Union and States cooperate in exercising executive power, resolve disputes, and coordinate policy.

Explanation: Article 256 obliges every State to exercise its executive power so as to comply with Union laws, and the Union can give directions to ensure this. Article 257 extends this to matters of national importance, like protecting railways within a State. Article 258 allows the Union to entrust some of its executive functions to State governments (and vice versa under 258A). Article 262 empowers Parliament to adjudicate disputes over inter-state rivers and river valleys, and importantly, bars the Supreme Court and other courts from adjudicating such disputes if Parliament has provided another mechanism (like a river water tribunal). Article 263 provides for an Inter-State Council, which the President can set up to inquire into and advise on disputes between States, or on subjects of common interest.

Example: The Cauvery Water Disputes Tribunal was set up under Article 262 read with the Inter-State River Water Disputes Act, 1956, to resolve the long-running dispute between Karnataka, Tamil Nadu, Kerala, and Puducherry over Cauvery river water sharing.

Real-World Example: During the COVID-19 pandemic, the Union invoked the Disaster Management Act, 2005 and issued directions to States on lockdown protocols under a framework of administrative coordination — showing how Article 256-style Union oversight operates in practice even outside a formally declared emergency.

Why It Matters: Many real governance problems — river water sharing, inter-state border disputes, coordinated disaster response — cannot be solved by one government acting alone. These provisions give India institutional channels (tribunals, the Inter-State Council, GST Council-style bodies) to manage them without constant litigation.

Common Misunderstanding: Students often assume the Supreme Court can always step in to resolve inter-state disputes. Article 262 specifically allows Parliament to oust the jurisdiction of all courts, including the Supreme Court, over inter-state water disputes — a rare and deliberate exception to Article 131's original jurisdiction over Centre-State/inter-State disputes.

3. Financial Relations and the Finance Commission (Articles 268-293)​

Definition: Financial relations determine how tax revenue is levied, collected, and distributed between the Union and the States, and how the Union channels grants and assistance to States.

Explanation: Articles 268-269 deal with duties levied by the Union but collected/appropriated by States (or assigned to them), such as stamp duties. Article 270 provides for the distribution of taxes (including GST-related shares) between the Union and States, based on the recommendations of the Finance Commission constituted under Article 280 every five years. The Finance Commission recommends the vertical (Union-to-States) and horizontal (State-to-State) distribution of the divisible pool of taxes, principles governing grants-in-aid to States under Article 275, and measures to augment State Consolidated Funds. Article 282 allows the Union or a State to make grants for any public purpose even outside their own legislative competence. The 101st Constitutional Amendment (2016) introduced the Goods and Services Tax and created the GST Council (Article 279A) as a cooperative body of Union and State finance ministers to decide GST rates and rules.

Example: The 15th Finance Commission (2021-26) recommended that 41% of the divisible pool of central taxes be devolved to the States — a number that directly shapes every State budget.

Real-World Example: In State of West Bengal v. Union of India (1963), the Supreme Court held that the Indian Constitution is not a "true federation" like the US because the Union retains overriding powers, including the power to acquire State property — a case frequently cited to describe India's financial and structural centralisation.

Why It Matters: Financial dependence shapes real political bargaining power. A State that relies heavily on central grants-in-aid has less room to resist Union policy, which is why arguments over Finance Commission formulas (like using 2011 census data, which favours States with higher population growth) become politically charged.

Common Misunderstanding: Many students think States keep all taxes they collect. In reality, major taxes like GST and income tax go into a shared divisible pool distributed per Finance Commission formulas — States don't simply retain what is collected within their borders.

4. President's Rule and the Safeguards After S.R. Bommai (Article 356)​

Definition: Article 356 allows the President to take over the functions of a State government ("President's Rule") if satisfied that the government of a State cannot be carried on in accordance with the Constitution, based on a report from the Governor or otherwise.

Explanation: When President's Rule is imposed, the State's Council of Ministers is dismissed, the Legislative Assembly is usually dissolved or kept in suspended animation, and Parliament exercises the State's legislative powers. Article 356 proclamations must be approved by both Houses of Parliament within two months and can continue for a maximum of three years, with periodic parliamentary approval every six months. For decades after independence, Article 356 was used more than 100 times, often for political reasons — to dismiss opposition-led State governments. This changed with the landmark case S.R. Bommai v. Union of India (1994), where a 9-judge Constitution Bench of the Supreme Court held that (1) the President's satisfaction under Article 356 is not immune from judicial review; (2) a floor test in the Assembly is the proper way to test whether a government has lost majority, not the Governor's subjective opinion; (3) if the proclamation is found to be mala fide or based on irrelevant grounds, courts can restore the dismissed government; and (4) secularism is part of the Constitution's basic structure, so a State government acting against it can attract Article 356.

Example: In S.R. Bommai itself, the Karnataka government led by S.R. Bommai was dismissed in 1989 without being given a chance to prove its majority on the floor of the Assembly — the Supreme Court's ruling made clear this procedure was improper.

Real-World Example: After Bommai, the frequency of arbitrary use of Article 356 dropped sharply. When President's Rule was imposed in Uttarakhand (2016) and Arunachal Pradesh (2016), courts (invoking Bommai principles) ordered floor tests and, in some instances, restored the dismissed governments after finding the proclamations improper.

Why It Matters: Article 356 is the sharpest tool the Union has against a State — it can wipe out an elected State government overnight. The Bommai safeguards are what keep this from being a routine weapon of political convenience, preserving India's federal balance.

Common Misunderstanding: Students often think President's Rule ends State autonomy permanently or converts India into a unitary state. It is a temporary, reviewable, constitutionally bounded measure (capped at three years with periodic renewal) — not a permanent transfer of power, and it remains subject to judicial review after Bommai.

5. Inter-State Council and Cooperative Federalism​

Definition: Cooperative federalism is the practice of the Union and States working together through consultative bodies, rather than the Union simply directing or overriding States.

Explanation: Article 263's Inter-State Council (formally constituted in 1990 following the Sarkaria Commission's recommendations) is the key institutional expression of this idea, alongside bodies like the GST Council (Article 279A) and NITI Aayog (a policy think tank replacing the Planning Commission in 2015, designed to give States more say than the old top-down planning model). These bodies bring Union and State representatives to the same table to negotiate policy rather than have it imposed.

Example: The GST Council, chaired by the Union Finance Minister with State finance ministers as members, decides tax rates by a weighted voting mechanism (Union gets one-third weight, States collectively two-thirds) — a genuinely federal decision-making structure built into a fiscal law.

Real-World Example: The Sarkaria Commission (1983) and later the Punchhi Commission (2007) both examined Centre-State relations and recommended greater consultation, restraint in using Article 356, and strengthening the Inter-State Council — recommendations that shaped how governments have used these provisions since.

Why It Matters: In a diverse country with regional parties often ruling different States than the party in power at the Centre, cooperative mechanisms prevent constant deadlock and let the Union and States negotiate rather than litigate every disagreement.

Common Misunderstanding: Students sometimes assume federalism in India means the Union and States are constitutional equals, like in the US. India's federalism is asymmetric and Union-leaning by design — cooperative federalism is a practice that softens this asymmetry, not a legal equalizer.

Visual Learning​

Key Terms​

TermDefinitionContext
Seventh ScheduleThe schedule to the Constitution containing the Union, State, and Concurrent ListsBasis for Article 246's legislative distribution
RepugnancyA direct conflict between a Union law and a State law on the same Concurrent List subjectResolved by Article 254
President's RuleUnion takeover of a State's executive and legislative functionsImposed under Article 356
Finance CommissionA quasi-judicial body appointed every 5 years under Article 280 to recommend tax devolutionShapes Union-State and inter-State financial distribution
Inter-State CouncilA body under Article 263 to advise on Centre-State and inter-State disputes and cooperationRecommended by the Sarkaria Commission, set up in 1990
GST CouncilA constitutional body under Article 279A deciding GST rates and rules jointlyExample of cooperative fiscal federalism
Divisible PoolThe share of central taxes distributed between the Union and States per Finance Commission recommendationsCurrently 41% devolution recommended by the 15th Finance Commission
Quasi-federalA term (coined in relation to India by scholars like K.C. Wheare) describing a mix of federal form and unitary tendenciesDescribes India's overall constitutional design
Grants-in-aidFinancial assistance given by the Union to States, especially those in needGoverned by Article 275 (need-based) and Article 282 (public purpose)

Common Mistakes​

  1. Misconception: India is a fully federal state like the United States. Why it's wrong: India has single citizenship, an integrated judiciary, a common all-India civil service (IAS/IPS), and emergency provisions (Articles 352, 356, 360) that let the Union override States — features absent or far weaker in true federations. Correct: India is best described as "quasi-federal" or having a "federation with a strong unitary bias" — federal in normal times, unitary in emergencies.

  2. Misconception: Once President's Rule is imposed under Article 356, courts cannot review it because it's a matter of the President's "satisfaction." Why it's wrong: This was the pre-1994 position, but S.R. Bommai v. Union of India (1994) held that the President's satisfaction is justiciable and can be struck down if based on mala fide intent or irrelevant material. Correct: Courts can and do review Article 356 proclamations, and can restore a dismissed State government if the proclamation is found unconstitutional.

  3. Misconception: On Concurrent List subjects, a State law automatically becomes void the moment Parliament passes a conflicting law. Why it's wrong: Article 254(2) creates an exception — if the State law was reserved for and received Presidential assent, it prevails in that State despite the conflict, until Parliament legislates again on the same matter. Correct: Repugnancy under Article 254 is not absolute; Presidential assent to a State law can preserve it against a later or existing Union law.

Comparison and Connections​

AspectUnion List (List I)State List (List II)Concurrent List (List III)
Who legislatesParliament exclusivelyState Legislature exclusivelyBoth Parliament and State Legislature
Approx. number of entries~100~61~52
Example subjectsDefence, foreign affairs, banking, railwaysPolice, public health, agriculture, local governmentEducation, forests, criminal law, marriage
Conflict ruleN/A (exclusive)N/A (exclusive)Union law prevails unless State law has Presidential assent (Art. 254)
Constitutional basisArticle 246(1)Article 246(3)Article 246(2)

Connection to Federalism (see the Federalism page): Centre-State relations is the operational machinery of India's broader federalism — Federalism explains the theory and structural design, while this topic explains the specific constitutional articles that implement it day to day.

Connection to Emergency Provisions: Article 356 (President's Rule) is one of three emergency mechanisms in the Constitution, alongside Article 352 (national emergency) and Article 360 (financial emergency). All three temporarily tilt the federal balance toward the Union, but each has distinct triggers, procedures, and durations.

Connection to Sovereignty: Some argue extensive Union override powers dilute State sovereignty, but Indian constitutional theory treats sovereignty as vesting in "We, the People" as a whole, with the Union and States both deriving power from the Constitution rather than States possessing independent sovereignty (unlike the US model, where States pre-existed the Union).

Practice Questions​

Recall

  1. Which article of the Constitution empowers Parliament to legislate on a State subject in the national interest, and what is the required process? Answer guidance: Article 249 — requires a Rajya Sabha resolution passed by a two-thirds majority of members present and voting, declaring it necessary or expedient for Parliament to legislate; valid for one year at a time, renewable.

  2. Name the body established under Article 280 and state its core function. Answer guidance: The Finance Commission, constituted every five years, recommends the distribution of the divisible pool of central taxes between the Union and States (vertical devolution) and among States (horizontal devolution), along with principles for grants-in-aid under Article 275.

Understanding

  1. Explain how Article 254 resolves a conflict between a Union law and a State law on a Concurrent List subject. Answer guidance: The Union law prevails and the State law is void to the extent of repugnancy, unless the State law was reserved for Presidential consideration and received assent, in which case it prevails in that State until Parliament legislates further on the matter (Article 254(2)).

  2. Why is India described as "quasi-federal" rather than purely federal? Answer guidance: Because it combines federal features (division of powers via the Seventh Schedule, written Constitution, independent judiciary) with unitary features (single citizenship, integrated judiciary, all-India services, emergency powers under Articles 352/356/360 that let the Union override States).

Application

  1. A State passes a law regulating factory working hours (a Concurrent List subject) that conflicts with an existing central labour law. The State law was never sent for Presidential assent. Which law prevails, and why? Answer guidance: The Union (central) law prevails under Article 254(1), because the State law is repugnant to it and was not reserved for and did not receive Presidential assent under Article 254(2).

  2. A Governor reports that a State government has lost its majority, and the President issues a proclamation under Article 356 without a floor test being conducted. Is this valid after S.R. Bommai? Answer guidance: No — S.R. Bommai held that loss of majority should be tested on the floor of the Assembly, not through the Governor's subjective assessment; a proclamation issued without allowing a floor test would be vulnerable to being struck down as mala fide or based on irrelevant material.

Analysis

  1. Compare the safeguards against misuse of Article 356 before and after S.R. Bommai v. Union of India (1994). Answer guidance: Before Bommai, the President's satisfaction was largely treated as non-justiciable, leading to frequent politically motivated dismissals of State governments (100+ times). After Bommai, courts can review the proclamation for mala fides or irrelevant grounds, a floor test is mandated to assess majority, and courts can restore a wrongly dismissed government — significantly curbing arbitrary use.

  2. Evaluate whether the GST Council (Article 279A) represents a genuine shift toward cooperative federalism, or whether it still favours the Union. Answer guidance: A strong answer should note the weighted voting structure (Union: one-third weight, States collectively: two-thirds), which gives the Union an effective veto on decisions requiring the three-fourths majority threshold, even though States collectively hold more votes — meaning the mechanism is genuinely consultative but still preserves significant Union leverage, consistent with India's broader quasi-federal tilt.

FAQ​

1. Is India a federal or a unitary state? Neither in the pure sense — India is "quasi-federal," combining a federal division of powers with strong unitary features like single citizenship, an integrated judiciary, and emergency powers that let the Union override States.

2. Can Parliament change the boundaries of a State without its consent? Yes. Under Article 3, Parliament can form new States, alter boundaries, or change names by a simple majority law, after referring the bill to the affected State legislature for its views (not consent) — a striking example of Union primacy over State territorial integrity.

3. What is the difference between President's Rule (Article 356) and National Emergency (Article 352)? President's Rule applies to a specific State when its constitutional machinery breaks down, dismissing the State government while Parliament legislates for it. National Emergency applies to the whole country (or part of it) due to war, external aggression, or armed rebellion, and can suspend fundamental rights (except Articles 20 and 21) — a much broader and more severe measure.

4. Why does the Finance Commission matter so much to States? Because it determines how much of the shared central tax pool each State receives — directly affecting how much money a State government has for schools, hospitals, and infrastructure, independent of its own tax collection.

5. Has Article 356 been used less often after S.R. Bommai? Yes, significantly. Judicial review, the mandatory floor test requirement, and the political cost of having proclamations struck down have made governments far more cautious about invoking Article 356 compared to the pre-1994 era.

Quick Revision​

  • Legislative relations: Articles 245-254; Seventh Schedule has Union List (~100), State List (~61), Concurrent List (~52) subjects.
  • Article 254: Union law prevails over repugnant State law on Concurrent List, unless State law has Presidential assent (254(2)).
  • Parliament can legislate on State subjects via Article 249 (national interest, Rajya Sabha resolution), 250 (emergency), 252 (State consent), 253 (international treaties).
  • Administrative relations: Articles 256-263; Article 262 lets Parliament oust court jurisdiction over inter-state river water disputes.
  • Article 263: Inter-State Council, set up in 1990 on the Sarkaria Commission's recommendation.
  • Financial relations: Articles 268-293; Article 280 sets up the Finance Commission every 5 years to recommend tax devolution.
  • 15th Finance Commission recommended 41% devolution of the divisible pool to States.
  • GST Council (Article 279A): Union has one-third voting weight, States two-thirds; created by the 101st Amendment (2016).
  • Article 356 (President's Rule): dismisses State government, capped at 3 years with 6-monthly parliamentary renewal.
  • S.R. Bommai v. Union of India (1994): made Article 356 justiciable, mandated floor tests, allowed courts to restore wrongly dismissed governments.
  • State of West Bengal v. Union of India (1963): held India is not a "true federation" in the classical sense.
  • India is called "quasi-federal" — federal structure, unitary tendencies especially during emergencies.

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