Lecture 26- Centre State Relations (2nd November)

➢ India is a quasi-federal state; when the Union was formed it was required that State should keep
maintaining its identity & the state should be given some freedom to function

➢ Federalism is a paradox in itself because although state was single & enjoyed autonomy, it became a
member of Union which required state to give up its freedom; and as soon as the state joined Union,
it desires autonomy. In such a scenario, there is a need to strike a balance. This balance in federalism
is known as Centre State Relations, a cooperative federalism

➢ This center state relation is a dynamic subject because someday Centre can become more powerful
in certain aspect or someday state could dominate other aspect

➢ There are 3 types of relationships between Centre & State:

o Legislative Relationship
o Administrative Relationship
o Financial Relationship

➢ Legislative Relationship begins at Article 245

o Article 245 (Territorial Jurisdiction)- Extent of laws made by parliament & by legislative of
the states
▪ This means Parliament can make laws for all over India
▪ State can make laws only for that particular state or a part of India
▪ Parliament can have extra territorial operation of law or extra-territorial
legislative powers i.e., Parliament can make laws for outside India also (although
extra-ordinary, yet admissible). This is known as Doctrine of Territorial Nexus
▪ Doctrine of Territorial Nexus – If Parliament is of the opinion that there exists is
a subject matter which is outside India right now; however, it has any/some
bearing upon such subject matter which is within the territory of India, then the
Parliament will have the power to make the law related to that
• RMDC vs IT Commissioner Bombay Case
o Suppose there are two states, X & Y
o A lottery is issued in the office of Y state, is also sold in X state
o So, does the revenue generated by sale of ticket in X state is also
subject to tax at Y state, or Y should be taxing the revenue
generated in Y state only? Answer – Y can tax the revenues of
both the states as a result of DOTN
o As per DOTN – Although the revenue is related to X state,
however, it has a direct, real & reasonable nexus

o Article 246 (Subject Matter Jurisdiction)- Subject matter of laws made by Parliament & by
the legislature of states
▪ For this purpose, three lists are maintained under 7th Schedule of COI, i.e.,
• List 1 - Union List
• List 2 - State List
• List 3 - Concurrent List
▪ However, the manner in which Schedule 7 is to be used, is mentioned in Article
246
 • Parliament can make laws on List 1 & 3
• The State Legislature can make laws over List 2 & 3
• In short, list no 3 is common

o Article 248 (Residuary Powers)- Parliament has exclusive powers to make any law
with respect to any matter not enumerated in the Concurrent List or State List
▪ If any subject matter not in State List or Concurrent List = Residuary Subject
matter
▪ Parliament has exclusive power to make law with respect to Residuary Power
▪ In USA, the power to make law on Residuary Subject matter lies with the
State, as it is a True Federation. However, in case of India, it is a Quasi Federal
State with Unitary Tilt

o From Article 249, 250, 252, 253; Centre becomes more powerful than State (Quasi
Federal State with Unitary Tilt)
▪ Article 249 – National Interest
• In National Interest, Rajya Sabha can allow the Parliament to deal
with matters related to State List
• RS, under A249, will pass a resolution to this effect allowing
Parliament to make law in National Interest (Since, RS is the Council
of States)
• Such motion should be passed by 2/3rd Present + Voting
• Such resolution is valid for 1 year; and if the Parliament wishes to
extend it, the resolution should be passed again before the expiry of
such term of 1 year, with the permission of the RS (That is why, RS is
the belief system of the Spirit of Federalism; & federalism is so crucial
that it forms a part of BSD)

▪ Article 250 – National Emergency

• Article 250 gets triggered in any type of Emergency, and
subsequently the Union Parliament gets the power to make the laws
in State List
• This is because of Article 355 – It is the duty of the Union to protect
India; and as such, it is possible only when the Parliament takes the
matter of making laws in the State List
• And, from the date the emergency has ceased, within 6 months, any
such law which is under State Lis will automatically become null &
void
• So, the maximum validity of such law is 6 months from the date the
emergency has ceased

▪ Article 252 – Request by 2 or more states

• Sometimes, 2 or more than 2 states can request the Parliament to
make a law which will be commonly applicable to them, and such
subject matter belongs to State List
 • As such, any law made by Parliament, is applicable only to the
requesting States, and not to the same subject matter of other states
• Also, repealing of such law can be done only by the Parliament and
not by the requesting states on their own
• As such, such requests are not healthy for the states, as they then
become bound by the Parliament

▪ Article 253 – International Agreements

• Any International Agreement / Trade Agreement etc., for which a law
is sought, then Parliament is allowed to touch the subject matter of
State List

▪ Inconsistency – Article 249 & Article 250 are affected by Article 251
• Suppose a state makes a law, say X; and suddenly, 249 or 250 gets
triggered, and subsequently Parliament makes a law
• If such Parliamentary law is repugnant with law X (existing or a later
formed state law), i.e., inconsistent or conflicting; then such
Parliamentary laws made during Article 249 or 250, will prevail (Quasi
Federal State with Unitary Tilt)

▪ Article 254 – If the Parliament made any law which is inconsistent with the
law made by State on the same subject matter in Concurrent List; then
Parliamentary Law will prevail
• Also link to Article 201 (Reserved for the consideration of the
President) used by Governor; where the consent of President
prevails, based on the recommendation of the Union
o Example - For a particular subject matter of Concurrent List:
▪ Parliament Law exist (say Congress at the Centre)
▪ State Legislature (also Congress) is making a law on
the same subject matter; & the Governor uses Article
201
▪ The President will consult the Parliament in this
regard
▪ If the law is consistent, the Parliament will give a
green signal
▪ Now, suppose in the next state elections, BJP comes
into power
▪ Now, the Parliament can make a new law which will
make the prior approved State law inconsistent, and
as such, the Union law will prevail
• Therefore, it is to be noted that irrespective of whether Parliament
makes a law before or after the existing state law, the Parliamentary
Law will prevail (Quasi Federal State with unitary Tilt)
▪ Doctrine of Pith & Substance is used to determine the nature of subject
matter to be included in the List – Pith & substance means ‘Understand the
core’ (Remember Money Lending Business example)
➢ Administrative Relationship
o Article 256 (Obligation of the State & the Union) – The executive power of every state
shall be so exercised as to ensure compliance with the laws made by the Parliament
and any existing laws which apply in that state, and the executive power of the Union
shall extend to the giving of such directions to a state as may appear to the
Government of India to be necessary for that purpose
▪ It is the responsibility of the Union to ensure that the States work in
accordance to the Constitution of India
▪ The Quasi Federation is unlike Partnership (i.e., Agreement based; as in case
of USA). Quasi Federation is like a family, in which the elderly speaks and the
young ones listen (QFSWUT)
▪ 256 can attract 356; this means that if Article 256 not followed, then
Governor can make a report citing that state is not working in accordance
with COI (breakdown of Constitutional Machinery) and accordingly, President
can impose President’s Rule in that State (Article 356)
o Article 257 (Control of the Union over States in certain cases)
▪ In certain cases, there is an automatic control of Union over the States
▪ In case of National matters, the Executive powers of Union will dominate over
executive of the states
▪ The Executive powers of the Union shall also extend to the giving of directions
to a state as to the
• Means of communication of National or Military importance
• Declaration of Highways or Waterways as National Highways or
National Waterways
• Construct & Maintain means of communication to be dealt by Naval,
Military, Air Force
• Protection of Railways
o Article 258 (Through the Governor) – Power of the Union to confer power etc., on
state in certain cases
▪ Notwithstanding anything in the Constitution, the President may, with the
consent of the Governor of a State, entrust either conditionally or
unconditionally to that government or to its officers’ functions in relation to
any other matter to which the executive power of the Union extends
▪ This means that the Union can confer power on states in certain cases
through the Governor; and since, the governor is the agent of the Union, he
will not misuse the power

o Article 261 (Public Acts, Records and Judicial Proceedings)

▪ Full faith & credit shall be given throughout the territory of India to Public
acts, records and judicial proceedings of the Union and of every state
▪ The manner in which and the conditions under which the acts, records, and
proceedings referred to in clause (1) shall be proved and the effect thereof
determined shall be provided by the law made by the Parliament
▪ Final Judgements or the orders delivered or passed by the civil courts in any
part of the territory of India shall be capable of execution anywhere within
that territory according to law disputes relating to waters
 • Although India is a Federation, but the deciding factor is the spirit of
federalism (e.g. Ram & Shyam are brothers, that is federation;
however, they do not talk to each other. So, Spirit of Federalism not
present). Federalism is based on trust; it is based on full faith and
credibility (e.g., Driving License issued in CG, is also valid in MH; this
is valid through Article 261)

o Article 262 (Inter-State Water Disputes) – Adjudication of disputes relating to waters

of Interstate rivers or river valleys
▪ Parliament may be law provide for the adjudication of any dispute or
complaint with respect to the use distribution or control of the water of, or
in, any inter state river or river valleys
▪ Notwithstanding anything in this Constitution, Parliament may by law provide
that neither the SC nor any other court shall exercise jurisdiction in repsect
of any such dispute or complaint as is referred to in clause (1) Coordination
between States
• In short, if there is any dispute, first it will be dealt with by Inter State
Water Tribunal; if it fails to sort out the matter, then it will be referred
to SC of India; i.e., Dispute > ISWT > SC

o Article 263 (Inter State Councils) – if at any time it appears to the President that the
public interests would be served by the establishment of a Council charged with the
duty of:
▪ Inquiring into and advising upon dispute
▪ Investigating & discussing subject (b/w State- State, b/w State- Union)
▪ Make recommendation upon any such subject, & in particular,
recommendations for better coordination of policy and action with respect
to that subject, in shall be lawful for the President by order to establish such
a Council
(Remember Head of the Family & dispute settlement in Court example)

➢ Emergency Relations (Included in Part 18 of the COI)

o Article 352
o Article 356
o Article 360

➢ Centre State Financial Relations (completely skewed towards Centre)

o Article 275 (Statutory Grants)
▪ These grants are given by the Parliament out of the CFI to such states which
are in need of assistance. Different states may be granted different sums
▪ Specific grants are also given to promote the welfare of the ST in a state or to
raise the level of administration of the Scheduled Areas therein
▪ Usually the recommendations of Finance Commission (Article 280) are used
in such cases
o Article 282 (Discretionary Grant)
▪ Center provides certain grants to the states on the recommendations of the
Planning Commission which are at the discretion of the Union Government
▪ These are given to help the state financially to fulfill plan targets (of the
states)
▪ The huge skewing of the influence of the Union over the State is seen in
Article 282

o India does not have federalism, it has asymmetric federalism