Centre-State & Inter-State Relations (Part XI-XIII): Legislative, Administrative, Financial Relations, the Inter-State Council & Zonal Councils (UPSC Polity)

Legislative Relations — Territorial Extent & the Three Lists

🎯 Exam priority: Important. A dense, high-yield chapter — Prelims regularly tests the predominance rules (Union > Concurrent > State), the five extraordinary circumstances for Parliament to legislate on State subjects, and the Inter-State Council's 1990 composition; Mains has repeatedly asked about cooperative/competitive/confrontational federalism (2016, 2018, 2022) and the GST Council. Learn the three-way relations (legislative/administrative/financial) plus the inter-state mechanisms.

Centre-state relations are studied under three heads — legislative, administrative and financial — while a separate set of provisions governs relations between the states themselves. Note: there is no division of judicial power — India's judiciary is integrated.

Legislative Relations — Territorial Extent & the Three Lists

• Articles 245 to 255 (Part XI) govern legislative relations. Territorially: Parliament can legislate for the whole of India (and extra-territorially — Indian citizens/property anywhere); a state legislature only for its own territory. Exceptions: the President can legislate by regulation for Andaman & Nicobar, Lakshadweep, Dadra & Nagar Haveli-Daman & Diu and Ladakh (and for Puducherry when its Assembly is suspended); Governors can exempt Fifth-Schedule scheduled areas, and the Assam Governor (or the President for Meghalaya/Tripura/Mizoram) can exempt Sixth-Schedule tribal areas from a Central Act.

• The Seventh Schedule's three lists: Union List (98 subjects, orig. 97) — Parliament's exclusive domain; State List (59, orig. 66) — states' domain "in normal circumstances"; Concurrent List (52, orig. 47) — both may legislate, Central law prevailing on conflict (unless the state law was reserved for and received Presidential assent — even then Parliament can later override it). Residuary powers (including residuary taxation) rest with the Centre — the Canadian, not the American, pattern. The 42nd Amendment (1976) moved five subjects — education, forests, weights & measures, protection of wild animals/birds, and administration of justice — from State to Concurrent.

• Predominance order: Union List > Concurrent List > State List — where lists overlap, the higher-ranked list always prevails.

Parliament's Power Over the State List — Five Extraordinary Routes

The normal legislative scheme bends in five extraordinary situations — a favourite "match the circumstance" Prelims format — and the Centre also retains direct control levers over state law-making.

Parliament's Power Over the State List — Five Extraordinary Routes

• A. Rajya Sabha Resolution — a two-thirds majority resolution (national interest) lets Parliament legislate on a State List (or GST) matter; valid for one year at a time, renewable any number of times; the resulting law lapses six months after the resolution ceases. B. National Emergency — Parliament gains the same power while it operates; laws lapse six months after the emergency ends.

• C. States' Request — if two or more state legislatures pass resolutions requesting it, Parliament may legislate for those states (others may adopt it later); such a law can be amended/repealed only by Parliament, not the states (examples: Wild Life Protection Act 1972, Water (Prevention & Control of Pollution) Act 1974). D. International Agreements — Parliament may legislate on any State subject to implement a treaty (e.g. the Geneva Convention Act 1960, Anti-Hijacking Act 1982). E. President's Rule — Parliament may legislate on State subjects for that state; such a law survives even after President's Rule ends, though the state legislature can later repeal it.

• Centre's control over state legislation: the Governor can reserve a state bill for the President, who enjoys an absolute veto (Art 200–201); certain trade-restricting state bills need the President's prior sanction (Art 304); during a financial emergency the Centre can direct states to reserve money bills for the President; a Governor cannot ordinance without Presidential instructions in some cases. The Sarkaria Commission (1983–88) called this "federal supremacy... indispensable for the successful functioning of the federal system."

Administrative Relations

Administrative relations (Articles 256–263, Part XI) largely mirror the legislative distribution but add several distinct Centre-control mechanisms.

Administrative Relations

• Distribution of executive power: follows legislative power — Union subjects → Centre, State subjects → states; on Concurrent subjects execution normally rests with the states unless the Constitution/a Parliamentary law says otherwise.

• Centre's coercive levers (Art 365): states must (a) comply with Parliament's laws and (b) not obstruct Central executive power; failure lets the President conclude the state cannot be run per the Constitution — the trigger for President's Rule under Article 356. The Centre can also direct states on communications of national/military importance, railway protection, mother-tongue instruction for linguistic minorities, and Scheduled Tribe welfare schemes.

• All-India Services — IAS, IPS (1947, replacing the ICS/IP) and IFoS (1966) — recruited/trained by the Centre, serving both levels, ultimate control with the Centre, immediate control with the states; Article 312 lets Parliament create new All-India Services on a Rajya Sabha resolution. Ambedkar defended them as necessary for "strategic posts" maintaining administrative standards despite technically breaching pure federalism.

• Public Service Commissions & judiciary: a State PSC's chairman/members are appointed by the Governor but removable only by the President; Parliament can create a Joint SPSC; the UPSC can serve a state on the Governor's request with Presidential approval. High Court judges are appointed by the President (consulting the CJI and Governor); Parliament can create a common High Court for two-plus states (e.g. Punjab-Haryana).

• Emergencies: National Emergency (Art 352) lets the Centre direct states on any matter; President's Rule (Art 356) lets the President assume the state government's functions; Financial Emergency (Art 360) lets the Centre enforce financial propriety, even cutting salaries. Article 355 imposes a dual duty on the Centre — protect states from external aggression/internal disturbance, and ensure their governance conforms to the Constitution.

• Extra-constitutional devices: advisory bodies (NITI Aayog, National Integration Council, Zonal Councils) and periodic conferences (Governors', Chief Ministers', Chief Secretaries', Chief Justices') supplement the formal machinery.

Financial Relations

Financial relations (Articles 268–293, Part XII) run on four pillars — taxing powers, distribution of proceeds, grants-in-aid, and borrowing.

Financial Relations

• Taxing powers: Parliament taxes 13 Union List entries; states tax 18 State List entries; there are no tax entries in the Concurrent List — except the 101st Amendment (2016)'s special GST exception, giving Parliament and states concurrent GST power (Parliament exclusive for inter-state supply). Residuary taxation power (e.g. gift tax, wealth tax) rests with the Centre.

• Grants-in-aid: Statutory grants (Article 275) — Parliament grants needy states, on Finance Commission recommendation; Discretionary grants (Article 282) — either Centre or states may grant for any public purpose, entirely at discretion (no obligation).

• GST Council (Article 279A) — established by Presidential order; a joint Centre-state forum on GST rates/exemptions. Finance Commission (Article 280) — a quasi-judicial body appointed by the President; the Constitution calls it the "balancing wheel of fiscal federalism."

• Borrowing: the Centre can borrow within India or abroad on the security of the Consolidated Fund of India, unrestricted; a state can borrow only within India (never abroad), on the security of its own Consolidated Fund, and — while it owes the Centre money — only with the Centre's consent.

Inter-State Relations — Water Disputes, the Inter-State Council & Full Faith and Credit

India's federal comity also runs between the states — four constitutional mechanisms plus a statutory one.

Inter-State Relations — Water Disputes, the Inter-State Council & Full Faith and Credit

• Water disputes (Article 262): Parliament can provide for adjudicating inter-state river disputes and can oust the jurisdiction of even the Supreme Court over them. Two laws implement this: the River Boards Act, 1956 (advisory river boards on state request) and the Inter-State River Water Disputes Act, 1956 (ad hoc tribunals whose decisions are final and binding, again with courts excluded). Notable tribunals: Krishna & Godavari & Narmada (1969), Ravi-Beas (1986), Cauvery (1990), Mahadayi/Vansadhara (2010), Mahanadi (2018).

• Inter-State Council (Article 263): the President may establish it whenever public interest warrants, to (a) enquire/advise on inter-state disputes, (b) investigate/discuss common-interest subjects, and (c) recommend better coordination. Set up in 1990 (on Sarkaria Commission advice) by the V.P. Singh government; composition — PM (Chairman), all state CMs, UT CMs (with Assemblies), UT Administrators, Governors of President's Rule states, and six nominated Union Cabinet ministers. Meets at least thrice a year, in camera, decisions by consensus. A Standing Committee (1996) and a Secretariat (1991) — which since 2011 also serves the Zonal Councils — support it.

• Full Faith & Credit (Articles 261): public acts, records and judicial proceedings of the Centre/any state must be recognised throughout India; civil judgments are executable anywhere without a fresh suit (this rule does not extend to criminal judgments).

Inter-State Trade & Commerce, and the Zonal Councils

The last piece of inter-state comity is economic — free trade across state lines — plus the statutory Zonal Councils that operationalise regional cooperation.

Inter-State Trade & Commerce, and the Zonal Councils

• Articles 301–307 (Part XIII): Article 301 declares trade, commerce and intercourse throughout India free — covering both inter-state and intra-state movement. Permitted restrictions: Parliament may restrict trade "in public interest" but cannot discriminate between states (except during goods scarcity); a state may impose reasonable restrictions in public interest but needs the President's prior sanction to introduce such a bill, and cannot discriminate either; states may tax imported goods at the same rate as local goods (non-discriminatory taxation only); the freedom yields to State/Centre monopoly (nationalisation) laws.

• Zonal Councils — statutory (not constitutional) bodies created by the States Reorganisation Act, 1956, dividing India into five zones: Northern, Central, Eastern, Western, Southern. Each council: Union Home Minister (common Chairman of all five), member states' CMs + 2 more ministers each, UT Administrators; advisors (non-voting) include a NITI Aayog nominee and each state's Chief Secretary. Each CM serves as Vice-Chairman by rotation (1 year). Purely deliberative/advisory, aiming at emotional integration and checking regionalism.

• A separate North-Eastern Council (North-Eastern Council Act, 1971) covers Assam, Manipur, Mizoram, Arunachal Pradesh, Nagaland, Meghalaya, Tripura and Sikkim, with the added duty of a unified regional plan and reviewing security measures.

Why This Matters for UPSC

• Prelims: the predominance order (Union > Concurrent > State); the five extraordinary legislative circumstances; Article numbers (262 water, 263 Inter-State Council, 275 statutory vs 282 discretionary grants, 279A GST Council, 280 Finance Commission, 301 free trade); the Inter-State Council's 1990 composition; the five zones and their headquarters.

• Mains: cooperative federalism's drawbacks (2016); cooperation-competition-confrontation shaping Indian federalism (2018); national vs regional parties on centralisation (2022); the GST Council and inter-state councils in resolving legislative-power disputes (recurring theme).

Further Reading

• Standard NCERT-level texts and reference books on modern Indian history (any UPSC reading list).

Test Yourself: Practice Questions & PYQs

Test yourself on legislative, administrative and financial relations between the Centre and states, plus inter-state mechanisms — water disputes, the Inter-State Council, free trade and the Zonal Councils. Work through all thirteen before revealing the answers.

Practice Questions

Q1. In case of a conflict between the Union List and the Concurrent List, which prevails?

• (a) The Concurrent List

• (b) Whichever was enacted more recently

• (c) Neither — the matter goes to the Supreme Court

• (d) The Union List

Q2. A Rajya Sabha resolution empowering Parliament to legislate on a State List subject requires which majority, and remains in force for how long?

• (a) Two-thirds of the total membership; five years

• (b) Two-thirds of members present and voting; one year at a time (renewable)

• (c) A simple majority; permanently until repealed

• (d) A special majority under Article 368; two years

Q3. Which of the following is an example of Parliament legislating on a State subject because two or more states requested it?

• (a) a law passed during a National Emergency

• (b) Wild Life (Protection) Act, 1972

• (c) Anti-Hijacking Act, 1982

• (d) Geneva Convention Act, 1960

Q4. Under Article 365, if a state fails to comply with Central directions, the President may conclude that:

• (a) a financial emergency must be declared

• (b) the government of the state cannot be carried on in accordance with the Constitution, triggering Article 356

• (c) the Governor must resign

• (d) the state must be immediately dissolved without any process

Q5. The All-India Services (IAS, IPS, IFoS) are controlled:

• (a) entirely by the Centre with no state role

• (b) ultimately by the Centre, with immediate control vested in the state governments

• (c) entirely by the state governments

• (d) jointly and equally with no distinction between ultimate and immediate control

Q6. Article 312 empowers Parliament to create new All-India Services based on:

• (a) a Rajya Sabha resolution

• (b) unanimous consent of all state legislatures

• (c) a Presidential ordinance

• (d) a Lok Sabha resolution alone

Q7. Statutory grants-in-aid to states under Article 275 are given on the recommendation of the:

• (a) NITI Aayog

• (b) GST Council

• (c) Inter-State Council

• (d) Finance Commission

Q8. The Finance Commission, provided for under Article 280, is best described as:

• (a) a statutory body created by an Act of Parliament

• (b) a quasi-judicial body and the 'balancing wheel of fiscal federalism'

• (c) a purely advisory body with no constitutional status

• (d) a permanent department of the Finance Ministry

Q9. A state government's power to borrow, unlike the Centre's, is restricted to:

• (a) borrowing with no restrictions at all

• (b) borrowing only for capital expenditure

• (c) borrowing only from the Reserve Bank

• (d) borrowing only within India, never abroad

Q10. The Inter-State Council, established in 1990 under Article 263, is chaired by:

• (a) the Union Home Minister

• (b) the Chief Justice of India

• (c) the President

• (d) the Prime Minister

Q11. Under the 'Full Faith and Credit' provisions, the rule that final civil judgments are executable anywhere in India without a fresh suit:

• (a) extends equally to criminal judgments

• (b) requires a fresh suit in every case

• (c) does not extend to criminal judgments

• (d) applies only to Supreme Court judgments

Q12. Article 301, guaranteeing freedom of trade, commerce and intercourse, applies to:

• (a) only trade conducted by the Central government

• (b) only trade in agricultural goods

• (c) only inter-state trade, not intra-state trade

• (d) both inter-state and intra-state trade throughout India

Q13. The Zonal Councils were established by which Act, and how many zones did it create?

• (a) Government of India Act, 1935 — four zones

• (b) States Reorganisation Act, 1956 — five zones

• (c) Constitution (Seventh Amendment) Act, 1956 — six zones

• (d) North-Eastern Council Act, 1971 — five zones

Mains Practice Questions

Use these to frame full-length answers. You don't have to answer one exactly — they show the angles UPSC tests, so let them guide which points you cover.

• The concept of cooperative federalism has been increasingly emphasised in recent years. Highlight the drawbacks in the existing structure and the extent to which cooperative federalism would answer the shortcomings. (UPSC Mains 2016)

• How far do you think cooperation, competition and confrontation have shaped the nature of federation in India? Cite recent examples. (UPSC Mains 2018)

• Examine the role of the GST Council and the Inter-State Council in resolving contentious issues of legislative power distribution between the Centre and the states.

• Discuss the five extraordinary circumstances under which Parliament can legislate on a subject in the State List.

• Assess the effectiveness of Article 263's Inter-State Council mechanism in promoting Centre-state and inter-state coordination.