Posted October 4, 2013 by advocateguru in Learning Centre

Distribution of Power between Centre and State


Indian Constitution is a federal Constitution. Various provisions give powers to both centre and states to exercise their powers and also provides for their scope of power. The Constitution provides for three major types of classification of powers between the centre and the states namely:

  1. Legislative Power
  2. Financial Powers
  3. Administrative Powers

These relations have been mentioned in Part XI of the Constitution, under the head Relations between The Union and The States.

  1. Legislative Relations

Chapter I of the XI part of the Constitution talks about the legislative relations between the centre and the states. Legislative power in the Constitution has been divided on the basis of:

  1. Territory and
  2. Subject matter.

Based on these two points the legislative power is divided between the centre and the states and also these are the two points the courts consider in case of any contention between the centre and the states.

  1. Territorial Jurisdiction

Article 245 of the Constitution lays down the territorial scope of the centre and the state to legislate. Article 245 (1) specifies that the parliament can legislate for the whole or any part of the territory of the nation, while the state legislature can make laws for the whole or any part of the state. Hence, the scope of parliament is wider than that of the state legislature.

Moreover, Article 245 (2) gives power to Parliament to make laws having extra territorial operation. The judiciary cannot scrutinise such laws since it is more of a policy matter of the government than the simple law making task. However, for the states do not have the option to make extra territorial laws open to them and the same is subjected to judicial review. In case there is a question on the extra territorial operation on the law legislated by the state the principle of territorial nexus is to be followed. (the principle is dealt with in depth in other section)

  1. Jurisdiction According to Subject Matter

Article 246 read with Schedule VII lays provision for three lists namely:

  1. The Union list

  2. The Concurrent list and

  3. The State list

The specifications of the lists are provided in Schedule VII of the Constitution.

Article 246 (1) gives the Union exclusive power to legislate on the matters enumerated in List-1 (Union List) provided in Schedule VII of the Constitution. The Union list consists of the maters like defence, foreign affairs, transportation and communication etc.

Article 246 (2) entrusts power to both the state and centre to legislate on the matters in List-3 of the Schedule VII, also known as the Concurrent List. This idea of concurrent list is inspired by the Australian Constitution. The centre and state are given power for broad subject matters like taxes, public welfare, education, economic planning, basic laws like the criminal law (example: state amendments in IPC and Cr.P.C) etc.

Article 246 (3) gives power to the state to legislate on the matters enlisted in List-2 of the Schedule VII. Some of the matters that the list consists are: police, law and justice, health communication, water issues etc.

  1. Administrative Relations

Chapter I of the XI part of the Constitution talks about the administrative relations between the centre and the states. The centre and state’s administrative relations have been enumerated in Articles 256-261 of the Indian Constitution. To make administration federal and still unitary both the centre and states have their own say in particular matters. There is administrative machinery for both the centre and the state. However, the laws made by the Union are to be complied with (Article 256).

The administrative powers can be delegated by the Union to the States and vice-versa. Article 258 confers the power on the Union to delegate administrative power to the states. Such an entrustment can be conditional or unconditional and the consent of the state government is to be obtained for the same. Such an entrustment can be by law or by agreement between the centre and the state. Such a delegation can be general or specific to one or many states.

The delegation of the power can be done regarding the Union or Concurrent list, since the states already power to make laws regarding the state list there arises no need to delegate the power for that.

There are specific conditions that the state governments should take care when entrusted with any sort of delegation:

  1. The state government should comply with general or specific directions of the central government issued from time to time.

  2. The central government may itself exercise any of these functions if it deems that to be fit to be done.

However there is a need to differentiate between:

  1. Functions vested in the Union which are exercisable by the President on behalf of the Union and

  2. Functions entrusted to the President by express provisions of the Constitution.1

Since only the former can be delegated to the states. The powers and functions provided to the President exclusively, by the Constitution cannot be delegated. Quasi-judicial and delegated legislation can be delegated only if there is any statute for the same and not under Article 258.

Article 258 (2) says that the government can delegate the matters of union list too. This clause is sui genreis and uncontrolled by Article 258 (1). Under this clause the states can be entrusted with duties even without their consent.

Article 2589 (3) is the clause whereby the centre has to defray the cost. That is if any such entrustment leads to any expenditure the centre is liable to pay the same and the states are saved from paying the same from their pockets.

Article 258A empowers the states to entrust functions to the union. This Article was added by the 7th Amendment, 1956. By virtue of this article the relationship between centre and state is not of a principal and agent.2

  1. Financial Relations

The financial relations between the state and the centre are contained in Part XII Chapter I of the Indian Constitution. Article 265 expressly lay down that no tax can be levied except by the authority of law. This part talks about the consolidated funds and the contingency fund.

The financial relations include distribution of the tax-revenue between the Union and the States, which stands as follows:

  1. Taxes belonging to the Union exclusively:

Corporation tax, taxes on capital value of assets of individuals and companies, income tax and other taxes in respects with matters mentioned in the Union List.

  1. Taxes belonging to the States exclusively:

Services on which the states have the power to levy taxes are included in this part. Land revenue, stamp duty except in documents included in the union list, succession duty, estate duty, and income tax on agricultural land, taxes on passengers and goods carried on inland waterways taxes on lands and buildings, mineral rights.

Taxes on road vehicles, on advertisements, on consumption of electricity, on luxuries and amusements, etc are also included.

  1. Duties levied by the union but collected and appropriated by the states:

Stamp duties on bills of exchange, etc., and excise duties on medical and toilet preparations containing alcohol.

  1. Taxes levied as well as collected by the union, but assigned to the states within which they are leviable:

Duties on succession to property other than agricultural land. Estate duty in respect of property other than agricultural land terminal taxes on goods or passengers carried by railway, air or sea taxes on railway fares and freights and so on.

  1. Taxes levied and collected by the union and distributed between union and the states:

Certain taxes shall be levied as well as collected by the Union, but their proceeds shall be divided between the Union and the States in a certain proportion, in order to effect on equitable division of the financial resources.

1Jayantilal Amrat Lal v F N Rana AIR 1964 SC 648


2 N.B. Singh v Duryodhan AIR 1959 Ori. 48