NATIONAL LAW INSTITUTE UNIVERSITY, BHOPAL

SESSION 2018-19

TRIMESTER V

CONSTITUTIONAL LAW – III

PROJECT

TOPIC: SOME ASPECTS OF INDIAN FEDERALISM

Submitted to:-

Prof. Kuldeep kaur

Submitted by:-

Anushri Bhalavi

2018(BALLB)53

CERTIFICATE

This is to certify that this project has been prepared and submitted by Anushri
Bhalavi, pursuing her B.A. LL.B. (Hons.) at National Law Institute University,

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Bhopal. This is in the fulfillment of the Constitutional Law II course. This is
also to certify that this is her original project work and this has not been
submitted to any other university.

Date: 10th November, 2019

Signature of student: …………………………

Signature of Professor: …………………………

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ACKNOWLEDGEMENT

I would like to thank my constitutional law professor, Professor Kuldeep Kaur

for providing me with the opportunity of working on this project. It was a great
learning experience and it helped in enhancing my research skills. Also, it
helped me in widening my knowledge about the aspects of Indian federalism. It
helps me to develop a better understanding about the idea and rationale behind
choosing federal structure for India. I would also like to thank the library
‘Gyanmandir’ for providing me resources essential for completion of research.

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Table of Contents

I. Introduction
II. Contemporary federations

III. Legislative relationship

IV. Administrative relationship

V. Emergency

VI. Conclusion

VII. Bibliography

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INTRODUCTION

Federalism is a mode of political organization that unites separate states or other

polities within an overarching political system in a way that allows each to
maintain its own integrity. Federal systems do this by requiring that basic
policies be made and implemented through negotiation in some form, so that all
the members can share in making and executing decisions. The political
principles that animate federal systems emphasize the primacy of bargaining
and negotiated coordination among several power centers; they stress the virtues
of dispersed power centers as a means for safeguarding individual and local
liberties.

The constitution of India was framed on January 26, 1950. It contains articles
and schedules to provide us the guideline to run the country. It ushers into the
country a polity based fundamentally on two ingredients – British type
democratic system of government and federalism. It provides India to be a
union of states1.

Contemporary federations
Indian federalism is standing on three pillars a strong centre, flexibility and a
co-operative federalism. This concept was accepted by various countries such as
Canada, Australia and U.S.A.
The oldest contemporary federal constitution is the American constitution
drafted in 1789. There were several colonies that came together to form a union
of states. American constitution has divided the powers among the centre and
the states. Whatever is not provided explicitly to fall under the central list is to
be dealt by the state.
In the 18th century America focused mainly on agriculture and by the end of the
20th century it shifted its lens and focused on the industrial side and emerged as

1
Article 1 in The Constitution Of India 1949
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an industrial community. The development took place in several dimensions not
only through the forma amendments to the constitution but through judiciary
interpretations. The judiciary indirectly empowered the centre by protecting the
centre from state actions that could interrupt the central policies.

Canadian federal structure has been majorly influenced by bi-racialism and

bilingualism (English and French). The majority population was English
speaking all over the country and only a minor section of the population spoke
French. But the interesting part was that the major section of the French-
speaking minority resided in a state of Canada, Quebec. Thus disputes arose as
the majority of Quebec population wanted the state to get more powers than the
state whereas the demands were flipped by the English speaking section; they
wanted centre to acquire more powers than the state.
The framers of the Canadian constitution preferred preserving national interest
over local interest. . In peace time, the Centre’s general power to legislate
for the ‘peace, order and good government° of Canada becomes more or
less functionless. It is only in the times of an emergency of war that the
Centre’s general power becomes omnipotent' ) and, to this extent, the
designs of the founding fathers may be said to have been respected, but
during peace-time the Centre finds itself handicapped in several ways. The
development of Canadian Federalism has been in striking contrast with that
of the American Federalism. In the latter, the Centre designed to have
limited powers has grown into a colossus, while in the former, the Centre
designed to be strong has turned out to have only restrictive capacity to deal
with the problems of a fast developing economy.

In Australia, the Centre has specified functions. Under its defence power,
the Centre assumes a very dominating position during a war'°). It has full
control over external affairs and can implement any treaty; it may choose to

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enter, with a foreign country. There is, however, a feeling that in peace-
time, the Centre lacks adequate power to deal with socio-economic probe-
elms facing the country and efforts to amend the Constitution to correct the
lacuna have not succeeded because of an extremely rigid process of
constitutional amendment").

First of all, in each federation need has been felt to have a strong Centre
to deal with war-emergency or the socio-economic problems of an
industrial society, and this need has been fulfilled in varying degrees in
various countries. Secondly, the prevailing federal systems are extremely
rigid, and formal amendments to the respective constitutions have been
difficult, creating a need to introduce flexibility through various expedients
to meet contemporary needs. In the U.S.A. and Australia, the judiciary has
helped in giving an interpretation to the Centre’s powers so as to
enable it to meet the problems of the day, but this has not obviated the
need to amend the Constitution which has proved to be extremely difficult.
Lastly, the growth of the concept of co-operative federalism in varying
degrees in each country is a phenomenon of the day, which helps a
federal system, with its divided ljurisdiction, to Solve many problems
which have arisen as a result of the philosophy of a social welfare
State. It is therefore not surprising that the founding fathers should have
designed the Indian federal structure on the three concepts of a strong
Centre, flexible federation, and co-operative federalism.

Legislative Relations
As compared to the schemes adopted for the purpose in the
Constitutions of the U, S.A., Canada and Australia, the Indian scheme
is a very elaborate affair •*). There are three lists: List I contains
matters with respect to which the Centre has exclusive right to make
laws; List II enumerates matters for exclusive legislation by the States;
and List III contains matters for concurrent law-making of both the
Centre and the States. Matters in List I are such which need a uniform
law for the whole country; those in List II admit of local variations,
while in List III fall matters where local treatment may be found
wanting and uniformity may have to be secured.

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To some extent, rigidity of the federal systems has been mitigated by
techniques of co-operative federalism, but these techniques are of limited
efficacy and are resorted to because better and more effective methods are
not available. There have been times in the federations of the U.S.A.,
Canada and Australia, when lack of necessary powers in the Centre has
been keenly felt as pressing problems has demanded solutions' ). India in
this respect breaks new ground as the Constitution contains a few unique
provisions, not to be found in other constitutions, for making temporary
adjustments in the Centre-State distribution of powers which introduce an
element of flexibility in an inherently rigid federal structure. Three types
of controversies may be indentified in this distribution of powers.
First; question of interpreting an entry to spell out its proper ambit.
Second; entries in the lists may overlap and there arises a question of
finding an interrelation among them.
Third; law may appear to relate to an entry in the other list.

Financial Relationship
An imbalance in the function-resource equation at any level cannot lead
to good government and this is bound to create tension in the federal
system. A viable scheme of Centre-State financial relationship therefore
is a sine qua non for a proper functioning of a federal polity as a whole.
The framers of the Indian Constitution sought to avoid some of the
difficulties faced in other federations in this area and adopted some of the
techniques developed therein. The Indian Constitution demarcates the
taxing powers of the Centre and the States; taxes of a local nature have
been given to the States.
But the compulsions of planning have cast a shadow on the smooth
operation of the Centre-State fiscal relationship. For one thing, there is
an overlap of functions between the planning and finance
commissions, and the truth is that to-day more funds pass to the States
under the former than under the latter, and so the finance commission
has been overshadowed by an extra-constitutional body. Further, in
spite of the massive Central assistance to the States, the finances
of most of them are in a none-too- happy position which results
in deficit budgets and over-drafts on the Reserve Bank, and the

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States continuously pressurize the Centre for more and more funds.
As things are, except customs and corporation tax which are
exclusively central, all other Central taxes are either shared or fully
utilised by the States and it is unthinkable that customs or
corporation tax can be transferred to the States. The transfer of any
other tax would not increase the taxing capacity of the States.

Some taxes like estate duty, terminal tax, etc. are collected by the
Centre but assigned wholly to the States, while such taxes as stamp
duties, tax on interstate sales are levied by the Centre but collected by
the States.

Administrative Relationship

The Indian Constitution lays down a flexible scheme of allocation of

Central-State administrative responsibility which permits all kinds of
co-operative arrangements between the governments as may be
deemed desirable. The Centre can administer any activity in its
exclusive field, or leave it to the States; the States administer matters
in their exclusive area but, by agreement, may leave any of their
functions to the Central administration; matters in the concurrent field
are ordinarily administered by the States but parliament can by law
enable the Centre to take up any of them under its administration.

For better understanding suppose; A government can carry on

any commercial or industrial activity, but if it falls outside its
legislative domain, it would be subject to the laws made by the
other government having power to do so. The States are not to
hamper or impede the Centre in exercising its executive
powers; they have to exercise their executive powers as to
comply with the laws made by the Parliament, and the Centre
can give necessary directions to the States for these purposes.
The Centre can direct the States to construct and maintain
means of communications of national or military importance or
for protecting the railways, the cost of this being defrayed by
the Centre. A special obligation has been placed on the Centre
to look after the welfare of the minorities and therefore, it can
direct the States to draw up and execute schemes for the
welfare of the scheduled tribes'•) or to provide facilities for

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instruction in the mother tongue at the primary stage to the
children of the linguistic minorities.

Emergency

‘Federalism as a system of counterpoise is no longer viable in the field of

war-making” and that there is ‘incomparability between the
requirements of total war and principles thus far deemed to be fundamental
to government under the Constitution’.
A unique feature of the provisions, however, is that instead of relying on the
judiciary to effect necessary adjustments in the Centre-State power balance,
they provide a simpler mechanism for the purpose, of executive
determination subject to parliamentary control. A reason for this
approach may be that, owing to elaborate nature of the distribution of
powers there was not much room left for the judiciary to make necessary
adjustments in emergency situations. Moreover, the emergency provisions
in India envisage certain situations which are not to be found in any other
constitution.

First of all, the President may issue a proclamation of emergency when

he 1s satisfied that there is a threat to the security of the country either by
external aggression or internal disorder , a concept which in parallel to
the war-time emergency.

Secondly, a financial emergency may be declared if the president is satisfied

that a situation has arisen threatening the financial stability or credit of the
country. The proclamation is subject to parliamentary approval. The Centre
becomes entitled to give directions to any State to observe such canons of
financial propriety as may be specified in the directions. Directions may
also be given for such purposes as reducing salaries and allowances of any
categories of persons serving in a State or requiring that all money or
financial bills or those involving expenditure shall be reserved for the
President’s consideration after being passed by the State Legislature.

Thirdly, the Indian Constitution envisages emergency arising

because of the failure of the constitutional machinery in a State.

Under the U.S. Constitution, the Centre guarantees to every

State a republican form of government, protects each of them
against invasion, and on application of the legislature or the
executive (when legislature cannot be convened) against
domestic violence.

There are three types of emergencies provided in Indian constitution.

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  National Emergency2

The maker of the constitution of India have equipped the Union under Article
352 with absolute control during time of emergency to preserve the integrity,
security and stability of the country. Proclamation of Emergency under this
Article excludes the other two kinds of Emergencies. President can impose
National Emergency if he is satisfied that a grave situation exists or is likely to
arise due to war, external aggression or armed rebellion (earlier it was internal
disturbance). However his powers are subject to the recommendation of the
Cabinet. The proclamation must also be laid before the House of Parliament
which may approve it by passing a resolution, take no action or disapprove it
within one month. Such a proclamation is notified by publication in official
gazette but this is not obligatory. So far National Emergency has been declared
three times in the country, first being in 1962-1968 when China attacked Indian
borders, second in 1971-1977 during Second World War and the third was
imposed in 1975 on grounds of internal disturbances.

 Failure of constitutional machinery in states3

Under this article the President is vested with wide discretionary powers when
he is satisfied that the government of the state cannot be carried on in
accordance with the provision of the Constitution of India. Imposition of
Emergency during failure of constitutional machinery in state is called
Presidents Rule and non-compliance by any state with direction of Union given
in the exercise of its executive power is an express ground to impose such a
rule. Such a proclamation to be operative must be placed before the House of
Parliament and with its approval it is valid for six months. In S.R. Bommai v.
Union Of India, a full bench of the Karnataka high court produced different
opinion about the imposition of the President’s Rule in Karnataka, while in
other states the court held that it was in violation of the constitution and would
have restored the original position.

In Rameshwar vs. UOI4, it was held that the presidential proclamation

dissolving state assembly in bihar under article 356 was unconstitutional on
extraneous and irrelevant ground. The court said the government misled the
centre in recommending dissolution of state assembly.

2
Article 352 in The Constitution Of India 1949
3
Article 356 in The Constitution Of India 1949
4
Rameshwar Prasad & Ors vs Union Of India & Anr on 24 January, 2006
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  Financial Emergency5

This article explains Financial Emergency imposed by the President in a

situation of financial crises where the credit of India, or any part is threatened or
in danger. The purpose of this article is to alter the governmental machinery at
the backdrop of the financial stability of the country. Unless approved by the
House of Parliament this proclamation shall cease to operate in two months. In
so far, this proclamation is not imposed in India.

5
Article 360 in The Constitution Of India 1949
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CONCLUSION

The federal system provides us to maintain a balance between the powers

described by the constitution of India. Indian constitution has been
inspired by other constitutions thus the policies provided in the same are
also inspired by different structures of the countries. Hence the federal
structure of India is also inspired by Australian, American, and Canadian
structure. But the framers have modified it further as per the
circumstances on India that are a way different f other countries especially
when we look into the vast diversified parts in aspects of geography,
language and customs.
Care has also to be taken for the multiple problems arising during the
imposition of such structure. Nothingg can be blindly followed. As if we
consider the taxation policies in india, overlapping taxation should not
arise. The solution lies in a moce effective husbanding of available
resources and their wise use. More will be said about this in the later
section on planning which has an intimate relation with the problems
considered here
Secondly if we take the power distribution between the centre and state, centre
is empowered more than the state in some aspects such as emergency in the
country.
Another important aspect to consider is that the States’ administrative
machinery itself needs to be strengthened. It may be advisable to institute
many more such services as the quality of the people loining them is
much better than those who go to exclusively State services. In the U.S.A.,
a good deal of thought is at present being given to the question of finding
ways and means of improving the State administrative machinery, and
the problem in India is no less crucial.

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BIBLIOGRAPHY

 http://www.wikipedia.org
 https://www.lawteacher.net/
 http://www.politicalsciencenotes.com/india/legislative-relations-between-
the-centre-and-state-india/922
 https://indiankanoon.org/doc/79280249/

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