Centre-State Relations and Emergency Provisions Notes for UPSC

India is called a "union of states" with a strong centre. The Constitution divides the powers between the Centre and the States and also gives the Centre special powers in a crisis through the Emergency provisions. This is one of the most important chapters of Indian polity for the UPSC: the Prelims asks about Articles, lists and the types of Emergency, and the Mains asks about cooperative federalism, the role of the Governor and the working of the Finance Commission. This note explains the legislative, administrative and financial relations between the Centre and the States, and the three types of Emergency, in simple language with tables.

Legislative Relations

The Seventh Schedule divides the subjects into three lists. The Union List (now 98 subjects, such as defence, foreign affairs, railways and banking) is for Parliament alone. The State List (now 59 subjects, such as police, public health, agriculture and land) is for the State legislatures. The Concurrent List (52 subjects, such as education, forests, marriage and criminal law) is for both, and in case of a conflict, the central law prevails (Article 254). Residuary powers (the subjects not in any list) belong to Parliament under Article 248, which is a sign of the centre's strength, unlike the USA where they belong to the States.

When Can Parliament Make Laws on the State List?

Administrative Relations

Articles 256 to 263 give the Centre the power to direct the States so that the Union laws are followed and that the executive power of the States does not obstruct the Union executive. The All-India Services (IAS, IPS and the Indian Forest Service, created under Article 312) are recruited by the Centre but serve under the States, which gives the Centre a means of control. The Centre can also take over some functions through the Governor, and the States are asked to maintain the Union's means of communication of national importance. Cooperation is encouraged by the following bodies.

• Inter-State Council (Article 263): Set up in 1990 on the recommendation of the Sarkaria Commission; the Prime Minister is the chairman, and the Chief Ministers and some Union ministers are members. It discusses matters of common interest.
• Zonal Councils: Five councils (Northern, Central, Eastern, Western and Southern) created by the States Reorganisation Act, 1956, chaired by the Union Home Minister; the North-Eastern Council was set up by a separate Act in 1971.
• NITI Aayog and the GST Council: Forums to promote cooperative federalism, with the participation of the States.

Financial Relations

The taxes are divided: the Union gets taxes like income tax (other than on agriculture), customs duty and corporation tax; the States get land revenue, tax on agricultural income, taxes on alcohol and stamp duty. Since 2017, the GST is shared by the Centre and the States. The Finance Commission (Article 280), constituted every five years, recommends how the divisible pool of central taxes is shared between the Centre and the States: the 15th Finance Commission recommended a 41 per cent share for the States. Cess and surcharge are not shared with the States. The Centre also gives grants-in-aid (Article 275) to the States that need help, and the centrally sponsored schemes. The borrowing of the States is limited by the Centre under Article 293 if they owe a loan to the Centre.

Commissions on Centre-State Relations

• Rajamannar Committee (1969): Set up by Tamil Nadu; asked for more autonomy for the States.
• Sarkaria Commission (1983): Recommended the Inter-State Council, consultation with the States before legislating on the Concurrent List, and caution in using Article 356.
• Punchhi Commission (2007-10): Advised on the role of the Governor, the use of Article 356 and the sharing of resources.

Emergency Provisions: Overview

National Emergency (Article 352)

The President can declare it on the written advice of the Union Cabinet (a safeguard added by the 44th Amendment, 1978). The ground "internal disturbance" was replaced by "armed rebellion". During the emergency, the Centre gets full control over the States, since Parliament can legislate on the State List; the Lok Sabha's term can be extended by one year at a time; and the fundamental rights are affected. The rights under Article 19 are automatically suspended if the emergency is declared on the ground of war or external aggression, and the President can suspend the right to move the courts for the other fundamental rights, except Articles 20 and 21, which can never be suspended. India has had three National Emergencies: in 1962 (the war with China), 1971 (the war with Pakistan) and 1975-77 (internal disturbance), which was the most controversial.

President's Rule (Article 356)

It is imposed if the President is satisfied, on the Governor's report or otherwise, that the government of a State cannot be carried on according to the Constitution. The President takes over the functions of the State government, the Governor acts as his agent, and the State legislature is suspended or dissolved. It can be extended up to three years, but any extension beyond one year needs a National Emergency or a certificate of the Election Commission that elections cannot be held. In the S. R. Bommai case (1994), the Supreme Court held that the proclamation is subject to judicial review and that a floor test must be held to test the majority, and the misuse of this provision, which was used many times in the earlier decades, was restricted.

Financial Emergency (Article 360)

If the President is satisfied that the financial stability or credit of India is threatened, he or she can declare a financial emergency. The President can then direct the States to follow financial rules, reduce the salaries and allowances of all government employees (including judges), and reserve all money bills for his consideration. It has never been declared in India.

Amending the Constitution (Article 368)

Some provisions can be changed by a simple majority (as an ordinary law, for example the creation of new States), some by a special majority (a majority of the total membership of each House and two-thirds of the members present and voting), and the federal features need the special majority and the ratification by half of the State legislatures: the election of the President, the extent of the executive power of the Union and States, the High Courts and the Supreme Court, the distribution of legislative powers, the representation of the States in Parliament and Article 368 itself. In Kesavananda Bharati (1973), the Court held that Parliament cannot change the basic structure.

Mains Angle: Is India's Federalism Cooperative or Centralised?

Argue that the Constitution has a strong unitary bias in times of crisis (the Emergency, residuary powers, the Governor and All-India Services), but in practice the federal character has deepened through the regional parties, the Bommai judgment, the GST Council and the increased devolution by the Finance Commission. The tensions continue over the use of central schemes, the Governor's role and the loss of fiscal autonomy after GST. The way forward is more consultation, a regular meeting of the Inter-State Council, fair resource-sharing and the recognition of the States as equal partners.

Practice Questions

• Q1. Which Article gives the Centre residuary powers? Answer: Article 248.
• Q2. Which Article provides for President's Rule? Answer: Article 356.
• Q3. Which fundamental rights cannot be suspended during an Emergency? Answer: Articles 20 and 21.
• Q4. Which case restricted the misuse of Article 356? Answer: S. R. Bommai v. Union of India (1994).

Read it together with our notes on Union Executive and fiscal policy.

Quick Revision

• Union List 98, State List 59, Concurrent List 52; residuary with Parliament (Article 248).
• Article 249: Rajya Sabha resolution; Article 252: States' request; Article 253: treaties.
• National Emergency 352; President's Rule 356 (max 3 years); Financial Emergency 360 (never used).
• Articles 20 and 21 are never suspended; 44th Amendment safeguards.

Frequently Asked Questions (FAQ)

How many subjects are in the Union, State and Concurrent lists?

The Union List has 98 subjects, the State List has 59 and the Concurrent List has 52.

Who has the residuary powers in India?

Parliament has the residuary powers under Article 248.

When can Parliament legislate on a State subject?

It can do so under Article 249 (Rajya Sabha resolution), Article 250 (Emergency), Article 252 (States' request), Article 253 (treaties) and Article 356.

What is the Inter-State Council?

It is a body under Article 263, set up in 1990, to discuss matters of common interest between the Centre and the States.

What do the Finance Commission recommendations cover?

The Finance Commission recommends the sharing of central taxes between the Centre and the States and the principles of grants-in-aid.

On what grounds can a National Emergency be declared?

It can be declared on the ground of war, external aggression or armed rebellion.

Which fundamental rights cannot be suspended during an Emergency?

The rights under Article 20 and Article 21 cannot be suspended.

What is President's Rule?

It is the takeover of a State's government by the Centre under Article 356 when the constitutional machinery fails.

What is the maximum duration of President's Rule?

The maximum duration is three years, with extension beyond one year only under specific conditions.

Which case limited the misuse of Article 356?

The S. R. Bommai case (1994) limited its misuse and made it subject to judicial review.

Has a Financial Emergency ever been declared in India?

No. A Financial Emergency under Article 360 has never been declared.

Which provisions need ratification by half of the States for amendment?

Federal features such as the election of the President, the distribution of legislative powers and Article 368 need ratification by half of the States.