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Centre State Relations

"The Indian Constitution is a federal Constitution in as much as it established what may be called a dual polity which will consist of the Union at the Centre and the States at the periphery each endowed with sovereign powers to be exercised in the field assigned to them respectively by the Constitution.".- D.R. Ambedkar

The term "federalism" is not specifically mentioned in the Constitution, but a conclusion can be formed regarding a governance structure that is largely federal.

K.C. Wheare, father of contemporary federal theories, defined federalism as "the method of dividing power so that general and regional governments are each within a sphere co-ordinate and independent." He called the Indian Constitution as quasi-federal in nature i.e., 'federation sui generis' or federation of its own kind.

In a federal country, Centre-State Relations are an important component of politics because they teach us about the dual character of having power divided between the Centre and the states. In their respective domains, the Centre and the State are regarded as superior. The Indian Constitution refers to the country as a "Union of States."

A separate section is devoted to 'Union-State Relations,' in which powers are divided between Centre-State Relations in the form of the executive, legislative, and financial powers. Because the Centre and the State are superior in their respective areas, they are supposed to maintain harmony and balance on a greater scale. As a result, numerous clauses in India's constitution help to govern Centre-State Relations on various levels.

Types Of Centre State Relations:

Part XI of the Indian Constitution is dedicated to center-state relations. It is divided into legislative and administrative connections. Part XII also contains laws governing financial relations. Following is a detailed discussion of all three types.

Legislative Relations
Articles 245255 deals with legislative relations between the Union and the states, specifically the Parliament and state legislatures. It analyses the scope of the Union's and states' legislative powers. Analyzing the provisions reveals that the Parliament evidently has superseding powers over state legislatures.

The different provisions define the subjects on which they can legislate, the consequence of inconsistency between state and national law, the Parliament's residuary powers, and many other provisions. Schedule VII, addresses the Union List, State List, and Concurrent List.

Administrative Relations
Articles 256 to 263 deal with administrative relations, including those between the Central Government and several state governments. Though India is federal, it has unitary characteristics, and so Article 256 states that state governments must ensure that they follow the laws passed by Parliament and do not conduct any executive or administrative functions in violation of the same.

To establish improved relations between the Centre and the states, the Sarkaria Commission advocated for cooperative federalism in administrative relations between the two. The same was crucial since multiple parties working at the federal and state levels frequently create turmoil and distrust, leading to inefficient administration.

Financial Relation
Part XII of the Constitution, Articles 264 to 293, deal with financial relation between the Centre and the state. Because India is a federal country, it adheres to the division of powers when it comes to taxation, and it is the responsibility of the Centre to allocate funds to the states.

All such connected provisions have been addressed in this document. Schedule VII describes the ability of the Centre and states to levy taxes. Furthermore, it contains numerous regulations concerning the levy and allocation of taxes by the center and states, grants to states, surcharges, and so on. The Goods and Services Tax, a dual structure tax, is a recent example of a financial center-state relationship.

Centre State Relations In India

The Indian Constitution is federal with unitary bias. Strengthening the federal system is critical for meeting the demands of people governed by state governments while also preserving India's unity. As a result, Centre-State relations, or agreements between the Union Government and the States regarding their respective powers, functions, and responsibilities, have always been crucial.

The underlying structure continues to be one in which legislative, administrative, and financial authorities are excessively concentrated in the Union Government, leaving the States burdened with a slew of obligations but lacking sufficient autonomy.

The major issues in the legislative sphere related to intrusions by the Centre into State-list subjects and delays in obtaining assents for important Bills passed by the State Assemblies. In the financial sphere, the major issues related to increasing centralization of powers in the Union Government in matters like resource mobilization and allocation and other key areas of economic decision-making like Planning.

With the demand for restructuring Centre-State relations gathering momentum, the Union Government had also set up the Sarkaria Commission in 1983. While this Commission took about five years to submit its report, its recommendations failed to resolve most of the basic issues mentioned above, except for some minor improvements in the financial sphere.

Such as giving powers to the municipalities to issue tax-free bonds, endorsing the Chief Ministers' decisions on consignment tax, extending slightly the time frame for over draft loans etc. It is unfortunate that even these recommendations of the Sarkaria Commission have not been implemented by the Union Government after nearly two decades.1

The Government of India constituted a Commission on Centre-State Relations under the chairmanship of Justice Madan Mohan Punchhi, former Chief Justice of India on 27th April 2007 to look into the new issues of Centre-State relations keeping in view the changes that have taken place in the polity and economy of India since the Sarkaria Commission had last looked at the issue of Centre-State relations over two decades ago.

The Commission examined and reviewed the working of the existing arrangements between the Union and States, various pronouncements of the Courts in regard to powers, functions and responsibilities in all spheres including legislative relations, administrative relations, role of governors, emergency provisions, financial relations, economic and social planning, Panchayati Raj institutions, sharing of resources including inter-state river water etc. The Commission made 273 recommendations in its seventh volume report presented to Government on 30 March 2010.2

Administrative Relations Between Centre And State

Administrative Relations are a critical component in controlling Centre-State relations. Articles 256 and 257, as well as Articles 356 and 365, deal with the components of Centre-State interactions. The Centre has been given authority to issue guidelines and directions to the State under Articles 256 and 257. The entire purpose of Article 356 is to provide for the governance of a state when no political party can establish a stable government by itself or by forming a coalition with another party.

Taste of President' s Rule in different states on more than 126 occasions. The Article 365, on the other hand, authorises the President to hold that a situation has arisen in which the Government of a state cannot be carried on in accordance with the provisions of the Constitution, that is , if the state fails to comply with or give effect to any directions given in exercise of the executive power of the Union.3 The meaning of expression "any direction" must be understood to mean that any direction issued under any of the provisions of this Constitution in the exercise of the executive powers of the Union.4

Article 365 may serve as a deterrent to any quick resort to severe measures under Article 356 in the event of a State Government's refusal to comply with or give effect to any Constitutional direction provided in the exercise of the Union.

As a result, the extraordinary powers granted by Article 365 are not only necessary, but should be used with utmost discretion and only in severe instances. In this way, the Sarkaria Commission has proven the express use of Article 365.

Where a direction issued by the Union in the exercise of its executive power under any of the provisions of the Constitution, such as Article 256, 257, and 339(2) or, during an emergency under Article 353, is not complied with by the State Government inspite of adequate warning and opportunity, and the President there upon holds under Article 365 that a situation, such that contemplated in Article 356 has arisen.

If public disorder of any magnitude endangering the security of the state takes place, it is the duty of the State Government to keep the Union Government informed of such disorder, and if the state fails to do so, then such failure may amount to impeding the exercise of the executive power of the Union Government and justify latter giving appropriate directions under Article 257(1).

If such a direction given to the State by the Union executive under Article 257(1) is not complied with, inspite of the adequate warning, the President thereupon may hold that the situation as that contemplated under Article 356 has arisen.5

Division of Administrative powers between the center and the states as per Centre-State Administrative constitutional provisions:

  • Directives from the union to state governments:
    Under Article 256, the union's executive power extends to issuing direction to the states in order for them to comply. The Union's power goes to the limit of controlling a state in a way that feels necessary for the purpose.

    For example, the union can provide directions to the state for the building and maintenance of means of communication designated as being of national or military importance, as well as the protection of railways within the state.

    This is critical to ensuring that legislative laws are implemented throughout the country. Non-compliance with the directions may result in a situation in which the Union can invoke Article 356, imposing President's control in the state and taking over the administration of state.
     
  • Delegation of union functions to the states:
    According to Article 254, the President may delegate to the state government, either conditionally or unconditionally, functions relating to any matter falling within the purview of union executive power. Under clause (2), Parliament is also entitled to use the state machinery for the enforcement of the union laws, and confer powers and entrust duties to the state. A state can also, with the consent of union government confer administrative functions on the union.
     
  • All India Services:
    In addition to central and state services, Article 312 of the Constitution provides for the establishment of "All-India services" common to both i.e. the union and the states. The state has the right to suspend officers of All India Services. Only the President of India has the authority to appoint them and take disciplinary action against them.
     
  • Deployment of Military and Para-military Forces:
    Military and paramilitary forces can be deployed in a state by the union if the circumstances demand, even against the intentions of the state administration
     
  • Constitution of Joint Public Service Commission for Two or more State:
    In addition to the Union Public Service Commission (UPSC) and the State Public Service Commission, the Constitution provides for a Joint Public Service Commission. When two or more states agree to form a joint commission by passing a resolution in their respective legislatures, the Parliament may create one by law. The Commission's structure encourages inter-governmental cooperation.

    There is also a clause in the Constitution that states can request that the UPSC assist them in developing and implementing joint recruitment plans for any service that requires candidates with particular qualifications.
     
  • Judicial System:
    A distinctive feature of our federal system is the presence of integrated judicial system. Though we have federal form of government with two sets of government and dual powers, there is no dual system of administration of justice. This is clear by the presence of single integrated chain of courts to administer both union and state laws with the Supreme Court at the apex of hierarchy of courts.
     
  • Inter-State Council:
    India is a union of states in which the centre plays a key role but at the same time is dependent on the states for policy implementation. The Constitution includes mechanisms to promote inter-governmental cooperation and effective consultations between the centre and states, ensuring that all major national policies are developed through dialogue, discussion, and consensus.

    The establishment of the Inter-State Council is one such method. Article 263 of the Constitution empowers the President to specify the nature of the Council's functions. The Council is responsible for investigating and advising on any conflicts that may have occurred between the states. Furthermore, it may explore and discuss topics of mutual interest.
     
  • Inter-State Water Disputes:
    In India there are many inter-state rivers and their regulation and development has been a source of inter-state function. These relate to the use, control and distribution of waters of inter-state rivers for irrigation and power generation. In the Indian Constitution, water-related matters within a state are included in the state list, while the matters related to inter-state river waters are in the union list.

    Keeping in view this problem of unending river water disputes, the Constitution framers vested the power to deal with it, exclusively in Parliament. The Parliament hence, may by law provide for the adjudication of any dispute or complaint, with regard to use, distribution or control of the waters. The Inter-State Water Disputes Act was enacted by the Parliament in 1956 according to which tribunals are set up for adjudication of water disputes referred to them.
     

Centre State Conflicts In India

Federalism, an important component of our democratic framework, derives its power from Articles 245263 of the Indian Constitution. According to the aforementioned provisions, power is clearly divided between the Centre and the State into legislative, administrative, and financial tasks.

Furthermore, the 7th Schedule of the Constitution is separated into three lists: the Union List, the State List, and the Concurrent List, which provide detailed information on the legislative power of the Parliament and the State Assemblies.

The study of Centre- State relations is of perennial interest since the governments at the two levels cannot and do not function in watertight compartments and hence there is bound to be interaction between them.6

Therefore, despite such evident distinctions, the subject of Centre-State disagreements has persisted.

Typically, such disagreements emerge when the Centre infringes on the State's power by passing laws on issues that fall under the State list, or when the Centre makes any other laws that impact the State's legal or constitutional rights.

The most contemporary example of the center-state dispute is the Disaster Management Act, 2005, which was invoked in light of the COVID-19 pandemic. The Act causes discontent among states as the Central guidelines are binding on them, even though public health is a state matter on which the Parliament cannot legislate.

Another example is of the recent suit filed under Article 131 by Kerala Government against the Union challenging the Citizenship Amendment Act, 2019 ('CAA') that infringes the fundamental rights and principle of secularism.

This was followed by a suit filed by the Chhattisgarh Government under the same Article challenging the National Investigating Act, 2008 ('NIA'), passed by the Centre in spite of "police" being a state subject.

The impetus behind the passage of Central laws that encroach State's right arises due to the ambiguity of Article 131, which gives Parliament a leeway to amend or pass laws without worrying about repercussions. 7

Article 131 of the Constitution upholds the spirit of cooperative federalism. According to the Article, the Supreme Court has original jurisdiction to resolve a dispute between the states or between the Union and a state.8

The pre-requisite for filing a suit under Article 131 is the existence of a dispute between the parties. Also, the dispute must involve a question of law or a question of fact that transcends a legal or a constitutional right, and should not include political conflict, unless legal rights are at stake. Prima facie, Article 131 seems unambiguous, but the legal quandary arises when we analyse cases related to it.

Over the years, the Supreme Court has issued contradictory rulings on whether a state can appeal a Central Act under Article 131. In the case of State of Madhya Pradesh v Union of India 9, the Court held that Central enactments could be only challenged as writ petitions under Article 32 and 262 of the Constitution and not under the original jurisdiction of the Court under Article 131.

However, in another instance a few years later, it disagreed with the previously mentioned verdict, arguing that Article 131 operates as an addition to Article 32 to deal with Centre-State Dispute. Furthermore, the Court stated unequivocally that it could not agree that the constitutional legitimacy of a Central Law could be questioned under Article 131. Because the Court lacked the necessary bench strength to overturn the prevision ruling, it deferred the decision to a bigger bench.

However, because the case is still unclear, both judgments can be utilised as a precedent for future references. This exacerbates the conflict between the Centre and the States, as Parliament can make laws that infringe on the latter's authority.

The State of West Bengal v. Union of India10 does not expressly deal with the subject of State power to contest central laws under Article 131, but its proceedings provide an answer to the controversy at hand. In this case the Court did not address the constitutional legality of the enactment under Article 131, but its decision to hear the State's claim against the Centre under the same Article demonstrates that the Constitution does allow the State to challenge Parliamentary statutes.

Despite having a decision that could help interpret Article 131, the State of Jharkhand v State of Bihar11 decided to ignore it totally since the Calcutta High Court did not investigate the constitutional legality of the Act under Article 131. A conceivable way out of this legal bind is for the Supreme Court to convene a larger bench and rule on the legal difficulties raised by Article 131.

Major Areas of Tension between Centre and State:

The Constitution endows the Central government with increased authority, and their meddling in the administration of the States has produced serious difficulties in the Centre-State relationship.

The following are crucial:
  1. Imposition of President's Rule:
    The President's Rule was imposed under Article 356 to cope with extreme crises and as a last resort. However, it has been misused numerous times by:
    1. Dismissing a state government having majority in the Assembly
    2. Suspending and dissolving the Assembly in a partisan consideration.
    3. Not giving a chance to the opposition to form government when electoral verdict is indecisive.
    4. Denying opportunity to the opposition to form a government when a ministry resigned in anticipation of a defeat on the floor of the House.
    5. Not allowing the opposition to form government even after the defeat of a ministry on the floor of the House.
    A clear illustration of the misuse of this provision is seen in 1980 when the Janata Government at the Centre dismissed the Congress Governments in nine States.
     
  2. Deployment of Central Forces:
    Many times, the Centre deploys paramilitary forces into the States to preserve peace and order without consulting the State's Government, and occasionally even against the preferences of the relevant State.
     
  3. Reservation of Bill:
    The right of a Governor to reserve a Bill enacted by a State Legislature for the President's assent is another source of contention, as a Governor usually reserved a Bill against the advice of a State's Ministry, but on the advice of the Central Government. A Governor frequently uses this authority to serve the interests of the Central Government.
     
  4. Fiscal Matters:
    Tensions arise with regards to fiscal matters because of:
    1. Comparative powers of taxation.
    2. Statutory versus discretionary grants.
    3. Economic planning.

Taxation power:

The Central control vast resources granted through deficit financing, loans from organized money market in the country as well as in the form of foreign aid. In addition, the Central can collect surcharge on taxes and raise additional funds in times of emergency. On the other hand, the States do not have enough resources to discharge their responsibilities and sometimes failed to mobilize their own resources. Thus, the States remain dependent on the Centre.

Statutory versus discretionary grants:
There are four methods of devolution of funds from the Centre to the States, viz, Obligatory sharing of Union taxes on income, assignment of certain Union duties taxes and wholly to the States, permissive sharing of Union excise duties, provision for giving financial assistance to the States in the form of grants and loans.

Even though the Finance Commission was set up to regulate, coordinate and integrate the finance of the Central and State Government, the Planning Commission has undermined the power of the Finance Commission. As the Planning Commission is a Central institution and the provisions for grants-in-aid are used for political purpose, there is a general feeling that the Centre discriminates on the basis of political party consideration.

Economic Planning:
Planning has been intended to push the Indian political system towards greater centralization. The provision relating to industries which was initially in the State List was transferred to the Union List without an amendment to the Constitution in the name of its being expedient for the public interest. It is also alleged that in the name of national planning, the funds for important State's projects are being delayed by the Central for political considerations.

Conclusions
To sum up, the administrative relationship between the center and the states in India has evolved during the course of colonial rule. After Independence the Constitution of India provided for a system of inter-governmental relationship both for normal times and emergencies. In normal times, the federal polity was expected to function on the principle of dual government.

The history of highly centralized government in the past, the influence of the Government of India Act 1935 and the concern of our founding fathers about national stability, peace and harmony led to the acceptance of a constitutional arrangement of distribution of powers that deliberately tilted the scale in favor of the union.

Later, in course of actual governance, the political forces started reshaping the Indian polity and central dominance through President's rule and other provisions harmed the effective working of the federal system. As different political parties came to power at the union and the state level, the phenomenon of central dominance had steadily come under attack by the constituent states.

The politics of center-state relations revolved round such issues as 'more powers to the states', 'more financial resources to the states' and even a clamor for redrafting of the Indian Constitution. In response to the states' demands, the Sarkaria Commission which was set up to review the working of the federal system suggested appropriate constitutional changes but nothing substantial came out of it. But it seems that in the years to come 'consensus' rather than 'control' is going to be the dominant paradigm of center-state administrative relationship in the years to come.

Suggestions
The distribution of powers between the center and states in the legislative and executive fields, as stipulated in the Constitution is clearly delimited in their scope. At the same time, the Constitution includes mechanisms for facilitating cooperation between the center and the states. These include the establishment of All India Services, the formation of a Joint Public Service Commission for two or more states, and the presence of an integrated judicial system.

The Constitution has enough mechanisms for guaranteeing harmonious financial ties between the center and the states, such as grants-in-aid and the establishment of a Finance Commission. The formation of the Inter-State Council by the National Front government is regarded as a significant move toward establishing amicable relationships between the union and states in bringing about peace and development in the country.

The center has emerged strong over the years due to centralization of certain powers in its hands. Through giving of directions to the states backed by a coercive sanction for their enforcement, exercising supervisory control over the states in the maintenance of order, and proclamation of emergencies, the union exerts its control over the states.

The Sarkaria Commission on center-state relations suggested certain constitutional changes, which would smoothen the relationship between the center and states. Efforts need to be made to make our federal system decentralized on both political and administrative fronts.

End-Notes:
  1. Vinti Rani, Centre State Relations in India, WORLD WIDE JOURNALS (Nov. 29, 2022, 9:34), https://www.worldwidejournals.com/paripex/recent_issues_pdf/2014/March/March_2014_1394869981_a457c_55.pdf
  2. Punchhi Commission, INTER-STATE COUNCIL SECRETARIAT, Ministry of Home Affairs, Government of India (Nov. 29, 2022, 9:50), http://interstatecouncil.nic.in/punchhi-commission/#main-content
  3. State of West Bengal v Union of India, 1963 AIR 1241, 1964 SCR (1) 371
  4. Krishna P. Shetty, "President's Power under Article 356 of the Constitution - Theory and Practice" in Alice Jacob (Ed.): Constitutional Developments since Independence (Bombay: Tripathi: 1975), p. 342
  5. Karan Audichya & Devina Das, The Centre State Administrative Relations in Contemporary India: A Detailed Analysis of the Constitutional Stipulations and Recommendations for a Progressive Execution, (Dec. 1, 2022, 8:56 P.M), https://gyansanchay.csjmu.ac.in/wp-content/uploads/2022/09/THE-CENTRE-%E2%80%93-STATE-ADMINISTRATIVE-RELATIONS-IN-CONTEMPORARY-INDIA.pdf
  6. H.A. Gani, Centre-State Relations in India: A Review Article, JSTOR (last visited Nov. 29, 2022, 10:11), https://www.jstor.org/stable/45072422#metadata_info_tab_contents
  7. Simran Upadhyaya, Centre-State Disputes: Article 131 the Need to Introspect, BAR AND BENCH (Oct. 18, 2020, 9:00), https://www.barandbench.com/apprentice-lawyer/centre-state-disputes-and-discontent-the-need-to-introspect-on-article-131
  8. INDIA CONST. art. 131
  9. State of Madhya Pradesh v Union of India, 1966 AIR 671, 1966 SCR (1) 466
  10. State of West Bengal v. Union of India, 1963 AIR 1241, 1964 SCR (1) 371
  11. State of Jharkhand v. State of Bihar, 2004 (2) JCR 183 Jhr
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