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Centre State Relations Notes


The Centre-State Relations define the distribution of powers and responsibilities between the Union Government and the State Governments.


Articles Related to Centre-State Relations

  • Part XI (Articles 245-263) of the Constitution deals with Centre-State relations.
  • These relations are divided into three types:

Type of Relation Articles Articles
Legislative Relations 245-255 Division of law-making powers between Centre & States.
Administrative Relations 256-263 Centre’s control over State administration.
Financial Relations 268-293 Distribution of financial resources (taxes, grants, borrowing).

Why is Centre-State Relation Important?
  • Ensures coordination between Centre and States.
  • Prevents conflicts over law-making, finance, and administration.
  • Maintains national unity while allowing state autonomy.


Legislative Relations (Articles 245-255)


A. Distribution of Law-Making Powers (Seventh Schedule)

The Constitution divides legislative powers between the Centre and the States:


List Who Can Make Laws? Examples
Union List (97 subjects) Only Parliament Defence, Railways, Foreign Affairs, Atomic Energy
State List (66 subjects) Only State Legislatures Police, Agriculture, Public Health, Land, Liquor
Concurrent List (52 subjects) Both Parliament & States Education, Marriage, Forests, Criminal Law

  • In case of conflict, the Union law prevails (Article 254).
  • Residuary Powers (Article 248) belong to the Centre (e.g., Cyber Laws, AI Regulations).
  • Example: The IT Act, 2000 (Cyber Laws) was enacted under Residuary Powers.

B. Parliament’s Power Over State List

Under certain conditions, Parliament can make laws on State subjects:


Article Condition Example
Article 249 Rajya Sabha resolves with a 2/3rd majority that a subject is of “national interest”. GST Act (2016).
Article 250 During National Emergency (Article 352). Laws on “Public Health” during COVID-19.
Article 252 If two or more states request Parliament to make a law. Water Disputes Act, 1956.
Article 253 If Parliament has to implement an international treaty. Environment Protection Act (1986) for the Stockholm Conference.

The Centre has overriding powers over State List in special situations.



Administrative Relations (Articles 256-263)


A. Distribution of Executive Power
Government Scope of Executive Powers
Union (Centre) Union List subjects (Defence, Railways, Banking).
State State List subjects (Police, Agriculture, Public Health).

  • Article 256 – States must ensure compliance with Parliamentary laws.
  • Article 257 – The Centre can direct States on railways and national security.


B. Centre’s Control Over State Administration
Article Provision
Article 258 Centre can delegate executive functions to States.
Article 263 Establishes Inter-State Councils to resolve disputes.
Article 355 Centre must protect States from external aggression & internal disturbances.
Article 356 President’s Rule (State Emergency) – If the State government fails to function properly.

Example: President’s Rule imposed in Uttarakhand (2016) due to political instability.



Financial Relations (Articles 268-293)


A. Division of Financial Resources

The Centre controls major sources of revenue, and States depend on financial assistance from the Union.


Type of Tax Collected By Kept By
Taxes in Union List Centre Mostly Centre, but some are shared with States.
Taxes in State List States States keep full revenue.
Taxes in Concurrent List Centre Shared with States.

Centre’s Financial Control Over States
  • Article 268-269 – Some taxes collected by the Centre but given to States.
  • Article 270 – Income Tax is shared between Centre & States.
  • Article 275 – Grants-in-aid to weaker states.
  • Article 280 – Finance Commission recommends tax distribution every 5 years.
  • Example: Finance Commission (15th FC, 2020) recommended 41% of central taxes to be given to States.


Role of Institutions in Centre-State Relations

Institution Role
Finance Commission Recommends tax distribution between Centre & States (every 5 years).
NITI Aayog Promotes Cooperative Federalism (replaced Planning Commission).
Inter-State Council (Article 263) Resolves Centre-State & State-State disputes.
Zonal Councils Regional cooperation among States.
GST Council Regulates tax-sharing & uniform taxation across India.

Example: GST Council ensures uniform taxation across states through a cooperative federalism approach.



Challenges in Centre-State Relations

  • Disputes over financial distribution – States demand more share in central taxes.
  • Misuse of Article 356 (President’s Rule) – Used for political gains.
  • Inter-State River Water Disputes – Conflicts over sharing of rivers (e.g., Cauvery dispute between Tamil Nadu & Karnataka).
  • Encroachment of State Powers – The Centre often interferes in State List matters.
  • Growing Demand for State Autonomy – States want more financial and legislative powers.


Important Supreme Court Judgments on Centre-State Relations

Case Judgment
S.R. Bommai Case (1994) President’s Rule (Article 356) is subject to judicial review.
State of West Bengal vs. Union of India (1963) India is not a traditional federation like the USA (Parliament has more power).
Kuldip Nayar Case (2006) Parliament can change Rajya Sabha elections (not a violation of federalism).

The Supreme Court protects federalism but allows Centre’s dominance in some areas.



Cooperative & Competitive Federalism

Type Meaning Example
Cooperative Federalism Centre & States work together for policies & development. GST Council, NITI Aayog.
Competitive Federalism States compete for investment & better governance. Ease of Doing Business ranking.

Example: “One Nation, One Tax” (GST) is an example of Cooperative Federalism.



Key Takeaways for UPSC

  • Centre-State Relations are divided into Legislative, Administrative, and Financial relations.
  • The Centre has overriding powers in emergencies (Articles 249, 250, 356).
  • The Finance Commission & GST Council regulate financial distribution.
  • Judicial rulings (S.R. Bommai Case) have strengthened federalism.
  • Cooperative & Competitive Federalism are emerging trends.


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