The Constitution of India establishes a quasi-federal system with a strong Centre. Although it provides a clear division of powers between the Union and the States, differences often arise regarding the exercise of these powers. These disputes are commonly categorized into Administrative, Financial, and Legislative conflicts.
The Seventh Schedule of the Constitution distributes legislative powers between the Union and the States under Seventh Schedule of the Constitution of India. It derives its authority mainly from Article 246 and contains three legislative lists.
| List | Number of Subjects (Original Constitution, 1950) | Present Number of Subjects* | Law-making Authority |
|---|---|---|---|
| Union List (List I) | 97 | 100 | Parliament |
| State List (List II) | 66 | 61 | State Legislatures |
| Concurrent List (List III) | 47 | 52 | Parliament and State Legislatures |
*The number of entries has changed due to constitutional amendments, especially the 42nd Constitutional Amendment Act, 1976.
Table of Contents
1. Administrative Relations
Administrative conflicts arise due to the distribution of executive powers and the Centre’s supervisory role over States.
| Area of Conflict | Constitutional Provision | Explanation |
|---|---|---|
| Directions of the Centre | Articles 256 & 257 | The Centre can issue directions to States for implementing Union laws, which States often view as interference in their autonomy. |
| Deployment of Central Forces | Articles 355 & 356 | States sometimes oppose the unilateral deployment of central armed forces without their consent, considering it an encroachment on federal principles. |
| Misuse of Governor’s Office | Articles 153–161 | Governors are appointed by the President and are often accused of acting as agents of the Centre, especially during government formation and recommending President’s Rule. |
| President’s Rule | Article 356 | Alleged misuse for political purposes has led to Centre–State conflicts. The Supreme Court restricted arbitrary use in the S. R. Bommai v. Union of India judgment. |
| All India Services | Article 312 | States argue that officers of services such as IAS and IPS are more accountable to the Centre than to State governments. |
| Investigation by Central Agencies | CBI, ED, NIA | Several States have withdrawn general consent for CBI investigations, alleging political misuse of central agencies. |
| Inter-State River Disputes | Article 262 | Conflicts over river water sharing often require Central intervention, which States may consider delayed or biased. |
| Centrally Sponsored Schemes | Various | States complain that CSS reduce their policy flexibility and impose centrally determined priorities. |
2. Financial Relations
Financial disputes stem from the unequal distribution of revenue sources and dependence of States on Central transfers.
| Area of Conflict | Constitutional Provision | Explanation |
|---|---|---|
| Vertical Fiscal Imbalance | Articles 268–281 | The Centre has larger taxation powers while States bear significant expenditure responsibilities, creating dependence. |
| GST Compensation | Article 279A | Delays in GST compensation payments have generated friction between the Centre and several States. |
| Finance Commission Recommendations | Article 280 | States often disagree with the formula used for tax devolution and grants. |
| Conditional Grants | Article 282 | States argue that tied grants reduce fiscal autonomy and influence State priorities. |
| Borrowing Restrictions | Article 293 | States require Central approval for borrowing in certain situations, limiting fiscal independence. |
| Centrally Sponsored Schemes | Article 282 | States bear part of the expenditure but have limited say in policy design. |
| Resource Distribution | Seventh Schedule | Resource-rich States often seek greater revenue sharing from minerals and natural resources. |
| Fiscal Responsibility Targets | Fiscal rules | States contend that borrowing limits restrict developmental expenditure. |
3. Legislative Relations
Legislative conflicts arise over law-making powers and overlapping jurisdiction.
| Area of Conflict | Constitutional Provision | Explanation |
|---|---|---|
| Distribution of Legislative Powers | Articles 245–246 & Seventh Schedule | Disputes arise regarding the Union, State, and Concurrent Lists. |
| Expansion of Concurrent List | 42nd Constitutional Amendment | Subjects such as education and forests were shifted to the Concurrent List, reducing State autonomy. |
| Residuary Powers | Article 248 | The Constitution assigns residuary powers to the Union, unlike many classical federations where States enjoy these powers. |
| Union Laws Prevailing | Article 254 | In case of conflict on Concurrent List subjects, Union law generally prevails over State law. |
| Parliament Legislating on State Subjects | Articles 249, 250, 252 & 253 | States often object when Parliament legislates on matters in the State List under special circumstances. |
| Ordinance-making | Articles 123 & 213 | Simultaneous ordinances by the Centre and States may create legal and political tensions. |
| Role of Governor in Bills | Article 200 | Governors may reserve State Bills for the President’s consideration, causing delays and political disputes. |
| Withholding Assent | Articles 200 & 201 | Delay in granting assent to State Bills has become a recurring source of conflict. |
Major Contemporary Issues
| Issue | Nature of Conflict | Explanation | Constitutional/Legal Context |
|---|---|---|---|
| GST Implementation | Compensation, taxation powers, fiscal autonomy | The introduction of the Goods and Services Tax (GST) subsumed several indirect taxes of the Union and States into a single tax regime. While it strengthened fiscal integration, States lost significant independent taxation powers. Delays in GST compensation and concerns over the increasing use of cesses and surcharges by the Centre have intensified demands for greater fiscal autonomy. | Articles 246A, 269A, 279A; 101st Constitutional Amendment Act, 2016 |
| NEET and National Education Policy (NEP) | Federal control over education versus State autonomy | Education is a Concurrent List subject, allowing both Parliament and State Legislatures to legislate. Several States have opposed NEET, arguing that it disadvantages regional language students and undermines State control over admissions. Some States have also raised concerns regarding the implementation of the National Education Policy (NEP), claiming inadequate consultation. | Concurrent List (Entry 25); Article 246; 42nd Constitutional Amendment (1976) |
| Agricultural Reforms | Centre legislating on subjects linked to agriculture and markets | Agriculture is primarily a State List subject, whereas trade and commerce fall under the Union and Concurrent Lists. The enactment of the three Farm Laws (2020), later repealed in 2021, triggered constitutional and political debates over Parliament’s legislative competence and State autonomy in agricultural marketing. | State List (Agriculture); Entries 14, 26 & 27; Articles 246 & 249 |
| CBI Investigations | Withdrawal of general consent by States | The Central Bureau of Investigation (CBI) requires the consent of State governments to investigate cases within their jurisdiction under the Delhi Special Police Establishment Act. Several States have withdrawn their general consent, alleging political misuse of the agency by the Union government. | Delhi Special Police Establishment Act, 1946; Federal principles |
| Appointment of Governors | Allegations of political bias | Governors are appointed by the President on the advice of the Union Council of Ministers. Several States have alleged that Governors act as representatives of the Centre, particularly in matters relating to government formation, assent to Bills, and constitutional recommendations. | Articles 153–161 |
| Governor–Chief Minister Disputes | Delay in assent to Bills and Assembly-related decisions | Conflicts have increased over Governors delaying assent to State Bills, reserving Bills for the President, summoning or proroguing legislative sessions, and inviting parties to form governments. Such actions have raised questions about constitutional conventions and the discretionary powers of Governors. | Articles 163, 174, 200 & 201 |
| Central Investigative Agencies (ED, CBI, Income Tax, NIA) | Alleged political misuse and federal concerns | Opposition-ruled States frequently allege that central agencies such as the Enforcement Directorate (ED), Central Bureau of Investigation (CBI), National Investigation Agency (NIA), and Income Tax Department are selectively used against political opponents. The Union argues that these agencies act independently under statutory powers to enforce national laws. | PMLA, 2002; NIA Act, 2008; DSPE Act, 1946 |
| Inter-State River Water Disputes | Resource sharing and delayed adjudication | Conflicts over the sharing of river waters continue among several States. Delays in tribunal awards, implementation of decisions, and competing developmental needs have prolonged disputes, often requiring intervention by the Union and the Supreme Court. | Article 262; Inter-State River Water Disputes Act, 1956 |
| Fiscal Devolution and Finance Commission | Distribution of tax revenue | States have expressed concerns over the criteria adopted by the Finance Commission for tax devolution, particularly the increased weightage given to population and income distance. States also argue that the Centre’s growing reliance on cesses and surcharges reduces the divisible pool of taxes. | Articles 270 & 280 |
| Delimitation of Parliamentary Constituencies | Concerns over political representation | Southern and some northeastern States have expressed concerns that future delimitation based on population could reduce their representation in Parliament despite their success in population control, potentially affecting the federal balance. | Articles 81 & 82; Delimitation Acts |
| Use of Article 356 (President’s Rule) | Federal autonomy versus Union intervention | Although judicial safeguards have reduced its misuse, States occasionally allege that Article 356 is invoked or threatened for political purposes. The Supreme Court has held that the proclamation is subject to judicial review. | Article 356; S.R. Bommai v. Union of India (1994) |
| Centrally Sponsored Schemes (CSS) | Conditional funding and policy priorities | States argue that Centrally Sponsored Schemes often impose uniform policy conditions without sufficient flexibility to address local needs. They also bear a significant share of the expenditure, affecting fiscal autonomy. | Article 282 |
| National Security and Law & Order | Deployment of Central Forces | States occasionally object to the deployment of central armed police forces without adequate consultation, arguing that ‘public order’ and ‘police’ fall under the State List. The Centre justifies intervention to protect national security and constitutional governance. | Articles 355 & 356; State List (Police & Public Order) |
Important Supreme Court Judgments
| Judgment | Year | Key Issue | Significance |
|---|---|---|---|
| State of West Bengal v. Union of India | 1962 | Whether Parliament could acquire property belonging to a State without its consent. | The Supreme Court upheld the constitutional supremacy of Parliament within its legislative competence. It ruled that States do not possess sovereign status independent of the Union and that India is an indestructible Union of destructible States. The judgment emphasized the strong-unitary features of Indian federalism. |
| Kesavananda Bharati v. State of Kerala | 1973 | Scope of Parliament’s power to amend the Constitution. | The Court evolved the Basic Structure Doctrine, holding that Parliament cannot alter the basic structure of the Constitution. Federalism was subsequently recognized as one of the basic features, thereby protecting the constitutional balance between the Union and the States. |
| State of Rajasthan v. Union of India | 1977 | Validity of the Union Government’s directive to dissolve State Legislative Assemblies after the General Election. | The Court upheld the Centre’s action but observed that the exercise of powers under Article 356 is not entirely beyond judicial scrutiny. The case laid the groundwork for later judicial review of President’s Rule. |
| S. R. Bommai v. Union of India | 1994 | Misuse of Article 356 (President’s Rule). | A landmark judgment that declared federalism to be part of the Basic Structure of the Constitution. It restricted arbitrary dismissal of State governments, made proclamations under Article 356 subject to judicial review, and held that the majority of a government must ordinarily be tested on the floor of the Legislative Assembly rather than decided by the Governor. |
| Special Reference No. 1 of 2002 (Gujarat Assembly Election Case) | 2002 | Whether elections to a dissolved State Assembly could be postponed indefinitely. | The Court clarified that the Election Commission has the constitutional responsibility to conduct elections independently, reinforcing democratic governance and constitutional federalism. |
| Government of NCT of Delhi v. Union of India | 2018 | Distribution of powers between the Lieutenant Governor and the elected Government of Delhi. | The Supreme Court emphasized cooperative federalism, constitutional morality, and representative democracy. It held that the Lieutenant Governor is generally bound by the aid and advice of the elected Council of Ministers except in matters where the Constitution specifically provides otherwise. |
| State of Karnataka v. Union of India | 1977 | Scope of the Union’s power to appoint Commissions of Inquiry into matters involving State governments. | The Court upheld the Union’s authority in appropriate circumstances but stressed that federalism requires mutual respect and constitutional restraint between the Union and the States. |
| Nabam Rebia v. Deputy Speaker, Arunachal Pradesh Legislative Assembly | 2016 | Governor’s discretionary powers in convening the State Legislature. | The Court ruled that the Governor cannot exercise discretionary powers arbitrarily and cannot interfere in the legislative functioning of the Assembly beyond constitutional limits. The judgment significantly curtailed the misuse of gubernatorial discretion. |
| State of Punjab v. Principal Secretary to the Governor of Punjab | 2023 | Delay by the Governor in granting assent to Bills passed by the State Legislature. | The Court held that Governors cannot indefinitely delay action on Bills and must act within a reasonable time. The judgment reaffirmed the principles of parliamentary democracy, responsible government, and cooperative federalism, while discouraging constitutional deadlock. |
| Rameshwar Prasad v. Union of India (Bihar Assembly Dissolution Case) | 2006 | Dissolution of the Bihar Legislative Assembly before its first sitting. | The Court declared the dissolution unconstitutional and reaffirmed that constitutional powers must not be exercised on political considerations. It strengthened judicial oversight over executive action affecting State governments. |
Landmark Contributions to Indian Federalism
| Judgment | Contribution to Centre–State Relations |
|---|---|
| State of West Bengal v. Union of India (1962) | Affirmed the supremacy of Parliament within constitutional limits and clarified the nature of Indian federalism. |
| Kesavananda Bharati (1973) | Recognized federalism as part of the Basic Structure of the Constitution. |
| State of Rajasthan v. Union of India (1977) | Opened the door for judicial review of Article 356. |
| S. R. Bommai (1994) | Curbed misuse of President’s Rule and strengthened State autonomy. |
| Government of NCT of Delhi (2018) | Reinforced cooperative federalism and constitutional morality. |
| Nabam Rebia (2016) | Limited arbitrary exercise of the Governor’s discretionary powers. |
| State of Punjab v. Principal Secretary to the Governor of Punjab (2023) | Ensured timely gubernatorial action on State Bills and protected legislative functioning. |
| Rameshwar Prasad (2006) | Strengthened judicial control over unconstitutional dissolution of State Assemblies. |
Recommendations to Reduce Centre–State Conflicts
| Recommendation | Purpose | Explanation |
|---|---|---|
| Strengthen the Inter-State Council (ISC) | Improve cooperative decision-making | The Inter-State Council under Article 263 should meet regularly and be empowered to function as the primary forum for consultation, coordination, and dispute resolution between the Union and the States. This would promote consensus-based policymaking and reduce political friction. |
| Implement the Sarkaria Commission Recommendations (1988) | Promote balanced federalism | The Sarkaria Commission recommended that the Centre should exercise restraint in using Article 356, consult States before legislating on Concurrent List subjects, strengthen the Inter-State Council, and appoint politically neutral Governors. Implementing these recommendations would foster greater trust and cooperation. |
| Implement the Punchhi Commission Recommendations (2010) | Clarify the role of Governors and strengthen Centre–State relations | The Punchhi Commission suggested fixed tenures for Governors, codification of their discretionary powers, guidelines for the use of Article 356, greater consultation in appointments, and improved mechanisms for resolving intergovernmental disputes. These reforms would enhance constitutional accountability and reduce political controversies. |
| Ensure Timely GST Compensation and Fair Tax Devolution | Strengthen fiscal federalism | The Centre should ensure timely release of GST compensation and adhere to the recommendations of the Finance Commission regarding tax devolution. Rationalising the use of cesses and surcharges would increase the divisible pool of taxes and strengthen States’ fiscal autonomy. |
| Appoint Politically Neutral Governors | Reduce political conflicts | Governors should be eminent individuals with no active political affiliation. Their appointment should be made after meaningful consultation with the concerned Chief Minister, as recommended by the Sarkaria and Punchhi Commissions. This would preserve the impartiality and dignity of the office. |
| Increase Consultation Before Central Legislation Affecting States | Promote cooperative federalism | Before enacting laws on matters that significantly affect States, especially those in the Concurrent List, the Union should engage in structured consultations through forums such as the Inter-State Council, GST Council, or meetings with Chief Ministers. This would strengthen participatory federalism. |
| Enhance Fiscal Autonomy of States | Improve governance and accountability | States should be provided greater flexibility in raising resources, borrowing within prudent fiscal limits, and designing expenditure priorities. Increased untied grants and greater financial independence would enable States to address region-specific developmental needs more effectively. |
| Encourage Institutional Dialogue Through the Inter-State Council and GST Council | Resolve disputes through consensus | Regular meetings of intergovernmental institutions can facilitate dialogue on contentious issues such as taxation, disaster management, internal security, education, and health. Institutional consultation helps prevent conflicts and promotes collaborative governance. |
| Strengthen the Role of the Finance Commission | Ensure equitable resource distribution | The Finance Commission should adopt transparent and objective criteria for tax devolution and grants, balancing equity, efficiency, and regional disparities. This would reduce fiscal grievances among States and strengthen cooperative fiscal federalism. |
| Rationalise Centrally Sponsored Schemes (CSS) | Increase State flexibility | The Centre should reduce excessive conditionalities attached to Centrally Sponsored Schemes and provide States with greater flexibility in adapting schemes to local socio-economic conditions. This would improve programme effectiveness and respect State priorities. |
| Limit the Misuse of Article 356 | Protect democratic federalism | The Union should invoke President’s Rule only in exceptional circumstances involving genuine constitutional breakdown. The principles laid down in the S. R. Bommai judgment should be strictly followed to prevent political misuse. |
| Strengthen Local Self-Government | Promote cooperative and participatory federalism | Effective implementation of the 73rd and 74th Constitutional Amendments by devolving functions, finances, and functionaries to Panchayats and Urban Local Bodies would deepen grassroots democracy and reduce excessive centralisation. |
| Establish Permanent Mechanisms for Inter-State Dispute Resolution | Resolve disputes efficiently | Permanent institutional mechanisms should be developed for addressing disputes relating to river waters, boundary issues, natural resources, and environmental governance through negotiation, mediation, and arbitration before resorting to litigation. |
| Promote Digital and Administrative Cooperation | Improve governance and service delivery | Greater collaboration in digital governance, data sharing, disaster management, cybersecurity, and e-governance initiatives can improve administrative efficiency and build trust between the Union and the States. |