Federalism in India Exercise Solutions | KalviGavani

(a) Article 245    (b) Article 246    (c) Article 248    (d) Article 250

(a) Sixth Schedule    (b) Fifth Schedule    (c) Seventh Schedule    (d) Eighth Schedule

(a) Defence    (b) Police    (c) Education    (d) Foreign Affairs

(a) State legislatures    (b) Parliament    (c) Supreme Court    (d) President

(a) Planning Commission    (b) NITI Aayog    (c) Finance Commission    (d) Inter-State Council

(a) Only Union List subjects    (b) Union and Concurrent List subjects    (c) All three lists including State List    (d) Only Concurrent List subjects

(a) Written Constitution    (b) Division of powers    (c) Single citizenship    (d) Independent judiciary

(a) Article 263    (b) Article 262    (c) Article 260    (d) Article 265

(a) State law always prevails    (b) Central law always prevails    (c) Central law prevails, except when the State law was reserved for Presidential assent and receives it    (d) Supreme Court decides on a case-by-case basis

(a) 44th Amendment    (b) 42nd Amendment    (c) 73rd Amendment    (d) 52nd Amendment

Federalism is a system of government in which sovereignty is constitutionally divided between a central authority and constituent political units (such as states or provinces). Its essential features include: (i) a written and rigid constitution, (ii) division of powers between the central and regional governments, (iii) supremacy of the constitution, (iv) an independent judiciary to interpret the constitution and adjudicate disputes, (v) bicameral legislature at the centre (with one house representing states), and (vi) dual polity with each level of government operating in its own sphere.

The Indian Constitution contains several unitary features that tilt the balance towards the Centre: (i) Single citizenship — all citizens are citizens of India alone; (ii) A strong Centre with more powers in the Union List and residuary powers; (iii) Governor appointed by the President as the Centre's representative in each state; (iv) All-India Services (IAS, IPS, IFoS) whose officers serve both the Centre and States; (v) Emergency provisions (Articles 352-360) that centralise power during crises; (vi) Parliament's power to alter state boundaries under Article 3 without state consent; (vii) President's Rule (Article 356) that places state administration under central control; (viii) Single integrated judiciary with the Supreme Court at the apex; (ix) Centre's power to issue directions to states under Articles 256-257.

The Seventh Schedule is the constitutional mechanism that distributes legislative powers between the Union and the States. It contains three lists: (i) Union List (List I) with approximately 100 subjects of national importance on which only Parliament can legislate, (ii) State List (List II) with approximately 61 subjects of local importance on which only State legislatures can legislate, and (iii) Concurrent List (List III) with approximately 52 subjects on which both Parliament and State legislatures can enact laws. This three-list distribution under Article 246 is the backbone of Indian federalism, defining the legislative competence of each level of government and preventing jurisdictional overlap in normal circumstances.

Residuary powers refer to the authority to legislate on subjects that are not mentioned in any of the three legislative lists. In India, under Article 248, residuary powers are vested in the Union Parliament, meaning the Centre can legislate on any matter not explicitly listed. This significantly strengthens the central government. In contrast, in the United States, the Tenth Amendment reserves all powers not delegated to the federal government nor prohibited to the states to the respective states or the people. Thus, in the USA, residuary powers lie with the states, reflecting a truly federal principle. India's approach to residuary powers is a clear unitary tilt within its quasi-federal framework.

Cooperative federalism refers to a model where the Centre and States work together in partnership rather than in isolation or opposition. Unlike classical federalism where each level operates independently in its own sphere, cooperative federalism emphasises collaboration, shared programmes, and joint decision-making. Examples include: (i) NITI Aayog, which replaced the Planning Commission and provides a more collaborative platform for Centre-State policy dialogue; (ii) the GST Council, where the Centre and States jointly decide on tax rates and policies; (iii) the Inter-State Council established under Article 263 for coordination; (iv) joint implementation of central schemes like MGNREGA and National Health Mission; (v) Zonal Councils that promote inter-state cooperation on economic and social matters.

Competitive federalism is a concept where states compete with each other — and sometimes with the Centre — to achieve better governance outcomes, attract investment, and improve development indicators. It shifts from a top-down model to one where states are incentivised to perform better through rankings, indices, and performance-based incentives. Examples include: (i) NITI Aayog's composite index ranking states on health, education, water management, and innovation; (ii) the Ease of Doing Business rankings that push states to improve regulatory environments; (iii) states like Tamil Nadu, Maharashtra, and Gujarat competing to attract FDI; (iv) the Aspirational Districts Programme that ranks districts on development parameters; (v) competitive bidding for centrally sponsored schemes. Competitive federalism promotes efficiency but can also widen regional disparities if not balanced with cooperative mechanisms.

The Finance Commission is a constitutional body established under Article 280. It is constituted by the President every five years and consists of a Chairperson and four other members. Its primary functions are: (i) to recommend the distribution of net tax proceeds between the Union and the States; (ii) to determine the principles governing grants-in-aid to states from the Consolidated Fund of India; (iii) to recommend measures needed to augment the Consolidated Fund of a State to supplement resources of Panchayats and Municipalities; and (iv) any other matter referred by the President. The Commission's recommendations ensure fiscal federalism by addressing vertical imbalance (Centre collects more than it spends) and horizontal imbalance (some states are poorer than others). So far, sixteen Finance Commissions have been constituted, with the 16th Finance Commission (Chairman: Arvind Panagariya) submitting its report for the period 2026-2031.

The Governor serves as a crucial constitutional link between the Centre and the State in several ways: (i) The Governor is appointed by the President and serves at the President's pleasure, making the Governor the Centre's representative in the state; (ii) The Governor submits periodic reports to the President on the state's administration, which can trigger President's Rule under Article 356; (iii) Under Article 200, the Governor can reserve Bills passed by the State legislature for the President's consideration, enabling central scrutiny of state legislation; (iv) The Governor ensures that state administration conforms to Union laws and central directives under Articles 256-257; (v) During President's Rule, the Governor administers the state on behalf of the President; (vi) The Governor also communicates the Centre's views and policies to the state government, acting as a channel of information and coordination.

Federal Features: 1. Written and rigid Constitution: India has the longest written constitution in the world, which is supreme and can be amended only through a special procedure. Certain provisions require ratification by half the state legislatures, protecting state interests. 2. Division of powers: The Seventh Schedule clearly divides legislative powers between the Union and States through three lists — Union List, State List, and Concurrent List. This allocation is constitutionally guaranteed. 3. Independent judiciary: The Supreme Court acts as the guardian of the Constitution and can declare laws unconstitutional, protecting the federal division of powers. High Courts also exercise independent judicial power within states. 4. Bicameral legislature: The Rajya Sabha (Council of States) represents the states at the central level, ensuring states have a voice in national legislation. 5. Supremacy of the Constitution: Both the Centre and States derive their authority from the Constitution, not from each other. Neither can override constitutional provisions. Unitary Features: 1. Strong Centre: The Union List has more and more important subjects; residuary powers belong to the Centre; during emergencies, Parliament can legislate on State List subjects. 2. Single citizenship: Unlike the USA, India provides only one citizenship — of India. There is no separate state citizenship. 3. Appointment of Governor: The Governor is appointed by the President and serves at the President's pleasure, acting as the Centre's agent in the state. 4. All-India Services: Officers of the IAS, IPS, and IFoS serve both the Centre and States but are recruited and trained by the Centre, giving the Union significant administrative control. 5. Emergency provisions: Articles 352 (National Emergency), 356 (President's Rule), and 360 (Financial Emergency) can convert the federal structure into a unitary one. 6. Single integrated judiciary: Unlike the USA's dual court system, India has a single hierarchy of courts with the Supreme Court at the apex. 7. Parliament's power over states: Article 3 allows Parliament to alter state boundaries and create new states without the affected state's consent (only consultation is required). 8. Centre's directions to states: Articles 256-257 empower the Centre to issue directions to states on matters of national importance. Is India truly federal? Dr. K.C. Wheare described the Indian Constitution as "quasi-federal" — federal in form but unitary in spirit. The Constitution itself uses the word "Union" instead of "Federation" in Article 1, indicating an indestructible union. Dr. Ambedkar stated that the Constitution is both unitary and federal depending on circumstances — federal in normal times and unitary during emergencies. The Supreme Court in S.R. Bommai v. Union of India (1994) affirmed that federalism is a basic feature of the Constitution but acknowledged its unitary tilt. Thus, India is best described as having a federal structure with a strong unitary bias — functional federalism during normal times but capable of centralized governance during crises.

Legislative relations between the Centre and the States are governed by Articles 245-255 and the Seventh Schedule. These can be analysed under three heads: territorial extent of laws, distribution of legislative subjects, and parliamentary legislation on state subjects. 1. Territorial Extent of Laws (Article 245): Article 245 defines the territorial limits of legislative powers. Parliament can make laws for the whole or any part of India, and State legislatures can make laws for the whole or any part of their respective states. Neither Parliament nor State legislatures can make laws that operate outside their territorial jurisdiction, except that Parliament can legislate for Indian citizens anywhere in the world and for ships and aircraft registered in India. 2. Distribution of Legislative Subjects (Article 246 and Seventh Schedule): The Seventh Schedule divides legislative subjects into three lists: - Union List (List I): Originally 97 entries, now approximately 100. These are subjects of national importance requiring uniform policy — Defence, Foreign Affairs, Banking, Railways, Citizenship, Atomic Energy, and others. Only Parliament can legislate on these subjects. - State List (List II): Originally 66 entries, now approximately 61. These are subjects of local and regional importance — Police, Public Health, Agriculture, Land, Local Government, and others. Only State legislatures can legislate on these subjects in normal circumstances. - Concurrent List (List III): Originally 47 entries, now approximately 52. These are subjects of shared concern — Education, Criminal Law and Procedure, Forests, Economic and Social Planning, Marriage and Divorce, and others. Both Parliament and State legislatures can make laws on these subjects. Priority rule: In case of conflict between a central law and a state law on a Concurrent subject, the central law prevails under Article 254. However, if a state law on a Concurrent subject has been reserved for Presidential consideration and receives Presidential assent, that state law prevails within that state. Residuary powers (Article 248): Parliament has exclusive power to legislate on any matter not mentioned in the three lists. 3. Parliamentary Legislation on State Subjects: Even in normal times, Parliament can legislate on State List subjects in specific circumstances: - Article 249: If the Rajya Sabha passes a resolution by two-thirds majority stating that it is necessary in the national interest, Parliament can legislate on a State List subject. Such a resolution is valid for one year and can be renewed. - Article 250: During a Proclamation of Emergency, Parliament gains the power to legislate on State List subjects. Laws made under this article cease to have effect six months after the emergency ends. - Article 252: If two or more State legislatures request Parliament to legislate on a State List subject for them, Parliament can enact a law that applies to those requesting states and any other state that subsequently adopts it. - Article 253: Parliament can legislate on any State List subject to give effect to an international treaty, agreement, or convention. - Article 256-257: The Centre can give directions to states, and failure to comply can empower Parliament to legislate on that state's behalf. This framework demonstrates that while the Constitution creates a federal division of legislative power, it provides numerous circumstances under which the Centre can override state legislative competence, reflecting the unitary tilt.

Financial relations between the Centre and States are among the most contested aspects of Indian federalism. The Constitution provides for a structured but Centre-favouring financial arrangement, addressed through Articles 264-293 and the role of the Finance Commission. 1. Distribution of Tax Revenues: The Constitution distinguishes between taxes that are levied and collected by the Centre, taxes levied by the Centre but collected and retained by states, and taxes levied and collected by the Centre but distributed between Centre and States. - Duties levied by the Union but collected and appropriated by the States (Article 268): Stamp duties and excise duties on medicinal and toilet preparations are levied by the Centre but collected by the states and retained by them. - Taxes levied and collected by the Union but assigned to the States (Article 269): Taxes on inter-state trade and commerce (like GST on inter-state supply) are collected by the Centre but assigned to states. - Taxes levied and collected by the Union and distributed between the Union and the States (Article 270): This is the most significant category. Income tax (except surcharge) and GST are distributed between the Centre and States on the basis of recommendations by the Finance Commission. The 80th Amendment introduced this arrangement, and the 101st Amendment (GST) modified it further. - Grants-in-Aid (Article 275): Parliament may provide grants to states in need of assistance, particularly for promoting welfare of Scheduled Tribes and raising the level of administration in Scheduled Areas. - Statutory Grants (Article 275): These are discretionary grants given by the Centre to states for specific purposes. 2. Finance Commission (Article 280): The Finance Commission is the primary constitutional mechanism for ensuring fair distribution of financial resources. Constituted every five years, it recommends: (i) the distribution of net tax proceeds between the Centre and States and among states inter se; (ii) the principles governing grants-in-aid; (iii) measures to augment state consolidated funds to supplement resources of local bodies; and (iv) any other matter referred by the President. The 15th Finance Commission (Chairman: N.K. Singh) recommended 41% devolution of central taxes to states for 2021-26. 3. Centre's Financial Superiority: The financial architecture favours the Centre: (i) The Union List contains more lucrative tax sources (income tax, corporate tax, customs, GST on inter-state supply); (ii) States depend heavily on central transfers and grants; (iii) The Centre can impose surcharges and cesses that are not shareable with states; (iv) The Centre can borrow without limits (Article 292), while states need central permission for borrowing (Article 293); (v) During a financial emergency (Article 360), all financial discretion passes to the Centre. 4. Goods and Services Tax (GST): The 101st Constitutional Amendment (2016) introduced GST, replacing multiple central and state indirect taxes with a single unified tax. The GST Council, chaired by the Union Finance Minister with state finance ministers as members, decides on tax rates, exemptions, and dispute resolution. This is a landmark example of cooperative federalism — both Centre and States have equal voting power on the GST Council, though the Chairperson has a casting vote. 5. Borrowing Powers: Under Article 292, the Centre can borrow on the security of the Consolidated Fund of India without limit. Under Article 293, states can borrow only on the security of their Consolidated Fund, and they need the Centre's consent if any part of a previous central loan is still outstanding. This limits state fiscal autonomy.

Administrative relations between the Centre and States are governed by Articles 256-263 and reflect a significant centralising tendency in the Indian constitutional scheme. 1. Centre's Direction to States (Articles 256-257): - Article 256: The executive power of every state must be exercised so as to ensure compliance with laws made by Parliament and with existing laws that apply in that state. - Article 257: The executive power of every state must be exercised so as not to impede or prejudice the exercise of the executive power of the Union. The Centre can give directions to states for this purpose, including directions regarding the construction and maintenance of means of communication of national importance and protection of railways within the state. - Failure to comply: If a state fails to comply with or give effect to central directions, the President can declare that a situation has arisen in which the state government cannot carry on in accordance with the Constitution, triggering President's Rule under Article 356. 2. Governor as Centre's Representative: The Governor, appointed by the President under Article 155, serves as the Centre's representative in the state. The Governor's dual role includes: (i) acting as the constitutional head of the state; (ii) reporting to the President on the state's administration; (iii) reserving Bills for Presidential consideration under Article 200; (iv) recommending President's Rule in the state under Article 356. The Governor holds office during the President's pleasure (Article 156), which has been controversial when Governors have acted in ways perceived as partisan. 3. All-India Services: Articles 312-314 provide for the creation of All-India Services (IAS, IPS, and IFoS). Officers of these services are recruited by the Centre but serve in states, and can be recalled by the Centre. This dual control mechanism gives the Centre significant administrative leverage over state governance. The All-India Services Act, 1951 governs their conditions of service. 4. Inter-State Council (Article 263): The President can establish an Inter-State Council to: (i) inquire into and advise on disputes between states; (ii) investigate and discuss subjects of common interest between the Centre and States; and (iii) make recommendations for better coordination of policy and action. The Council was constituted in 1990 following the Sarkaria Commission recommendation. It is chaired by the Prime Minister and includes Chief Ministers of all states and Union Territories with legislatures, Administrators of UTs without legislatures, and Union Ministers. 5. Inter-State Water Disputes (Article 262): Article 262 empowers Parliament to adjudicate disputes relating to the use, distribution, or control of waters of any inter-state river or river valley. Parliament has enacted the Inter-State River Water Disputes Act, 1956, under which tribunals are constituted to resolve such disputes. The Supreme Court's jurisdiction is barred in such matters. 6. Zonal Councils: The States Reorganisation Act, 1956 established five Zonal Councils (Northern, Southern, Eastern, Western, and Central) to promote inter-state cooperation and coordination. A North-Eastern Council was added later. These are advisory bodies chaired by the Union Home Minister. 7. Emergency Provisions and Administrative Control: During a national emergency (Article 352), the Centre can direct any state on how to exercise its executive power. During President's Rule (Article 356), the state government is dismissed and the President (through the Governor) administers the state. During a financial emergency (Article 360), the Centre can direct states on financial matters and reduce salaries of government officials including judges.

The Finance Commission: The Finance Commission is the primary constitutional mechanism for maintaining fiscal federalism and promoting harmony between the Centre and States. Established under Article 280, it addresses two fundamental imbalances in Indian federalism: Vertical imbalance: The Centre collects a disproportionately large share of tax revenues compared to its expenditure responsibilities. States, on the other hand, have greater expenditure responsibilities (health, education, law and order) but limited revenue-raising powers. The Finance Commission corrects this by recommending the share of central taxes to be transferred to states. The 14th Finance Commission raised this share from 32% to 42%, and the 15th Finance Commission recommended 41% for 2021-26. Horizontal imbalance: Not all states are equally developed. Some states like Bihar, Odisha, and Jharkhand have greater developmental needs than states like Maharashtra or Tamil Nadu. The Finance Commission recommends differential transfers based on factors like population, area, forest cover, income distance, and demographic performance, ensuring equitable distribution. Significance: - It provides a predictable, rule-based mechanism for financial transfers, reducing ad hocism and political bargaining. - Its recommendations are binding in nature (though the Centre can accept or modify them), giving states an assured revenue stream. - It has progressively increased state shares in central taxes, empowering state governments. - By addressing fiscal imbalances, it reduces inter-governmental friction and promotes cooperative federalism. - It also recommends grants for local bodies (Panchayats and Municipalities), strengthening the third tier of governance. The Inter-State Council: The Inter-State Council, established under Article 263, is a constitutional forum for dialogue, coordination, and dispute resolution between the Centre and States and among states themselves. Though the Constitution enabled its creation in 1950, it was constituted only in 1990 following the Sarkaria Commission's recommendation. Composition: Chaired by the Prime Minister, it includes Chief Ministers of all states, Chief Ministers of Union Territories with legislatures, Administrators of UTs without legislatures, and Union Ministers of Cabinet rank. Functions: - Inquiring into and advising on inter-state disputes. - Discussing subjects of common interest between the Centre and States. - Making recommendations for better coordination of policy and action. Significance: - It provides a structured institutional mechanism for Centre-State dialogue, reducing confrontation and promoting consensus. - Unlike judicial mechanisms that are adversarial, the Inter-State Council promotes deliberative resolution of disputes. - It has discussed critical issues like Centre-State relations, Sarkaria Commission recommendations, and cooperative federalism. - It complements the Finance Commission by addressing the political and administrative dimensions of federalism while the Finance Commission handles fiscal dimensions. Together, the Finance Commission and Inter-State Council form the twin pillars of cooperative federalism in India. The Finance Commission ensures equitable distribution of financial resources, while the Inter-State Council provides a platform for political dialogue and policy coordination. Their effective functioning is essential for maintaining the delicate balance between central authority and state autonomy that defines Indian federalism. However, both institutions have been criticised — the Finance Commission for its recommendations not always being accepted in full, and the Inter-State Council for meeting infrequently and having only advisory powers. Strengthening these institutions is key to deepening Indian democracy and federalism.