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Concept of federalism part 2- Centre State Relations

Centre State Relations | Concept of federalism part 2- Centre State Relations 

  • The Constitution of India provides a dual polity with a clear division of powers between the Union and the States, each being supreme within the sphere allotted to it.
  • The Indian federation is not the result of an agreement between independent units, and the units of Indian federation cannot leave the federation.
  • Thus the constitution contains elaborate provisions to regulate the various dimensions of the relations between the centre and the states.
  • The relations between centre and state are divides as:
    • Legislative relations
    • Financial relations
    • Administrative relations

Legislative Relations | Concept of federalism part 2- Centre State Relations 

Articles 245 to 255 describe Legislative relations.

  • Article 245(1)states that Subject to the provisions of this Constitution,Parliament may make laws for the whole or any part of the territory of India,and the Legislature of a State may make laws for the whole or any part!of the State.
  • Article 245(2)states that no law made by Parliament shall be deemed to be invalid on the ground that it would have extra-territorial operation.
  • Article 246 states that the Parliament has exclusive power to make laws with respect to any of the matters enumerated in ListI(i.e.Union List)and List lll(i.e.Concurrent List)of the seventh schedule.   ( Concept of federalism part 2- Centre State Relations )
  • Article 248 states that the Parliament has exclusive power to make any law with respect to any matter not enumerated in the Concurrent List or State List.
  • Further,Article 250 states that notwithstanding anything in this Chapter,Parliament shall,while a Proclamation of Emergency is in operation,have power to make laws for the whole or any part of the territory of India with respect to any of the matters enumerated in the State List.

Financial relations | Concept of federalism part 2- Centre State Relations 

Articles 268 to 293 describe financial relations

  • Article 268 describes the duties levied by the union but collected and appropriated by the states
  • Article 269 describes the taxes levied and collected by the union but assigned to the states.
  • Article 270 described the taxes levied and distributed between the union and states. ( Concept of federalism part 2- Centre State Relations )

Article 268 to 293

  • Taxes and duties levied by the Union, but collected and appropriated by the States:
    • Stamp duties and duties of excise on medical and toilet preparations are levied by the Government of India, but collected and appropriated by the States, within which such duties are leviable, except in the Union Territories, where they are collected by the Union Government ( 268).
    • The proceeds of these duties levied within any State are assigned to that State only and do not form a part of Consolidated Fund of India.
  • Service tax levied by the Centre, but collected and appropriated by the Centre and the States:
    • Taxes on services are levied by the Centre, but their proceeds are collected and appropriated by both the Centre and the States.
    • Principles of their collection and appropriations are formulated by the Parliament.
  • Taxes levied and collected by the Union, but assigned to the States within which they are leviable (Art.269):
    • Succession duty in respect of property, other than agricultural land.
    • Estate duty in respect of property, other than agricultural land.
    • Terminal taxes on goods or passengers carried by railways, sea or air.
    • Taxes on railway fares and freights taxes on transactions in Stock Exchanges.
  • Taxes levied and collected by the Union and distributed between the Union and the States (Art.270):
    • Certain taxes are levied as well as collected by the Union, but their proceeds are divided between the Union and the States in a certain proportion in order to effect an equitable distribution of the financial resources.
    • This category includes all the taxes and duties referred to in the Union List, except the three categories mentioned above, any surcharge and any cess levied for specific purposes. The manner of distribution of net proceeds of these taxes is prescribed by the President, on the recommendation of the Finance Commission.
  • Surcharge on certain taxes (Art.271):
    • The Parliament is, authorized to levy surcharge on the taxes mentioned in the above two categories (Art.369 and Art.370) and the proceeds of such surcharges go to the Centre exclusively and are not shareable.
  • Taxes levied and collected and retained by the states:These are the taxes enumerated in the State List (20 in number) and belong to the States exclusively.
  • Grants-in-Aid:
    • The Parliament may make grants-in-aid from the Consolidated Fund of India to such States as are in need of assistance (Art.275), particularly for the promotion of welfare of tribal areas, including special grant to Assam.
    • These are called statutory grants and made on the recommendation of the Finance Commission. Apart from this, Art.282 provides for discretionary grants by the Centre and States both, for any public purposes. The Centre makes such grants on the recommendation of the Planning Commission (an extra-constitutional body).
  • Loans:The Union Government may provide loan to any State or give guarantees with respect to loans raised by any State.
  • Previous sanction of the President (Art 274):
    • No Bill or amendment can be introduced or moved in either House of Parliament without the previous sanction of the President, if:
    • It imposes or varies any tax in which the States are interested; or
    • It varies the meaning of the expression “Agricultural Income” as defined in the Indian Income-Tax Act; or
    • It affects the principles on which money are distributed to the States; or
    • It imposes a surcharge on the State taxes for the purpose of the Union.
    • According to Article 301, Freedom of Trade, Commerce and Intercourse throughout the territory of India is guaranteed, but Parliament has the power to impose restrictions in public interest.     ( Concept of federalism part 2- Centre State Relations )
    • Although taxes on income, other than agricultural income, are levied by the Union, yet the State Legislatures can levy taxes on profession, trade, etc.
  • Distribution of non-tax revenues:
    • Non tax revenues from post and telegraph, railways, banking, broadcasting, coinage and currency, central public sector enterprises and escheat (death of a person without heir) and lapse (termination of rights) go to the Centre, while State receives non-tax revenues from irrigation, forests, fisheries, state public sector enterprises and escheat and lapse (if property is situated in that state).
  • Provision has been made for the constitution of a Finance Commission to recommend to the President certain measures for the distribution of financial resources between the Union and the States (Art.280).   (Concept of federalism part 2- Centre State Relations )

Administrative Relations | Concept of federalism part 2- Centre State Relations 

Articles 255 to 263 describe Administrative relations.

  • Article 256 states that the executive power of every State shall be so exercised as to ensure compliance with the laws made by Parliament and any existing laws which apply in that state. And the executive power of the Union shall extend to the giving of such directions to a State as may appear to the Government of India to be necessary for that purpose.
  • Article 257(1) states that the executive power of every State shall be so exercised as not to impede or prejudice the exercise of the executive power of the Union,and the executive power of the union shall extend to thee giving of such directions to a state as many appear to the government of India to be necessary for that purpose.
  • Article 258(2) states that a law made by Parliament which applies in any State may, notwithstanding that it relates to a matter with respect to which the Legislature of the State has no power to make laws, confer powers and impose duties,or authorize the conferring of powers and the imposition of cuties,upon the State or officers and authorities thereof.
  • Article 261(3) states that final judgments or orders delivered or passed by civil courts in any part of the territory of India shall be capable of execution anywhere within that territory according to the law.  ( Concept of federalism part 2- Centre State Relations )
  • Artice 262(1) states that Parliament may by law provide for the adjudication of any dispute or complaint with respect to the use.distribution or control of the waters of,or in,any lnter-state or river valley.
  • Article 262(2) states that notwithstanding anything in this Constitution,Parliament may be law provide that neither the Supreme Court nor any other court shall exercise jurisdiction in respect of any such dispute or complaint as is referred to in clause (1).

 

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