Unit-II
Federal System
Introduction:
Federalism in India refers to relationship between the Central Government and the State
governments of India. The Constitution of India establishes the structure of the Indian
government. Part XI of the Indian constitution specifies the distribution of legislative,
administrative and executive powers between the union government and the States of India. The
legislative powers are categorized under a Union List, a State List and a Concurrent List,
representing, respectively, the powers conferred upon the Union government, those conferred upon
the State governments and powers shared among them.
This federalism is symmetrical in that the devolved powers of the constituent units are
envisioned to be the same. Historically, the state of Jammu and Kashmir was accorded a status
different from other States owing to an explicitly temporary provision of the Indian Constitution
namely Article 370 (which was revoked by the Parliament in 2019). Union territories are unitary
type, directly governed by the Union government. Article 1 (1) of the constitution stipulates two
tier-governance with an additional local elected government. Delhi and Puducherry were accorded
legislatures under Article 239AA and 239A, respectively.
Federal features:
1. Written Constitution: The Indian Constitution is a written document containing 395 Articles
and 12 schedules, and therefore, fulfils this basic requirement of a federal government. In fact, the
Indian Constitution is the most elaborate Constitution of the world.
2. Supremacy of the Constitution: India’s Constitution is also supreme and not the hand-made
of either the Centre or of the States. If for any reason any organ of the State dares to violate any
provision of the Constitution, the courts of laws are there to ensure that dignity of the Constitution
is upheld at all costs.
3. Rigid Constitution: The Indian Constitution is largely a rigid Constitution. All the provisions
of the Constitution concerning Union-State relations can be amended only by the joint actions of
the State Legislatures and the Union Parliament. Such provisions can be amended only if the
amendment is passed by a two-thirds majority of the members present and voting in the Parliament
(which must also constitute the absolute majority of the total membership) and ratified by at least
one-half of the States.
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4. Division of Powers: In a federation, there should be clear division of powers so that the units
and the centre are required to enact and legislate within their sphere of activity and none violates
its limits and tries to encroach upon the functions of others. This requisite is evident in the Indian
Constitution.
The Seventh Schedule contains three Legislative Lists which enumerate subjects of
administration, viz., Union, State and Concurrent Legislative Lists. The Union List consisted of
97 subjects, the more important of which are defence, foreign affairs, railways, posts and tele-
graphs, currency, etc.
The State List consisted of 66 subjects, including, inter-alia public order, police, administration of
justice, public health, education, agriculture etc. The Concurrent List embraced 47 subjects
including criminal law, marriage, divorce, bankruptcy, trade unions, electricity, economic and
social planning, etc.
The Union Government enjoys exclusive power to legislate on the subjects mentioned in
the Union List. The State Governments have full authority to legislate on the subjects of the State
List under normal circumstances. And both the Centre and the State can’t legislate on the subjects
mentioned in the Concurrent List, The residuary powers have been vested in the Central
Government.
5. Independent Judiciary: In India, the Constitution has provided for a Supreme Court and every
effort has been made to see that the judiciary in India is independent and supreme. The Supreme
Court of India can declare a law as unconstitutional or ultra Vires, if it contravenes any provisions
of the Constitution. In order to ensure the impartiality of the judiciary, our judges are not remov-
able by the Executive and their salaries cannot be curtailed by Parliament.
6. Bicameral Legislature: A bicameral system is considered essential in a federation because it
is in the Upper House alone that the units can be given equal representation. The Constitution of
India also provides for a bicameral Legislature at the Centre consisting of Lok Sabha and Rajya
Sabha.
While the Lok Sabha consists of the elected representatives of people, the Rajya Sabha
mainly consists of representatives elected by the State Legislative Assemblies. However, all the
States have not been given equal representation in the Rajya Sabha.
7. Dual Government Polity: In a federal State, there are two governments—the national or federal
government and the government of each component unit. But in a unitary State there is only one
government, namely the national government. So, India, as a federal system, has a Central and
State Government.
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Working/ Functioning of Federal System
1. Legislative Functions:
➢ Union List: Union List consists of 100 items (earlier 97) on which the parliament
has exclusive power to legislate. This includes: defense, armed forces, arms and
ammunition, atomic energy, foreign affairs, war and peace, citizenship,
extradition, railways, shipping and navigation, airways, posts and telegraphs,
telephones, wireless and broadcasting, currency, foreign trade, inter-state trade
and commerce, banking, insurance, control of industries, regulation and
development of mines, mineral and oil resources, elections, audit of Government
accounts, constitution and organisation of the Supreme Court, High courts and
union public service commission, income tax, customs and export duties, duties
of excise, corporation tax, taxes on the capital value of assets, estate duty and
terminal taxes.
➢ State List: State List consists of 61 items (earlier 66 items). Uniformity is
desirable but not essential on items in this list: maintaining law and order, police
forces, healthcare, transport, land policies, electricity in the state, village
administration, etc. The state legislature has exclusive power to make laws on
these subjects. In certain circumstances, the parliament can make laws on
subjects mentioned in the State List, but to do so the Rajya Sabha (Council of
States) must pass a resolution with a two-thirds majority that it is expedient to
legislate in the national interest.
Though states have exclusive powers to legislate with regards to items on
the State List, articles 249, 250, 252, and 253 mention situations in which the
Union government can legislate.
➢ Concurrent List: Concurrent List consists of 52 (earlier 47) items. Uniformity is
desirable but not essential on items in this list. The list mentions: marriage and
divorce, transfer of property other than agricultural land, education, contracts,
bankruptcy and insolvency, trustees and trusts, civil procedure, contempt of
court, adulteration of foodstuffs, drugs and poisons, economic and social
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planning, trade unions, labour welfare, electricity, newspapers, books and
printing press NS stamp duties.
➢ Other (residuary) subjects: Subjects not mentioned in any of the three lists are
known as residuary subjects. However, many provisions in the constitution
outside these lists permit parliament or state Legislative assembly to legislate.
Excluding the provisions of the constitution outside these lists per Article 245, the
power to legislate on such subjects, rests with the parliament exclusively per
Article 248. Parliament shall legislate on residuary subjects following the Article
368 procedure as constitutional amendments.
In case the above lists are to be expanded or amended, the legislation
should be done by the Parliament under its constituent power per Article 368 with
ratification by the majority of the states. Federalism is part of the basic structure
of the Indian constitution which cannot be altered or destroyed through
constitutional amendments under the constituent powers of the Parliament
without undergoing judicial review by the Supreme Court.
2. Executive functions: The Union and States have independent executive staffs controlled
by their respective governments. In legislative and administrative matters, the union
government cannot overrule the constitutional rights/powers of a state government except
when presidential rule is declared in a State. The Union's duty is to ensure that the
government of every State is carried on in accordance with the provisions of the
Constitution as per Article 355 and Article 256. The State governments cannot violate the
Central laws in administrative matters. When a State violates the Constitution, Presidential
rule can be imposed under Article 356 and the President takes over the State’s
administration with ex post facto consent of the Parliament per Article 357.
3. Financial functions: Article 282 accords financial autonomy in spending financial
resources available to the states for public purpose. Article 293 allows States to borrow
without limit without consent from the Union government. However, the Union
government can insist upon compliance with its loan terms when a state has outstanding
loans charged to the consolidated fund of India or a federally-guaranteed loan.
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The President of India constitutes a Finance Commission every five years to
recommend devolution of Union revenues to State governments.
Under Article 360, the President can proclaim a financial emergency when the
financial stability or credit of the nation or of any part of its territory is threatened.
However, no guidelines define "financial emergency" for the country or a state or union
territory or a panchayat or a municipality or a corporation.
An emergency like this must be approved by the Parliament within two months by
a simple majority and has never been declared. A state of financial emergency remains in
force indefinitely until revoked by the President. The President can reduce the salaries of
all government officials, including judges of the supreme court and high courts, in cases of
a financial emergency. All money bills passed by the state legislatures are submitted to the
President for approval. He can direct the state to observe economy measures.
4. Judicial functions: States can make agreements among themselves. When a dispute arises
with other states or union territory or the union government, the Supreme Court adjudicates
per Article 131. However, Article 262 excludes Supreme Court jurisdiction with respect to
the adjudication of disputes in the use, distribution or control of interstate river waters.
Under Article 263 the President can establish an interstate council to
coordinate/resolve disputes between states and the Union. States have their own
jurisdiction.
The recent experience of the successful implementation of indirect tax reforms in
India shows that a dominant ruling party can adopt a concessionary approach to resolve
disputes amicably, rather than attempting to over-awe the states or impose its will on the
units. This has been called concessionary federalism.
Unitary Features of the Indian federalism:
• The flexibility of the constitution – the constitution is a blend of flexibility and rigidity.
Certain provisions of the constitution can be easily amended. In case the amendments seek
to change aspects of federalism in India, the provision to bring about such amendments is
not easy. (Read about types of majorities in India Parliament using which amendments or
certain other provisions are introduced.)
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• More power vests with the Centre – the constitution guarantees more powers with the
Union List. On the Concurrent List subjects, the parliament can make laws that can
override the laws made by a state legislature on some matters. The parliament can also
make laws regarding certain subjects in the State List.
• Unequal representation of states in the Rajya Sabha – the representation of the states
in the upper house is based on the states’ populations. For example, Uttar Pradesh has 31
seats and Goa, 1 in the Rajya Sabha. In an ideal federal system, all the states should have
equal representation.
• The executive is a part of the legislature – in India, the executive in both the centre and
the states is a part of the legislature. This goes against the principle of division of powers
between the different organs of the government.
• Lok Sabha is more powerful than the Rajya Sabha – in our system, the Lok Sabha is
more powerful than the upper house and unequal powers to two houses is against the
principle of federalism.
• Emergency powers – the centre is provided with emergency powers. When an emergency
is imposed, the centre has increased control over states. This undermines the autonomy of
the states. (You may also read about President’s rule – Article 356 in the linked article.)
• Integrated judiciary – the judiciary in India is integrated. There is no separate judiciary
at the centre and the state levels. (Gain more information about Indian Judiciary from the
notes mentioned in the linked article. )
• Single citizenship – in India, only single citizenship is available to citizens. They cannot
be citizens of the state as well. This helps in increasing the feeling of nationality as it forges
unity amidst regional and cultural differences. It also augments fundamental rights such as
the freedom of movement and residence in any part of the nation.
• Governor’s appointment – the governor of a state acts as the centre’s representative in
the state. The state government does not appoint the governor, the centre does.
• New states formation – the parliament has the power to alter the territory of a state by
increasing or reducing the area of the state. It can also change the name of a state.
• All India Services – through the All India Services such as the IAS, IPS, etc. the centre
interferes in the executive powers of the states. These services also offer uniformity in
administration throughout the nation.
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• Integrated election machinery – the Election Commission of India is responsible for
conducting free and fair elections at both the centre and the state levels in India. The
members of the EC is appointed by the president.
• Veto over states bills – The governor of a state can reserve certain kinds of bills for the
president’s consideration. The president enjoys absolute veto on these bills. He can even
reject the bill at the second instance that is when the bill is sent after reconsideration by the
state legislature. This provision is a departure from the principles of federalism. (Read in
detail about veto power in the linked article.)
• Integrated audit machinery – the president of the country appoints the CAG who audits
accounts of both the centre and the states.
• Power to remove key officials – the state government or state legislature does not have
the authority to remove certain key government officials even at the state level like the
election commissioner of a state, judges of the high courts, or the chairman of the state
public service commissions.
Arbitrary use of Article 356:
Article 356, also known as the imposition of President’s Rule in states has become a
frequent topic in the news.
Article 356
Article 356 of the Constitution of India is based on Section 93 of the Government of India Act,
1935.
According to Article 356, President’s Rule can be imposed on any state of India on the grounds
of the failure of the constitutional machinery. This is of two types:
1. If the President receives a report from the state’s Governor or otherwise is convinced or
satisfied that the state’s situation is such that the state government cannot carry on the
governance according to the provisions of the Constitution.
2. Article 365: As per this Article, President’s Rule can be imposed if any state fails to comply
with all directions given by the Union on matters it is empowered to.
In simple words, President’s Rule is when the state government is suspended and the central
government directly administers the state through the office of the governor (centrally appointed).
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It is also called ‘State Emergency’ or ‘Constitutional Emergency’.
President’s Rule:
Parliamentary approval is necessary for the imposition of the President’s Rule on any state.
The proclamation of President’s Rule should be approved in both Houses of Parliament within two
months of its issue. The approval is through a simple majority.
The President’s Rule is initially for a period of six months. Later, it can be extended for a
period of three years with parliamentary approval, every six months.
The 44th Amendment to the Constitution (1978) brought in some constraints on the imposition
of the President’s Rule beyond a period of one year. It says that President’s Rule cannot be
extended beyond one year unless:
1. There is a national emergency in India.
2. The Election Commission of India certifies that it is necessary to continue the President’s
Rule in the state because of difficulties in conducting assembly elections to the state.
What happens after President’s Rule is imposed?
• The governor carries on with the administration of the state on behalf of the President. He
or she takes the help of the state’s Chief Secretary and other advisors/administrators whom
he or she can appoint.
• The President has the power to declare that the state legislature’s powers would be
exercised by the Parliament.
• The state legislative assembly would be either suspended or dissolved by the President.
• When the Parliament is not in session, the President can promulgate ordinances with
respect to the state’s administration.
When is President’s Rule imposed?
It has been seen that the President’s Rule has been imposed when any one of the following
circumstances have occurred:
1. The state legislature is not able to elect a leader as the Chief Minister for a time prescribed
by the state’s governor.
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2. Breakdown of a coalition in the state government, that leads to the CM having minority
support in the legislature, and the CM is unable to prove his majority within the time
prescribed by the governor.
3. A no-confidence vote in the legislative assembly leading to a loss of majority.
4. Postponement of elections owing to unavoidable reasons such as a natural disaster,
epidemic or war.
5. Article 365 (explained above)
Revocation of President’s Rule
President’s Rule can be revoked anytime after such a proclamation has been made by a
subsequent proclamation by the President. A proclamation of revocation does not require approval
by the Parliament.
This occurs when the leader of a political party produces letters indicating majority support
for him in the assembly and stakes his claim to form the state government.
Misuse of Article 356
Article 356 gave the Central government wide powers to stamp its authority on the state
governments. Although it was meant only as a means to preserve the integrity and unity of the
country, it had been used blatantly to oust state governments who were ruled by political opponents
of the centre.
• It was used for the first time in 1951 in Punjab. Between 1966 and 1977, Indira Gandhi’s
government used it about 39 times against various states.
• In the S.R. Bommai case (1994), the Supreme Court of India put forth strict guidelines for
the imposition of Article 356.
• The proclamation (of President’s Rule) is subject to judicial review on grounds of
mala fide intention.
• The imposition of Article 356 should be justified by the centre.
• The court has the power to revive the suspended or dissolved state government if
the grounds for the imposition is found to be invalid and unconstitutional.
• The state assembly cannot be dissolved before parliamentary approval for the
imposition of Article 356 and the President can only suspend the assembly.
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• Serious allegations of corruption against the state ministry and financial instability
are not grounds for the imposition of Article 356.
• Any action by the state government that leads to the security of secularism (which
is a basic feature of the Constitution) cannot be grounds for the use of Article 356.
• Article 356 cannot be used to sort out any intraparty issues in the ruling party.
• If the Ministry of the state resigns or is dismissed or loses the majority, then the
governor cannot advise the President to impose this article until enough steps are
taken by the governor for the formation of an alternative government.
• The power under Article 356 is to be used only in case of exigencies. It is an
exceptional power.
• There have also been subsequent judgements of the SC that have limited the room for the
misuse of this Article.
• The Sarkaria Commission Report (1983) recommended that Article 356 should be used
“very sparingly” and only as a last resort.
• The President’s proclamation of President’s Rule should include reasons as to why
he thinks the state cannot run normally.
• Whenever possible, the centre should give the state government a warning before
imposing Article 356.
• The Article should not be used for settling political scores.
• The commission recommended the amendment of the article in order for the
President to be authorised to dissolve the state legislature only after getting
parliamentary approval.
• The Punchhi Commission recommended that the centre should try to bring only a specific
troubled area under its jurisdiction and that too for a brief period, not more than three
months.
• The commission recommended that suitable amendments should be made to
incorporate the guidelines established by SC in the Bommai case.
• The commission recommended the provision of a ‘Localized Emergency’ which
implies that the centre can tackle issues at town/district (local) level without
dissolving the state legislative assembly while at the same time, performing the
duty of the Union to protect States as per Article 355.
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