Constitutional Provisions on Centre–State Relations

1. Relevant Parts & Articles

Aspect Constitutional Provision
Legislative Relations Articles 245 to 255 (Part XI)
Administrative Relations Articles 256 to 263 (Part XI)
Financial Relations Articles 268 to 293 (Part XII)
Inter-State Council Article 263
Borrowing Powers Article 293
Taxes assigned to States Article 268, 269, 270, 275, 280
Finance Commission Article 280
Dispute Resolution Article 131, 263
Entrusting Functions Articles 258 & 258A
President’s Rule Article 356, Article 365
Implementation of International Treaties Article 253
Doctrine of Repugnancy Article 254
Zonal Councils (Statutory) Under States Reorganisation Act, 1956
GST Council Article 279A (via 101st Constitutional Amendment)

2. Seventh Schedule – Division of Subjects

List Subjects Legislative Power
Union List (List I) 97 Subjects (e.g., defense, foreign affairs, railways) Parliament
State List (List II) 66 Subjects (e.g., police, public health) State Legislatures
Concurrent List (List III) 47 Subjects (e.g., education, forests) Both; Union prevails in conflict

3. Important Articles Explained

LEGISLATIVE RELATIONS (Arts. 245–255)
Article Provision
Art. 245 Territorial extent of laws
Art. 246 Subject-matter distribution through 3 lists
Art. 247 Parliament’s power to establish additional courts
Art. 249 Parliament can legislate on State List in national interest (Rajya Sabha 2/3)
Art. 250 Parliament’s power to legislate on State List during Emergency
Art. 252 States can request Parliament to legislate on State matters
Art. 253 Legislation for implementing international agreements
Art. 254 Union law prevails in Concurrent List conflict
Art. 255 Requirement of Presidential assent in certain cases

ADMINISTRATIVE RELATIONS (Arts. 256–263)

Article Provision
Art. 256 States to follow Union laws; Centre can issue directions
Art. 257 State not to impede Centre’s executive powers
Art. 258 Centre can entrust its functions to States
Art. 258A State can entrust its functions to Centre
Art. 261 Recognition of public acts, records across India
Art. 263 President can establish an Inter-State Council

FINANCIAL RELATIONS (Arts. 268–293)

Article Provision
Art. 268 Duties levied by Union but collected by States
 Art. 269 Taxes assigned to States (inter-State trade)
Art. 270 Taxes shared between Union and States
Art. 271 Surcharge for Union purposes – not shared
Art. 275 Statutory grants to certain states
Art. 280 Finance Commission: recommends tax devolution
Art. 282 Discretionary grants for public purposes
Art. 293 Borrowing powers of the States with Centre’s consent

4. Judicial Provisions Related to Centre–State Relations

Article Description
Art. 131 Supreme Court has original jurisdiction in Centre–State disputes
Art. 136 Special leave to appeal by the Supreme Court
Art. 226 High Courts can issue writs against state/central authorities

5. Emergency Provisions Affecting Centre–State Relations

Article Effect
Art. 352 National Emergency – Parliament can legislate on State List
Art. 356 President’s Rule – Centre assumes state functions
Art. 360 Financial Emergency – Centre controls State finances

Centre–State Relations in India

(Part XI, XII; Schedules VII & Articles 245–263)
Background & Objective:
• India has adopted a quasi-federal structure — a strong Centre with cooperative federalism.
• The Centre–State relations are divided into three key areas as per the Constitution:
1. Legislative Relations (Articles 245–255)
2. Administrative Relations (Articles 256–263)
3. Financial Relations (Articles 268–293)

1. LEGISLATIVE RELATIONS (Articles 245–255)

Territorial Jurisdiction (Article 245):
• Parliament: laws for whole or any part of India
• State Legislature: laws for whole or any part of that state
Subject-Matter Jurisdiction – 7th Schedule:
List Subjects Power
Union List 97 items Parliament has exclusive power
State List 66 items State Legislatures have exclusive power
Concurrent List 47 items Both can legislate; Union law prevails in case of conflict (Art. 254)
Parliament’s Authority Over State List:
Parliament can legislate on State List items in the following cases:
Provision Situation Article
National Interest Rajya Sabha passes resolution by 2/3 majority Art. 249
During Emergency National Emergency (Art. 352) Art. 250
President’s Rule State under Art. 356 Art. 357
On State Request 2 or more states pass resolutions Art. 252
To Implement Treaties Even on State subjects Art. 253
Doctrine of Repugnancy (Art. 254):
• In Concurrent List conflicts: Union law prevails unless the State law has Presidential assent
 2. ADMINISTRATIVE RELATIONS (Articles 256–263)
Distribution of Executive Power:
Area Who Exercises Power
Union List Union
State List State
Concurrent List Normally by State, but Centre can issue directions
Obligation of States & Control of Union:
Article Provision
256 States must comply with laws made by Parliament; President can issue directions
257 States must not obstruct Centre's executive power; Centre can give directions for national interests
258 Centre can entrust its functions to States with their consent
258A States can voluntarily entrust their functions to Centre
365 State’s failure to comply with directions may lead to President’s Rule (Art. 356)
All-India Services (Article 312):
• Created by Parliament in national interest on Rajya Sabha resolution
• IAS, IPS, IFS – Common services for Centre & States
Public Acts and Proceedings (Art. 261):
• Full faith and credit to public acts and records throughout India
Inter-State Council (Art. 263):
• Established in 1990 based on Sarkaria Commission recommendation
• Advisory body for coordination and resolving inter-state disputes

3. FINANCIAL RELATIONS (Articles 268–293)

Division of Taxes:
Type of Tax Levied by Collected Appropriated by
by
Art. 268 Duties (e.g., stamp duty) Union States
Art. 269 Taxes on inter-state trade Union Assigned to States
Art. 270 Union taxes (excluding surcharges & Union Shared with States via Finance
cesses) Commission
Art. 271 Surcharges Union Not shareable
Art. 272 Formerly duties in State List — —
(repealed)
Grants-in-Aid (Article 275 & 282):
• Statutory Grants: Under Article 275 to needy states
• Discretionary Grants: Under Article 282 for public purpose (Plan & Centrally Sponsored Schemes)
Finance Commission (Article 280):
• Recommends distribution of taxes between Centre and States
• Also reviews fiscal condition of states
Borrowing Powers:
Entity From Restriction
Union Anywhere No restriction
State Within India Can borrow externally only with Centre's consent (Art. 293)

OTHER COORDINATION MECHANISMS

Zonal Councils (States Reorganisation Act, 1956):
• 5 Zonal Councils (North, South, East, West, Central)
• Promote cooperation among states
NITI Aayog:
• Replaced Planning Commission
• Platform for cooperative and competitive federalism
 GST Council:
• Joint body of Centre & States (Art. 279A)
• Decides tax rates, exemptions, threshold limits under GST

IMPORTANT CASE LAWS

Case Significance
State of West Bengal v. Union of India (1962) Centre can make laws affecting states without consent
S.R. Bommai v. Union of India (1994) Restricted misuse of Article 356; upheld federalism
Keshavananda Bharati v. State of Kerala (1973) Federalism is part of Basic Structure

COMMISSIONS ON CENTRE–STATE RELATIONS

Commission Recommendations
Sarkaria Commission (1983) Greater autonomy for states, use Article 356 sparingly
Punchhi Commission (2007) Fixed tenure of Governors, limit misuse of Centre’s powers
Rajamannar Committee (1969) Suggested states should have equal say in constitutional amendments and planning

CHALLENGES IN CENTRE–STATE RELATIONS

• Political Centralisation (e.g., misuse of Article 356)
• Fiscal Imbalance
• Governor's Bias
• Unequal Resource Sharing
• Tensions in Law & Order Areas (e.g., NIA vs State Police)

WAY FORWARD
• Strengthen Inter-State Council
• Implement Punchhi Commission recommendations
• More financial autonomy for states
• Promote cooperative federalism via NITI Aayog
• Clear rules for Governor’s role

Evolution of Centre–State Relations Since Independence

Background:
India adopted a quasi-federal structure with a strong Centre to ensure national unity and integrity, especially in a newly
independent and diverse country. Over time, democratic maturity, regional aspirations, and coalition politics
necessitated a rethinking of Centre–State relations.

PHASE-WISE EVOLUTION
1. 1947–1967: Centralised Federalism
• Congress dominated both Centre and States → cooperative relations, little friction.
• Planning Commission controlled finances centrally.
• Constitution provided strong Centre:
o Emergency provisions
o Article 356 misuse not yet seen
• States complied with Centre's decisions.

2. 1967–1989: Competitive Federalism & Political Friction

• Non-Congress governments in many states after 1967 elections.
• Centre–State disputes increased over:
o Article 356 misuse
o Interference via Governors
 o Resource sharing
• Demands for greater autonomy arose.
• Led to formation of commissions to study Centre–State issues.

3. 1990–2000s: Coalition Era & Decentralisation

• Coalition governments at the Centre → States became partners in governance
• Rise of regional parties empowered states.
• Panchayati Raj (73rd) and Municipalities (74th) Constitutional Amendments:
o Strengthened grassroots federalism
• Finance Commission became more central to resource devolution.

4. 2014–Present: Co-operative & Competitive Federalism

• NITI Aayog replaced Planning Commission (2015):
o Greater emphasis on state consultation
• GST regime created institutional federalism through GST Council
• Disputes remain:
o Over fiscal federalism, farm laws, language, Centre’s ordinances
• Simultaneous push for One Nation, One Election, CAA-NRC, etc. → centre-state friction

MAJOR COMMITTEES ON CENTRE–STATE RELATIONS

1. Rajamannar Committee (1969)

Feature Details
Appointed by Tamil Nadu Government
Chairman Dr. P.V. Rajamannar (Former Chief Justice, Madras HC)
Objective Examine scope of Centre’s interference in State matters
Key Recommendations:
• Abolish Planning Commission
• Set up Inter-State Council
• Make Article 356 non-justiciable
• Transfer more subjects to State List
• States to have equal say in constitutional amendments affecting them
Note: Recommendations were not implemented by the Centre.

2. Sarkaria Commission (1983–1988)

Feature Details
Appointed by Union Government
Chairman Justice R.S. Sarkaria
Objective Review working of existing arrangements between Centre and States
Key Recommendations:
• Strengthen Inter-State Council
• Use Article 356 sparingly, only as a last resort
• Governor should be apolitical, appointed with CM consultation
• Finance Commission's role must be enhanced
• More autonomy in Concurrent List to States
• Transfer residuary powers related to state subjects
• Set up permanent body for Centre–State consultation
Implementation:
• Some recommendations accepted (e.g., Inter-State Council revived in 1990)
• Most major reforms not implemented

3. Punchhi Commission (2007–2010)

 Feature Details
Appointed by UPA Government
Chairman Justice M.M. Punchhi
Objective Suggest improvements in Centre–State relations for changing political scenario
Key Recommendations:
• Fixed 5-year tenure for Governors
• Governor’s role to be limited; removal only on objective grounds
• Restrict use of Article 356; establish clear guidelines
• Create National Integration Council for handling communal violence
• States to have greater role in concurrent subjects
• Strengthen role of Inter-State Council as decision-making body
Status: Awaiting full implementation; many recommendations remain unaddressed.

CURRENT CHALLENGES IN CENTRE–STATE RELATIONS

Challenge Details
Fiscal Centralisation More funds controlled by Centre post-GST; States’ fiscal space reduced
Article 356 Misuse Though reduced post S.R. Bommai case, issues remain
Governor’s Role Seen as political agents; friction in Tamil Nadu, Kerala, West Bengal
Language & Culture Imposition of Hindi, NEET-related issues
One Nation Initiatives Seen as eroding federalism (e.g., simultaneous elections, CAA)

WAY FORWARD
Strategy Explanation
Implement Punchhi Commission Clear tenure, role limits for Governors; federal balance
Strengthen Inter-State Council Use as real decision-making platform
Fiscal Devolution Greater autonomy in taxation and resource sharing
Judicial Oversight Stronger review of Centre’s actions under Articles 356, 360
Empower States in NITI Aayog More planning say for States
Strengthen Cooperative Federalism Dialogue-based decisions (e.g., GST Council, Health, Education)

Inter-State Relations in India

Constitutional Basis
Part XI and Part XIII of the Constitution deal with Centre–State and Inter-State relations, respectively. These relations
include legislative, administrative, financial, and judicial coordination among states.

Key Areas of Inter-State Relations

1. Inter-State Water Disputes

Aspect Description
Article 262 Parliament may provide for adjudication of inter-state river disputes and exclude SC/HC jurisdiction
Act Inter-State River Water Disputes Act, 1956
Mechanism Central government forms a Tribunal for the dispute
Jurisdiction Supreme Court barred once Tribunal is formed
Examples:
• Cauvery Water Dispute – Karnataka vs Tamil Nadu
• Krishna Water Dispute – Maharashtra, Karnataka, Andhra Pradesh
• Ravi-Beas Dispute – Punjab vs Haryana
 2. Inter-State Trade & Commerce
Article Provision
Article 301 Freedom of trade, commerce, and intercourse throughout India
Article 302 Parliament may impose restrictions in public interest
Article 303 No discrimination in taxation between states
Article 304 States can impose reasonable restrictions on trade with other states (with Presidential assent)

3. Inter-State Council (Article 263)

Feature Description
Constitutional body Under Article 263
Purpose Promote coordination and resolve disputes between States
Composition PM (Chairman), Union Ministers, State CMs
Status Advisory body, non-binding recommendations
Setup Established in 1990, based on Sarkaria Commission

4. Zonal Councils
Feature Description
Statutory body Under States Reorganisation Act, 1956
Types 5 Zonal Councils: North, South, East, West, Central (NEC separately)
Chairperson Union Home Minister
Purpose Promote cooperation on matters like border disputes, economic planning, law & order,
transport, etc.
North Eastern Council Separate statutory body under NEC Act, 1971
(NEC)

5. Public Acts, Records & Judicial Proceedings

Article Provision
Article Full faith and credit shall be given throughout the territory of India to public acts, records, and judicial
261 proceedings of the Union and of every State

6. Adjudication of Inter-State Disputes (Article 131)

Article Provision
Article Supreme Court has original jurisdiction in disputes between Centre and one or more states or between
131 states
Examples:
• Boundary disputes
• GST compensation disputes
• Punjab vs Haryana over Sutlej-Yamuna Link Canal

7. Inter-State Migration Issues

• States may dispute over:
o Quota and domicile
o Law and order issues
o Language conflicts
• No direct constitutional provision for conflict resolution
• Can be handled via ISC or political negotiation

Judicial Interventions
Case Summary
State of Karnataka v. Union of India (1977) SC held that Centre can direct states under Article 256
Cauvery Water Disputes Tribunal Case Clarified scope of Article 262 and Tribunal's jurisdiction
 State of West Bengal v. Union of India (1962) States have no right to secede; India's federalism is indestructible

Challenges in Inter-State Relations

Challenge Example
Water disputes Long pending cases, non-compliance
Border disputes Maharashtra-Karnataka, Assam-Mizoram
Political differences Different parties in power create confrontation
Fiscal competition States undercut each other in taxation/incentives
Language and culture-based tensions E.g., Hindi imposition issues, NEET controversy in Tamil Nadu

Way Forward
Suggestion Purpose
Empower Inter-State Council Make it a decision-making body
Permanent Water Disputes Tribunal Faster resolution, binding mechanism
Use Zonal Councils more effectively Regular meetings, specific mandates
Institutional federalism Strengthen GST Council-like models
Judicial fast-track Set timeline for resolving inter-state disputes

Zonal Councils

Constitutional & Statutory Basis

Aspect Details
Type Statutory Body
Created Under States Reorganisation Act, 1956
Articles Involved Not a constitutional body; no direct Article
Total Councils 5 Zonal Councils (originally planned for 6)
Purpose Promote cooperation and coordination between states, UTs, and Centre

List of Zonal Councils

Zonal Council Member States/UTs
Headquarters
1. Northern Zonal Haryana, Himachal Pradesh, Jammu & Kashmir, Punjab, Rajasthan, New Delhi
Council Delhi, Chandigarh
2. Central Zonal Chhattisgarh, Madhya Pradesh, Uttarakhand, Uttar Pradesh Bhopal
Council
3. Eastern Zonal Bihar, Jharkhand, Odisha, West Bengal Kolkata
Council
4. Western Zonal Goa, Gujarat, Maharashtra, Rajasthan, Dadra & Nagar Haveli and Mumbai
Council Daman & Diu
5. Southern Zonal Andhra Pradesh, Karnataka, Kerala, Tamil Nadu, Telangana, Chennai
Council Puducherry

Note: North Eastern States are not under Zonal Councils — instead they are part of the North Eastern Council (NEC)
set up under NEC Act, 1971.

Composition of Zonal Councils

Position Role
Chairperson Union Home Minister (ex-officio)
Vice-Chairperson CM of the host state (rotational)
Members CMs and 2 Ministers from each member State
Advisory Members Union Ministers and senior officers (on invitation)

Functions and Objectives

Area Function
Dispute Resolution Address border disputes, language issues, law & order
Economic Planning Discuss economic and social planning, regional imbalance
Infrastructure Coordinate on roads, railways, water, power, and industries
Social Issues Discuss internal security, crime control, drug trafficking
Promoting Unity Strengthen national integration and cooperative federalism

Importance of Zonal Councils

• Promote cooperation in a federal structure
• Provide a platform for dialogue between states and Centre
• Help avoid judicial disputes by enabling consensual decisions
• Support economic development and integration
• Help in handling regional tensions (e.g., migrant labor, river disputes)

Limitations
Issue Explanation
Advisory Nature Decisions are not legally binding
Irregular Meetings Many councils do not meet regularly
Overlapping Jurisdictions With Inter-State Council and other bodies
Lack of Enforcement No mechanism to implement decisions
Underutilization Potential not fully realized in governance

Recent Developments
• Southern Zonal Council (2022) focused on:
o Cybercrime
o Coastal security
o Narcotics control
• Northern Zonal Council (2023) discussed:
o Sharing intelligence on gang activity and drugs
o Coordination for border area development

Comparison: Zonal Councils vs Inter-State Council

Feature Zonal Councils Inter-State Council
Basis Statutory (1956) Constitutional (Art 263)
Chairperson Union Home Minister Prime Minister
Function Regional cooperation National coordination
Members Specific states in a zone All states & UTs
Decisions Advisory only Also advisory, but broader scope
Frequency Irregular Less frequent but nationally significant

North Eastern Council (NEC)

Basic Details
Feature Description
Type Statutory Body
Establishment 1971, under the North Eastern Council Act, 1971
 Operational Since August 1972
Headquarters Shillong, Meghalaya
Amended Act Amended in 2002 and 2018 for expanded role

Member States
NEC covers the 8 North Eastern States:
1. Arunachal Pradesh
2. Assam
3. Manipur
4. Meghalaya
5. Mizoram
6. Nagaland
7. Sikkim (added in 2002 amendment)
8. Tripura

Composition (Post-2018 Amendment)

Position Member
Chairperson Union Home Minister (since 2018 amendment)
Vice Chairperson Minister of DoNER (Development of North Eastern Region)
Members Governors & CMs of 8 NE states, 3 nominated members by President

Objectives of NEC
Area Focus
Economic Planning Promote balanced economic development
Infrastructure Road, rail, telecom, and energy connectivity
Inter-State Coordination Solve regional issues and disputes
Advisory Role Guide Centre in formulating NE development policies
Capacity Building Skill development, education, and human resource planning

Achievements of NEC

1. Infrastructure Development
• Over 10,000 km of roads funded and developed through NEC schemes.
• Supported rail connectivity projects: e.g., Jiribam–Imphal line, Lumding–Silchar.
• Played a role in regional airports development: Agartala, Dibrugarh, Imphal.

2. Power & Energy

• Promoted hydropower development in Arunachal and Sikkim.
• Funded transmission lines to improve power distribution.

3. ICT & Telecom

• Supported expansion of telecom towers and connectivity in remote border areas.
• Enabled planning for the North East Fibre Grid.

4. Agricultural & Allied Sectors

• Helped establish regional agri-marketing infrastructure.
• Supported horticulture & livestock missions tailored to hilly terrain.

5. Skill Development & Education

• Funded institutions like NERIST (Itanagar) and NIT Nagaland.
• Supported vocational training and skill development for youth.
 • Helped establish Model Degree Colleges in underserved districts.

6. Peace, Integration, and Coordination

• NEC has coordinated efforts among states to address insurgency and border issues.
• Organizes North East Festival and cultural exchange programs.

7. Funding Support
• Acts as a regional planning body that supplements funds of line ministries.
• Provides project-based grants for small but impactful projects.

Limitations / Challenges
Issue Explanation
Limited Financial Powers Dependent on Ministry of Finance and DoNER for funds
Advisory Role No binding authority on states
Delay in Project Execution Terrain & administrative hurdles slow implementation
Political Underutilization Less assertive compared to other central planning bodies

Way Forward
Suggestion Purpose
Convert to executive body To ensure enforceability of decisions
Increase Budget Allocation For large-scale regional infrastructure
Coordination with Zonal Councils & NITI Aayog Avoid duplication and strengthen federalism
Promote People-Centric Projects In tourism, sports, and cultural heritage

Abbreviation Full Form Location Function

NEPA North Eastern Police Shillong, Meghalaya Training of police personnel from
Academy NER states
NEEPCO North Eastern Electric Shillong, Meghalaya Generation and transmission of
Power Corporation Ltd. electric power in NER
NERAMAC North Eastern Regional Guwahati, Assam Marketing support and value
Agricultural Marketing addition for agricultural products in
Corporation Ltd. NER
NERIST North Eastern Regional Nirjuli, Arunachal Technical education and research
Institute of Science and Pradesh institute
Technology
RIPAN Rajiv Gandhi Institute of Sivasagar, Assam Training and research in petroleum
Petroleum Technology technology
(Assam Centre)
NERIWALM North Eastern Regional Tezpur, Assam Research & training on water and
Institute of Water and Land land resource management
Management
RIMS Regional Institute of Imphal, Manipur Tertiary healthcare and medical
Medical Sciences education in NER
NESAC North Eastern Space Umiam, Meghalaya Space technology applications in
Applications Centre disaster management, agriculture,
and resource mapping
BBCI Dr. Bhubaneswar Borooah Guwahati, Assam Comprehensive cancer treatment,
Cancer Institute research, and training
RIPSAT Regional Institute of Aizawl, Mizoram Training in paramedical and nursing
Paramedical and Nursing fields
Sciences
 CBTC Cane and Bamboo Burnihat, Assam Promotion of bamboo and cane
Technology Centre (near Guwahati) technology and enterprise
NETDC North East Tourism Likely Guwahati, Policy support and coordination for
Development Council Assam (operational tourism promotion in NER
HQ varies)

NITI Aayog – (National Institution for Transforming India)

Establishment
• Formed: 1 January 2015
• Replaced: Planning Commission (established in 1950)
• Type: Executive body (non-constitutional, non-statutory)
• Announcement: By PM Narendra Modi on 15 August 2014

Objective
To serve as the policy think tank of the Government of India, providing strategic and technical advice on development
processes, cooperative federalism, innovation, and long-term planning.

Structure of NITI Aayog

Component Composition / Head
Chairperson Prime Minister of India
Vice Chairperson Appointed by the Prime Minister(Current: Suman Bery)
CEO Appointed by the PM(Current: B.V.R. Subrahmanyam)
Governing Council Chief Ministers of all states + Lt. Governors of UTs
Regional Councils Formed for specific issuesChaired by PM or his nominee
Special Invitees Experts, specialists, and practitioners from various fields
Full-time Members Appointed by PM
Ex-Officio Members Union Ministers nominated by PM

Key Functions of NITI Aayog

Area Description
Policy Formulation Draft long-term strategic policies and development agendas
Cooperative Federalism Promote structured support between Centre and States
Monitoring and Evaluation Evaluate government programs and recommend improvements
Innovation & Research Promote innovation through Atal Innovation Mission (AIM)
Think Tank Role Acts as an ideas hub for sustainable, inclusive development
Foster Competitive Federalism Rank states using indices like SDG Index, Health Index, etc.

NITI Aayog vs Planning Commission

Feature NITI Aayog Planning Commission
Nature Advisory body Allocative body
Statutory Status Non-statutory Non-statutory
Head PM as Chairperson PM as Chairperson
Role Policy Think Tank Centralised Planning
Fund Allocation No power to allocate funds Had power to allocate funds to states
Approach Bottom-up Top-down
Cooperative Federalism Strong emphasis Less participatory

Major Initiatives by NITI Aayog

Initiative Description
 Aspirational Districts Programme Improves socio-economic indicators in underdeveloped districts
Atal Innovation Mission (AIM) Fosters a culture of innovation and entrepreneurship
National Nutrition Strategy Roadmap to address malnutrition in India
India Energy Dashboard Provides integrated energy statistics
SDG India Index Monitors state-wise progress on Sustainable Development Goals
Health Index Ranks states based on healthcare performance
Digital India Support Helps in digital governance and infrastructure
LiFE Campaign Lifestyle for Environment — nudging sustainable consumer behavior

Criticism / Challenges
Concern Description
No Financial Powers Cannot allocate funds like Planning Commission
Lack of Statutory Backing Purely executive; functions can be limited or overruled
Limited Influence Some states feel it lacks impact on major reforms
Implementation Gaps Effective on paper but faces hurdles in state-level execution
Centre-Dominated Despite federal ideals, sometimes lacks equal say for states

Way Forward
• Grant statutory backing to improve legitimacy
• Strengthen its role in data analytics and evidence-based policymaking
• Ensure greater participation of states in policy formation
• Integrate with ministries and state governments for better implementation

GST Council – Goods and Services Tax Council

Constitutional Provision
• Article: 279A
• Introduced by: 101st Constitutional Amendment Act, 2016
• Purpose: To make recommendations on issues related to Goods and Services Tax (GST)

Formation
• Constituted on: 12 September 2016
• First Meeting: 22–23 September 2016
• Constitutional Body: Yes
• Type: Federal decision-making body for GST

Composition of GST Council (as per Article 279A)

Position Member
Chairperson Union Finance Minister
Member Minister of State for Finance/Revenue, Government of India
Members from States Finance or Taxation Ministers of each State or UT with Legislature
Vice Chairperson Chosen from among the State Ministers (by rotation)

Functions of GST Council

As per Article 279A(4), the Council makes recommendations on:
Area Recommendations on…
Tax Rates GST rates on goods and services
Exemptions Goods/services to be exempt from GST
Threshold Limits Thresholds for registration under GST
Model Laws Drafting model GST laws, principles of levy
Special Rates Rates during natural calamities, disasters
 Dispute Resolution Mechanism between Centre and States

Decision-Making Process
• Quorum: 50% of total members
• Voting Weightage:
o Centre: 1/3rd of votes
o States (all combined): 2/3rd of votes
• Decision Rule: Minimum 75% majority required for any decision

Significance in Federalism
Aspect Contribution
Cooperative Federalism Equal voice for Centre and States in tax policy
Economic Integration Ensures one nation, one tax structure
Dispute Resolution Platform for resolving inter-government fiscal conflicts
Uniform Taxation Prevents cascading taxes, promotes ease of doing business

Recent Key Recommendations (for example-based answers)

• GST on food delivery apps (2022)
• Rate rationalization committees formed
• Compensation to states for GST revenue loss till June 2022 (5 years as per original Act)

Challenges / Criticism
Challenge Details
Centre Dominance Despite vote sharing, Centre often influences decisions
Compensation Issue Delay in GST compensation during COVID drew criticism
Complex Rate Structure Multiple slabs (5%, 12%, 18%, 28%) remain
Disputes States like Punjab, Kerala, Chhattisgarh have demanded greater flexibility

Way Forward
• Move towards two or three rate slabs
• Strengthen dispute resolution mechanisms within the Council
• Ensure timely compensation and transparent fund sharing
• Improve digital infrastructure (GSTN) to reduce compliance burden