Centre-State Relations in India: A Deep Dive into Federal Dynamics
Introduction
India, as a constitutional democracy, follows a federal structure with a strong unitary bias. The relationship between the Centre and the States is a foundational feature of the Indian Constitution. It ensures the unity of the nation while allowing regional governments the flexibility to govern local affairs.
Understanding the Centre-State dynamic is essential to grasp the functioning of Indian democracy. This blog delves into the constitutional provisions,types of relations mechanisms for cooperation and conflict resolution, and recent developments in Centre-State relations.
Constitutional Foundation of Centre-State Relations
The Constitution of India, in Part XI and Part XII (Articles 245 to 293), outlines the distribution of powers and responsibilities between the Union and State governments. It draws heavily from the Government of India Act, 1935 which first introduced federal elements into Indian governance.
| Dual Government Structure | Governments at the Centre and State levels |
| Written Constitution | Clear demarcation of powers |
| Supremacy of the Constitution | All laws must conform to the Constitution |
| Independent Judiciary | Supreme Court acts as interpreter and guardian of the Constitution |
Types of Centre-State Relations
The Centre-State relationship in India can be divided into three main categories :
1. 🏛️ Legislative Relations (Articles 245–255)
Legislative relations between the Centre and the States are based on a clear division of responsibilities as outlined in the **Seventh Schedule** of the Constitution. The distribution of subjects is structured to maintain national integrity while giving states control over local matters.
Union List
Defence, foreign affairs, banking, atomic energy | Parliament only
State List
Police, agriculture, local government | State legislatures only
Concurrent List
Education, forests, marriage, adoption Both; Central law prevails on conflict
Union List : covers matters of national and international importance requiring uniformity across India.
State List : includes matters of local or regional importance where state-specific policies are more effective.
Concurrent List : ensures both levels can legislate. In cases of conflict, Central law prevails, ensuring uniformity when needed.
Special Situations Where Centre Can Legislate on State Subjects:
During a National Emergency, the Centre can make laws on any matter in the State List.
When Rajya Sabha passes a resolution (with a two-thirds majority), authorising Parliament to make laws in the national interest.
When two or more States consent, Parliament can make laws applicable to those States.
To fulfil international obligations , the Centre can legislate even on State subjects.
This framework ensures flexibility and coordination in a complex, diverse country like India.
Special Situations Where Centre Can Legislate on State Subjects:
During a National Emergency
When Rajya Sabha passes a resolution with two-thirds majority
When two or more states pass resolutions requesting Parliament to legislate
For implementing international treaties
2. 🏢 Administrative Relations (Articles 256–263)
Administrative relations govern the day-to-day functioning and cooperation between the Union and State governments. These provisions ensure that national policies are effectively implemented at the local level without undermining state autonomy.
Article 256 : States are obliged to implement the laws made by Parliament, even if the subject falls under the State List.
Article 257: The Union can issue directions to states to maintain national standards and protect national interests.
Article 263: Empowers the President to establish an **Inter-State Council** to resolve disputes and foster inter-governmental cooperation.
Coordination Mechanisms:
Inter-State Council facilitates policy discussions and conflict resolution.
Zonal Councils promote cooperation among states in different regions and address matters like security, transport, and language.
All India Services (like IAS, IPS). function under joint control and are key to maintaining administrative cohesion.
Administrative relations enable the Centre to guide state policies in critical sectors such as defence, infrastructure, and communication, while states retain autonomy in implementation.
3. 💰 Financial Relations (Articles 268–293)
Financial relations define how resources are distributed between the Centre and the States to ensure adequate funding for their respective responsibilities.
Union Government | Income tax (except agriculture), customs, corporate tax |
State Governments | Land revenue, alcohol tax, stamp duty, property tax |
Types of Financial Arrangements:
Taxes Exclusively Assigned to the Union. Custom duties, excise duties on manufactured goods, income tax.
Taxes Exclusively Assigned to the States: Land revenue, taxes on vehicles, agricultural income, entertainment tax.
Shared Taxes: Certain taxes like income tax are collected by the Centre but shared with the States based on recommendations by the Finance Commission.
Grants-in-Aid: Provided by the Centre to States for specific purposes or to help them maintain basic levels of service.
Finance Commission (Article 280):
Constituted every five years to recommend distribution of net tax revenue between the Centre and States (vertical sharing) and among States (horizontal sharing).
The 15th Finance Commission has recommended 41% of the Centre’s net tax revenue be devolved to States, taking into account factors like population, income distance, forest cover, and demographic performance.
Other Institutions:
NITI Aayog also provides strategic and financial guidance but has no formal role in revenue distribution.
GST Council determines tax rates under the new Goods and Services Tax system, a joint forum of the Centre and States.
This financial architecture balances national needs with state-specific priorities, ensuring equitable development across the country.
| Union Government | Income tax (except agriculture), customs, corporate tax |
| State Governments | Land revenue, alcohol tax, stamp duty, property tax |
Revenue Sharing:
Governed by the Finance Commission (Article 280)
Recommends tax distribution between Centre and States
The 15th Finance Commission recommended 41% of net tax revenue be devolved to States
⚖️ Inter-Governmental Bodies
Body Function
| Inter-State Council | Advises on policy and resolves disputes |
| National Development Council | Discusses and approves planning goals |
| Zonal Councils | Promotes regional cooperation and problem solving |
These institutions play a key role in cooperative federalism by fostering dialogue and negotiation
Contemporary Issues in Centre-State Relations
a) GST Compensation Disputes
Delays in GST compensation to states post-implementation led to financial stress and friction between Centre and States, especially during the pandemic.
b) Use of Governor’s Powers
Governors have allegedly used discretionary powers to delay or influence legislative processes in states, leading to accusations of bias and misuse.
c) Centralization of Policies
Laws and policies like NEET, farm laws, and Aadhaar are often criticized for infringing on State powers, especially when implemented without adequate state consultation.
Suggested Reforms
1. Strengthen Inter-State Councils: Make recommendations more impactful and frequent.
2. Clarify Role of Governors : Codify limitations to prevent overreach.
3. Encourage Decentralized Planning: State-level planning should be encouraged for context-specific policies.
4. Revise Finance Commission Criteria: Include needs-based and backward-state-focused metrics.
Conclusion
India's federal structure is a well-thought-out system that blends the best aspects of centralization and decentralization. However, as the nation grows and evolves, the dynamics of governance demand that both the Centre and States function not as competitors, but as cooperative partners. Challenges like fiscal sharing disputes, political influence through gubernatorial power, and excessive centralization require not just legal, but political and administrative remedies as well.
True federalism thrives when the Centre respects the autonomy of the States, and the States, in turn, contribute responsibly to national interests. By encouraging dialogue, transparency, and mutual respect, India can continue to strengthen the foundational relationship between its Centre and States — paving the way for inclusive growth, national unity, and democratic deepening.
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