1] Federalism and administration
Federalism refers to a system of governance where power is constitutionally diverged between a central authority and constituent units (states). India follows this distinctive federal structure to accommodate its tremendous diversity and intricate socio-political dynamics. This system is also popularly described as "quasi-federal" with power granted to both levels of the government, and significant authority to the center, especially in times of emergency or national crisis.
The Indian Constitution outlines a three-tiered structure:
Union Government: Accountable for areas of national importance, such as security, foreign affairs, and macroeconomic policy.
State Governments: Oversee region-specific concerns, including law enforcement, healthcare, and agriculture.
Local Governments: Fortified by the 73rd and 74th Constitutional Amendments, these bodies supervise grassroots governance through Panchayati Raj institutions and urban municipal councils.
The administrative machinery serves under this federal system, securing the enactment of policies across multiple levels:
Concurrent List: Specific matters, like education and environmental policy, mandate collusion between the center and states, exhibiting the interdependent nature of federalism.
Finance Commission: Balances fiscal concerns, guaranteeing equitable resource distribution to states while preserving the central government’s financial hegemony.
Inter-State Council: Encourages dialogue and resolves disputes between states or with the center, accentuating cooperative federalism.
2] Division of powers between Union & States
Article 245: Extent of laws made by Parliament and by the Legislatures of States.
Article 246: Subject matter of laws made by Parliament and by the Legislatures of States (Union List, State List, and Concurrent List).
Article 249: Power of Parliament to legislate concerning a matter in the State List in the national interest.
Article 250: Power of Parliament to legislate concerning any matter in the State List if a proclamation of emergency is in operation.
Article 252: Power of Parliament to legislate for two or more States by consent and adoption of such legislation by any other State.
3] Administrative relations between Union & States
Article 256: Obligation of States and the Union.
Article 257: Control of the Union over States in certain cases.
Article 258: Power of the Union to confer powers, etc., on States in certain cases.
4] About Schedule 7 (Union, State, and Concurrent lists)
Union List
The Union List includes subjects of national importance on which only the Parliament can legislate. These matters typically require uniformity across the country. There are 100 subjects in this list, such as:
Defense (e.g., armed forces, atomic energy).
Foreign Affairs (e.g., treaties, diplomacy).
Economy (e.g., banking, currency, foreign trade).
Communications (e.g., railways, postal services).
Citizenship and Immigration.
The Union List grants exclusive powers to Parliament, highlighting India's centralized federalism.
4.1] State List
The State List contains subjects of local or regional importance on which the State Legislatures have exclusive authority to legislate. There are 61 subjects, including:
Public Order and Police.
Agriculture.
Public Health and Sanitation.
Water Supply and Irrigation.
Markets and Fairs.
However, during emergencies under Articles 249, 250, or 356, Parliament can also legislate on State List subjects.
4.2] Concurrent List
The Concurrent List includes subjects on which both the Union and State Legislatures can legislate. In case of a conflict between the two, Union law prevails. There are 52 subjects, such as:
Criminal Law and Procedure.
Marriage and Divorce.
Education.
Forests and Protection of Wildlife.
Trade Unions.
The Concurrent List facilitates cooperation between the Union and States, reflecting India’s cooperative federalism. The introduction of GST has redefined financial relations, creating the GST Council as a cooperative federal institution.
4.3] Special Provisions
Article 356: Provisions in case of failure of constitutional machinery in States (President’s Rule).President's Rule, under Article 356 of the Indian Constitution, is a provision for the Union Government to take over the governance of a state in exceptional circumstances. It is supposed to be invoked when the President, based on the Governor's report or other credible information, believes that the constitutional machinery of a state has failed. This situation may arise due to a breakdown of law and order, political instability, inability to elect a chief minister, or loss of majority by the ruling party. Under the President's Rule, the state legislature is either dissolved or suspended, and the executive authority of the state is assumed by the President, who delegates it to the Governor. The Parliament assumes the power to legislate for the state during this period. President's Rule is initially imposed for six months but can be extended up to three years with periodic parliamentary approval and adherence to conditions like a national emergency. While it is a necessary safeguard against governance failure, the President's Rule has been criticized for misuse, particularly during the era of single-party dominance, to dismiss opposition-led state governments. However, judicial pronouncements, notably the S.R. Bommai vs. Union of India (1994) case, have laid down stringent guidelines to check arbitrary use, making judicial review a strong deterrent against its misuse. The provision remains a key mechanism for balancing federalism with national stability.
Article 371A - 371 J: Special provisions relating to certain States (e.g., Maharashtra, Gujarat, Nagaland, Assam, Manipur, Sikkim, Mizoram, Andhra Pradesh, Telangana, etc.).Article 371 of the Indian Constitution and its sub-clauses (Articles 371A to 371J) provide special provisions for certain states to address their unique socio-economic, cultural, and geographical circumstances. These provisions aim to safeguard local interests, promote regional development, and address historical or cultural distinctiveness. For instance, Article 371A grants Nagaland autonomy over laws related to religious and social practices, customary law, and ownership of land and resources, ensuring the preservation of Naga traditions. Similarly, Article 371B provides for a special committee of the Assam Legislative Assembly to address the needs of tribal areas, while Article 371C focuses on the development of tribal regions in Manipur through a special legislative committee.
Other clauses cater to states like Maharashtra, Gujarat, Andhra Pradesh, Telangana, Sikkim, Mizoram, and Goa, each addressing specific issues. For example, Articles 371D and 371E ensure equitable opportunities in education and public employment in Andhra Pradesh and Telangana, while Article 371F preserves Sikkim's distinct identity after its merger with India. Article 371G protects the cultural and religious practices of Mizoram, and Article 371H provides Arunachal Pradesh with special administrative arrangements. Articles 371I and 371J extend provisions for Goa and Karnataka, respectively, with Article 371J addressing the backward Hyderabad-Karnataka region by granting educational and employment opportunities. These provisions reflect India’s commitment to respecting regional diversity while fostering unity.
4.4] Financial Relations Between Union & States
The financial relations between the Union and States are detailed in Articles 268 to 293 of the Constitution. They govern taxation powers, revenue sharing, grants-in-aid, and borrowing. Some of these are:
Article 268: Duties levied by the Union but collected and appropriated by the States.
Article 269: Taxes levied and collected by the Union but assigned to the States.
Article 270: Taxes levied and distributed between the Union and the States.
Article 275: Grants from the Union to certain States.
Article 280: Finance Commission.
Article 282: Expenditure defrayable by the Union or a State out of its revenues.
Union Exclusive Taxes: Customs, excise on non-alcoholic goods, income tax (excluding agricultural income), and corporate tax.
Concurrent Taxes: GST, which is jointly levied by the Union and States (Central GST and State GST).
State Exclusive Taxes: Taxes on Agricultural Income, Land Revenue (Revenue from land ownership, transfers, and tenancies), Taxes on Buildings (Property tax on residential and commercial buildings), Excise Duty on Alcoholic Liquor and Narcotics (States impose excise duty on liquor for human consumption and narcotics produced within the state), Taxes on Goods and Passengers (Includes taxes on vehicles used for the transport of goods and passengers), Stamp Duty (Duty on transactions involving legal documents (e.g., property sales, leases, and other agreements), Taxes on Professions, Trades, and Employments (A small tax imposed on professions like doctors, lawyers, and businesses), Taxes on Electricity, Entertainment Tax, Taxes on Betting and Gambling.
States have lost some autonomy over indirect taxes due to the introduction of the Goods and Services Tax (GST) in 2017, which subsumed many state-level taxes like VAT, luxury tax, and entry tax.
4.4.1] Revenue Sharing
Taxes shared between Union and States (Article 270): Taxes like GST, income tax, and Union excise duties are shared between the Union and States based on recommendations of the Finance Commission.
Taxes collected by the Union but assigned to States: Duties on succession (other than agricultural income) and estate duty.
4.4.2] Grants-in-Aid (Article 275 and 282)
States receive grants from the Union to meet revenue deficits or fund centrally sponsored schemes.
The Finance Commission recommends devolution of funds to states based on factors like population, area, income levels, and fiscal performance.
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