Centre-State relations in India refer to the dynamic interactions and distribution of powers between the central government and the state governments within the framework of the Constitution of India. These relations are crucial in ensuring the smooth functioning of a federal system. They are broadly categorized into legislative, administrative, and financial relations.

Legislative Relations

• Three Lists: The Constitution of India provides for a division of legislative powers between the Centre and the States through three lists in the Seventh Schedule:

  • Union List: Subjects on which only the Centre can legislate, such as defense, foreign affairs, atomic energy, and railways.
  • State List: Subjects on which only the States can legislate, such as police, public health, and agriculture.
  • Concurrent List: Subjects on which both the Centre and States can legislate, such as education, marriage, and bankruptcy. However, in case of a conflict, the Central law prevails.

• Residuary Powers: Any subject not mentioned in any of the three lists falls under the residuary powers, which are vested in the Centre.

• Parliament's Power to Legislate on State List: Under certain circumstances, Parliament can legislate on matters enumerated in the State List:

  • In the national interest (Article 249).
  • During a proclamation of emergency (Article 250).
  • When two or more states request Parliament to legislate on a matter (Article 252).
  • To implement international agreements (Article 253).

Inter-State relations in India pertain to the interactions and collaborations among the various states within the country. These relations are crucial for maintaining national unity and ensuring balanced development across regions. The Constitution of India provides a framework for managing these relationships, promoting cooperation, resolving conflicts, and fostering mutual understanding. Key aspects of inter-state relations include legal frameworks, economic cooperation, dispute resolution mechanisms, and institutional arrangements.

Legal Framework

• Inter-State Council: Established under Article 263 of the Constitution, the Inter-State Council aims to facilitate coordination between states and the Centre. It addresses disputes, advises on policy matters, and fosters cooperation on issues of common interest.

• Zonal Councils: These are statutory bodies established under the States Reorganisation Act of 1956. There are five Zonal Councils (Northern, Southern, Eastern, Western, and Central), each headed by the Union Home Minister and comprising the Chief Ministers of the respective zones. They discuss and resolve inter-state matters related to economic and social planning, border disputes, and regional cooperation.

• Parliamentary Legislation: Under Article 252, if two or more states consent, Parliament can legislate on matters in the State List. Such legislation applies only to consenting states, but it promotes uniformity in certain areas.

Economic Cooperation

• Shared Resources: States often share natural resources like rivers, forests, and minerals. Collaborative management and equitable sharing are vital for preventing conflicts and ensuring sustainable development.

• Joint Projects: States sometimes undertake joint infrastructure projects such as inter-state highways, power plants, and irrigation schemes. These projects require coordination and shared funding but can significantly boost regional development.

Dispute Resolution Mechanisms

• Inter-State Water Disputes Tribunal: Established under the Inter-State River Water Disputes Act, 1956, these tribunals adjudicate disputes between states over river water sharing. Examples include the Cauvery Water Disputes Tribunal and the Krishna Water Disputes Tribunal.

• Supreme Court: As the highest judicial authority, the Supreme Court adjudicates disputes between states under Article 131. Its decisions are binding and aimed at ensuring justice and equity.

• States in India cannot adopt a uniform stance because they are at varying stages of development and have significantly different levels of resources. Wealthier states have more resources, while poorer states need additional funds to develop and catch up.
• The Finance Commission is tasked with allocating more funds to the poorer states proportionately. However, despite the efforts of the 15 Finance Commissions so far, the disparity remains significant.
• Richer states, which contribute more revenue and receive proportionally less, often resent this system.
• They overlook the fact that poorer states provide markets that facilitate their growth. Additionally, poorer states lose much of their savings to wealthier states, further accelerating the latter's development.
• It is frequently argued that since Mumbai contributes a significant portion of corporate and income taxes, it should receive more funding.
• However, this is because Mumbai, as the financial capital, hosts many large corporations that pay taxes there, reflecting revenue contribution in an accounting sense rather than actual production.
• The Centre distributes resources to states in two primary ways: through the Finance Commission's recommendations and direct expenditures in states.
• All central government expenditures occur within some state, effectively making these expenditures transfer to the states.
• This becomes another source of conflict, as expenditures create jobs and prosperity in the recipient state. Consequently, each state seeks more central expenditure within its borders.
• The Centre can manipulate the allocation of schemes and projects for political gain, leading to accusations of favouritism toward states like Gujarat and Uttar Pradesh. Opposition-ruled states have long complained of biased treatment

• Inter-State Council: Established under Article 263 of the Constitution, the Inter-State Council aims to facilitate coordination between states and the Centre. It addresses disputes, advises on policy matters, and fosters cooperation on issues of common interest.

• Zonal Councils: These are statutory bodies established under the States Reorganisation Act of 1956. There are five Zonal Councils (Northern, Southern, Eastern, Western, and Central), each headed by the Union Home Minister and comprising the Chief Ministers of the respective zones. They discuss and resolve inter-state matters related to economic and social planning, border disputes, and regional cooperation.

• Parliamentary Legislation: Under Article 252, if two or more states consent, Parliament can legislate on matters in the State List. Such legislation applies only to consenting states, but it promotes uniformity in certain areas.

• Shared Resources: States often share natural resources like rivers, forests, and minerals. Collaborative management and equitable sharing are vital for preventing conflicts and ensuring sustainable development.

• Joint Projects: States sometimes undertake joint infrastructure projects such as inter-state highways, power plants, and irrigation schemes. These projects require coordination and shared funding but can significantly boost regional development.

• Inter-State Water Disputes Tribunal: Established under the Inter-State River Water Disputes Act, 1956, these tribunals adjudicate disputes between states over river water sharing. Examples include the Cauvery Water Disputes Tribunal and the Krishna Water Disputes Tribunal.

• Supreme Court: As the highest judicial authority, the Supreme Court adjudicates disputes between states under Article 131. Its decisions are binding and aimed at ensuring justice and equity.