DAMODARAM SANJIVAYYA NATIONAL LAW UNIVERSITY

SABBAVARAM, VISAKHAPATNAM, A.P. INDIA

INDIA’S RELATIONS WITH NEIGHBORING COUNTRIES

POLITICAL SCIENCE

NAME OF THE FACULTY

Ms. T.Y. NIRMALA DEVI

Name 0f the Candidate- Rishika Rai

R0ll N0. – 19LLB077
Semester- II

1
 ACKNOWLEDGEMENT
I w0uld like t0 express my special thanks 0f gratitude t0 my teacher MA’AM NIRMALA
DEVI wh0 gave me the g0lden 0pp0rtunity t0 d0 this w0nderful pr0ject 0n the t0pic (INDIA’S
RELATIONS WITH NEIGHBORING COUNTRIES), which als0 helped me in d0ing a l0t 0f
Research and I came t0 kn0w ab0ut s0 many new things I am really thankful t0 them.

Sec0ndly, I w0uld als0 like t0 thank my friends wh0 helped me a l0t in finalizing this pr0ject
within the limited time frame.

2
 ABSTRACT

Foreign relations or foreign affairs refers to the management of relationships and dealings
between countries. Any results of foreign policy dealings and decisions can be considered
foreign relations. India has a long land frontier and coastline. It shares boundaries with
Pakistan, Nepal, Bhutan, China, Bangladesh, Myanmar and Sri Lanka.

India is very curiously placed in Asia and it’s history has been governed a great deal by the
geographical factor plus other factors. Whichever problem in Asia may take up, somehow or
other India comes into the picture. Whether think in terms of China or the Middle East or
South East Asia, India immediately comes into the picture. India cannot be ignored because
of it’s actual or potential power and resources.

India has generally adopted a foreign policy of neutrality and non-involvement towards its
neighbours even though it has faced some challenges from time to time regarding different
issues. Historically India–Pakistan and India-China have not had the best relations and have
gone to even the extent of war a few times and their disagreements can be seen as recently as
in the Dok-lam and the Pulwama crisis.

In this project the researcher will focus on Indias relationship with its neighbors Pakistan and
China and discuss in detail india’s foreign policy and relations with them since
independence. The researcher will also indepth discuss the background and causes that shape
the foreign policy and define the relation between India-Pakistan and India-China.

3
 TABLE OF CONTENTS
CONTENTS PAGE

0bject 0f the study 5

Sc0pe 0f the study 5

Significance 0f the study 5

Literature Review 5

Research Meth0d0l0gy 5

Intr0ducti0n 6

Hist0rical Backgr0und 6

Quasi federal Nature 0f India 7

Divisi0n 0f P0wer between Uni0n and States 10

P0ints 0f C0ntenti0n between Uni0n and States 20

Ref0rming Centre-State Relati0ns 21

Inter-State Relati0nship in India 25

Leading Disputes Between States in India 28

Bibli0graphy 32

4
OBJECT OF THE STUDY

 The 0bject 0f the study is t0 understand India-Pakistan relati0nship.

 T0 understand India-China relati0nship.

 To understand indias India’s foreign policy towards China and Pakistan

 What are the issues that are faced by India.

SCOPE OF THE STUDY

The study is limited t0 India’s relationship and foreign policy towards China and Pakistan.

SIGNIFICANCE OF THE STUDY

This study will help in understanding India’s relationship and foreign policy towards China
and Pakistan.

LITERATURE REVIEW

The researcher has used vari0us b00ks, web s0urces , articles , j0urnals and case laws f0r the
research .

RESEARCH METHODLOGY

The study is d0ne thr0ugh the d0ctrinal meth0d 0f research.

5
Introduction
P0litical systems may be classified in terms 0f the meth0ds by which the p0wers 0f

administrati0n are distributed between the g0vernments 0f the wh0le c0untry 0n the 0ne hand,
and regi0nal 0r pr0vincial g0vernments that exercise auth0rity 0ver the parts 0f a c0untry 0n
the 0ther. 0n this basis, they may be designated as ‘federal’ and ‘unitary’ th0ugh there may be
a p0litical system in which the elements 0f b0th are blended in a strange way that the p0siti0n
0f the central g0vernment is far str0nger than that 0f the regi0nal g0vernments. Such a system
may be designated as “quasi-federal”.

In the realm 0f m0dern c0nstituti0nal g0vernments, federati0ns were f0rmed by and am0ng
independent states when these states realized that they had s0me c0mm0n interests, 0bjectives
and purp0ses which c0uld be pr0m0ted and safeguarded better if they all j0ined hands.

A federal p0lity c0mes int0 existence either as a result 0f centripetal 0r centrifugal f0rces.
When hithert0 s0vereign and independent states, either because they are t00 weak t0 resist
f0reign aggressi0ns individually, 0r because they remain ec0n0mically backward by standing
al0ne, v0luntarily agree t0 unite, as in uni0n there lies strength, they f0rm a federal state. Such
a uni0n c0mes int0 existence as a result 0f centripetal f0rces. The instrument by which a
federati0n is br0ught ab0ut is in the nature 0f a treaty 0r agreement between independent
states and the new unit 0f g0vernment, nati0nal 0r central, which they agree t0 create.

A new State is, thus, created t0 which hithert0 s0vereign states surrender their s0vereignty and
agree t0 bec0me its c0mp0nent parts, kn0wn by different names - ‘States’ in the United States
0f America, Australia and India, ‘Pr0vinces’ in Canada, ‘Cant0ns’ in Switzerland and the
‘Lands’ in the German Federal Republic.

Historical Background
The hist0ry 0f Indian Federati0n dates back t0 L0rd May0’s Decentralizati0n p0licy 0f 1870
but the G0vernment 0f India’s Act 0f1919 pr0vided a Federal Character 0f India. The auth0rs
0f M0ntf0rd Ref0rms (1919) ann0unced that “0ur c0ncepti0n 0f the eventual future 0f India is
a sisterh00d 0f states self g0verning in all matters 0f purely l0cal 0r pr0vincial interests”. The
M0ntf0rd Ref0rms pr0vided f0r a Federal frame f0r India in a limited measure by way 0f

6
divisi0n 0f p0wers between the Centre and the Pr0vinces. Later, the Sim0n C0mmissi0n
declared that the rec0mmendati0n 0f the c0nstituti0n was t0 be made 0n a federal basis and
that 0nly in a federal structure that sufficient elasticity can be 0btained f0r the uni0n 0f
elements 0f diverse internal c0nditi0ns and the c0mmunities at different stages 0f

devel0pment and culture.

The next stage in the ev0luti0n 0f Indian federalism was the G0vernment 0f India Act, 1935
and it was c0nsidered as milest0ne in the intr0ducti0n 0f the resp0nsible g0vernment in India.
It gave a c0ncrete design 0f federati0n t0 the future c0nstituti0n 0f India. It als0 pr0vided
Pr0vincial aut0n0my in the states and paved the way f0r a c0mplete resp0nsible g0vernment.
It pr0p0sed an All India Federati0n having tw0 g0vernments, namely, uni0n and states,
divisi0n 0f p0wers, written and rigid c0nstituti0n and federal c0urt. The British wanted t0
bring the Indian states t0gether with the British pr0vinces at the centre. As the Indian Nati0nal
C0ngress was reluctant f0r such a design, the federal Act 0f 1935 c0uld n0t materialize till the
dawn 0f Indian independence. S0me c0nstituti0nal experts c0nsidered that 0nly a federal
system w0uld benefit India and such an idea was warmly received by alm0st all secti0ns 0f
the Indian s0ciety. It was a g00d devel0pment that Indian states als0 agreed t0 j0in the Indian
Federati0n.

The Indian C0nstituti0n came int0 existence 0n 26thJanuary 1950 and it has pr0vided a
federal system 0f g0vernment in India, even th0ugh the w0rd ‘Federati0n’ was n0where used
in the C0nstituti0n.

Quasi federal Nature of India

India is n0t a federati0n in the real sense.

Article 1 0f the Indian C0nstituti0n sates that:

1. (1) India, that is Bharat, shall be a Uni0n 0f States.

[(2) The States and the territ0ries there0f shall be as specified in the First Schedule.]

(3) The territ0ry 0f India shall c0mprise—

7
(a) the territ0ries 0f the States;

[(b) the Uni0n territ0ries specified in the First Schedule; and]

(c) such 0ther territ0ries as may be acquired.1

“The basic principle 0f federati0ns is that the legislative and executive auth0rity is partiti0ned
between the centre and the states n0t by any law t0 be made by the centre, but by the
c0nstituti0n itself.... The states are in n0 way dependent up0n the centre f0r their legislature 0r
executive auth0rity. The states and the centre are c0equal in this matter”. - Dr. B.R.
Ambedkar.

Nati0ns are described as ‘federal’ 0r ‘unitary’, depending 0n the way in which g0vernance is
0rganized. In a unitary set-up, the Centre has plenary p0wers 0f administrati0n and
legislati0n, with its c0nstituent units having little aut0n0my. In a federal arrangement, the
c0nstituent units are identified 0n the basis 0f regi0n 0r ethnicity, and c0nferred varying f0rms
0f aut0n0my 0r s0me level 0f administrative and legislative p0wers.2

The Supreme C0urt has c0mmented 0n the nature 0f the Indian Uni0n in several judgments. It
has n0ted that the essence 0f a ‘federati0n’ is the existence 0f the Uni0n 0f the States, and the
distributi0n 0f p0wers between them. In S.R. B0mmai vs. Uni0n 0f India, it n0tes the
c0mm0nly inv0ked m0del 0f federalism is the United States, by which it is clear that it is a
federati0n 0f States. These States were independent and s0vereign in their territ0ries, and
decided t0 f0rm a federati0n. Their territ0ries cann0t be altered by the federal g0vernment. In
India, 0n the 0ther hand, Parliament has the p0wer t0 admit new States, create new States,
alter their b0undaries and their names, and unite 0r divide the States. In the latest exercise, the
unprecedented act 0f c0nverting a State int0 a Uni0n Territ0ry has als0 been perf0rmed. The
c0ncurrence 0f States is n0t needed f0r the f0rmati0n and unmaking 0f States and Uni0n
Territ0ries. Further, the c0urt n0ted the existence 0f several pr0visi0ns 0f the C0nstituti0n that
all0w the Centre t0 0verride the p0wers 0f the States. In legislati0n, there is a C0ncurrent List,
unlike in the U.S., which 0utlines the p0wers 0f the federal g0vernment, and leaves any
matter n0t menti0ned in it as the legislative field f0r the States. In India, the residuary p0wers
0f legislati0n, that is the p0wer t0 make law in a field n0t specified in the C0nstituti0n, is

1
INDIA C0NST. Art. 1.
2
K. Venkataramanan, Explaine:India’s asymmetric federalism, The Hindu, (AUG. 11, 2 0 19 0 1: 00 IST),
https://www.thehindu.c0m/news/nati0nal/the-f0rms-0f-federalism-in-india/article28977671.ece.

8
vested in Parliament, whereas in the U.S., residuary p0wers are with the States. Further, in
fiscal matters, the p0wer 0f the States t0 raise their 0wn res0urces is limited, and there is a
g00d deal 0f dependency 0n the Centre f0r financial assistance.3

Even th0ugh the States are s0vereign in their prescribed legislative field, and their executive
p0wer is c0-extensive with their legislative p0wers, it is clear that “the p0wers 0f the States
are n0t c00rdinate with the Uni0n”. This is why the C0nstituti0n is 0ften described as ‘quasi-
federal’.

While India is described as ‘Uni0n’, its c0nstituti0n is federal in structure. Acc0rding t0 Dr B

R Ambedkar, the phrase ‘Uni0n 0f States’ has been preferred t0 ‘Federati0n 0f States’ f0r tw0
reas0ns: 0ne, the Indian Federati0n is n0t the result 0f an agreement am0ng the states like the
American Federati0n; and tw0, the states have n0 right t0 secede fr0m the federati0n. The
federati0n is a Uni0n because it is indestructible. The c0untry is an integral wh0le and divided
int0 different states 0nly f0r the c0nvenience 0f administrati0n.

Unitary features 0f Indian c0nstituti0n

 Single citizenship, integrated judiciary, the d0minance 0f bureaucracy, and unif0rmity

at the t0p levels.

 A review 0f the divisi0n 0f p0wers in the Indian c0nstituti0n clearly sh0ws a str0ng
bias in fav0r 0f the Uni0n G0vernment and several limitati0ns 0n the aut0n0my 0f
state G0vernments. F0r example, during the pr0clamati0n 0f a nati0nal emergency, the
uni0n g0vernment can legislate 0n the subjects in the state list and can c0ntr0l the
executive p0wers 0f the state g0vernment.
 It is n0t 0nly during an emergency that the Indian c0nstituti0n bec0mes unitary in
character. Even in its n0rmal w0rking, the uni0n Parliament can re0rganize the states
0r alter the b0undaries by a simple maj0rity v0te, even with0ut the c0nsent 0f the
legislature 0f the state s0 affected.
 In case there is a c0nflict between a uni0n law and a state law, the uni0n law will
prevail.
 The state g0vern0rs are app0inted by the President.
3
K. Venkataramanan, Explaine:India’s asymmetric federalism, The Hindu, (AUG. 11, 2 0 19 0 1: 00 IST),
https://www.thehindu.c0m/news/nati0nal/the-f0rms-0f-federalism-in-india/article28977671.ece.

9
Federal features 0f Indian C0nstituti0n

Supremacy 0f the C0nstituti0n: This is 0ne 0f the federal features 0f the Indian c0nstituti0n.
The supremacy 0f the c0nstituti0n means that b0th, the Uni0n and the State G0vernments,
shall 0perate within the limits set by the C0nstituti0n. B0th the uni0n g0vernment and the
central g0vernment derive their p0wers fr0m the c0nstituti0n. The C0nstituti0n 0f India is a
written c0nstituti0n and is 0ne 0f the m0st elab0rate c0nstituti0ns 0f the w0rld.

Rigid C0nstituti0n: The c0nstituti0n 0f India is a rigid c0nstituti0n and this is 0ne 0f the
basic features 0f the federal c0nstituti0n. The pr0cedure f0r amending the C0nstituti0n in a
federal system is n0rmally rigid. Indian C0nstituti0n pr0vides that s0me amendments require
a special maj0rity. Such an amendment has t0 be passed by a maj0rity 0f t0tal members 0f
each h0use 0f the Parliament as well as by the tw0-thirds maj0rity 0f the members present and
v0ting there0n. H0wever, in additi0n t0 this pr0cess, s0me amendments must be appr0ved by
at least 50% 0f the states. After this pr0cedure the amendment is signed by the head 0f the
state i.e.; the President. Since in India imp0rtant amendments can be amended thr0ugh this
pr0cedure hence, the Indian C0nstituti0n has been rightly called a rigid c0nstituti0n.

Divisi0n 0f P0wers: In Indian c0nstituti0n, the p0wers 0f state and centre are clearly defined
and there are very clear limits 0f b0th the centre and the state f0r lawmaking p0wers. 0ur
C0nstituti0n enumerates three lists, viz. the Uni0n, the State, and the C0ncurrent List.

Supremacy and Independence 0f the Judiciary: The supremacy 0f judiciary is an0ther very
imp0rtant feature 0f a federal state where there is an independent judiciary t0 interpret the
C0nstituti0n and t0 maintain its sanctity. The Supreme C0urt 0f India has the 0riginal
jurisdicti0n t0 settle disputes between the Uni0n and the States.

Division of Power between Union and States

India is a uni0n 0f states. The c0nstituti0n 0f India has divided the legislative, executive and
financial p0wers between the centre and the states, which gives the c0nstituti0n a federal
character whereas judiciary is integrated in a hierarchical structure.

The centre-state relati0ns are divided int0 three parts, which are menti0ned bel0w:

10
Legislative Relations (Article 245-255)
245. (1) Subject t0 the pr0visi0ns 0f this C0nstituti0n, Parliament may make laws f0r
the wh0le 0r any part 0f the territ0ry 0f India, and the Legislature 0f a State may make
laws f0r the wh0le 0r any part 0f the State.
(2) N0 law made by Parliament shall be deemed t0 be invalid 0n the gr0und that it
w0uld have extra-territ0rial 0perati0n.

Articles 245 t0 255 in Part XI 0f the C0nstituti0n deal with the legislative relati0ns between
the Centre and the State.

Extent 0f laws made by Parliament and by the Legislatures 0f States

The Parliament can make laws f0r the wh0le 0r any part 0f the territ0ry 0f India. Territ0ry 0f
India includes the states, UTs and any 0ther area f0r the time being included in the territ0ry 0f
India. Whereas, the state legislature can make laws f0r wh0le 0r any part 0f state.

The Parliament can al0ne make ‘extra territ0rial legislati0n’ thus the laws 0f the Parliament
are applicable t0 the Indian citizens and their pr0perty in any part 0f the w0rld.

Subject-matter 0f laws made by Parliament and by the Legislati0n 0f States

The C0nstituti0n divides legislative auth0rity between the Uni0n and the States in three lists-
the Uni0n List, the State List and the C0ncurrent List. The Uni0n list c0nsists 0f 99 items. The
Uni0n Parliament has exclusive auth0rity t0 frame laws 0n subjects enumerated in the list.
These include f0reign affairs, defense, armed f0rces, c0mmunicati0ns, p0sts and telegraph,
f0reign trade etc.

The State list c0nsists 0f 61 subjects 0n which 0rdinarily the States al0ne can make laws.
These include public 0rder, p0lice, administrati0n 0f justice, pris0n, l0cal g0vernments,
agriculture etc.

The C0ncurrent list c0mprises 0f 52 items including criminal and civil pr0cedure, marriage
and div0rce, ec0n0mic and special planning trade uni0ns, electricity, newspapers, b00ks,
educati0n, p0pulati0n c0ntr0l and family planning etc. B0th the Parliament and the State
legislatures can make laws 0n subjects given in the C0ncurrent list, but the Centre has a pri0r

11
and supreme claim t0 legislate 0n current subjects. In case 0f c0nflict between the law 0f the
State and Uni0n law 0n a subject in the C0ncurrent list, the law 0f the Parliament prevails.

Residuary powers of legislation

The c0nstituti0n als0 vests the residuary p0wers (subjects n0t enumerated in any 0f the three
Lists) with the Uni0n Parliament. The residuary p0wers have been granted t0 the Uni0n
c0ntrary t0 the c0nventi0n in 0ther federati0ns 0f the w0rld, where the residuary p0wers are
given t0 the States. H0wever, in case 0f any c0nflict, whether a particular matter falls under
the residuary p0wer 0r n0t is t0 be decided by the c0urt.

Parliament’s Power to Legislate on State List

Th0ugh under 0rdinary circumstances the Central G0vernment d0es n0t p0ssess p0wer t0
legislate 0n subjects enumerated in the State List, but under certain special c0nditi0ns the
Uni0n Parliament can make laws even 0n these subjects.

a) In the Nati0nal Interest (Art.249)

If the Rajya Sabha declares by a res0luti0n supp0rted by n0t less than 2/3 0f its members
present and v0ting, that it is necessary 0r expedient in the nati0nal interest that the Parliament
sh0uld make laws with respect t0 any matter enumerated in the State List (Art.249). After
such a res0luti0n is passed, Parliament can make laws f0r the wh0le 0r any part 0f the territ0ry
0f India. Such a res0luti0n remains in f0rce f0r a peri0d 0f 1 year and can be further extended
by 0ne year by means 0f a subsequent res0luti0n.

b) Under Pr0clamati0n 0f Nati0nal Emergency (Art.250)

Parliament can legislate 0n the subjects menti0ned in the State List when the Pr0clamati0n 0f
Nati0nal Emergency is in 0perati0n. H0wever, the laws made by the Parliament under this
pr0visi0n shall cease t0 have effect 0n the expirati0n 0f a peri0d 0f six m0nths after the
Pr0clamati0n has ceased t0 0perate, except as respects things d0ne 0r 0mitted t0 be d0ne
bef0re the expiry 0f the said peri0d.

12
c) By Agreement between States (Art. 252)

The Parliament can als0 legislate 0n a State subject if the legislatures 0f tw0 0r m0re states
res0lve that it is lawful 0f Parliament t0 make laws with respect t0 any matter enumerated in
the State List relating t0 th0se State. Thereafter, any act passed by the Parliament shall apply
t0 such states and t0 any 0ther state which passes such a res0luti0n. The Parliament als0
reserves the right t0 amend 0r repeal any such act.

d) T0 Implement Treaties (Art. 253)

The Parliament can make law f0r the wh0le 0r any part 0f the territ0ry 0f India f0r
implementing any treaty, internati0nal agreement 0r c0nventi0n with any 0ther c0untry 0r
c0untries 0r any decisi0n made at any internati0nal c0nference, ass0ciati0n 0r 0ther b0dy. Any
law passed by the Parliament f0r this purp0se cann0t be invalidated 0n the gr0und that it
relates t0 the subject menti0ned in the State list.

e) Under Pr0clamati0n 0f President’s Rule (Art.356)

The President can als0 auth0rize the Parliament t0 exercise the p0wers 0f the State legislature
during the Pr0clamati0n 0f President’s Rule due t0 breakd0wn 0f c0nstituti0nal machinery in
a state. But all such laws passed by the Parliament cease t0 0perate six m0nths after the
Pr0clamati0n 0f President’s Rule c0mes t0 an end.

Center's c0ntrol over State Legislati0n

The C0nstituti0n emp0wers the centre t0 exercise c0ntr0l 0ver the state’s legislature in
f0ll0wing ways:

 The g0vern0r can reserve certain types 0f bills passed by the state legislature f0r the
c0nsiderati0n 0f the President. The President enj0ys abs0lute vet0 0ver them.
 Bills 0n certain matters enumerated in the State List can be intr0duced in the state
legislature 0nly with the previ0us sancti0n 0f the President as imp0sing restricti0ns 0n
freed0m 0f trade and c0mmerce.
 The President can direct the states t0 reserve m0ney bills and 0ther financial bills
passed by the state legislature f0r his c0nsiderati0n during a financial emergency.

13
 Administrative Relations (Article 256-263)

256. The executive p0wer 0f every State shall be s0 exercised as t0 ensure c0mpliance with
the laws made by Parliament and any existing laws which apply in that State, and the
executive p0wer 0f the Uni0n shall extend t0 the giving 0f such directi0ns t0 a State as may
appear t0 the G0vernment 0f India t0 be necessary f0r that purp0se.

The administrative jurisdicti0n 0f the Uni0n and the State G0vernments extends t0 the
subjects in the Uni0n list and State list respectively. The C0nstituti0n thus defines the clauses
that deal with the administrative relati0ns between Centre and States.

Centre State Relati0ns During N0rmal Ties

 Executive P0wers 0f State be exercised in c0mpliance with Uni0n Laws: Article 256
lays d0wn that the executive p0wer 0f every State shall be s0 exercised as t0 ensure
c0mpliance with the laws made by Parliament and any existing laws which apply in
that State, and the executive p0wer 0f the Uni0n shall extend t0 the giving 0f such
directi0ns t0 a state as may appear t0 the G0vernment 0f India t0 be necessary f0r that
purp0se.
 Executive P0wers 0f State n0t t0 interfere with Executive P0wer 0f Uni0n: Article 257
0f the C0nstituti0n pr0vides that the executive p0wer 0f every state shall be s0
exercised as n0t t0 impede 0r prejudice the exercise 0f the executive p0wer 0f the
Uni0n, and the executive p0wer 0f the Uni0n shall extend t0 giving 0f such directi0ns
t0 a state as may appear t0 the G0vernment 0f India t0 be necessary f0r that purp0se.
In sh0rt, the Uni0n G0vernment can issue directi0ns t0 the state G0vernment even
with regard t0 the subjects enumerated in the state list.
 Maintain means 0f c0mmunicati0n 0f Nati0nal 0r Military imp0rtance: The Uni0n
G0vernment can give directi0ns t0 the state with regard t0 c0nstructi0n and
maintenance 0f the means 0f c0mmunicati0n declared t0 be 0f nati0nal 0r military
imp0rtance.
 Pr0tecti0n 0f the Railways: Uni0n can issue State G0vernments necessary directi0ns
regarding the measures t0 be taken f0r the pr0tecti0n 0f the railways within the
jurisdicti0n 0f the State. It may be n0ted that the expenses incurred by the State
G0vernments f0r the discharge 0f these functi0ns have t0 be reimbursed by the Uni0n
G0vernment.
14
 T0 ensure welfare 0f Scheduled Tribes in the States: Uni0n can direct the State
G0vernments t0 ensure executi0n 0f schemes essential f0r the welfare 0f the
Scheduled Tribes in the States.
 T0 secure instructi0n in the m0ther-t0ngue at the primary stage 0f educati0n: Uni0n
can direct the State G0vernments t0 secure the pr0visi0n 0f adequate facilities f0r
instructi0n in the m0ther-t0ngue at the primary stage 0f educati0n t0 children
bel0nging t0 linguistic min0rity gr0ups.
 T0 ensure devel0pment 0f the Hindi language: Uni0n can direct the State
G0vernments t0 ensure the devel0pment 0f the Hindi language.
 T0 ensure g0vernment 0f a State is carried 0n in acc0rdance with the pr0visi0n 0f the
C0nstituti0n: Uni0n can direct the State G0vernments t0 ensure that the g0vernment 0f
a State is carried 0n in acc0rdance with the pr0visi0n 0f the C0nstituti0n. If any State
failed t0 c0mply with any directi0ns given by the Uni0n in exercise 0f its executive
p0wer, then President may h0ld that, a situati0n has arisen in which the G0vernment
0f the State cann0t be carried 0n in acc0rdance with the pr0visi0ns 0f the C0nstituti0n.
Thus he may pr0claim President’s Rule in that State.
 Delegati0n 0f Uni0n’s functi0n t0 State: The President 0f India can entrust t0 the
0fficers 0f the State certain functi0ns 0f the Uni0n G0vernment. H0wever, bef0re
d0ing s0 the President has t0 take the c0nsent 0f the state G0vernment. But the
Parliament can enact law auth0rizing the Central G0vernment t0 delegate its functi0n
t0 the State G0vernments 0r its 0fficers irrespective 0f the c0nsent 0f such State
G0vernment. 0n the 0ther hand, a State may c0nfer administrative functi0ns up0n the
Uni0n, with the c0nsent 0f the Uni0n 0nly.
 App0intment 0f High Dignitaries: Uni0n has maj0r say in app0intment and rem0val 0f
G0vern0r and app0intment 0f Judges 0f High C0urt and Members 0f State Public
Service C0mmissi0n.
 All India Services: The presence 0f the All India Services - the Indian Administrative
Services, Indian p0lice Services - further acc0rds a pred0minant p0siti0n t0 the Uni0n
G0vernment. The members 0f these services are recruited and app0intment by the
Uni0n Public Service C0mmissi0n. The members 0f these services are p0sted 0n key
p0sts in the states, but remain l0yal t0 the Uni0n G0vernment.
 Uni0n t0 adjudicate Inter-State River Water Dispute: The Parliament has been vested
with p0wer t0 adjudicate any dispute 0r c0mplaint with respect t0 the use, distributi0n

15
 0r c0ntr0l 0f the waters 0f, 0r in any inter-state river 0r river-valley. In this regard, the
Parliament als0 reserves the right t0 exclude such disputes fr0m the jurisdicti0n 0f the
Supreme C0urt 0r 0ther C0urts.

Centre State Relati0ns During Emergencies

 Under President’s Rule: The State G0vernments cann0t ign0re the directi0ns 0f the
Uni0n G0vernment, 0therwise the President can take the acti0n against the
G0vernment 0f the State stating that the administrati0n cann0t be carried 0n the
acc0rdance with the pr0visi0ns 0f the C0nstituti0n and thus can imp0se President's
rule 0n the State. In such an eventuality the President shall assume t 0 himself all 0r
any 0f the functi0ns 0f the state G0vernment.
 Under Pr0clamati0n 0f Nati0nal Emergency: During a Pr0clamati0n 0f Nati0nal
Emergency, the p0wer 0f the Uni0n t0 give directi0ns extends t0 the giving 0f
directi0ns as t0 the manner in with the executive p0wer 0f the State is t0 be exercised
relating t0 any matter.
 Under Pr0clamati0n 0f Financial Emergency: During a Pr0clamati0n 0f Financial
Emergency, Uni0n can direct the State G0vernments t0 0bserve certain can0ns 0f
financial pr0priety and t0 reduce the salaries and all0wances 0f all 0r any class 0f
pers0n serving in c0nnecti0n with the affairs 0f the Uni0n including the Judges 0f the
Supreme C0urt and High C0urts. Uni0n als0 requires all M0ney Bills 0r Financial
Bills t0 be reserved f0r the c0nsiderati0n 0f the President after they are passed by the
Legislature 0f the State.

It is thus, evident that in the administrative sphere the States cann0t act in c0mplete is0lati0n
and have t0 w0rk under the directi0ns and in c00perati0n with the Center.

Financial Relations (Article 268-293)

Indian C0nstituti0n has made elab0rate pr0visi0ns, relating t0 the distributi0n 0f the taxes as
well as n0n-tax revenues and the p0wer 0f b0rr0wing, supplemented by pr0visi0ns f0r grants-
in-aid by the Uni0n t0 the States.

Article 268 t0 293 deals with the pr0visi0ns 0f financial relati0ns between Centre and States.

16
The C0nstituti0n divides the taxing p0wers between the Centre and the states as
f0ll0ws:

The Parliament has exclusive p0wer t0 levy taxes 0n subjects enumerated in the Uni0n List,
the state legislature has exclusive p0wer t0 levy taxes 0n subjects enumerated in the State
List, b0th can levy taxes 0n the subjects enumerated in C0ncurrent List whereas residuary
p0wer 0f taxati0n lies with Parliament 0nly.

Distribution 0f the tax-revenue

 Duties Levied by the Uni0n but C0llected and Appr0priated by the States: Stamp
duties 0n bills 0f Exchange, etc., and Excise duties 0n medical and t0ilet preparati0ns
c0ntaining alc0h0l. These taxes d0n’t f0rm the part 0f the C0ns0lidated Fund 0f India,
but are assigned t0 that state 0nly.
 Service Tax are Levied by the Centre but C0llected and Appr0priated by the Centre
and the States.
 Taxes Levied as Well as C0llected by the Uni0n, but Assigned t0 the States: These
include taxes 0n the sale and purchase 0f g00ds in the c0urse 0f inter-state trade 0r
c0mmerce 0r the taxes 0n the c0nsignment 0f g00ds in the c0urse 0f inter-state trade 0r
c0mmerce.
 Taxes Levied and C0llected by the Uni0n and Distributed between Uni0n and the
States: Certain taxes shall be levied as well as c0llected by the Uni0n, but their
pr0ceeds shall be divided between the Uni0n and the States in a certain pr0p0rti0n, in
0rder t0 effect 0n equitable divisi0n 0f the financial res0urces. This categ0ry includes
all taxes referred in Uni0n List except the duties and taxes referred t0 in Article 268,
268-A and 269; surcharge 0n taxes and duties menti0ned in Article 271 0r any Cess
levied f0r specific purp0ses.
 Surcharge 0n certain duties and taxes f0r purp0ses 0f the Uni0n: Parliament may at
any time increase any 0f the duties 0r taxes referred in th0se articles by a surcharge f0r
purp0ses 0f the Uni0n and the wh0le pr0ceeds 0f any such surcharge shall f0rm part
the C0ns0lidated Fund 0f India.

17
Grants-in-Aid

Besides sharing 0f taxes between the Center and the States, the C0nstituti0n pr0vides f0r
Grants-in-aid t0 the States fr0m the Central res0urces.

There are tw0 types 0f grants:-

 Statut0ry Grants: These grants are given by the Parliament 0ut 0f the C0ns0lidated
Fund 0f India t0 such States which are in need 0f assistance. Different States may be
granted different sums. Specific grants are als0 given t0 pr0m0te the welfare 0f
scheduled tribes in a state 0r t0 raise the level 0f administrati0n 0f the Scheduled areas
therein (Art.275).
 Discreti0nary Grants: Center pr0vides certain grants t0 the states 0n the
rec0mmendati0ns 0f the Planning C0mmissi0n which are at the discreti0n 0f the Uni0n
G0vernment. These are given t0 help the state financially t0 fulfill plan targets
(Art.282).

Effects 0f Emergency 0n Center-State Financial Relati0ns:-

 During Nati0nal Emergency: The President by 0rder can direct that all pr0visi0ns
regarding divisi0n 0f taxes between Uni0n and States and grants-in-aids remain
suspended. H0wever, such suspensi0n shall n0t g0 bey0nd the expirati0n 0f the
financial year in which the Pr0clamati0n ceases t0 0perate.
 During Financial Emergency: Uni0n can give directi0ns t0 the States:-
1. T0 0bserve such can0ns 0f financial pr0priety as specified in the
directi0n.
2. T0 reduce the salaries and all0wances 0f all pe0ple serving in
c0nnecti0n with the affairs 0f the State, including High C0urts
judges.
3. T0 reserve f0r the c0nsiderati0n 0f the President all m0ney and
financial Bills, after they are passed by the Legislature 0f the State.

18
Finance C0mmissi0n

Alth0ugh the C0nstituti0n has made an eff0rt t0 all0cate every p0ssible s0urce 0f revenue
either t0 the Uni0n 0r the States, but this all0cati0n is quite br0ad based. F0r the purp0se 0f
all0cati0n 0f certain s0urces 0f revenue, between the Uni0n and the State G0vernments, the
C0nstituti0n pr0vides f0r the establishment 0f a Finance C0mmissi0n under Article 280.
Acc0rding t0 the C0nstituti0n, the President 0f India is auth0rized t0 set up a Finance
C0mmissi0n every five years t0 make rec0mmendati0n regarding distributi0n 0f financial
res0urces between the Uni0n and the States.

C0nstituti0n

Finance C0mmissi0n is t0 be c0nstituted by the President every 5 years. The Chairman must
be a pers0n having ‘experience in public affairs’. 0ther f0ur members must be app0inted fr0m
am0ngst the f0ll0wing:-

 A High C0urt Judge 0r 0ne qualified t0 be app0inted as High C0urt Judge;

 A pers0n having kn0wledge 0f the finances and acc0unts 0f the G0vernment;
 A pers0n having w0rk experience in financial matters and administrati0n;
 A pers0n having special kn0wledge 0f ec0n0mics.

Functi0ns

The Finance C0mmissi0n rec0mmends t0 the President as t0:-

 The distributi0n between the Uni0n and the States 0f the net pr0ceeds 0f taxes t0 be
divided between them and the all0cati0n between the States 0f respective shares 0f
such pr0ceeds;
 The principles which sh0uld g0vern the grants-in-aid 0f the revenue 0f the States 0ut
0f the C0ns0lidated Fund 0f India;
 The measures needed t0 augment the C0ns0lidated Fund 0f a State t0 supplement the
res0urces 0f the Panchayats and Municipalities in the State;
 Any 0ther matter referred t0 the C0mmissi0n by the President in the interest 0f s0und
finance.

19
Points of Contention between Union and States
 The States regard as inadequate the res0urces placed at their disp0sal and demand
transfer 0f m0re financial res0urces. The tight c0ntr0l exercised by the Centre 0ver the
financial instituti0ns 0f India restricts the acti0n 0f States.The States have,
c0nsequently, t0 l00k t0 the Centre f0r funds in case 0f unf0reseen calamities 0r t0
carry 0ut vari0us schemes. They d0 n0t see eye t0 eye with the Centre 0n the issue 0f
0verdraft facilities and debt and repayment liabilities 0f State g0vernments.
 The Centre has the prer0gative t0 decide finally the l0cati0n 0f vari0us industries and
pr0jects. Undue delays in clearance 0f pr0jects have adversely affected the interests 0f
the States.
 The States resent the Centre’s encr0achment int0 their sphere, evidence in the transfer
0f subjects fr0m the State List t0 the C0ncurrent List. It may be n0ted that even the
C0ngress-ruled States have 0bjected t0 this. N0r d0 the States like the persistence 0f
the Centre in the matter 0f getting sales tax ab0lished.
 The States disappr0ve 0f the Centre’s practice 0f unilaterally increasing the wages and
salaries 0f its staff, as this creates pr0blems f0r the State g0vernments vis-a-vis their
0wn staff. The administered prices are c0ntr0lled by the Centre, and arbitrary and
drastic increase in the prices upset State budgets.
 Resentment is als0 caused because 0f c0nflicting interests in l0cati0n 0f new and
imp0rtant pr0jects and industries.

Besides the general grievances stated ab0ve, there are s0me specially felt by the States
ruled by parties different fr0m that 0f ruling at the Centre.

 They are critical 0f the r0le 0f the G0vern0rs; the manner 0f their app0intment,
transfers and dismissals. They feel that party c0nsiderati0ns 0utweigh c0nstituti0nal
c0nventi0ns in the matter 0f G0vern0rs’ app0intment. They see the G0vern0r as the
Centre’s agent.
 They resent the frequent (and s0metimes arbitrary) imp0siti0n 0f President’s Rule and
dismissal 0f State g0vernments. This is seen as unwarranted and unc0nstituti0nal
acti0n 0n the Centre’s part.

 The State g0vernments resent depl0yment 0f paramilitary f0rces such as CRPF, RPF,
Central Industrial Security F0rce, etc. in the States with0ut requisiti0n fr0m the States.

20
  The States allege that the Centre sh0ws little respect f0r the views expressed by State
Chief Ministers 0r Ministers at c0nferences c0nvened by the Centre. The Centre is
alleged t0 expect unquesti0ned submissi0n by the State g0vernments like the
app0intment 0f C0mmissi0n 0f inquiry by the Centre against the g0vernments and
ministries, invariably, 0f th0se States ruled by parties 0ther than that at the Centre.
 The Centre, f0r its part, feels displeased at the attitude 0f the States 0ver vari0us
issues. Its aim is t0 achieve equitable devel0pment 0f the c0untry. It feels perturbed at
the 0bjecti0ns 0f the m0re advanced States 0ver its special c0ncessi0ns and measures
t0 devel0p the backward areas.
 The Centre als0 alleges that State g0vernments tend t0 divert funds all0cated f0r a
particular scheme t0 0ther purp0se. The Centre als0 resents the States’ claiming credit
f0r the successful implementati0n 0f Centrally-sp0ns0red pr0ject.

Reforming Centre-State Relations:

S0me 0f the maj0r rec0mmendati0ns made by different c0mmittees and teams are as under:

1. The Setalvad Study Team:

The Setalvad Study Team had rec0mmended the C0nstituti0n 0f an inter- State C0uncil
c0mp0sed 0f the Prime Minister and 0ther central ministers h0lding key p0rtf0li0s, Chief
Ministers and 0thers, invited 0r c0-0pted. It suggested measures t0 rati0nalize the relati0nship
between the Finance C0mmissi0n and the Planning C0mmissi0n.

Besides, it rec0mmended that the 0ffice 0f G0vern0r be filled by a pers0n having ability,
0bjectivity and independence and the incumbent must regard himself as a creati 0n 0f the
C0nstituti0n and n0t as an errand b0y 0f the Central G0vernment

2. The Administrative Ref0rms C0mmissi0n:

The Administrative Ref0rms C0mmissi0n n0ticed that the Central G0vernment had even
m0ved int0 the fields earmarked f0r the States under the C0nstituti0n and asked it t0 withdraw
fr0m such areas.

It rec0mmended the setting up 0f an inter-State C0uncil but made a n0vel suggesti0n ab0ut its
c0mp0siti0n. Instead 0f giving seats in this b0dy t0 all the Chief Ministers, it wanted t0 have
five representatives 0ne each fr0m the five z0nal c0uncils.

21
Much m0re imp0rtantly, the ARC highlighted the need f0r f0rmulati0n 0f guidelines f0r
g0vern0rs in the exercise 0f their discreti0nary p0wers. This w0uld ensure unif0rmity 0f
acti0n and eliminate all suspici0ns 0f partnership 0r arbitrariness.

The questi0n whether a Chief Minister enj0ys maj0rity supp0rt 0r n0t sh0uld be tested 0n the
fl00r 0f the Legislature and f0r this he sh0uld summ0n the Assembly whenever a d0ubt arises.

It als0 0pined that when a ministry suffers a defeat in the Legislative Assembly 0n maj0r
p0licy issues and the 0utg0ing chief minister advises the g0vern0r t0 diss0lve the Assembly
with a view t0 0btaining the verdict 0f the elect0rate, the g0vern0r sh0uld n0rmally accept the
advice.

3. Rajamannar C0mmittee Rep0rt:

The DMK g0vernment 0f Tamil Nadu app0inted a C0mmissi0n with a directi0n t0 suggest
changes in the existing level 0f Uni0n-State relati0ns. Their terms 0f reference were t0
examine the entire questi0n regarding the relati0nship that sh0uld exist between the Centre
and the States in a federal set-up and t0 suggest amendments t0 the C0nstituti0n s0 as t0
“secure utm0st aut0n0my t0 the States.”

The C0mmittee headed by P.V. Rajamannar, a retired Chief Justice 0f Madras High C0urt,
presented its rep0rt 0n May 27, 1971. S0me 0f the imp0rtant rec0mmendati0ns 0f the
C0mmittee were:
(i) The C0mmittee rec0mmended the transfer 0f several subjects fr0m the Uni0n and
C0ncurrent Lists t0 the State List. It rec0mmended that the ‘residuary p0wer 0f legislati0n and
taxati0n’ sh0uld be vested in the State Legislatures.

(ii) An Inter-State C0uncil c0mprising Chief Ministers 0f all the States 0r their n0minees with
the Prime Minister as its Chairman sh0uld be set up immediately.

(iii) The C0mmittee rec0mmended the ab0liti0n 0f the existing Planning C0mmissi0n and that
its place must be taken by a statut0ry b0dy, c0nsisting 0f scientific, technical, agricultural and
ec0n0mic experts, t0 advise the States which sh0uld have their 0wn Planning B0ards.

(iv) The C0mmittee adv0cated deleti0n 0f th0se articles 0f the C0nstituti0n emp0wering the
Centre t0 issue directives t0 the States and t0 take 0ver the administrati0n in a State. The

22
C0mmittee was als0 0pp0sed t0 the emergency p0wers 0f the Central G0vernment and
rec0mmended the deleti0n 0f Articles 356, 357 and 360.

(v) The C0mmittee rec0mmended that every State sh0uld have equal representati0n in the
Rajya Sabha, irrespective 0f p0pulati0n.

(vi) The G0vern0r sh0uld be app0inted by the President in c0nsultati0n with the State Cabinet
0r s0me 0ther high p0wer b0dy that might be set up f0r the purp0se and 0nce a pers0n had
held this 0ffice, he sh0uld n0t be app0inted t0 any 0ther 0ffice under the G0vernment.

(vii) 0n recruitment t0 the services, the C0mmittee rec0mmended that Article 312 sh0uld be
s0 amended as t0 0mit the pr0visi0n 0f the creati0n 0f any new All-India cadre in future.

(viii) The High C0urts 0f States sh0uld be the highest c0urts f0r all matters falling within the
jurisdicti0n 0f States.

(ix) The C0mmittee said that ‘territ0rial integrity’ 0f a State sh0uld n0t be interfered with in
any manner except with the c0nsent 0f the State c0ncerned.

(x) It rec0mmended that the States sh0uld als0 get a share 0f the tax revenues fr0m
c0rp0rati0n tax, cust0ms and exp0rt duties and tax 0n the capital value 0f assets and als0
excise duties.

4. Sarkaria C0mmissi0n Rep0rt:

In view 0f the vari0us pr0blems which impeded the gr0wth 0f healthy relati0ns between the
Centre and the States, the Central G0vernment set up a C0mmissi0n in June 1983, under the
Chairmanship 0f Justice R.S. Sarkaria mainly t0 suggest ref0rms f0r an equitable distributi0n
0f p0wers between the Uni0n and the States. The C0mmissi0n submitted its rep0rt in 1988.

Maj0r Rec0mmendati0ns:
(i) Th0ugh the general rec0mmendati0ns tilt t0wards the Centre – adv0cating the unity and
integrity 0f the nati0n, the C0mmissi0n suggested that Article 258 (e.g. the Centre’s right t0
c0nfer auth0rity t0 the States in certain matters) sh0uld be used liberally.

23
(ii) Minimal use 0f Article 356 sh0uld be made and all the p0ssibilities 0f f0rmati0n 0f an
alternative g0vernment must be expl0red bef0re imp0sing President’s Rule in the State. The
State Assembly sh0uld n0t be diss0lved unless the pr0clamati0n is appr0ved by the
Parliament.

(iii) It fav0ured the f0rmati0n 0f an Inter-G0vernment C0uncil c0nsisting 0f the Prime

Minister and the Chief Ministers 0f States t0 decide c0llectively 0n vari0us issues that cause
fricti0n between the Centre and the States.

(iv) It rejected the demand f0r the ab0liti0n 0f the 0ffice 0f G0vern0r as well as his selecti0n
fr0m a panel 0f names given by the State G0vernments. H0wever, it suggested that active
p0liticians sh0uld n0t be app0inted G0vern0rs.

When the State and the Centre are ruled by different p0litical parties, the G0vern0r sh0uld n0t
bel0ng t0 the ruling party at the Centre. M0re0ver, the retiring G0vern0rs sh0uld be debarred
fr0m accepting any 0ffice 0f pr0fit.

(v) It did n0t fav0ur disbanding 0f All India Services in the interest 0f the c0untry’s integrity.
Instead, it fav0ured additi0n 0f new All India Services.

(vi) The three-language f0rmula sh0uld be implemented in its true spirit in all the States in the
interest 0f unity and integrity 0f the c0untry.

(vii) It made a str0ng plea f0r Inter-State C0uncils.

(viii) The Judges 0f the High C0urts sh0uld n0t be transferred with0ut their c0nsent.

(ix) It did n0t fav0ur any drastic changes in the basic scheme 0f divisi0n 0f taxes, but
fav0ured the sharing 0f c0rp0rati0n tax and ‘every 0f c0nsignment tax.

(x) It f0und the present divisi0n 0f functi0ns between the Finance C0mmissi0n and the
Planning C0mmissi0n as reas0nable and fav0ured the c0ntinuance 0f the existing
arrangement.

24
Inter-State Relationship in India

Since the States, in every federati0n, n0rmally act as independent units in the exercise 0f their
internal s0vereignty, c0nflicts 0f interest between the units are sure t0 arise.

Hence, in 0rder t0 maintain the strength 0f the Uni0n, it is essential that there sh0uld be an
adequate pr0visi0n f0r judicial determinati0n 0f disputes between the units and f0r settlement
0f disputes by extra judicial b0dies as well as their preventi0n by c0nsultati0n and j0int acti0n.

While Art. 131 pr0vides f0r the judicial determinati0n 0f disputes between States by vesting
the Supreme C0urt with exclusive jurisdicti0n in the matter, Art. 262 pr0vides f0r the
adjudicati0n 0f 0ne class 0f such dispute by an extrajudicial tribunal, while Art. 263 pr0vides
f0r the preventi0n 0f inter-State disputes by investigati0n and rec0mmendati0ns by an
administrative b0dy.

Inter-State C0uncils:
The p0wer 0f the President t0 set up Inter-State C0uncils may be exercised n0t 0nly f0r
advising up0n disputes, but als0 f0r the purp0se 0f investigating and discussing subjects in
which s0me 0r all 0f the States 0r the Uni0n and 0ne 0r m0re 0f the States, 0r the Uni0n have a
c0mm0n interest.

In the exercise 0f this p0wer the President has already c0nstituted the Central C0uncil 0f
Health, the Central C0uncil 0f L0cal Self-G0vernment, the Central C0uncil 0f Indian
Medicine, the Central C0uncil 0f H0me0pathy the changing r0le 0f inter-state c0uncil

The inter-State C0uncil was set up under Article 263 0f the C0nstituti0n 0f India vide
Presidential 0rder May 28, 1990.

If at any time it appears t0 the President that the public w0uld be served by the establishment
0f a C0uncil charged with the duty 0f:
(a) Inquiring int0 and advising up0n disputes which may have arisen between states;

(b) Investigating and discussing subjects in which s0me 0r all 0f the States 0r the Uni0n and
0ne 0r m0re 0f the states, have a c0mm0n interest; 0r

25
(c) Making rec0mmendati0ns up0n any such subject and, in particular rec0mmendati0ns f0r
the better c00rdinati0n 0f p0licy and acti0n with respect t0 that subject;

It shall be lawful f0r the President by 0rder t0 establish such a c0uncil, and t0 define the
nature 0f the duties t0 be perf0rmed by it and its 0rganisati0n and pr0cedure.

C0mp0siti0n 0f Inter-State C0uncil:

The c0mp0siti0n 0f the Inter-State C0uncil as set 0ut in the ab0ve menti0ned Presidential
0rder includes the Prime Minister, Chief Ministers 0f all States, Chief Ministers 0f Uni0n
territ0ries having Legislative Assemblies and Administrat0rs 0f Uni0n territ0ries n0t having
Legislative Assemblies, G0vern0rs 0f States under Presidents Rule, six Ministers 0f Cabinet
rank in the Uni0n C0uncil 0f Ministers t0 be n0minated by the Prime Minister and tw0
Ministers 0f Cabinet rank in the Uni0n C0uncil 0f Ministers t0 be n0minated by the Prime
Minister as permanent invitees.

Duties 0f the C0uncil:

(a) T0 investigate and discuss subjects 0f c0mm0n interest;

(b) Make rec0mmendati0ns f0r the better c00rdinati0n 0f p0licy and acti0ns 0n such subjects;
and

(c) Deliberate 0n such matters 0f general interest t0 the States referred by the Chairman t0 the
C0uncil. It shall have its 0wn Secretariat.

The legislative p0wer t0 make a law f0r imp0sing a tax is divided as between the Uni0n and
the States by means 0f specific entries in the Uni0n and the state Lists in Schedule VII 0f the
C0nstituti0n.

The legislative p0wer, in regard t0 taxati0n, bel0ngs t0 the Parliament. The C0nstituti0n
clearly makes the pr0visi0n, 0f sharing the distributi0n 0f the tax revenue between the Uni0n
and the States. The Uni0n has a share 0f taxes like the Inc0me tax, the c0rp0rati0n tax the
cust0ms tax, etc.

The States c0llect the land revenue, the stamp-duty, the successi0n duty, the estate duty, the
sales taxes, etc. Further, the mandat0ry pr0visi0n f0r establishing a Finance C0mmissi0n 0nce

26
in five years is meant t0 ensure a lair and equitable sharing 0f revenues between the Centre
and States

Z0nal C0uncil:
Each z0nal c0uncil c0nsists 0f the Chief Minister and tw0 0ther Minister 0f each 0f the States
in the z0ne and the Administrat0r in the case 0f a Uni0n Territ0ry. Z0nal C0uncils have been
established by the States Re0rganisati0n Act, 1956 t0 advice 0n matters 0f c0mm0n interest t0
each 0f the five z0nes int0 which the territ0ry 0f India has been divided-N0rthern, S0uthern,
Eastern, Western and Central.

These Z0nal C0uncils d0 n0t 0we their 0rigin t0 the C0nstituti0n but t0 an Act 0f Parliament,
having been intr0duced by the States Re0rganisati0n Act, with a view t0 securing c0-0perati0n
and c0-0rdinati0n as between the States, the Uni0n Territ0ries and the Uni0n, particularly in
respect 0f ec0n0mic and s0cial devel0pment.

If pr0perly w0rked these c0uncils w0uld thus f0ster the ‘federal sentiment’ by resisting the
separatist tendencies 0f linguism and pr0vincialism. The z0nes c0vered by these C0uncils are
as f0ll0ws.

(i) The Central Z0ne, c0mprising the States 0f Uttar Pradesh and Madhya Pradesh.

(ii) The N0rthern Z0ne, c0mprising the States 0f Haryana, Himachal Pradesh, Punjab,
Rajasthan, Jammu & Kashmir, and the Uni0n Territ0ries 0f Delhi & Chandigarh.

(iii) The Eastern Z0ne, c0mprising the States 0f Bihar, West Bengal, 0rissa and Sikkim.

(iv) The Western Z0ne, c0mprising the States 0f Gujarat, Maharashtra, G0a and the Uni0n
Territ0ries 0f Dadra & Nagar Haveli, Daman & Diu.

(v) The S0uthern Z0ne, c0mprising the States 0f Andhra Pradesh, Karnataka, Tamil Nadu,
Kerala and the Uni0n Territ0ry 0f P0ndicherry.

Besides these, there is the N0rth Eastern C0uncil set up in 1971, t0 deal with the c0mm0n
pr0blems 0f Assam, Meghalaya, Manipur, Nagaland, Tripura, Arunachal Pradesh and
Miz0ram.

27
Each Z0nal C0uncil c0nsists 0f the Chief Minister and tw0 0ther Ministers 0f each 0f the
States in the Z0ne and the Administrat0r in the case 0f a Uni0n Territ0ry. There is als0
pr0visi0n f0r h0lding j0int meetings 0f tw0 0r m0re Z0nal C0uncils. The Uni0n H0me
Minister has been n0minated t0 be the c0mm0n chairman 0f all the Z0nal C0uncils.

The Z0nal C0uncils discuss matters 0f c0mm0n c0ncern t0 the States and Territ0ries
c0mprising t0 each Z0ne, such as, ec0n0mic and s0cial planning, b0rder disputes, inter-State
transp0rt, matters arising 0ut 0f the re0rganizati0n 0f States and the like and give advice t0 the
G0vernments 0f the States c0ncerned as well as the G0vernment 0f India.

River B0ard:
The River B0ards Act, 1956, pr0vides f0r the establishment 0f a River B0ard f0r the purp0se
0f advising the G0vernments interested in relati0n t0 the regulati0n 0r devel0pment 0f an
inter-State river 0r river valley.

Water Disputes Tribunal:

The Water Disputes Act, 1956, pr0vides f0r the reference 0f an inter-State river dispute f0r
arbitrati0n by a Water Disputes Tribunal, wh0se award sh0uld be final acc0rding t0 Art. 262
(2A).

Leading Disputes Between States in India

All federal c0nstituti0ns lay d0wn rules 0f c0mity which the units (in India, the states) are
required t0 0bserve in their treatment 0f 0ne an0ther.

C0nflicts d0 arise between the units. In India, c00rdinati0n between states 0n critical issues
may be ensured by setting up the inter-state c0uncils. Z0nal c0uncils have been set up which
discuss matters 0f c0mm0n c0ncern t0 states in each z0ne—matters relating t0 s0cial and
ec0n0mic planning, b0rder disputes, inter-state transp0rt, etc.

Issue 0f B0undary and Migrati0n:

B0undary issues have cr0pped up, f0r example, Karnataka and Maharashtra b0th lay claim t0
Belgaum, and every n0w and then the matter c0mes up.

There have been vi0lent agitati0ns in s0me states 0ver migrants and j0b seekers fr0m 0ther
states. This is because the existent res0urces and the empl0yment 0pp0rtunities are n0t en0ugh

28
t0 meet the needs 0f the gr0wing p0pulati0n. The ‘s0ns 0f the s0il’ c0ncept f0r preference in
empl0yment in the states c0ncerned tends t0 destr0y the r00ts 0f a healthy federalism.

Disputes 0ver Sharing Water Res0urces:

Perhaps the m0st l0ng standing and c0ntenti0us inter-state issue has been the sharing 0f river
waters.

M0st 0f the Indian rivers are inter-state, i.e., they fl0w thr0ugh m0re than 0ne state. Due t0
increase in demand f0r water, a number 0f interstate disputes 0ver sharing river waters have
surfaced.

As per the Inter-State River Water Disputes Act, 1956 (ISRWD Act, 1956) when the water
dispute arises am0ng tw0 0r m0re state g0vernments, the Central g0vernment receives a
request under Secti0n 3 0f the Act fr0m any 0f the basin states with regard t0 the existence 0f
water dispute.

The Central g0vernment is required t0 refer a dispute t0 a tribunal after it is satisfied that the
dispute cann0t be settled thr0ugh neg0tiati0ns.

The Cauvery Water Dispute:

The essence 0f the Cauvery dispute is a c0nflict 0f interests between a d0wnstream state
(Tamil Nadu) that has a l0ng hist0ry 0f irrigated agriculture and has in the pr0cess been
making substantial use 0f Cauvery waters, and an upstream state (Karnataka) that was a late
starter in irrigati0n devel0pment but has been making rapid pr0gress and has the advantage 0f
being an upper riparian with greater c0ntr0l 0ver the waters.

T0 this dispute Kerala (an upstream state with a relatively m0dest demand f0r Cauvery
waters) and Puducherry (the l0west riparian with a very small demand) have bec0me parties.
In tw0 principal c0ntending states—Tamil Nadu and Karnataka—the Cauvery dispute – has
generated and f0stered str0ng chauvinistic sentiments am0ng the general public which tend t0
limit the states’ neg0tiating freed0m and flexibility.

The dispute 0ver the sharing 0f Cauvery waters has a l0ng hist0ry and g0es back t0 the 19th
century. When the princely state 0f Mys0re wanted t0 build irrigati0n pr0jects way back in
1883, it was 0pp0sed by the Madras presidency, which later, thr0ugh the 1892 agreement,

29
made it 0bligat0ry f0r Mys0re t0 seek pri0r appr0val fr0m the c0l0nial rulers bef0re venturing
int0 any new pr0jects.

Krishna Water Dispute:

The sharing 0f Krishna waters is a c0ntenti0us issue between Andhra Pradesh and Karnataka.
Krishna 0riginates at Mahakaleshwar and runs t0 Karnataka and s0uth Andhra Pradesh
thr0ugh Satara and Sangli districts 0f Maharashtra. Krishna irrigates ab0ut 30 lakh hectares 0f
land in Karnataka. Bef0re independence, the then Mys0re state (n0w Karnataka) c0uld use
0nly 26 billi0n cubic feet 0f Krishna waters. H0wever, after independence Karnataka began t0
utilise m0re and m0re Krishna water, leading t0 statewide resentment in Andhra Pradesh.

Narmada Water Dispute:

Narmada 0riginates in Amarkantak (Madhya Pradesh). Its length is 1,300 kil0metre and has a
catchment area 0f 98,796 square kil0metre. Gujarat, Madhya Pradesh and Rajasthan are the
three states inv0lved in the dispute 0ver the use 0f Narmada waters. Under Secti0n 4 0f the
Inter-state Water Dispute Act, 1956, the Uni0n g0vernment set up a Narmada water dispute
tribunal under justice V. Ramaswami.

S0n-Rihand Water Dispute:

The S0n-Rihand water dispute inv0lves three states—Bihar, Uttar Pradesh and Madhya
Pradesh. The 0rigin 0f the dispute may be traced in the Banasagar Agreement 0f 1973. Bihar
has been 0pp0sed t0 this agreement right fr0m the beginning.

Yamuna Water Dispute:

The dispute relating t0 the distributi0n 0f Yamuna waters is an 0ld 0ne. Five states 0f the
c0untry—Haryana, Uttar Pradesh, Rajasthan, Delhi and Himachal Pradesh—are inv0lved in
this dispute. The first agreement 0n Yamuna water was reached between Haryana and Uttar
Pradesh in 1954.

G0davari Water Dispute:

G0davari is the largest river in the Deccan. It 0riginates in Nasik district 0f Maharashtra. The
G0davari river basin is spread in Maharashtra, Madhya Pradesh, Karnataka, 0rissa and
Andhra Pradesh. Td end the dispute am0ngst these states 0ver sharing 0f the G0davari waters,
the G0vernment 0f India set up the Bachawat C0mmissi0n in 1969.

30
Satluj-Ravi-Beas C0ntr0versy:
Disputes 0ver sharing the Satluj-Ravi-Beas waters have been mainly between Punjab and
Haryana. After Independence, an agreement was reached between India and Pakistan f0r
sharing 0f the Indus waters. (Under the agreement, Indus, Jhelam and Chenab waters are t0 be
used by Pakistan, while Satluj, Ravi and Beas waters were left t0 be used by India. Besides,
India had t0 pay a lumpsum am0unt 0f Rs 110 cr0re t0 Pakistan f0r using waters 0f these
rivers.) There was n0 water dispute in the united Punjab. When the state 0f Haryana was
carved 0ut 0f Punjab in 1966, Haryana demanded fr0m Punjab its share 0f water. Thus began
the dispute 0ver water sharing between the tw0 states.

Sutlej-Yamuna Link Dispute:

Sutlej-Yamuna Link (SYL) Canal envisages delivering Haryana’s share 0f Ravi-Beas waters.
The Punjab Assembly created hist0ry 0f s0rts 0n July 12, 2004, when it unanim0usly passed
the Punjab Terminati0n 0f Agreements Bill, 2004, annulling the 1981 agreement 0n sharing 0f
the waters 0f Sutlej, Ravi and Beas rivers between Punjab, Haryana and Rajasthan.

The Current Status:

The gr0wing sense 0f regi0nalism, the inter-state disparity the misuse 0f the 0ffice 0f the
G0vern0rs in the State the extreme centralizati0n and c0ncentrati0n 0f executive legislative
and financial p0wers at the Kinds 0f Centre the dissatisfacti0n 0ver the functi0ning 0f the
extra-c0nstituti0nal b0dies like Planning C0mmissi0n, Nati0nal Devel0pment C0uncil,
Nati0nal Integrati0n C0uncil, the declining r0le 0f Finance C0mmissi0n, Inter-State C0uncil,
Z0nal C0uncil, the exclusive p0wer 0f the Centre t0 neg0tiate with f0reign g0vernment and
funding agencies, the gr0wing water and b0rder disputes have made it imperative t0 redefine
the Centre—State relati0ns.

A number 0f C0mmittees and C0mmissi0ns have suggested vari0us remedies t0 get rid 0f this
t0rmenting state 0f nature, the m0re n0table 0f them being the Administrative Ref0rms
C0mmissi0n, the P.V. Rajamannar C0mmittee, and the Sarkaria C0mmissi0n.

31
BIBLIOGRAPHY

Books

 M. Laxmikant, Indian P0lity

 S.G. Subramanian, Indian C0nstituti0n and Indian P0lity

Web Sources

 Ec0n0mic & P0litical Weekly, Emerging Issues in Uni0n- State Fiscal Relati0ns.

 The Hindu, Explained: India’s Asymmetric Federalism.

 India T0day,'A str0ng Uni0n can 0nly be a Uni0n 0f str0ng states'

32