Centre-state relations

Legislative relations.
Administrative relations.
Financial relations.
• LEGISLATIVE RELATIONS

1. Territorial Extent of Central and State Legislation

• Parliament can make laws for the whole or any part
of India
• Parliament alone can make ‘extra-territorial
legislation’.
• state legislature can make laws for the whole or any
part of the state
Some limits to parliament’s law making power
• President can make regulations for the peace,
progress and good government of the Union
Territories—the Andaman and Nicobar Islands,
Lakshadweep, Dadra and Nagar Haveli and Daman
and Diu.
• A regulation so made has the same force and effect
as an act of Parliament.
• It may also repeal or amend any act of Parliament in
relation to these union territories.
• Governor is empowered to direct that an act of
Parliament does not apply to a scheduled area in
the state.
• Governor of Assam may likewise direct that an act
of Parliament does not apply to a tribal area
(autonomous district) in the state.
• President enjoys the same power with respect to
tribal areas (autonomous districts) in Meghalaya,
Tripura and Mizoram.
2. Distribution of Legislative Subjects
• Parliament can make laws on subjects in Union List.
• State legislature “in normal circumstances” can make
laws on subjects in State List.
• Both can make laws with respect to Concurrent List.
• Parliament can make laws on residuary subjects.
• 42nd CA,1976 transferred five subjects to Concurrent
List from State List,
• (a) education,
• (b) forests,
• (c) weights and measures,
• (d) protection of wild animals and birds, and
Predominance order
• Union list > Concurrent list > State list
• Central law prevails over the state law

3. five extraordinary circumstances:

• 1. If the Rajya Sabha passes a resolution by two-thirds of
the members present and voting & declares that it is
necessary in national interest that Parliament should make
laws on a matter in the State List.
• resolution remains in force for one year; it can be renewed
any number of times, one year at a time. The laws cease to
have effect on the expiration of 6 months after the
resolution has ceased to be in force.
• state can make laws on the same matter. parliamentary law
prevails in case of inconsistency.
2. During a National Emergency
• The Parliament acquires the power to legislate with
respect to matters in the State List, while a
proclamation of national emergency is in operation.
• The laws become inoperative on the expiration of
six months after the emergency has ceased to
operate.
• state can make laws on the same matter.
• parliamentary law prevails in case of inconsistency.
3. Suicidal/surrender clause
• When two or more states pass resolutions requesting
the Parliament to enact laws on a matter in the State List,
then the Parliament can make laws for regulating that
matter.
• A law so enacted applies only to those states, other state
may adopt it afterwards by passing same resolution.
• Parliament becomes entitled to legislate, amend, repeal
& State ceases to have the power to make a law with
respect to that matter.
• The resolution operates as abdication or surrender of the
power of the state legislature with respect to that matter
• Examples - Prize Competition Act, 1955; Wild Life Act,
1972; Water Act, 1974; Urban Land ceiling Act, 1976;
• 4. To Implement International Agreements
• The Parliament can make laws on any matter in the
State List for implementing the international
treaties, agreements or conventions to fulfil its
international obligations and commitments.
• Examples
• United Nations (Privileges and Immunities) Act,
1947;
• Geneva Convention Act, 1960;
• Anti-Hijacking Act, 1982 and
• Legislations relating to environment and TRIPS.
• 5.During President’s Rule
• When the President’s rule is imposed in a state, the
Parliament becomes empowered to make laws with
respect to any matter in the State List in relation to
that state.
• A law made so by the Parliament continues to be
operative even after the president’s rule.
• This means that the period for which such a law
remains in force is not co-terminus with the
duration of the President’s rule.
• But, such a law can be repealed or altered or re-
enacted by the state legislature.
4. Centre’s Control Over State Legislation
• governor can reserve certain bills for the
consideration of the President. The president enjoys
absolute veto over them.
• Bills on certain matters enumerated in the State List
can be introduced in the state legislature only with
the previous sanction of the president. (For
example, the bills imposing restrictions on the
freedom of trade and commerce).
• President can direct the states to reserve money
bills and other financial bills passed by the state
legislature for his consideration during a financial
 Critial analysis
• Constitution upholds doctrine of federal supremacy
• Sarkaria Commission on Centre–State Relations
(1983–87)
• doctrine of federal supremacy is indispensable
• to avoid absurdity, resolve conflict and ensure
harmony between the Union and state laws.
• Avoid interference, strife, legal chaos and confusion
caused by a host of conflicting laws, much to the
bewilderment of the common citizen.
• Integrated legislative policy and uniformity on basic
issues of common concern
ADMINISTRATIVE
RELATIONS
• executive power has been divided between the
Centre and the states on the lines of the legislative
powers
• the executive power of the Centre extends to the
whole of India for the subjects of Union List
• Centre has power to exercise rights, authority and
jurisdiction conferred on it by any treaty or
agreement.
• the executive power of a state extends to its
territory in respect of matters of State List
• the executive power rests with the states for the
Concurrent List.
#Mamta banerjee vs modi/shah campaign incident
• state shall ensure compliance with Parliamentary laws
and any existing laws
• state shall not impede or prejudice the exercise of
executive power of the Centre in the state.
• Centre can give ”general” “coercive” “directions” to the
state.
• Article 365
• if state has failed to comply with (or to give effect to) any
directions given by the Centre, it will be lawful for the
President to hold that government of the state cannot be
carried on in accordance with the provisions of the
Constitution.
• Further, President’s rule can be imposed in the state
• Centre can also give “Specific coercive directions”
• (i) the construction and maintenance of means of
communication;
• (ii) protection of the railways
• (iii) instruction in the mother-tongue at the primary
education to children of linguistic minority in the
state
• (iv) the drawing up and execution of the specified
schemes for the welfare of the Scheduled Tribes
Mutual Delegation of Functions
• To soften the rigid distribution
• mutual delegation = by agreement or legislation.
• President may, with the consent of the state
government, entrust to that government any of the
executive functions of the Centre.
• governor may, with the consent of the Central
government, entrust to that government any of the
executive functions of the state.
• Parliament may, by law, without the consent of the
state delegate functions to a state(not vice versa)
• Centre can use both the methods state can use only
the first method.
 Other themes
• Parliament can provide for the adjudication of inter
state river water dispute.
• President can establish Inter-State Councils
• Full faith and credit is to be given throughout the
territory of India to public acts, records and judicial
proceedings of the Centre and every state.
 • Article 312
• Parliament can create new All-India Services if
• Council of States passes a resolution supported by not
less than two-thirds of the members present and voting
in national interest
• IAS, IPS and IFS.
• common to the Union and the States
• serve them by turns.
• key posts under both the Centre and the states
• recruited by the Centre.
• trained by the Centre.
• controlled jointly
• immediate control vests with the state governments.
• all-India services violate the principle of federalism
• Restrict the autonomy and patronage of the states,
• Rationale of AIS
• maintaining high standard of administration
• ensure uniformity of the administrative system throughout
the country;
• facilitate cooperation, coordination and joint action on the
issues of common interest between the Centre and states.
• Dr B R Ambedkar :
• certain posts are strategic
• maintain high standard of administration
• High calibre of the civil servants
• without depriving the states of their
• States still have rights to form their own civil services
FINANCIAL RELATIONS
Grants-in-Aid to the States
• Constitution provides for grants-in-aid to the states from
the Central resources.
• on the recommendation of the Finance Commission.
1. Statutory Grants (Article 275)
• Parliament to make grants to the states for “general
purpose”
• which are in need of financial assistance
• not to every state.
• different sums may be fixed for different states.
• charged on the Consolidated Fund of India.
• Specific purpose grants
• welfare of the scheduled tribes
2. Discretionary Grants (Article 282)
• both the Centre and the states to make these grants
• any public purpose
• the Centre makes grants to the states on the
recommendations of the Planning Commission —an
extra-constitutional body.
• Centre is under no obligation to give these
• to help the state financially to fulfil plan targets; and
to give some leverage to the Centre to influence and
coordinate state action
• Planning Commission had assumed greater
significance than the Finance Commission in Centre
state financial relations.
Finance Commission (Article 280 ).
• quasi-judicial body.
• constituted by the President
• every fifth year or even earlier.
• Composes of chairman and 4 other members
• Term = specified by the president in his order
• eligible for reappointment.
• Parliament to determine the qualifications & manner of
selection.
• 1. chairman = experience in public affairs
• 2. HC judge or one qualified to be appointed as one.
• 3. special knowledge of finance and accounts of government.
• 4. experience in financial matters and in administration.
• 5. special knowledge of economics.
Functions :
recommendations to the President on the following
matters:
• The vertical and horizontal distribution of the net
proceeds of taxes
• The principles governing grants-in-aid
• augment the Consolidated fund of a state to
supplement the resources of the panchayats and
the municipalities
• Any other matter
• The Constitution envisages the Finance Commission
as the balancing wheel of fiscal federalism in India.
Certain proposals which need a prior presidential
recommendation…
• A taxation proposal concerning states
• A proposal that redefines the term ‘agricultural
income’
• a proposal affecting distribution of funds between
union and states
• A proposal to impose any surcharge on any
specified tax or duty for the purpose of the Centre.
• Borrowing regulations
• Union can borrow at the security of the
Consolidated Fund of India
• Parliament can fix limits to borrowing.(FRBM ACT)
• state government can borrow with the security of
Consolidated Fund of the State
• Vidhan Sabha can fix limits to borrowing
• Central government can make loans to any state or
give guarantees in respect of loans raised by any
state, to be charged upon the Consolidated Fund of
India.
• state cannot raise any loan without the consent of
the Centre, if it already has a pending loan.
 Mutual tax immunity clauses
• Centre is exempted from taxes imposed by a state
or its organs like like municipalities, district boards,
panchayats
• Parliament can alter this exemption.
• States are immune from central taxation
• Parliament can alter this exemption.
• However, property and income of local bodies, state
PSU’s are not exempted from Central taxation.
 Areas of conflict
• office of governor
• President’s Rule
• Central forces in the states AFSPA
• Reservation of UT/state bills for of the President
• States re-organization
• financial allocations
• All-India Services (IAS, IPS, and IFS);
• Use of electronic media for political purposes
• intelligence/enforcement agencies/enquiry
commissions (sushant singh rajput case)
• Encroachment by the Centre on the State List(recent
 Morarji Desai Commission,1966(ARC)
ARC created M C Setalvad study team
Final ARC report compiled on the basis of Study Team
report.
• Appoint non partisan governors
• More powers to states
• Implement article 263
• more financial resources
• Armed deployment only on their request
 Rajmannar committee report, 1971
• Article 263
• Planning Commission abolished
• Finance Commission on a permanent basis
• President’s Rule omitted
• pleasure of the governor
• Transferred more subjects to the State List
• Residuary functions to the states
• All-India services abolished
 Anandpur Sahib Resolution,1973
• Centre’s control over defence, foreign policy,
communications, and currency only.
• residuary powers with states.
• Symmetric federalism – equal authority and
representation to all the states at the Centre.
 Sarkria commission report, 1988
• a strong Centre with moderate centralization
• President’s Rule be reluctantly applied
• Article 263 implementation
• AIS be strengthened, more services be added
• limit period for surcharges
• Planning Commission is reasonable and relevant
• implementation the 3 - language formula aptly
• States reorganisation must remain a unitary feature
• commissioner for linguistic minorities be appointed
• fixed term for governor’s office
• zonal councils should be re-constituted
• Consult states when deploy armed forces
• consult states before legislating on Concurrent List.
• Role of PM in appointment of Governor
• governor not to misuse his pleasure doctrine
• President to withhold state bills for just reasons
• residuary powers in the Concurrent List.
 Punchhi Commission, 2008
• Fix tenure for governor
• Reforms in selection process for a governor
• Governor’s impeachment like the president
• Reasonable discretion
• Act within 6 months on state bills
• Clear guidelines on governor’s role in a hung
assembly
• Governor should allow CM to prove his majority on
the floor of the House
• Must focus only on constitutitonal role, not extra
constitutional/statutory mandates
• Regulate president’s rule as per the Bommai
Judgment of SC
• 356 to be used only as a “last resort”
• Implement 263
• Union to consult states before legislating on
Concurrent List.
• President to act within 6 months on state bills