Reforming Centre-State Relations in India

Introduction

Centre-State relations in India concern the distribution of powers and responsibilities between the Union Government and the State Governments. Over time, several committees and commissions have recommended reforms to improve cooperation, protect State autonomy (the power of States to manage their own affairs) and reduce conflicts between the Centre and the States. The Setalvad Study Team, Administrative Reforms Commission, Rajamannar Committee and Sarkaria Commission made important recommendations on these issues.

Meaning of Reforming Centre-State Relations

Reforming Centre-State relations means improving the constitutional, administrative and financial arrangements between the Union and the States to ensure that both levels of government can perform their duties effectively.

The Constitution gives the Union a stronger position in several areas, while also recognising the powers and responsibilities of the States. Disagreements may arise over subjects such as the appointment of Governors, the use of emergency powers, the distribution of tax revenue and the role of central institutions.

Various committees and commissions have therefore examined how the existing arrangements could be improved. Their recommendations differ: some called for greater autonomy for States, while others supported cooperation within the existing constitutional framework.

Major Committees and Commissions

Setalvad Study Team

The Setalvad Study Team examined ways to improve relations between the Union and the States. Its recommendations focused on consultation, financial planning and the role of Governors.

Major recommendations

• Inter-State Council: It recommended establishing an Inter-State Council consisting of the Prime Minister, important Union Ministers, Chief Ministers and other persons who could be invited or selected to participate. The Council would provide a forum for discussion between the Union and the States.
• Coordination between financial institutions: It suggested improving the relationship between the Finance Commission and the Planning Commission to make their work more consistent.
• Appointment of Governors: It recommended appointing persons with ability, fairness and independence as Governors. A Governor should act according to the Constitution rather than simply follow the wishes of the Union Government.

The team emphasised that Governors should perform their constitutional duties independently and fairly.

Administrative Reforms Commission

The Administrative Reforms Commission (ARC) examined administrative problems affecting Centre-State relations. It expressed concern that the Union Government had entered areas assigned to the States and recommended that it withdraw from such areas where appropriate.

Major recommendations

• Inter-State Council: It recommended establishing an Inter-State Council. Instead of giving every Chief Minister a seat, it suggested five representatives, one from each Zonal Council.
• Guidelines for Governors: It recommended clear guidelines for Governors when exercising their discretionary powers (powers they may use without following the ordinary advice of the Council of Ministers). This would help ensure consistent decisions and reduce the risk of unfair or arbitrary action.
• Testing majority support: If there was doubt about whether a Chief Minister had the support of a majority of the Legislative Assembly, the question should be decided through a floor test (a vote in the Assembly to establish majority support). The Governor should summon the Assembly when such doubt arose.
• Dissolution of the Assembly: If a government lost a major policy vote and the outgoing Chief Minister advised the Governor to dissolve the Assembly and seek a fresh public mandate, the Governor should normally accept that advice.

These recommendations sought to make the Governor's role more impartial and to ensure that important political questions were decided through the elected legislature.

Rajamannar Committee Report

The Tamil Nadu Government, then led by the Dravida Munnetra Kazhagam (DMK), appointed a committee headed by P. V. Rajamannar, a retired Chief Justice of the Madras High Court. The committee submitted its report on 27 May 1971.

Its main objective was to recommend constitutional changes that would secure the greatest possible autonomy for the States.

Major recommendations

• Redistribution of legislative powers: It recommended transferring several subjects from the Union List and Concurrent List to the State List. It also proposed that residuary legislative and taxation powers (powers over matters not specifically listed in the Constitution) should belong to the States.
• Inter-State Council: It recommended establishing an Inter-State Council consisting of the Chief Ministers of all States, or their nominees, with the Prime Minister as Chairperson.
• Planning Commission: It proposed abolishing the existing Planning Commission and replacing it with a statutory body (a body established by law) consisting of scientific, technical, agricultural and economic experts. It also recommended that States establish their own Planning Boards.
• Union directives and emergency powers: It recommended deleting constitutional provisions that allowed the Union to issue certain directions to States and take over a State's administration. It also proposed removing Articles 356, 357 and 360, which deal with President's Rule, related legislative powers during President's Rule and financial emergency.
• Representation in the Rajya Sabha: It recommended giving every State equal representation in the Rajya Sabha, irrespective of population.
• Appointment of Governors: It proposed that the President appoint Governors in consultation with the State Cabinet or another suitable high-level body. It also recommended that a person who had served as Governor should not later be appointed to another government office.
• All-India Services: It recommended amending Article 312 to prevent the creation of new All-India Services in the future.
• High Court jurisdiction: It proposed that State High Courts should be the highest courts for matters within State jurisdiction.
• Protection of State boundaries: It recommended that a State's territorial integrity (the preservation of its geographical boundaries) should not be changed without that State's consent.
• Distribution of tax revenue: It recommended that States receive a share of revenues from corporation tax, customs and export duties, taxes on the capital value of assets, and excise duties.

The Rajamannar Committee strongly favoured greater State autonomy and a substantial reduction in the Union Government's powers over the States.

Sarkaria Commission Report

The Union Government established the Sarkaria Commission in June 1983 under the chairmanship of Justice R. S. Sarkaria. Its main purpose was to examine Centre-State relations and recommend measures to improve the balance of powers between the Union and the States.

The Commission submitted its report in 1988. Unlike the Rajamannar Committee, it generally favoured retaining the existing constitutional framework while improving its operation through cooperation and restraint.

Major recommendations

• Use of Article 258: It recommended that Article 258, which allows the Union to entrust certain functions to State Governments with their consent, should be used more freely to improve administrative cooperation.
• Limited use of Article 356: President's Rule should be imposed only in exceptional circumstances. Before taking this step, the Union should explore all reasonable possibilities of forming an alternative government in the State. The State Legislative Assembly should not be dissolved before Parliament approves the proclamation.
• Inter-Governmental Council: It strongly supported establishing an Inter-State Council consisting of the Prime Minister and Chief Ministers to discuss issues causing disagreement between the Union and the States.
• Appointment of Governors: It rejected the proposal to abolish the office of Governor and did not support selecting Governors from a panel of names submitted by State Governments. However, it recommended that active politicians should not be appointed Governors. Where the Union and State Governments were controlled by different political parties, the Governor should not belong to the ruling party at the Centre. It also recommended that retiring Governors should not accept another office of profit (a paid government position that may create a conflict of interest).
• All-India Services: It opposed abolishing All-India Services, considering them important for national unity and administrative coordination. It supported creating additional All-India Services.
• Three-language formula: It recommended implementing the three-language formula properly in all States to support national unity.
• Inter-State cooperation: It made a strong case for Inter-State Councils as a way to discuss and resolve disputes through consultation.
• Transfer of High Court judges: It recommended that High Court judges should not be transferred without their consent.
• Distribution of tax revenue: It did not support major changes to the existing system of tax distribution. However, it favoured sharing corporation tax and taxes on the consignment of goods.
• Finance Commission and Planning Commission: It considered the division of responsibilities between the Finance Commission and the Planning Commission reasonable and supported continuing the existing arrangement.

The Sarkaria Commission sought to strengthen cooperative federalism (a system in which the Union and States work together) without making major changes to the basic constitutional structure.

Comparison of the Major Committees and Commissions

Important Constitutional Provisions

The recommendations of these committees relate to several provisions of the Constitution of India.

• Article 258: Allows the Union to entrust certain functions to State Governments with their consent.
• Article 263: Provides for the establishment of an Inter-State Council to support coordination and discussion between States and between the Union and States.
• Article 312: Provides for the creation of All-India Services under the conditions specified in the Constitution.
• Article 356: Deals with President's Rule when a State government cannot be carried on in accordance with the Constitution.
• Article 357: Deals with the exercise of legislative powers during President's Rule.
• Article 360: Deals with a financial emergency.
• Article 280: Provides for the Finance Commission, which recommends how certain financial resources should be distributed between the Union and States.

These provisions show that reforming Centre-State relations may involve changes to the distribution of powers, the conduct of constitutional offices and the methods used to resolve disagreements.

Practical Example

Suppose a State Government alleges that the Governor is acting in favour of the Union Government and that the State's elected ministry has lost the Governor's confidence.

The recommendations of the Administrative Reforms Commission are relevant because they support clear guidelines for Governors and a floor test in the Legislative Assembly to establish whether the ministry has majority support.

The Sarkaria Commission's approach is also relevant because it favours restraint in the use of Article 356 and recommends exploring the possibility of forming an alternative government before imposing President's Rule.

The Rajamannar Committee took a broader approach by proposing the removal of Article 356 itself. These different recommendations illustrate the difference between seeking greater State autonomy through major constitutional changes and improving Centre-State relations within the existing constitutional framework.

Summary

• The Setalvad Study Team recommended an Inter-State Council, better coordination between the Finance Commission and Planning Commission, and independent Governors.
• The Administrative Reforms Commission recommended limits on Union involvement in State subjects, guidelines for Governors and floor tests to establish majority support.
• The Rajamannar Committee strongly favoured State autonomy, greater State control over legislative and taxation powers, and major changes to emergency provisions and the appointment of Governors.
• The Sarkaria Commission supported cooperative federalism, limited use of Article 356, an Inter-State Council and the continuation of All-India Services.
• The main difference is that the Rajamannar Committee sought substantial constitutional changes to increase State autonomy, while the Sarkaria Commission generally favoured improving Centre-State relations within the existing constitutional framework.
• These recommendations remain important for understanding the constitutional debate over national unity, State autonomy and cooperation between the Union and the States.