Centre-State Relations — Legislative, Administrative, Financial (Articles 245–263)

Centre-State relations form the backbone of Indian federalism. The Constitution divides powers between the Union and States across three dimensions: legislative, administrative, and financial.

Constitutional Framework

Provision	Articles	Subject
Distribution of legislative powers	245–255	Who can make laws on what
Distribution of revenues	268–281	Tax sharing and grants
Administrative relations	256–263	Executive cooperation and control
Seventh Schedule	Lists I, II, III	Union, State, Concurrent lists

1. Legislative Relations (Articles 245–255)

Seventh Schedule — Three Lists

List	Items (originally)	Examples	Who Legislates
Union List (List I)	97 subjects (now 100)	Defence, atomic energy, foreign affairs, banking, railways, currency, census	Parliament only
State List (List II)	66 subjects (now 61)	Police, public health, agriculture, land, local government, state taxes	State Legislature only
Concurrent List (List III)	47 subjects (now 52)	Criminal law, marriage, education, forests, trade unions, electricity	Both; Parliament prevails in conflict

Key Articles on Legislative Powers

Article	Provision
245	Parliament can make laws for whole or any part of India; State legislature for whole or part of the state
246	Distribution of legislative powers as per three lists
248	Residuary powers belong to Parliament (unlike USA where residuary lies with states)
249	Rajya Sabha can authorise Parliament to legislate on State List matter by 2/3 majority (for national interest, valid for 1 year)
250	During National Emergency, Parliament can legislate on State List subjects
251	Parliamentary law prevails over State law on Concurrent List
252	Two or more states can request Parliament to legislate on a State List matter
253	Parliament can legislate on any subject to implement international treaties/agreements
254	Concurrent List conflict: Central law prevails unless State law received Presidential assent

When Parliament Can Legislate on State List

Situation	Article	Duration
Rajya Sabha resolution (2/3 majority)	249	1 year (renewable)
During National Emergency	250	Duration of Emergency + 6 months
Request by 2 or more states	252	Until states revoke
International treaty obligations	253	No time limit
During President’s Rule	356	Duration of President’s Rule

2. Administrative Relations (Articles 256–263)

Article	Provision
256	State executive must comply with Union laws; Union can give directions
257	Union can direct states on certain matters (communication, railways, protection of railways)
258	Union can confer powers on state officers (with consent of state government)
258A	States can confer powers on Union officers (added by 7th Amendment)
260	Union jurisdiction over territories outside India
261	Full faith and credit to public acts, records, judicial proceedings of Union and States
262	Parliament can make laws for adjudication of inter-state river disputes
263	President can establish an Inter-State Council

Inter-State Council (Article 263)

Aspect	Details
Established by	President of India
Constitutional basis	Article 263
Recommended by	Sarkaria Commission (1988); set up in 1990
Chairman	Prime Minister
Members	Chief Ministers of all states, administrators of UTs, 6 Union Cabinet Ministers
Function	Inquire and advise on inter-state disputes; investigate subjects of common interest; recommend coordination
Meetings	Meets occasionally (not fixed schedule)

Important Commissions on Centre-State Relations

Commission	Year	Key Recommendations
Sarkaria Commission	1983–1988	Strengthen ISC; use Article 356 sparingly; Governor should be non-political; Concurrent List not to be expanded
Punchhi Commission	2007–2010	Governor’s appointment — panel of names; localise emergency; strengthen ISC
Rajamannar Committee	1969 (Tamil Nadu)	Demanded more autonomy for states; abolish All India Services
Anandpur Sahib Resolution	1973 (Punjab)	Demanded limiting Centre to defence, foreign affairs, communications, currency

3. Financial Relations (Articles 268–281)

Tax Distribution Framework

Category	Article	Examples
Taxes levied and collected by Union but assigned to States	268	Stamp duties on financial documents (now limited after GST)
Taxes levied by Union, collected and appropriated by States	268A (repealed)	Was for service tax (pre-GST)
Taxes levied and collected by Union but distributed between Union and States	270	Income tax, Union excise duties (now subsumed under GST framework)
Surcharge on certain taxes for Union purposes	271	Parliament can levy surcharges on taxes in Articles 269–270

Finance Commission (Article 280)

Aspect	Details
Constitutional body	Yes (Article 280)
Appointed by	President
Composition	Chairman + 4 members
Qualification	Chairman must be a person with experience in public affairs
Tenure	Determined by President
Function	Recommend distribution of net tax proceeds between Centre and States; principles for grants-in-aid; measures to augment State resources

Recent Finance Commissions:

FC	Chairman	Period	Key Recommendation
14th	Y.V. Reddy	2015–2020	Increased States’ share to 42% of divisible pool (from 32%)
15th	N.K. Singh	2021–2026	States’ share at 41% (reduced by 1% due to creation of new UTs of J and K, Ladakh)
16th	Arvind Panagariya	2026–2031	Constituted on 31 December 2023

Grants-in-Aid (Articles 275 and 282)

Article	Type	Details
275	Statutory grants	Charged on Consolidated Fund of India; for Scheduled Tribes welfare and administration costs
282	Discretionary grants	Union or State can make grants for any public purpose; basis of Centrally Sponsored Schemes

GST Council (Article 279A)

Aspect	Details
Added by	101st Amendment Act, 2016
Chairman	Union Finance Minister
Members	Union Minister of State for Finance + Finance Ministers of all States/UTs with legislature
Voting	Centre has 1/3 weightage; all states together have 2/3; decisions by 3/4 majority of weighted votes
Function	Recommend GST rates, exemptions, model laws, dispute resolution

PSC-Focused Quick Recall

Question Pattern	Answer
Residuary powers under Indian Constitution	Parliament (Article 248)
Which list has maximum subjects?	Union List (100 subjects)
Article for inter-state river disputes	262
Article for Inter-State Council	263
Finance Commission article	280
Chairman of GST Council	Union Finance Minister
Sarkaria Commission relates to	Centre-State Relations
States’ share of divisible pool (15th FC)	41%
Rajya Sabha resolution for State List legislation	Article 249 (2/3 majority)
Education was moved to Concurrent List by	42nd Amendment (1976)

Related Notes

Hub: Indian Polity — Complete Guide for Kerala PSC

More on Federal Structure:

• Inter State Relations
• Special Provisions