Centre-State Relations in India – Legislative, Administrative and Financial’

Centre-State Relations in India – Legislative, Administrative and Financial

India i.e. Bharat consist of 28 states and 8 Union territories. It has been divided into various small parts to ease the functioning of administration of the country which has such a huge population and has people having such diverse backgrounds. Every region has its own peculiar demands and issues due to which it becomes necessary to divide the country into smaller administrative units.

The nature of the Constitution of India is quasi-federal i.e. it contains the features of both a federal as well as unitary constitution. To regulate various dimensions between the center and state, the Constitution contains elaborate provisions and can be studied under three heads.

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


  1. Legislative Relations :- Legislative relations between center and states are mentioned in Article 245 to Article 255 in Part IX of the constitution. The four aspects in the center state legislative aspects are ;
  • Territorial extent of central and state legislation :- The parliament of India has the power to redefine the boundaries of the states and frame laws for the entire county as and when needed, while the territorial extent of state legislature is limited upto the extent of that state only. The Union parliament has been provided with extra territorial legislation as well viz. the laws of parliament are also applicable to Indian citizens and their property in any part of the world.
  • Distribution of legislative subjects :- Schedule seven of the constitution specifies three lists which is a distribution of legislative subjects between the center and states viz. List 1( Central list), List 2( State List), List 3(Concurrent List).
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Under List 1, Parliament can make laws on any matter mentioned under this list. This list contains 100 subjects(earlier 97) like defence,banking, etc.

Under List 2, State legislature can make laws on any matter mentioned under this list. This list contains 61 subjects(earlier 66) like public order, police etc.

Under List 3, both, the Parliament as well as state legislature can make laws on any matter menti oned under this list. This list contains  52 subjects (earlier 47) like marriage, divorce etc.

The 42nd amendment transferred five subjects from state list to concurrent list.

Power to make laws in any subject which are not enumerated in any of the three lists(residuary subject) is vested in the Parliament.

  • Parliament legislation in state field:- Parliament is empowered to make laws on subject of state list if :-
    • When Rajya Sabha passes a resolution that it is necessary for the parliament to make laws on state list, in national interest.
    • The parliament can make laws on subjects of state list during national emergency while a proclamation of national emergency is in operation
    • When two or more states pass a resolution requesting the Parliament to make laws on matters in state list, the parliament can make laws regulating the matter.
    • Parliament can make laws on subjects of state list for implementing international treaties and agreements
    • Parliament can make laws on subjects of state list during the tenure when President’s rule is imposed in the state.
  1. Administrative Relations :- Administrative relations between center and states are mentioned in Article 256 to Article 263 in Part IX of the constitution.
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The executive power of the center extends to whole of India on matters on which Parliament has exclusive power of legislation. Similarly, the executive power of state  extends to its territory in matters where state legislature has exclusive power.

But the state has to ensure compliance with the laws made by the parliament and should not impede the exercise of executive power of the center in the state.

Article 365 allows President to impose state emergency in the state in case if the state has failed to comply with any direction given by the center.

To ensure cooperation between center and states, Inter state council is established to discuss subject of common interest. Various inter state river disputes are also solved by the interference of the Parliament.

All India Services :- There are three All India Services namely IAS,IPS,IFS. These services are controlled both by the Center and the states. These services help in maintaining administration both in center and states. They also ensure uniformity of administrative system throughout the country.

  1. Financial Relations :- Financial relations between center and states are mentioned in Article 268 to Article 293 in Part IX of the constitution.

Parliament has exclusive power to levy tax on 15 subjects enumerated in Union List while States can levy tax on 20 subjects enumerated in State list. Both the Parliament and state legislature can levy taxes on subjects enumerated in Concurrent list.

Various methods of distribution of taxes among center and state is mentioned in Article 268 to Article 271 of the Constitution. Apart from these sharing of taxes, the constitution provides for grant-in-aid to the states viz, statutory grant and discretionary grant.


Article 275 allows the Parliament to make grants to the state which are in need of financial assistance while Article 282 empowers both the center and states to make any grant for any public purpose, to help the state financially to fulfil planned targets.

Finance Commission :- Article 280 establishes Finance Commission which is a quasi judicial body. It recommends the President on

  • The distribution of net proceeds of taxes between the Center and States concerned
  • The principle which governs the grant-in-aids to the states by the center
  • To supplement the resources of Panchayats and municipalities in the state on the recommendation of State Finance Commission.
  • Any other matter referred by the President.

The Central government can borrow within or outside India upon the security of Consolidated Fund of India while the state government can borrow only within India and not abroad.

Various committees formed at different times to ensure smooth coordination between center and states are Administrative reforms commission, Anandpur Sahib resolution, Sarkaria Commission and Punchhi Commission.

Author: Yatharth Tripathi,
1st year, Faculty of Law, University of Delhi/ Student

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