The Indian Constitution calls for a federal system. The Constitution founded both the Union and the states, and they both receive their legitimacy from it. However, there is some argument that India is a federal state with unitary characteristics. The core of federalism is the relationship between the Centre and the States, which is enumerated in Parts XI and XII of the Constitution under the headings of legislative, administrative, and financial ties. The Constitution creates a dual polity with the Union at the centre and states on the perimeter. Each is endowed with sovereign powers that must be exercised in the areas designated by the Constitution.

1. Legislative Relations:

The model of power distribution proposed in our Constitution reflects functional realities, centralising trends, and shifting concepts of federalism. This concept aims to balance the necessity for a strong central government with the requirement for state autonomy. These are the primary considerations evaluated by the Constitution's founders in granting the Centre a pre-eminent role in all aspects of Union State arrangements, particularly in the constitutional framework of legislative power allocation. One of the main features of a Federal Constitution is the division of legislative powers between the Union and the states. This can be accomplished through a single, two-fold, or three-fold enumeration of legislative powers. The issue of the Centre's and States' legislative ties is examined below:

(I) Distribution of Subject:

The Constitution of India adopts a three fold distribution of the subjects of legislative power by placing them in 7th Schedule in List I (Union), List II (State) and List III (Concurrent). Chapter I in Part XI of the Constitution enumerates the provisions which Govern Union-State Legislative relations. It comprises 11 Articles from 245 to 255. Out of them the provisions in articles 245, 246, 248 and 254 constitute the core of the distribution of legislative powers.

(II) Overriding Powers of Centre:

Under Article 245 (1), Parliament is competent to make laws for whole or any part of territory of India. Legislature of state may make laws for whole or any part of state.

Under Article 245 (2), Legislation enacted by Parliament may have extraterritorial application (outside of Indian Territory). Parliamentary laws also govern Indian subjects and their property elsewhere in the world. Regulations enacted by the President have the same effect as Acts of Parliament in some Union Territories such as Andaman & Nicobar, Lakshadweep, and Dadra and Nagar Haveli. Such rules have the authority to repeal or amend a law enacted by Parliament in relation to such territory. The Governor may prohibit or modify the applicability of Acts of Parliament to any scheduled region by issuing notifications.

The subjects specified in the Union List are of national importance, and only Parliament has the authority to pass legislation on them. Only the states have the authority to establish legislation in the case of the State List. The Concurrent List is a Common Zone in which both the Union and the states have the authority to make laws without conflict. With few exceptions, where the Central law and state law disagree, the Central law takes precedence over the state law.

(III) Residuary Power:

According to Article 248, Parliament has the exclusive authority to pass legislation on issues not included by any of the three lists (Entry 97 of Union List). Such powers include the authority to enact any law imposing a tax that is not specified in any of the three lists. Courts decide whether a certain issue falls under the residuary authority or not. The Doctrine of Pith and Substance is used to determine if a specific enactment comes under one of the two entries.

The genuine goal of the law or statute, as well as the competence of the legislature that enacts it, are referred to as Pithr and Substance in this context. Otherwise, the legislature's motivations are irrelevant in deciding whether it has exceeded the legislative power's constitutional boundaries. This approach is founded on the adage that you can't do what you can't do directly. It is referred to as the Doctrine of Colorable Legislation.

(IV) Special Powers of Parliament:

According to Article 249, Parliament has the authority to enact laws in the national interest concerning any matter on the State List. However, this is only for a limited time if the Rajya Sabha passes a resolution supported by at least two-thirds of the members present and voting in that regard. This clause was invoked three times: in 1950 (for black marketing), 1951 (for evacuee properties), and 1986.

Article 250 of the Proclamation of Emergency authorises the Parliament to establish laws for the entire or any part of the Indian Territory pertaining to all matters on the State List. However, such a statute will expire six months after the proclamation of emergency has expired.

Under Article 252, if the legislatures of two or more states pass a resolution to the effect that it is desirable to have a law passed by Parliament on any matters in State List common to these states, Parliament can make laws in that respect.

Under Article 253, Parliament has power to make any law for the whole or any part of the Territory of India for implementing treaties and international agreements and conventions.

Under Article 256, Parliament is empowered to make laws with respect to all matters in the State List when there is failure of constitutional machinery of the state under Article 356.

 

2. Administrative Relations:

A federal polity's success and strength are dependent on collaboration and coordination between the two levels of government, as well as a division of authorities and functions between them. This is true in federation administrative interactions. Coordination between the Union and the States is ensured by giving the Union some jurisdiction over the states. During an emergency, the Indian Constitution functions similarly to a unitary government. In normal times, constitutional provisions preserve the Union's control over the states. The following issues concern the administrative relationship between the Centre and the states:             

(I) Appointments to States:

The Centre has the ability to appoint and dismiss the Governor (Articles 155-156) through the President; the right to appoint judges of the High Court and the power to dismiss members of the State Public Service Commission (Articles 217, 317, respectively). According to Article 256, the executive authority of the state shall be exercised in such a way as to ensure compliance with the laws passed by the Parliament, and the executive power of the union shall likewise extend to the issuance of such orders to a state as it may think necessary for the purpose.

(II) Directives from Centre:

Article 257 stipulates that states must exercise their executive power in such a way that it does not impede or prejudice the exercise of the Union's executive power in the state. The Union Government's powers also include the ability to issue specific directives to states. These are the following:

• Construction and maintenance of means of communication which are declared to be of national or military importance.
• Measures to be taken for the protection of the railway within the states. The Constitution prescribes coercive sanction for the enforcement of its directions through Article 356.
• Provision of adequate facilities for instruction in the mother tongue at the primary stage of education to children belonging to linguistic minority groups in the state.
• Formulation and implementation of schemes for the welfare of STs.

 

(III) Delegation of Power:

According to Article 258 (1), Parliament, with the permission of the State Government, may entrust to it any matter falling within the Union's executive authorities. According to Article 258(2), Parliament has the authority to deploy state machinery to enforce Union Laws.

It can grant authorities or impose duties on state functionaries for this purpose. As a result, power is delegated with the approval of the state, but the consent of the state is not required if the delegation is done by law by the Parliament.

This means that Parliament has the authority to intervene in state management even without the approval of the state. The State Government may also assign its powers to the Union and its officers. Article 258 (A) states that the Governor of the State, with the approval of the Government of India, may delegate to the government those responsibilities to which the executive power of the state extends.

(IV) Redressal of Disputes:

Article 261 states that public acts, records, and judicial proceedings of the Union and each state should be given full faith and credit throughout the territory of India. Article 261 (3) states that final judgments or decrees made or passed by civil courts in any portion of India's territory can be executed everywhere in the country. According to Article 262, the Parliament Union may establish a body to adjudicate conflicts involving interstate rivers or river valleys. Article 262 (2) states that Parliament has provided by statute that neither the Supreme Court nor any other court shall have jurisdiction over any such dispute.

According to Article 263, the President has the authority to form Inter-State Councils. These bodies are responsible for investigating and advising on disputes that emerge between states. These councils also look into and debate issues of mutual interest between the Union and the states, or between two or more states.

The President has established councils like Central Council of Health, Central Council of Local Government and Urban Development Council.

3. Financial Relations:

These relationships are connected to tax distribution, non-tax revenue, and borrowing power. The Finance Commission (Article 280) makes recommendations to the President on the division of net tax proceeds between the Centre and the states. The Constitution divides taxation authorities between the Centre and the states in an unusual arrangement. The following topics are covered in regard to the Centre's and states' financial relations:

(I) Powers of Taxation:

Parliament has sole authority to charge the taxes included in the Union List. There are 15 of these taxes. The State Legislature has sole authority to impose the taxes listed on the State List. There are a total of 20 such taxes. The Concurrent List taxes can be levied by both the Parliament and the State Legislature. There are three of these taxes. The Parliament has residuary taxation power (i.e., the authority to levy taxes not included in any of the three lists). The Parliament enacted a gift tax, a wealth tax, and an expenditure tax under this clause.

(II) Grants-In-Aid:

Parliament can provide for grants-in-aid to states by the centre. Such sums are charged on the Consolidated Fund of India (Article 275). The Centre can make public purpose grants to states and to any institution within the states (Article 282).

The Centre can grant loans to states and also give guarantee in respect of loans raised by them (Article 293). Parliament can impose restrictions on inter-state trade and commerce in the public interest (Article 302).

(III) Fiscal Management:

The states' accounts must be kept in the format stipulated by the President on the advise of the Comptroller and Auditor-General of India (Article 150). According to Article 301-304, the Parliament has the ability to appoint an authority to regulate trade and commerce in India. However, no such authority has been established as of yet.