Lesson 8 - Federalism

Federalism is the form of government where the powers are divided between its constituent
units - the Centre and the States – in a way that each remains independent of each other.
K.C.Wheare argues that: By the federal principle, I mean the method of dividing powers so
that general and regional governments are each within a sphere, coordinate and independent.1
The framers of the Indian Constitution divided the powers between the Centre and the States
but at the same time, in Article 1 of the Constitution, declared India as a ‘Union of States’
and not as a Federation of States. The complexity of the nature of Indian federalism is further
evident from the views of various political scientists. People like Sir Ivor Jennings, Paul H.
Appleby, K. Subba Rao, Dr. Rajendra Prasad and Dr. B.R.Ambedkar describe the
Constitution as federal whereas, Dr.K.M.Munshi calls it more unitary than federal. And
K.C.Wheare describes it as quasi-federal.
Division of Powers
The federal principle envisages sharing of power between the Centre and the States. It is the
Constitution that confers powers on these units by specifying the subjects allotted to both the
Centre and the States. The Indian Constitution provides for three lists – According to Article
246 Parliament has been given the exclusive power to make laws on matters mentioned in the
Union List and the State Legislature has been given the exclusive powers to make laws on
matters mentioned in the State List. On matters mentioned in the Concurrent list, both
Parliament and the State Legislature have concurrent jurisdiction. However, in case of a
conflict between the law made by Parliament and the State Legislature on a matter mentioned
in the Concurrent list, the law made by Parliament prevails and the law made by the State
legislature shall be void to the extent it clashes with the law made by Parliament (Article
254).
List I of Schedule 7 called as Union List contains 1001 subjects of national importance e.g.
Defence of India, Armed forces, Foreign affairs, War and peace, Railways, Currency and
coinage, Reserve Bank of India, Trade and Commerce, etc. on which the Central Government
can legislate.
List II of Schedule 7 contains 611 subjects e.g. Police, Prisons, Local governments, Public
health, Agriculture, Land, Money lending, etc. over which the State legislature has exclusive
power to make laws.
List III of 7th Schedule contains 521 subjects e.g. Criminal law, Marriage and Divorce,
Forests, Price control, Factories, Acquisition and requisitioning of property, etc. on which
both the Centre and the States are competent to make laws.
Legislative Relations
In ordinary circumstances the distribution of powers in legislative matters is guided by
Article 245 and Article 246 which specifies the subjects and the jurisdictions of the Centre
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and the States. The Union government has no jurisdiction with respect to the subjects
mentioned in the State list. But under certain circumstances this scheme of distribution of
powers automatically gets modified whereby many articles of the Constitution either
empower Parliament to make laws even on matters mentioned in the State list or empower
the President to veto the Bills passed by the State legislature. For example:
a) According to Article 249, if the Rajya Sabha passes a resolution, supported by at least
2/3rd of its members, present and voting, declaring a particular subject to be of
‘national interest’, then the Parliament becomes competent to make law on the
specified State subject, for a period of not more than one year at a time.
b) Under Article 250, the Parliament has the power to make laws on State subjects for
the whole or any part of the territory of India during ‘the proclamation of
Emergency.’
c) According to Article 252, the legislatures of two or more States may pass resolutions
requesting Parliament to make laws on a subject which is not included in the Union
list. Such laws will be applicable only in those Stated which have passed such
resolutions. It will also apply to those Stated which adopt it by resolution. For
example, The Wild Life (Protection) Act, 1972; The Transplantation of Human
Organs Act, 1994 were passed under Article 252.
d) According to Article 253 Parliament has the power to make laws for implementing
any treaty, agreement or convention with any other country or any decision made at
any international conference or body. Under this article the Parliament may legislate
on a subject enumerated in the State list.
e) The Governor of the State may reserve certain kinds of Bills for the Presidential
assent. Even some of the Bills pertaining to matters mentioned in the Concurrent list
[Article 254(2)] may also be reserved by the Governor for the consideration of the
President.
f) Whenever emergency is declared in the country under Article 352 of the Constitution,
Parliament gets the power of making laws on matters mentioned in the State list
[Article 250(1)] which means for all practical purposes the State list is automatically
converted into a Concurrent list.
Thus, the mere listing of subjects in the three different lists does not specify the positions
occupied by the Centre and the States in the balance of power. Despite the fact that
certain important subjects are listed in the State list, Parliament can intervene in that field
on many grounds mentioned in the Constitution and this has strengthened the position of
the Centre vis-a-vis the States. The socio-economic-political conditions of the Country
and the international environment at the time of the framing of the Constitution made it
all the more essential to strengthen the Centre and this was done by giving it a dominant
role in the distribution of legislative powers.
Administrative Relations
The Indian federal system is based on the general principle that the executive power is co-
extensive with the legislative power, i.e., the executive power of the Union extends to all

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those matters with respect to which Parliament has the power to make laws (Article 73)
and the executive power of the States extends to all those matters with respect to which
the legislature of the State has the power to make laws (Article 73). But as far as exercise
of administrative powers is concerned, the Centre possesses much more powers than it
enjoys in the field of legislation. Articles 256 to 263 provide for Union control over the
States even in normal conditions. The Union may give directions to a State –
a) To ensure compliance with laws made by the Parliament (Article 256).
b) To ensure that the executive powers of the State is exercised in a manner not to
impede the exercise of the executive power of the Union (Article 257).
c) For the construction and maintenance of means of communication of national and
military importance and for the protection of railways within the State.
d) To execute schemes related to welfare of Schedule tribes (Article 339).
e) To ensure that every State is run in accordance with the provisions of the Constitution
(Article 355).
f) Regarding the manner in which the executive power is to be exercised during a
Proclamation of Emergency under Article 352 (Article 353).
Also, if a State fails to comply with any of the directions given by the Government of
India under any of the provisions of the Constitution, the President may hold that a
situation has arisen in which the Government of the State cannot be carried on in
accordance with the provisions of this Constitution (365). As soon as this declaration is
made the State Government will be dismissed under Article 356 and the State Assembly
may either be suspended or dissolved.
Other than those mentioned above, there are certain more provisions in the Constitution
which tilt the balance of power in favour of the Centre. For example:
a) Article 275 provides for payment by the Union of grants-in-aid of revenues of the
States.
b) The officers of the All India Services are allotted to a State cadre but are controlled by
the Union. More such All India services can be created by the Centre if the Rajya
Sabha by passing a resolution by two-thirds majority of members present and voting
recommends the creation of such All India services.
c) Article 258 empowers the Union to entrust certain functions either conditionally or
unconditionally to the State government or its officers with the consent of the State
government. But in certain cases even without the consent of the State government,
Parliament, may by law confer powers and imposes duties on State officials.
However, in such cases if the State Government is to incur certain additional
expenses, then they are to be paid by the Government of India.
d) Governors are the Constitutional Head of the State and they are appointed, dismissed
and transferred by the President. Many a times, because of the pressure of the Central
government, they have to exercise their power of appointing and dismissing
Ministries, summoning, proroguing and dissolving the Assemblies; making
recommendations to impose the President’s rule, keeping in view the interests of the
ruling party at the Centre.
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The facts mentioned here undoubtedly point towards the administratively predominant
position of the Centre vis-à-vis the States. Though the Constitution framers tried their best
to delicately balance the issues of State autonomy and that of providing for a strong
Centre to maintain the Unity and Integrity of the Country, yet the States occupy a
subordinate position as far as administrative powers are concerned.
Financial Relations
In order to ensure that both the Centre and the States have their independent sources of
income the Constitution framers, in Part XII of the Constitution, made provisions for the
distribution of various taxes and duties between the Centre and the State. But a detailed
analysis of Articles 264 – 300 will reveal that the States have been made dependent on the
Union for funds. The various taxes, duties, and other sources of revenue can be
summarised in the following six categories:
a) Taxes levied by the Union but collected and appropriated by the States. They are:
i) Stamp duties mentioned in the Union list, and
ii) Duties of excise on medicinal and toilet preparations.
The Union has no share in the proceeds (Article 268).
b) Taxes levied and collected by the Union but are assigned to the States as per the
principles formulated by the Parliament by law (Article 269).
c) Taxes levied and collected by the Union (except those mentioned in Articles 268, 268
A and 269) and distributed between the Union and the States (Article 270). This
article was inserted by the 80th Constitution Amendment act, 2000 and has
considerably increased the resources of the States.
d) Article 271 provides for levy of surcharges on duties and taxes. The proceeds of such
surcharges go to the Union exclusively with no share to the States.
e) Taxes which are levied and collected by the Union and may be distributed between
the Union and the States if Parliament by law so provides (Article 272).
f) Certain grants-n-aid provided by the Centre:
i) A certain amount of export duty on jute and jute products is to be given as grants-
in aid to the States of Assam, Bihar, Orissa and West Bengal (Article 273).
ii) Certain grants-in-aid may be given to the States which are in need of assistance if
Parliament so provides (Article 275). Different sums may be fixed for different
States depending upon the assessment of their needs and some of them may not be
given at all.
iii) Article 282 empowers the Union and the States to make grant for any public
purpose.
Consolidated Fund: Under Article 266, the Constitution has brought in to existence a
Consolidated Fund for the Central government and also a separate Consolidated Fund
for each State. All the receipts of the taxes, fees, cesses, etc., in favour of the Centre
or the State are credited in their Consolidated Funds respectively. In order to
withdraw money from the Consolidated Fund the competent legislature passes
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 Appropriation Acts. The purpose of creating these funds was to ensure that no
appropriation can be made from these Funds without the authority of law.
Finance Commission and Planning Commission: Article 280 provides for the
Constitution of a Finance Commission. Article 280(3) of the Constitution has
assigned an important role to the Finance Commission so far as the distribution of the
net proceeds of the taxes which are to be and may be divided between Centre and the
States and in giving grants-in-aid including the determination of the principles
governing them is concerned. But apart from it there is another Commission which
has been created by a resolution of the Government which controls and distributes
Central grants to the States. This Commission was an extra-Constitutional body but
was performing important financial functions.
Despite the fact that there is a division of powers between the Centre and the States,
the Centre has very frequently used its powers to meet the political needs of the party
in power. The various issues that have been major irritants in the Centre – State
relations are:
(a) Discriminatory Role of the Governor
(b) Reservation of Bills for the Consideration of the President
(c) Dismissal of State Governments under Article 356
(d) Use of All India Services by the Centre
(e) Discrimination against States in allocation of Funds
(f) Postponement of Assembly By-elections on partisan grounds
(g) Appointment of Enquiry Commissions
(h) Demand for State Autonomy
(i) Law and Order problem in the States and the role of the Centre
(j) Differences on Finance and Planning
(k) Inter-State Disputes (Boundary and Water)
Fifth and Sixth Schedules
The fact that the geographical size of the States is different from each other requires that the
Constitution recognises this inequality while at the same time protect the diversity as well as
the unity of the country. The statutory arrangements recognising this asymmetry have been
appropriately incorporated in the Constitution. These asymmetries have been visible in
different forms – economic, social, and cultural. The Constitutional provisions also ensure
that the cultural identities, customs, and political and economic interests of various regions
and communities are protected.
With the purpose of protecting the interests of Scheduled Tribes with regard to land
alienation and other social aspects provisions of ‘Fifth Schedule’ and ‘Sixth Schedule’ have
been integrated in the Constitution. The Constitution contains special provisions for
administration and control of certain areas which have been named as Scheduled Areas and
also for Scheduled Tribes even though such areas form part of a State or Union Territory.

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