The intricate relationship between the Union and the States in India is a defining characteristic of its constitutional framework, reflecting a unique blend of federal and unitary features. India adopted a federal system, not through a voluntary agreement of sovereign units, but as a “holding together” federation, where the pre-existing unitary state was reorganized into a federal structure. This choice was driven by the imperative to balance the need for a strong central authority to ensure national unity and integrity in a diverse society, with the necessity of granting autonomy to regional units to accommodate linguistic, cultural, and administrative variations. The Constitution of India, while delineating powers between the Centre and the States, exhibits a clear inclination towards a robust Union, a feature often described as “quasi-federal” or “federal in form but unitary in spirit.”

This dynamic interplay between the Union and the States is not static; it has evolved significantly since India’s independence, influenced by political shifts, economic policies, and judicial pronouncements. The initial decades saw a period of dominant central authority, largely due to the single-party rule at both levels. However, the emergence of multi-party politics, coalition governments, and the rise of regional parties have increasingly asserted the demands for greater state autonomy, leading to both cooperative engagement and points of friction. A critical examination reveals that while the constitutional design provides for a division of powers, various provisions and their practical application have often tilted the balance towards the Union, prompting ongoing debates about the true nature of Indian federalism and the appropriate distribution of power and resources.

Legislative Relations

The distribution of legislative powers between the Union and the States is enshrined primarily in Part XI of the Constitution (Articles 245-255) and the Seventh Schedule. The Seventh Schedule contains three lists that meticulously delineate the subject matters on which the Union Parliament and State Legislatures can make laws:

Union List (List I): Comprising 97 subjects (originally 97), this list includes matters of national importance requiring uniform legislation across the country. Examples include defence, foreign affairs, atomic energy, railways, banking, currency, postal services, and major ports. Parliament has exclusive power to make laws on subjects enumerated in this list.

State List (List II): Originally 66 subjects, now 61, this list contains matters of local or regional importance, allowing States to legislate according to their specific needs and conditions. Public order, police, public health, sanitation, agriculture, local government, and prisons are examples of subjects on this list. State Legislatures have exclusive power to make laws on these subjects, subject to certain constitutional exceptions.

Concurrent List (List III): Containing 52 subjects (originally 47), this list allows both the Union Parliament and State Legislatures to make laws. Subjects like criminal law, civil procedure, marriage and divorce, forests, education, trade unions, and price control fall under this category. In case of a conflict between a Union law and a State law on a subject in the Concurrent List, the Union law generally prevails (Article 254), unless the State law has received Presidential assent after being reserved for his consideration.

Residuary Powers (Article 248): The Constitution vests residuary legislative powers (i.e., subjects not enumerated in any of the three lists) with the Union Parliament. This provision reinforces the centralizing tendency of the Indian federal structure, distinguishing it from federal systems like the United States, where residuary powers lie with the states.

Parliament’s Power to Legislate on State List Subjects: Despite the general demarcation, the Constitution provides several circumstances under which the Parliament can legislate on subjects otherwise exclusive to the State List, further underscoring the Union’s dominance:

  • In the National Interest (Article 249): If the Rajya Sabha declares by a two-thirds majority resolution that it is necessary or expedient in the national interest for Parliament to legislate on a State List subject, Parliament can do so. Such a resolution remains in force for one year but can be extended.
  • During a Proclamation of Emergency (Article 250): While a Proclamation of National Emergency (Article 352) is in operation, Parliament gains the power to legislate on any subject in the State List. Such laws cease to have effect six months after the emergency ceases to operate.
  • With the Consent of States (Article 252): If two or more State Legislatures pass a resolution requesting Parliament to legislate on a matter in the State List, Parliament can enact a law for those States. Any subsequent amendment or repeal of such a law requires Parliament’s action.
  • For Implementing International Agreements (Article 253): Parliament can make any law for the whole or any part of India for implementing any international treaty, agreement, or convention, even if it relates to a State List subject. This ensures India’s ability to fulfill its international obligations.
  • During President’s Rule (Article 356): When President’s Rule is imposed in a State due to the failure of constitutional machinery, Parliament assumes the power to legislate for that State, either directly or by authorizing the President to do so.

These provisions collectively illustrate a legislative framework that, while attempting to decentralize power, maintains a strong central grip, allowing the Union to intervene in State legislative domains under various exigencies and for the sake of national uniformity or interest.

Administrative Relations

The administrative relations between the Union and the States are equally complex and are governed by Articles 256 to 263 of the Constitution. The executive power of the Union extends to matters on which Parliament has legislative power, and similarly, for the States. However, the Constitution ensures that the States operate within the broader framework defined by the Union, emphasizing administrative coordination and control.

Obligation of States and Union’s Control (Articles 256 & 257): States are constitutionally bound to ensure compliance with laws made by Parliament and existing laws applying in the State. The Union Executive has the power to issue directions to States regarding the exercise of their executive power to ensure compliance with Union laws and to prevent any prejudice to the executive power of the Union. This includes directions for the construction and maintenance of means of communication declared to be of national or military importance, and for the protection of railways within the State. Non-compliance with such directions can be a ground for imposing President’s Rule under Article 365, further highlighting the Union’s leverage.

Delegation of Functions (Article 258 & 258A): To facilitate administrative efficiency and cooperation, the President may, with the consent of the State Government, entrust any Union executive function to the State. Conversely, a State Governor may, with the consent of the Union Government, entrust any State executive function to the Union. This provision allows for flexibility and cooperative administrative arrangements, but it is contingent on mutual consent.

All-India Services (Articles 312): The All-India Services (IAS, IPS, IFS) play a crucial role in administrative relations. Members of these services are recruited and trained by the Union but are allocated to various State cadres, where they serve under the State Governments. However, they remain ultimately accountable to the Union, which controls their disciplinary matters and conditions of service. This unique structure ensures a degree of administrative uniformity and efficiency across the country but has also been a source of occasional friction, with States sometimes perceiving these officers as agents of the Union and demanding greater control over them.

Inter-State Council (Article 263): The Constitution provides for the establishment of an Inter-State Council to inquire into and advise upon disputes between States, investigate and discuss subjects of common interest, and make recommendations for better coordination of policy and action. Though constituted in 1990 after recommendations from the Sarkaria Commission, its effectiveness in fostering cooperative federalism has been varied. It serves as a crucial forum for deliberating on complex issues that cut across State boundaries.

Other Mechanisms of Coordination:

  • Zonal Councils: Established under the States Reorganisation Act, 1956, these five councils (Northern, Central, Eastern, Western, Southern) promote inter-state cooperation in economic, social, and cultural matters.
  • NITI Aayog: Replacing the Planning Commission in 2015, NITI Aayog acts as a “think tank” and a platform for cooperative federalism, fostering greater involvement of States in policymaking. It focuses on facilitating bottom-up planning and providing strategic guidance to the Union and States.
  • Centrally Sponsored Schemes (CSS): These schemes, primarily funded by the Union Government but implemented by States, are a significant tool for the Union to influence State policies and development priorities. While they address national priorities, they also reduce State autonomy and often lead to debates over funding patterns and implementation flexibility.

The administrative landscape, therefore, presents a picture where the Union has considerable supervisory and directive powers, yet relies heavily on State machinery for the implementation of its policies and laws.

Financial Relations

The financial relationship between the Union and the States is arguably the most critical aspect of Indian federalism, significantly influencing the autonomy and developmental capacity of States. Articles 268 to 293 of the Constitution deal with the distribution of taxing powers and revenues.

Distribution of Taxing Powers: Similar to legislative powers, taxing powers are also divided using the three lists of the Seventh Schedule:

  • Union List: Parliament has exclusive power to levy taxes on subjects like customs duties, corporation tax, income tax (excluding agricultural income), excise duties (except alcoholic liquors and narcotics), estate duty, and service tax (before GST).
  • State List: State Legislatures have exclusive power to levy taxes on subjects such as land revenue, agricultural income, duties on alcoholic liquors, excise on intoxicating drugs, taxes on professions, trades, callings and employments, taxes on vehicles, taxes on luxuries, and sales tax (before GST, now replaced by SGST under GST).
  • Concurrent List: No head of taxation exists in the Concurrent List.

Distribution of Tax Revenues: The Constitution provides for the distribution of the proceeds of taxes and duties between the Union and the States, rather than strictly linking the power to tax with the power to retain the proceeds. This complex mechanism aims to address the vertical imbalance (Union raising more revenue than it needs, States needing more than they raise) and horizontal imbalance (disparities among States).

  • Taxes Levied by Union but Collected and Appropriated by States (Article 268): E.g., stamp duties, duties of excise on medicinal and toilet preparations.
  • Service Tax (Repealed with GST): Article 268A, inserted for service tax, which was levied by Union but collected and appropriated by Union and States.
  • Taxes Levied and Collected by Union but Assigned to States (Article 269): E.g., estate duty on property, terminal taxes on goods/passengers carried by rail, sea, or air.
  • Taxes Levied and Collected by Union but Distributed Between Union and States (Article 270): This is the most significant pool, including income tax and most Union excise duties (pre-GST), which are compulsorily shared. Post-GST, this article applies to the net proceeds of Union taxes and duties (excluding surcharge and cess) as per the Finance Commission recommendations.
  • Surcharges and Cesses (Articles 271): Parliament can levy surcharges on certain taxes (e.g., income tax) for Union purposes, which are not shared with the States. Various cesses are also levied for specific purposes, which similarly do not form part of the divisible pool.

Goods and Services Tax (GST): The 101st Constitutional Amendment Act, 2016, introduced Goods and Services Tax, fundamentally altering indirect tax distribution. It unified various Union and State indirect taxes into a single tax. The Goods and Services Tax Council, comprising Union and State Finance Ministers, makes recommendations on GST rates, laws, and administration, exemplifying a new model of cooperative fiscal federalism. The GST comprises Central GST (CGST), State GST (SGST), and Integrated GST (IGST), with IGST being apportioned between the Union and States.

Grants-in-Aid: To further bridge the fiscal gap, the Constitution provides for grants from the Union to the States:

  • Statutory Grants (Article 275): Parliament provides grants-in-aid to States “as Parliament may determine” and specifically “such sums as Parliament may by law provide” to States which are in need of assistance. These grants are recommended by the Finance Commission.
  • Discretionary Grants (Article 282): The Union or a State can make grants for any public purpose, even if the purpose is not within their respective legislative competence. This provision has been widely used by the Union to give grants to States, often through the erstwhile Planning Commission and now through Centrally Sponsored Schemes, which are outside the purview of the Finance Commission.

Finance Commission (Article 280): The President constitutes a Finance Commission every five years (or earlier) to make recommendations on:

  • The distribution of the net proceeds of taxes between the Union and States.
  • The principles governing grants-in-aid to States.
  • Measures needed to augment the Consolidated Fund of a State to supplement the resources of Panchayats and Municipalities. The Finance Commission’s recommendations are crucial for horizontal and vertical fiscal devolution and are generally accepted by the Union Government.

Borrowing Powers (Article 292 & 293): The Union can borrow on the security of the Consolidated Fund of India within limits fixed by Parliament. States can also borrow within India, but they require Union consent if they are indebted to the Union or if the Union has given a guarantee in respect of a loan taken by the State. This provision gives the Union significant control over State finances, especially their indebtedness.

The financial relations often lead to significant friction, with States frequently demanding a greater share of central taxes, more autonomy in spending central grants, and relief from growing debt burdens. The fiscal dependence of States on the Union is a core reason for the centralizing tendency in Indian federalism.

Emergency Provisions

The emergency provisions contained in Part XVIII of the Constitution (Articles 352-360) represent the most significant instances of the shift from a federal to a unitary structure, giving the Union extraordinary powers to deal with crises.

National Emergency (Article 352): If the President is satisfied that a grave emergency exists whereby the security of India or any part thereof is threatened by war, external aggression, or armed rebellion, a Proclamation of Emergency can be issued. During such an emergency:

  • The executive power of the Union extends to giving directions to any State regarding how its executive power is to be exercised.
  • Parliament gains the power to legislate on any subject in the State List.
  • The distribution of revenues between the Union and the States can be modified by the President.
  • The fundamental rights of citizens, except Articles 20 and 21, can be suspended. This provision effectively transforms the federal structure into a unitary one, concentrating all powers in the hands of the Union.

State Emergency / President’s Rule (Article 356): If the President, on receipt of a report from the Governor of a State or otherwise, is satisfied that a situation has arisen in which the government of a State cannot be carried on in accordance with the provisions of the Constitution, President’s Rule can be imposed. This is the most controversial of the emergency provisions and has been frequently invoked, often criticized for political misuse.

  • The President assumes to himself all or any of the functions of the State Government, or powers vested in or exercisable by the Governor or any body or authority in the State.
  • Parliament can make laws with respect to any matter in the State List.
  • The powers of the State Legislature are exercised by or under the authority of Parliament. This effectively suspends the State government and Legislature, placing the State under direct Union rule, undermining the federal principle.

Financial Emergency (Article 360): If the President is satisfied that a situation has arisen whereby the financial stability or credit of India or any part of its territory is threatened, a Financial Emergency can be declared. Although never invoked, its provisions are far-reaching:

  • The executive authority of the Union extends to giving directions to any State to observe canons of financial propriety.
  • Directions can include reduction of salaries and allowances of all or any class of persons serving the Union or a State, including judges of the Supreme Court and High Courts.
  • All money bills or other financial bills passed by the State Legislature can be reserved for the President’s consideration. This provision grants the Union substantial control over State finances, further eroding State autonomy during a financial crisis.

Centralizing Tendencies and Criticisms

Despite the formal division of powers, the Indian federal system is undeniably characterized by a strong central bias. This centralizing tendency has been a consistent theme and a subject of critical debate:

  • Dominance of the Union List and Residuary Powers: The Union List contains more subjects of national importance, and Parliament has exclusive legislative powers over them. The vesting of residuary powers in the Union further strengthens its position.
  • Supremacy of Union Law in Concurrent List: In case of conflict, Union law prevails over State law, giving the Union an upper hand even in areas of shared competence.
  • Extensive Emergency Provisions: As discussed, Articles 352, 356, and 360 allow the Union to assume near-total control over States during crises, fundamentally altering the federal structure. The frequent imposition of President’s Rule (Article 356) for political reasons has been a major point of contention and criticism.
  • Financial Dependence of States: States rely heavily on Union transfers (share in central taxes and grants-in-aid) to meet their expenditure. Their limited revenue-raising capacity, coupled with borrowing restrictions and the Union’s control over discretionary grants, restricts their fiscal autonomy.
  • Role of the Governor: The Governor, appointed by the President, acts as both the constitutional head of the State and a representative of the Union. This dual role often leads to controversies, especially when the Governor exercises discretionary powers, such as reserving State bills for Presidential assent or recommending President’s Rule, perceived by States as central interference.
  • All-India Services: While promoting national integration and administrative efficiency, the All-India Services are viewed by some States as instruments of central control, limiting State autonomy over their own bureaucracy.
  • Integrated Judiciary: India has a single integrated judicial system, with the Supreme Court at the apex and High Courts below it. Judges of High Courts are appointed by the President. This unified structure ensures uniformity of law but can also be seen as a centralizing feature.
  • Unified Election Commission: The Election Commission of India, a central body, conducts elections for both Union and State Legislatures, ensuring uniformity and fairness but also signifying a centralized control over the electoral process.
  • Amendments to the Constitution: Certain parts of the Constitution affecting federal provisions can be amended by a special majority of Parliament and ratification by half of the State Legislatures. However, other crucial provisions do not require State consent, allowing the Union to unilaterally alter the federal balance to some extent.

Evolution and Dynamics

The nature of Union-State relations in India has undergone a significant transformation since independence.

  • Era of One-Party Dominance (1950s-late 1960s): The initial decades were characterized by the dominance of the Congress party both at the Centre and in most States. This led to a largely cooperative federalism, albeit with a strong Centre often dictating terms due to political homogeneity. The Planning Commission played a significant role during this period, with its centralized planning approach.
  • Rise of Regional Parties and Coalition Politics (Late 1960s-1990s): The decline of Congress dominance and the emergence of regional parties in several States led to increased friction. States began to demand greater autonomy, especially financial, and raise voices against perceived central overreach, particularly the misuse of Article 356. This era saw more confrontational relations.
  • Liberalization and Coalition Era (1990s onwards): Economic liberalization led to a shift from centralized planning to market-oriented policies, gradually reducing the Planning Commission’s direct control. The era of coalition governments at the Centre further necessitated greater accommodation of regional interests and State demands, as regional parties became crucial partners in central governments. This period has seen some moves towards more cooperative and bargaining federalism.
  • Cooperative and Competitive Federalism (Post-2014): The current discourse emphasizes ‘cooperative federalism’ and ‘competitive federalism.’ NITI Aayog’s creation aimed to foster greater State involvement in policy formulation. ‘Competitive federalism’ encourages States to compete with each other for investment and development, often facilitated by the Centre. However, centralizing tendencies persist, and debates continue, particularly concerning fiscal federalism and the role of centrally sponsored schemes.

Mechanisms for Cooperation and Conflict Resolution

While the potential for conflict exists, the Indian federal system also provides mechanisms for inter-governmental cooperation and conflict resolution:

  • Inter-State Council and Zonal Councils: These bodies facilitate discussion and coordination on matters of common interest.
  • NITI Aayog: Provides a platform for States to participate in national policy formulation and offers strategic guidance.
  • Finance Commission: Its role in revenue sharing and grants-in-aid is crucial for fiscal equity and stability.
  • Judiciary: The Supreme Court acts as the final arbiter of disputes between the Union and States, and among States themselves. Its judgments, such as in S.R. Bommai v. Union of India (1994), have laid down strict guidelines for the imposition of President’s Rule, thereby limiting central arbitrariness.
  • Inter-State Water Disputes Act: Provides a mechanism for resolving disputes related to the waters of inter-state rivers.

Reforms and Future Trajectory

Several commissions have examined Union-State relations and suggested reforms. The Sarkaria Commission (1983), one of the most comprehensive, recommended limiting the misuse of Article 356, increasing the share of States in central taxes, establishing a permanent Inter-State Council, and greater consultation with States. The Punchhi Commission (2007) reiterated many of these points and further emphasized the need for decentralization, greater fiscal autonomy for States, and stricter norms for President’s Rule.

The ongoing trajectory of Union-State relations in India is a continuous balancing act. While the constitutional framework leans towards a strong Centre, the political realities of a diverse and democratic nation necessitate accommodating regional aspirations and empowering States. The shift towards cooperative and competitive federalism, the establishment of the Goods and Services Tax Council, and the greater assertiveness of States in demanding their rightful share and autonomy signify an evolving dynamic.

The relationship between the Union and the States in India is a testament to the country’s unique constitutional experiment in nation-building. It embodies a complex interplay of legislative, administrative, and financial powers, deliberately designed with a strong central bias to preserve national unity and integrity in a vast and diverse subcontinent. This architecture, though often described as quasi-federal, has proven resilient, adapting to changing political landscapes and socio-economic imperatives, from the initial decades of one-party dominance to the contemporary era of multi-party coalitions and the assertive rise of regional identities. The continuous negotiation and re-calibration of this power dynamic remains central to India’s democratic journey, balancing the imperatives of a unified nation with the aspirations for regional self-governance.

The evolution of this relationship reflects both cooperative engagements and inherent tensions. While the constitutional provisions grant the Union significant leverage—through its predominant legislative powers, pervasive administrative control, and overarching financial influence—States have progressively articulated their demand for greater autonomy. The ongoing debates surrounding fiscal federalism, the utility and funding of centrally sponsored schemes, and the role of institutions like the Governor underscore the persistent quest for a more equitable distribution of power and resources. The institutional mechanisms, such as the Finance Commission, Inter-State Council, and more recently NITI Aayog and the GST Council, signify a continuous effort to foster dialogue and address contentious issues through consultative processes, thereby reinforcing the spirit of collaborative governance.