Centre-State Relations & Inter-State Relations

India is a federal state with a strong unitary bias. The Constitution meticulously distributes powers between the Centre and States through three lists, financial transfers, and administrative directives. Mastering Arts 245–293 — legislative, administrative and financial relations — along with the mechanisms for inter-state cooperation (Art. 262–263, Zonal Councils) is indispensable for GS-II Polity.

UPSC Prelims · Mains GS-II Laxmikanth Ch. 14–16 ~22 min read Arts 245–293 7th Schedule · Finance Commission

Conceptual Clarity — Indian Federalism: Quasi-Federal with Unitary Bias

India is described as a "Union of States" (Art. 1) — not a federation. Dr. Ambedkar called it "federal in structure, unitary in spirit." The Constitution distributes powers through three lists (7th Schedule), yet gives Parliament power to encroach on State subjects under five exceptional circumstances. The Sarkaria Commission (1983–87) and Punchhi Commission (2007–10) examined Centre-State relations and recommended greater autonomy for states while preserving national unity.

  • Federalism features: Written constitution, dual polity, division of powers, independent judiciary, bicameralism.
  • Unitary features: Single citizenship, unified judiciary, All India Services, Parliament's power to alter state boundaries, Emergency provisions, residuary powers with Centre.
  • Key principle: In conflict between Central and State law on Concurrent List — Central law prevails (Art. 254), subject to Presidential assent exception.

Part A: Legislative Relations (Arts 245–255)

1. Territorial Extent of Laws (Art. 245)

Art. 245 defines the geographic scope of legislative power:

  • Parliament: May make laws for the whole or any part of the territory of India — including Union Territories and areas not included in any state.
  • State Legislature: May make laws only for the whole or any part of the state — its writ does not run beyond state boundaries.
  • Extra-territorial legislation: Parliament can legislate with extra-territorial operation (i.e., laws affecting Indian citizens or their property/actions abroad). State legislatures generally cannot, unless there is a sufficient territorial nexus with the state.
Art. 245(2): No law made by Parliament shall be deemed invalid on the ground that it has extra-territorial operation. This gives Parliament very wide reach — e.g., laws on Indian ships on high seas, Indian citizens abroad.

2. Distribution of Legislative Powers — Art. 246 & 7th Schedule

Art. 246 read with the 7th Schedule distributes legislative subjects into three lists:

ListScheduleSubjectsWho LegislatesExamples
Union List (List I)7th Schedule97 subjects (originally 97; now reduced due to amendments)Parliament exclusively (Art. 246(1))Defence, Foreign affairs, Atomic energy, Railways, Banking, Insurance, Currency, Income tax, Corporation tax, Customs
State List (List II)7th Schedule66 subjects (originally 66)State Legislature exclusively (Art. 246(3)) — subject to Parliament's special powersPublic order, Police, Public health, Agriculture, Land, Local government, State taxes (land revenue, entertainment tax pre-GST)
Concurrent List (List III)7th Schedule47 subjects (originally 47)Both Parliament and State Legislature (Art. 246(2)) — Parliament prevails in repugnancyCriminal law, Criminal procedure, Marriage, Bankruptcy, Education (after 42nd Amdt), Forests (after 42nd Amdt), Population control, Trade unions, Labour welfare

Residuary Powers (Art. 248)

Subjects not enumerated in any of the three lists vest in Parliament exclusively. Parliament has residuary power to make laws on such subjects. Example: cyber crimes, space law, computer networks (not specifically listed when the Constitution was drafted).

UPSC Trap: Education and Forests were originally in the State List. The 42nd Amendment 1976 transferred them to the Concurrent List. GST has effectively subsumed many State List items. The current count of subjects in each list varies across editions — focus on the original numbers: 97 / 66 / 47.
7th Schedule — Three Lists & Parliament's Special Powers to Encroach UNION LIST (List I) 97 subjects Parliament EXCLUSIVELY Defence · Banking · Railways Foreign Affairs · Currency CONCURRENT LIST (List III) 47 subjects Both — Parliament prevails Education · Forests · Labour Criminal Law · Marriage STATE LIST (List II) 66 subjects State Legislature exclusively Police · Public Health · Land Agriculture · Local Govt Residuary Powers (Art. 248) → Parliament (e.g., cyber crimes) Repugnancy (Art. 254) — Concurrent List conflict: Central law prevails · State law void to extent of inconsistency Parliament encroaches on State List: Art.249 (RS resolution) · Art.250 (National Emergency) · Art.252 (2+ States request) · Art.253 (International treaty) · Art.356 (President's Rule) State List is NOT inviolable — Centre can encroach under five exceptional circumstances
Fig 14.1 — 7th Schedule: Three Lists, Residuary Powers, Repugnancy Rule, and Parliament's five powers to legislate on State subjects

3. Parliament's Power to Legislate on State Subjects

Under normal circumstances, Parliament cannot make laws on State List subjects. However, five special provisions allow Parliament to encroach on the State List:

ArticleConditionRequirementDuration
Art. 249National interest — Parliament to legislate on State List subjectRajya Sabha passes resolution by 2/3 majority of members present and voting; remains in force for 1 year (renewable)1 year at a time (renewable by RS); ceases 6 months after resolution lapses
Art. 250Proclamation of National Emergency (Art. 352) in forceNo special resolution needed — Parliament automatically gets power to legislate on State ListCeases 6 months after Emergency ends
Art. 252Two or more state legislatures pass resolutions requesting Parliament to legislateResolution by state legislatures (simple majority); Parliament may then legislate for those consenting states only; other states can adopt the law laterNo fixed limit; can be amended/repealed only by Parliament (not state legislature once adopted)
Art. 253Implementation of international treaties, agreements or conventionsNo concurrence of states required — Parliament can legislate on any subject including State List to implement treaty obligationsNo fixed limit
Art. 356President's Rule proclaimed in a stateParliament can legislate for the state under President's Rule; state legislature's powers exercised by ParliamentDuration of President's Rule
Key distinction — Art. 249 vs Art. 252: Art. 249 requires Rajya Sabha resolution (RS represents states — safeguard against central overreach). Art. 252 requires the states themselves to request Parliament. Art. 253 requires neither — India's treaty obligations override state autonomy in the subject matter.

4. Repugnancy — Art. 254

When both Parliament and a State Legislature have legislated on the same Concurrent List subject, a conflict may arise. Art. 254 resolves this:

4.1 General Rule

  • If a State law is repugnant (inconsistent) to a Central law on a Concurrent List subject: the Central law prevails.
  • The State law is void to the extent of the inconsistency — not entirely void, only the conflicting portion.

4.2 Presidential Assent Exception (Art. 254(2))

  • If a State law on a Concurrent List subject has been reserved by the Governor and received Presidential assent — the State law prevails in that state over the Central law, notwithstanding the repugnancy.
  • BUT: Parliament can subsequently enact a law that overrides even such an assented State law. Parliament always has the last word.
  • This provision gives states a window to pass innovative legislation — e.g., Kerala Rent Control Act, certain state labour laws.
UPSC Trap — Art. 254 applies only to Concurrent List. If Parliament legislates on a Union List subject, there is no question of repugnancy — states simply cannot legislate on Union List items. Art. 254 applies only when both Parliament and a state have concurrent power.

4.3 Governor's Role — Reserving Bills for Presidential Assent (Art. 200/201)

  • The Governor may reserve certain State bills for the consideration of the President — particularly bills that encroach on the Union List, impose restrictions on trade, or are repugnant to a Central law.
  • The President may give or withhold assent, or return the bill for reconsideration.
  • If the state legislature passes the bill again (with or without amendments), the President is not bound to give assent — unlike the President's position with Parliamentary bills after reconsideration.

Part B: Administrative Relations (Arts 256–263)

5. Direction by Centre to States (Art. 256)

Art. 256 establishes a key supervisory power of the Centre over state executive machinery:

  • The executive power of every state shall be exercised so as to ensure compliance with the laws of Parliament and any existing laws applicable to the state.
  • The Union may give directions to states as may appear to the Government of India to be necessary for that purpose.
  • Failure to comply with such directions can be a ground for imposition of President's Rule under Art. 365.

6. Art. 257 — State Not to Impede Union's Executive Power

  • The executive power of every state shall be exercised so as not to impede or prejudice the exercise of the executive power of the Union.
  • The Union may give directions to states regarding:
    • Construction and maintenance of means of communication declared to be of national or military importance.
    • Measures to be taken for the protection of railways within the state.
  • The cost of complying with such directions is borne by the Union (if it imposes extra burden on the state).
Art. 258 — Delegation of Union Powers to States: The President may, with the consent of the state government, entrust to the state (or its officers) functions in relation to any matter to which the executive power of the Union extends. This allows cooperative federalism without formal legislative changes.
ArticleSubjectKey Provision
Art. 256Compliance with Central lawsState executive power must ensure compliance; Centre can give directions
Art. 257Not impeding Union powerState must not obstruct Union; Centre directs on communications/railways
Art. 257ADeployment of armed forces(Inserted by 42nd Amdt, repealed by 44th Amdt 1978) — Centre could deploy forces in a state to deal with grave situation of law and order
Art. 258Delegation to statesCentre can entrust functions to state with consent
Art. 258ADelegation to CentreGovernor of a state may, with President's consent, entrust state functions to Centre
Art. 265No tax without lawTaxes levied only by authority of law — protects states and individuals

7. All India Services (Art. 312)

The All India Services are a unique feature of Indian federalism — officers serve both the Centre and the states, acting as an integrative mechanism.

7.1 Constitutional Basis

  • Art. 312 enables Parliament to create new All India Services common to the Union and the states if the Rajya Sabha passes a resolution by 2/3 majority declaring it necessary or expedient in the national interest.
  • Currently three All India Services: IAS (Indian Administrative Service), IPS (Indian Police Service), and IFoS (Indian Forest Service — created 1966).

7.2 Key Features

  • Recruited by Centre: Through UPSC-conducted Civil Services Examination.
  • Cadre allocation: Officers are allocated to state cadres but can be deputed to Central government.
  • Service conditions: Governed by Central rules — states cannot unilaterally alter service conditions of AIS officers posted in their state.
  • Control: Disciplinary control is shared — state government for minor penalties; Central government for major penalties and final authority.
  • Significance: Ensures uniform standards of administration; preserves national integration; state cannot capture administrative machinery; officers bring Central perspective to state administration.
Tension: States often complain that AIS officers are loyal to the Centre rather than the state, undermining state autonomy. Sarkaria Commission recommended that states be consulted in cadre allocations. A recurring debate in Centre-State relations.

8. Inter-State Council (Art. 263)

Art. 263 empowers the President to establish an Inter-State Council if it appears to the President that the public interest would be served. Once established, it:

  • Inquires into and advises upon disputes which may have arisen between states.
  • Investigates and discusses subjects of common interest to some or all states or to the Union and one or more states.
  • Makes recommendations upon any such subject and in particular recommendations for the better coordination of policy and action.

8.1 Key Facts

  • Established in 1990 on the recommendation of the Sarkaria Commission (which specifically recommended a permanent Inter-State Council).
  • Chaired by the Prime Minister of India.
  • Members include: Chief Ministers of all states and UTs with legislature; Lt. Governors of other UTs; 6 Cabinet Ministers of the Union nominated by PM.
  • Advisory in nature — its recommendations are not binding. However, they carry significant political weight.
  • A Standing Committee of the ISC also exists for continuous consultation and processing of matters before the ISC itself meets.
Sarkaria Commission (1983–87): Set up to examine Centre-State relations; submitted report 1988. Key recommendations: restoring balance between Centre and States; Art. 356 to be used sparingly; ISC to be activated; governors to be persons of eminence; greater financial devolution. Many recommendations still not implemented. Punchhi Commission (2007) revisited these themes.

Part C: Financial Relations (Arts 264–293)

9. Constitutional Framework

Arts 264–293 deal with the financial relations between the Centre and the States. The basic principle is that the Centre controls most major taxes but must share revenue with states, who have limited tax-raising capacity but significant expenditure responsibilities.

Consolidated Funds (Art. 266)

  • Consolidated Fund of India: All revenues received by the Union, all loans raised by the Union, and all money received in repayment of loans constitute this fund. No money can be appropriated from this fund except through Parliamentary appropriation.
  • Consolidated Fund of a State: Corresponding state-level fund for state revenues and borrowings. Subject to the control of the state legislature.

Contingency Funds (Art. 267)

  • Parliament and State Legislatures can establish Contingency Funds to enable advances for unforeseen expenditure, subject to subsequent parliamentary/legislative authorization.

10. Distribution of Tax Revenues

CategoryLevied byCollected byRetained byExamples
Category 1Centre (Union List)CentreShared between Centre & States (Art. 270 — divisible pool)Income tax (non-corporate), Corporation tax, GST (CGST portion shared via Finance Commission formula)
Category 2Centre (Union List)States (where collected)States keep entirelyStamp duties (Art. 268), Excise duties on medical and toilet preparations (Art. 268)
Category 3CentreCentreDistributed to states only (surcharges & cesses)Surcharge on income tax (not part of divisible pool); cesses like Education Cess, Swachh Bharat Cess — states receive none of these
Category 4States (State List)StatesStates keep entirelyLand revenue, State excise (liquor), Professional tax (subject to Art. 276 limit), Entry tax, Entertainment tax (pre-GST), Agricultural income tax

10.1 Grants-in-Aid (Art. 275)

  • Parliament may provide grants-in-aid to states that are in need of assistance from the Consolidated Fund of India.
  • Different amounts may be fixed for different states based on need.
  • Also includes capital grants for development schemes and specific-purpose grants.
  • States like Bihar, Odisha, MP, UP receive significant Art. 275 grants due to fiscal incapacity.

10.2 Discretionary Grants (Art. 282)

  • The Union or a State may make any grants for any public purpose notwithstanding that the purpose is not one with respect to which Parliament or the State Legislature may make laws.
  • This gives the Centre wide discretionary power to fund state schemes — used for Centrally Sponsored Schemes (CSS) like PM KISAN, MGNREGA component, etc.
  • States resent Art. 282 grants because they come with Central conditionalities — tension point in Centre-State financial relations.
UPSC Key — Surcharges and Cesses NOT shared with states: Art. 271 permits Parliament to impose surcharges on Union taxes — these accrue to the Union alone and are NOT part of the divisible pool shared with states. States have consistently demanded abolition/reduction of cesses and surcharges. The 15th FC noted that cesses and surcharges have increased from ~3% to ~20% of gross tax revenue, effectively reducing states' share of the divisible pool.
Financial Relations — Flow of Tax Revenues to States Centre Collects Income Tax, Corp Tax GST, Customs, Excise Divisible Pool Gross Tax Revenue minus cesses & surcharges Finance Commission (Art. 280) Recommends Distribution Vertical Devolution 41% of divisible pool → States (15th FC recommendation; was 42% in 14th FC) Horizontal Devolution Among states: Population (15%), Area (15%) Income Distance (45%), Forest cover (10%), Demo. perf. (12.5%), Tax effort (2.5%) Additional: Grants-in-Aid (Art. 275) + Discretionary Grants (Art. 282) Art. 275 — needs-based grants · Art. 282 — Centrally Sponsored Schemes (with conditionalities)
Fig 14.2 — Financial Relations: Flow of tax revenues from Centre to States via divisible pool, Finance Commission recommendations, vertical and horizontal devolution

11. Finance Commission (Art. 280)

11.1 Constitutional Basis

  • Art. 280 requires the President to constitute a Finance Commission every 5 years (or earlier if necessary).
  • Composition: Chairman + 4 other members (qualifications prescribed by Parliament).
  • A quasi-judicial body — makes recommendations, not binding decisions. But by convention, Centre accepts FC recommendations.

11.2 Functions (Terms of Reference)

  • Recommend distribution of net proceeds of taxes between Centre and States (vertical devolution).
  • Recommend allocation among states (horizontal devolution) of respective shares of such proceeds.
  • Recommend grants-in-aid to states in need (Art. 275).
  • Any other matter referred by the President in the interests of sound finance.
  • Recommend measures to augment the Consolidated Fund of a state to supplement the resources of panchayats and municipalities (after 73rd/74th Amendments).

11.3 Key Finance Commission Numbers

FCPeriodStates' Share (Vertical)Key Feature
11th FC2000–0529.5%First to recommend local body grants
12th FC2005–1030.5%Recommended debt relief to fiscally responsible states
13th FC2010–1532%Recommended grants to improve state fiscal position
14th FC2015–2042% (highest ever)Y.V. Reddy Commission; large jump; reduced conditionalities on grants
15th FC2021–2641%N.K. Singh Commission; 1% reduction due to J&K bifurcation; introduced performance-based criteria
Horizontal Devolution Criteria (15th FC): Income distance 45% + Population (2011 census) 15% + Area 15% + Forest and ecology 10% + Demographic performance (TFR control) 12.5% + Tax and fiscal efforts 2.5%. Note: 14th FC used 1971 population for devolution; 15th FC shifted to 2011 — southern states with better demographic performance received compensation through new "demographic performance" criterion.

12. GST Council (Art. 279A)

12.1 Constitutional Basis

  • Inserted by the 101st Constitutional Amendment Act, 2016 — which introduced the Goods and Services Tax (GST) regime.
  • Art. 279A provides for the constitution of the GST Council as a joint forum of the Centre and states to make recommendations on GST.

12.2 Composition

  • Chairperson: Union Finance Minister.
  • Members: Union Minister of State for Finance; Finance Minister (or equivalent) of every state and UT with legislature.

12.3 Voting and Decision-Making

  • Centre's vote: Weightage of 1/3 of total votes cast.
  • States' combined vote: Weightage of 2/3 of total votes cast.
  • Decision threshold: Requires 3/4 majority (75%) of weighted votes — meaning Centre + significant majority of states must agree. Neither Centre alone nor states alone can pass a resolution.
  • This structure embodies cooperative federalism — Centre and states have shared authority over GST rates, exemptions, etc.

12.4 Functions

  • Recommend taxes, cesses and surcharges to be subsumed in GST.
  • Recommend goods and services exempted from GST.
  • Recommend GST rates, including floor rates and band of rates.
  • Recommend special provisions for specified states (Jammu & Kashmir, NE states, hilly states).
  • Recommend date from which GST shall be levied on petroleum, crude, diesel, petrol, natural gas, ATF.
SC on GST Council (Union of India v. Mohit Minerals, 2022): The Supreme Court held that GST Council recommendations are not binding on Centre and States — they are merely recommendatory. Both Centre and States have equal power to legislate on GST. This was a landmark ruling strengthening cooperative federalism and state autonomy in GST matters.

Part D: Inter-State Relations (Arts 261–263)

13. Full Faith and Credit Clause (Art. 261)

  • Art. 261(1): Full faith and credit shall be given throughout India to public acts, records and judicial proceedings of the Union and of every state.
  • Art. 261(2): The manner in which and conditions under which such acts, records and proceedings shall be proved and the effect thereof determined shall be as Parliament may by law provide.
  • Art. 261(3): Final judgments or orders delivered or passed by civil courts in any part of India shall be capable of execution anywhere within India according to law.
  • This provision ensures that a judgment from a court in Maharashtra can be executed in Tamil Nadu — critical for commercial relations and individual rights across states.

14. Inter-State Water Disputes (Art. 262)

  • Art. 262(1): Parliament may by law provide for the adjudication of any dispute or complaint with respect to the use, distribution or control of waters of, or in, any inter-state river or river valley.
  • Art. 262(2): Parliament may by law provide that neither the Supreme Court nor any other court shall exercise jurisdiction in respect of any such dispute or complaint.
  • This is a significant ouster of Supreme Court's jurisdiction — one of the few areas where Parliament can exclude the SC.

Inter-State River Water Disputes Act, 1956 (ISRWDA)

  • Passed under Art. 262 — provides for tribunal adjudication of inter-state water disputes.
  • Key tribunals: Cauvery Water Disputes Tribunal (1990; final award 2007; Supreme Court modified 2018); Krishna Water Disputes Tribunal (1969; 2nd tribunal 2004); Ravi-Beas Water Tribunal (1986); Mahanadi Tribunal (2018); Godavari, Narmada Tribunals; Vansadhara Tribunal.
  • Awards of tribunals are final and binding; published in the Gazette of India; given the same force as Supreme Court decrees.
  • Criticism: Tribunals take too long (Cauvery tribunal took ~30 years); disputes recur even after awards; no permanent mechanism for monitoring compliance.
UPSC Important — SC jurisdiction excluded: The Inter-State River Water Disputes Act excludes SC jurisdiction. However, the SC has held that it can still exercise writ jurisdiction under Art. 32 if there are constitutional violations, and can review whether the tribunal has exceeded its jurisdiction. The SC cannot adjudicate the merits of the water dispute itself.
Inter-State Relations — Four Mechanisms INTER-STATE RELATIONS Inter-State Council Art. 263 · Est. 1990 Chaired by PM · Advisory Zonal Councils 5 zones · SRA 1956 Chaired by Union Home Min. Water Tribunals Art. 262 · ISRWDA 1956 SC jurisdiction excluded Full Faith & Credit Art. 261 · Judicial orders enforceable across India
Fig 14.3 — Inter-State Relations: Four key mechanisms — Art. 261 (Full Faith & Credit), Art. 262 (Water Tribunals), Art. 263 (Inter-State Council), and statutory Zonal Councils

14. Zonal Councils & North-Eastern Council

14.1 Zonal Councils — Nature and Origin

  • Extra-constitutional bodies — not mentioned in the Constitution.
  • Created under Part III of the States Reorganisation Act, 1956 — a parliamentary statute, not a constitutional amendment.
  • Established to promote cooperation and coordination among states within a zone and between zonal states and the Centre.

14.2 Five Zonal Councils

ZoneStates IncludedHeadquarters
Northern Zonal CouncilHaryana, Himachal Pradesh, Jammu & Kashmir, Punjab, Rajasthan, Delhi, Chandigarh, Ladakh (UTs)New Delhi
Central Zonal CouncilChhattisgarh, Uttarakhand, Uttar Pradesh, Madhya PradeshAllahabad (Prayagraj)
Eastern Zonal CouncilBihar, Jharkhand, Odisha, West BengalKolkata
Western Zonal CouncilGoa, Gujarat, Maharashtra, Dadra & Nagar Haveli, Daman & DiuMumbai
Southern Zonal CouncilAndhra Pradesh, Karnataka, Kerala, Tamil Nadu, Telangana, PuducherryChennai

14.3 Composition and Functions

  • Chairman: Union Home Minister (chairs all five Zonal Councils — common chairmanship ensures national integration perspective).
  • Vice-Chairman: Chief Ministers of states in the zone take turns on a rotation basis.
  • Members: Chief Ministers + 2 other ministers from each state; Lt. Governor/Administrator of UTs in zone + 2 ministers.
  • Functions: (i) Achieve emotional integration; (ii) help arrest development of interstate disputes; (iii) enable Centre and States to cooperate; (iv) rekindle the cooperative spirit; (v) plan and execute joint projects.
  • Nature: Purely advisory — recommendations not binding. But provide an important political forum for dispute resolution before they become formal legal disputes.

14.4 North-Eastern Council

  • A special statutory body for the development and coordination of the North-Eastern region.
  • Created by the North-Eastern Council Act, 1971.
  • Covers 8 states: Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim (added 2002), and Tripura.
  • Unlike Zonal Councils (advisory only), NEC has a broader developmental mandate — prepares regional development plans, coordinates policy, reviews implementation.
  • Chaired by the Union Home Minister (same as Zonal Councils); HQ at Shillong.
NE Council vs Zonal Council: NE states are NOT part of any Zonal Council — they have their own separate NEC. The NEC was created because the special challenges of the North-East (insurgency, underdevelopment, border issues, diverse ethnic groups) required a dedicated body beyond the standard zonal framework.

15. Prelims PYQs

Prelims 2023

With reference to the 7th Schedule of the Indian Constitution, which of the following statements is/are correct? (1) Union List has 100 subjects. (2) State List has 66 subjects. (3) Concurrent List has 52 subjects.
Answer: (2) only — State List originally has 66 subjects; Union List has 97 (not 100); Concurrent List has 47 (not 52). These original numbers are most tested.

Prelims 2022

Under which Article of the Constitution can the Rajya Sabha, by a resolution supported by not less than two-thirds of its members present and voting, empower Parliament to legislate on a State subject in the national interest?
Answer: Article 249

Prelims 2021

Consider the following regarding the Finance Commission: (1) It is a permanent constitutional body. (2) It makes binding recommendations on tax devolution. (3) 15th FC recommended 41% devolution to states.
Answer: (3) only — FC is not permanent (constituted every 5 years); its recommendations are advisory (not binding), though conventionally accepted; 41% is correct for 15th FC.

Prelims 2020

Which of the following statements about the Zonal Councils is/are correct? (1) They are statutory bodies. (2) They are chaired by the President of India. (3) They include the North-Eastern states.
Answer: (1) only — Zonal Councils are statutory (States Reorganisation Act 1956), not constitutional; chaired by the Union Home Minister (not President); NE states have their own NEC, not part of any Zonal Council.

Prelims 2019

Under Article 262 of the Constitution, regarding inter-state water disputes: Parliament may exclude the jurisdiction of which court?
Answer: The Supreme Court — Art. 262(2) specifically allows Parliament to exclude SC jurisdiction over inter-state water disputes, which it has done through ISRWDA 1956.

Prelims 2018

The GST Council was established under which Constitutional provision and by which amendment?
Answer: Art. 279A, inserted by the 101st Constitutional Amendment Act, 2016. Voting: Centre = 1/3, States combined = 2/3; decisions require 3/4 majority.

Prelims 2017

The Sarkaria Commission was set up to examine: (A) Centre-State relations (B) Electoral reforms (C) Constitutional amendments (D) Judicial reforms.
Answer: (A) — Sarkaria Commission (1983–87) was set up specifically to examine Centre-State relations; submitted report in 1988 with 247 recommendations.

16. Mains PYQs

Mains GS-II 2023

"The GST Council's functioning exemplifies cooperative federalism in India." Critically examine with reference to voting structure and the Supreme Court's 2022 ruling. (250 words)

Hint: Art. 279A structure (1/3 Centre + 2/3 States = 3/4 threshold); spirit of cooperative federalism — shared decision-making; Mohit Minerals 2022 — SC held recommendations advisory; implication: states can deviate; tension — Centre dominated initial GST decisions; example of cess on petroleum; state autonomy vs. uniformity; GST Council as model for other cooperative bodies; comparison with Inter-State Council; way forward: stronger dispute resolution within GST Council.

Mains GS-II 2021

Examine the constitutional provisions relating to legislative relations between the Centre and States. How does the doctrine of repugnancy under Art. 254 balance Centre-State power? (250 words)

Hint: Arts 245–246, 7th Schedule (3 lists), Art. 248 (residuary); Art. 254 repugnancy — Central law prevails; Art. 254(2) exception — Presidential assent saves State law; Parliament's 5 exceptional powers (Arts 249, 250, 252, 253, 356); 42nd Amendment transferred Education and Forests to Concurrent List; recent examples of repugnancy — agricultural laws 2020–21 controversy; Art. 254 balance — states have first shot at concurrent legislation but Centre can always override; Presidential assent gives states some protection.

Mains GS-II 2020

Inter-state water disputes have been a persistent source of conflict in Indian federalism. Critically evaluate the existing mechanisms under Art. 262. (250 words)

Hint: Art. 262 and ISRWDA 1956; SC jurisdiction excluded; major disputes — Cauvery (TN-Karnataka-Kerala-Puducherry), Krishna (AP-Karnataka-Maharashtra), Ravi-Beas (Punjab-Haryana-Rajasthan), Mahanadi (Odisha-Chhattisgarh); criticisms — tribunals take decades; no permanent implementation mechanism; political interference; awards not complied with; SC stepping in through Art. 32 despite exclusion; reform suggestions — standing river board, fixed timelines (ISRWDA 2002 amendment), Punchhi Commission recommendations; cooperative water governance.

Mains GS-II 2019

"The Finance Commission is the key institution ensuring fiscal federalism in India." Discuss the role and limitations of the Finance Commission in the context of Centre-State financial relations. (250 words)

Hint: Art. 280; constitutional basis; functions — vertical and horizontal devolution; 15th FC: 41% devolution, 2011 census, demographic performance criterion; limitations — FC recommendations not binding; surcharges and cesses erode divisible pool (risen to ~20%); CSS with conditionalities undermine state autonomy; Art. 282 grants; overlapping with Planning Commission (abolished 2014, replaced by NITI Aayog — non-constitutional); demand for higher devolution from states; positive development: 14th FC increased devolution to 42%; GST compensation mechanism.

Mains GS-II Expected 2026

Analyse the tensions in Centre-State relations in India with reference to the recommendations of the Sarkaria Commission and their present-day relevance. (250 words)

Hint: Sarkaria Commission context (1983–87) — set up after Emergency excess, state demands for autonomy; 247 recommendations; key recs: ISC to be permanent and active (done 1990); Art. 356 sparingly (partial — Bommai case 1994); governors to be eminence (not implemented well); AIS continuation; greater financial devolution; Punchhi Commission 2007–10 — further recommendations; current tensions: CAA-NRC (states refusing implementation), farm laws withdrawal, GST compensation dispute, Governor-CM conflicts in opposition states; cooperative vs competitive federalism — NITI Aayog model; way forward: genuine consultative mechanisms.

17. 15-Minute Revision Box

Must-Remember — Centre-State & Inter-State Relations

Three Lists — Original Numbers:
  • Union List (List I): 97 subjects — Parliament exclusively
  • Concurrent List (List III): 47 subjects — Both; Centre prevails
  • State List (List II): 66 subjects — States exclusively
  • Residuary (Art. 248): Parliament only
Parliament Encroaches on State List:
  • Art. 249 — RS resolution (2/3 majority), national interest, 1 year at a time
  • Art. 250 — National Emergency (automatic)
  • Art. 252 — Two+ states request Parliament
  • Art. 253 — International treaty (no state consent needed)
  • Art. 356 — President's Rule
Finance Commission Key Numbers:
  • 14th FC (2015–20): 42% to states — highest ever
  • 15th FC (2021–26): 41% to states
  • Constituted every 5 years under Art. 280
  • Advisory (not binding) — but conventionally accepted
Inter-State Mechanisms:
  • Art. 261 — Full Faith & Credit; court orders enforceable across India
  • Art. 262 — Inter-State Water Disputes; SC jurisdiction excluded; ISRWDA 1956
  • Art. 263 — Inter-State Council; President constitutes; PM chairs; 1990
Zonal Councils:
  • Statutory — States Reorganisation Act 1956 (not constitutional)
  • 5 zones: North, South, East, West, Central
  • Chaired by Union Home Minister (all five)
  • Advisory in nature only
  • NE states — separate NEC (North-Eastern Council Act 1971); 8 states
GST Council (Art. 279A):
  • 101st Amendment 2016
  • Centre vote = 1/3; States combined = 2/3
  • Decision threshold = 3/4 majority
  • SC in Mohit Minerals 2022 — recommendations advisory, not binding
5 UPSC traps: (1) Zonal Councils are statutory (SRA 1956), NOT constitutional. (2) FC recommendations are advisory, not binding. (3) 14th FC gave 42% (highest), 15th FC gave 41%. (4) NE states are NOT part of any Zonal Council — they have NEC. (5) SC jurisdiction can be excluded for water disputes (Art. 262) — this is one of very few constitutional exclusions of SC jurisdiction.

Frequently Asked Questions

Why is Centre-State Relations important for UPSC 2027?
Centre-State Relations is part of Indian Polity & Constitution (GS Paper 2). It carries high weightage in Prelims (8/15 relevance) and Mains (7/10). Topic 14: Legislative, administrative, financial relations; inter-state
How should I prepare Centre-State Relations for UPSC Prelims?
Focus on factual clarity, PYQs, and Art.246, 7th Schedule, Finance Commission. Read this note once for structure, then revise with MCQ practice and current-affairs linkages for UPSC Prelims 2027.
How is Centre-State Relations asked in UPSC Mains?
Mains questions on Centre-State Relations often need analytical answers linking constitutional/statutory framework with examples. Use headings, diagrams, and recent developments while staying within GS Paper 2 syllabus scope.
What are the most important topics within Centre-State Relations?
Key areas include: Topic 14: Legislative, administrative, financial relations; inter-state. Tags to prioritise: Art.246, 7th Schedule, Finance Commission, Zonal Councils.
How long does it take to complete Centre-State Relations notes?
Estimated reading time is 22 minutes. Allow 2–3 revision cycles and PYQ practice for exam-ready retention before UPSC 2027.
Which books should I refer along with these Centre-State Relations notes?
Pair these notes with standard references for Indian Polity & Constitution (NCERT/Laxmikanth/RS Sharma as applicable), previous year papers, and Mentors Daily test series for integrated Prelims + Mains preparation.