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Yours IAS > Blog > Center State Relation

Center State Relation

  • May 14, 2025
  • Posted by: Beauty Kumari
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Introduction:  The structure of the constitution of India  being federal and it divides all power between center and state. There is no division of judicial power as the constitution has established an integrated judicial system to enforce both the Central laws as well as State laws.

How are Powers and Functions Divided in the Indian Federal System?

In India, the Constitution divides powers and responsibilities between the Centre and the states across legislative, executive, and financial areas. It also creates a unified judicial system to ensure that both federal and state laws are followed.

The Centre-state relations are categorized into three main areas:

  1. Legislative Relations
  2. Administrative Relations
  3. Financial Relations

Centre-State Relations in Legislative Matters

Part XI of the Constitution (Articles 245–255) outlines how legislative powers are shared between the Centre and the states. Here are the key points:

Extent of Law-Making Authority

  • State Legislatures: Can make laws for their state or any part of it.
  • Parliament: Can make laws for the entire country or any part of it, including laws that have extra-territorial (outside India) implications.

Division of Subjects

  1. Union List: The Centre has exclusive powers to legislate on topics listed here, such as defense, foreign affairs, and banking.
  2. State List: States can exclusively legislate on matters like police, public health, and local government.
  3. Concurrent List: Both the Centre and states can make laws on subjects like education and forests. In case of conflict, the Centre’s law prevails.

Residuary Powers (Article 248)

The Centre has the authority to legislate on matters not mentioned in any of the three lists.

When Parliament Can Make Laws on State Subjects

  • Article 249: If the Rajya Sabha approves by a two-thirds majority, Parliament can legislate on State List matters in the national interest.
  • Article 250: During a national emergency, Parliament can legislate on State List subjects, but such laws expire six months after the emergency ends.
  • Article 252: If two or more states request, Parliament can legislate on specific State List matters.
  • Article 253: Parliament can make laws for implementing treaties or international agreements.
  • Article 356: During President’s Rule in a state, Parliament can make laws on that state’s subjects.

Centre’s Control Over State Legislation

  • Article 200: The Governor can forward certain state bills to the President for approval.

Centre-State Relations in Administrative Matters

Articles 256–263 of Part XI explain how administrative powers are shared.

Executive Authority

  • Union Government: Can exercise executive powers on subjects where Parliament can legislate.
  • State Governments: Must follow laws made by Parliament in their executive functions.

Centre’s Directives to States

  • Article 256: States must ensure compliance with central laws.
  • Article 257: The Centre can give directions to states in specific cases.

During Emergencies

  • National Emergency: The Centre can direct states on how to use their executive powers.
  • President’s Rule: The Union takes direct control of state governance.

Public Services

  • State Public Service Commissions: Appointed by the Governor, but members can only be removed by the President.
  • All India Services: Jointly managed by the Centre and states, but the Centre has more control.

Other Key Provisions

  • Article 355: The Union must protect states from external threats and internal disturbances.
  • Governor’s Appointment: Appointed by the President and serves at their pleasure.
  • State Election Commissioner: Appointed by the Governor but removable only by the President.

Centre-State Relations in Financial Matters

Articles 268–293 in Part XII detail financial arrangements.

Taxation Powers

  • Parliament: Can impose taxes on Union List subjects.
  • State Legislatures: Can impose taxes on State List subjects.
  • Residuary Powers: Parliament has the authority to impose taxes not covered in the lists.

Grants and Revenue Sharing

  • Article 275: Parliament can provide financial assistance to states as required.
  • Article 282: Both the Centre and states can give grants for public purposes.
  • GST: Introduced through the 101st Amendment, allowing both the Centre and states to levy and collect Goods and Services Tax.

Finance Commission (Article 280)

The Finance Commission recommends how taxes and other revenues should be shared between the Centre and states.

Issues in Centre-State Relations

  1. Resource Allocation: Disputes arise over fund distribution, taxes, and benefits, especially post-GST.
  2. Challenging Central Laws: States have contested central laws like the CAA and NIA Act in court.
  3. Article 356 Misuse: Historically, President’s Rule has been imposed for political reasons rather than genuine governance crises.
  4. Governor’s Role: Appointed by the Centre, governors are sometimes seen as central government representatives, creating tensions.

Measures for Better Centre-State Relations

Sarkaria Commission (1983) Recommendations:

  • Strengthen All-India Services and limit central intervention in concurrent subjects.

MM Punchhi Commission (2007) Recommendations:

  • Fix a five-year tenure for governors and allow removal only by state assemblies.
  • Increase powers of local bodies.

Other Suggestions:

  • Establish a legislative Inter-State Trade and Commerce Commission.
  • Add disaster management to the Concurrent List.
  • Strengthen institutions like the Inter-State Council, Finance Commission, and Niti Aayog.
  • Promote fiscal federalism for fair resource distribution.
  • Encourage innovation at the state level and revisit the Seventh Schedule for further decentralization.