Centre-State Relations and the Federal Structure

The Constitution calls India “a Union of States.” It never uses the word “federation.” Power is split between the Centre and the states, but with a strong central core. This article shows how the split works and where it causes friction.

1Is India Really a Federation?

India has the classic federal features. It also has strong central powers that check each one. The scholar K.C. Wheare studied this mix. He called India “quasi-federal.”

Federal features	Unitary features
Two governments: Union and states	Single citizenship for all
Written, supreme Constitution	Strong Union List, with residuary power at the Centre
Three lists dividing lawmaking	Governor appointed by the President
Independent judiciary	Emergency powers favouring the Centre

• Federal side: Neither Parliament nor a state legislature can act outside the powers the Constitution gives it. Courts settle disputes between the Centre and states.
• Unitary side: Voters do not elect the Governor. The President appoints each one.
• Why “quasi”: In ordinary times states run their own affairs. In an emergency, the system leans hard toward the Centre.
• The Constituent Assembly wanted a strong Centre. It had to hold a newly independent, diverse country together after Partition.

2How Is Lawmaking Power Divided?

The Seventh Schedule splits lawmaking into three lists. This is the core of Indian federalism.

List	Who legislates	Sample subjects
Union	Only Parliament	Defence, foreign affairs, currency, railways, banking, income tax, corporation tax
State	State legislatures	Public order, police, public health, agriculture, land, local government
Concurrent	Both	Criminal law, marriage, contracts, education, electricity, price control

• Conflict rule: Article 254 settles a clash on the Concurrent List. The Union law prevails. The conflicting part of the state law becomes void.
• The Union List is the longest of the three. It covers the biggest national subjects.
• Residuary power: A subject named in no list goes to the Centre.

3How Does India Differ From the US?

The two systems began in opposite ways. The US formed when sovereign states agreed to join. India is a “Union of States” created by the Constitution.

Point	India	USA
Origin	Constitution created the Union	Sovereign states joined together
Citizenship	One, common to all	Federal and state, both
Residuary power	With the Union	With the states

• The word “federation” appears nowhere in the Constitution’s text.
• India borrowed its residuary-powers scheme from Canada’s Constitution, not Ireland’s.
• Indian states never had a separate existence before the Union formed.

4How Do the Centre and States Work Together?

Cooperative federalism means shared goals, not guarded lists. The GST Council is the clearest modern example. It brings the Centre and every state to one table to set tax rates.

Body	Basis
Inter-State Council	Constitutional (Article 263)
Zonal Councils	Statutory (States Reorganisation Act, 1956)
North-Eastern Council	Statutory (its own 1971 Act)
National Security Council	Executive order, 1998

• Inter-State Council: It is the only body with a direct basis in the Constitution. It discusses disputes and policy that touch more than one state.
• Zonal Councils: They group neighbouring states into five zones.
• NSC: It has no constitutional or statutory basis. This split is a favourite exam trap.

5When Can the Centre Take Over State Powers?

Four tools let the Centre reach into the state sphere. Three are emergencies. One needs no emergency at all.

• Article 352: In a National Emergency the Union can direct the states on almost any matter. Power is centralised for the emergency’s duration.
• Article 356: If a state’s constitutional machinery is reported to have broken down, the Union takes over its administration. The state legislature’s powers move to Parliament.
• The Sarkaria Commission said Article 356 should be a last resort.
• Article 360: In a Financial Emergency the Union can direct states on money matters. This can include cutting state employees’ pay.
• Article 249: The Rajya Sabha can pass a resolution by a two-thirds majority. Parliament can then legislate on a State List subject in the national interest.
• This is a safety valve. It lets the Centre act on a genuinely national matter without a full emergency.
• The Rajya Sabha represents the states. Its two-thirds vote keeps the power from being used casually.

6Who Shares the Money, and What Did Three Commissions Say?

Money is where friction shows most. States often say they bear the cost of centrally designed schemes. They have little control over how the funds are released.

• Finance Commission: The President sets one up every five years under Article 280. It recommends how the Union’s tax revenue is shared with the states.
• The CAG audits accounts at both the Central and state level.

Body	Set up	Reported	Set up by
Rajamannar Committee	1969	1971	Tamil Nadu government
Sarkaria Commission	1983	1988	Union government
Punchhi Commission	2007	2010	Union government

• Rajamannar: It went furthest. It wanted real limits on Union power and more autonomy for states.
• Sarkaria: It studied Centre-State relations broadly. It said Article 356 should be a last resort.
• Punchhi: It looked at the Governor’s role and the use of Article 356.
• All three lean toward more state autonomy. None has been fully implemented.

7What Is the Kerala Borrowing Case About?

GST, borrowing caps, and central schemes keep the Centre-State balance in the news. Kerala sued the Centre in the Supreme Court over limits on how much it can borrow.

• The case is State of Kerala v. Union of India.
• It tests fiscal federalism directly. The question is how far the Union can limit a state’s own borrowing.
• Sources: LiveLaw and Supreme Court Observer.

8What Does the Exam Test Here?

Must Know

• Residuary power is with the Centre, the reverse of the US (Trap).
• Only the Inter-State Council is constitutional.
• Article 249 needs no emergency.

Good to Know

• Wheare called India quasi-federal.
• Article 254 settles Concurrent List clashes.
• The Finance Commission comes from Article 280.

Great to Know

• Rajamannar (1969) came from a state, Sarkaria (1983) and Punchhi (2007) from the Union (Trap).
• Zonal and North-Eastern Councils are statutory.

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