Indian Federalism

Some Aspects of Indian Federalism
M. P. Jain
Contents
1. Introductory
II. Contemporary Federations
III. Legislative Relations
IV. Financial Relationship
V. Administrative Relationship
VI. Intergovernmental Disputes
VII. Intergovernmental Immunities
VIII. Interstate Trade, Commerce and Intercourse
IX. Planning
X. Emergency
XI. The Language Problem
XII. Co-operative Federalism
I. Introdmaory
The present Constitution of India was brought into force on January 26,
1950. It is a prolix and detailed document containing 395 articles and 9
schedules. It ushers into the country a polity based fundamentally on two
ingredients a British type democratic system of government and federal-
-
ism. India, says the Constitution, is to be a Union of States'). India has a
Central Government and 17 State GovernmentS2) At both levels, parlia-

mentary form of government based on adult suffrage operates. The Con-
stitution makes elaborate provisions covering many aspects of Centre-State
and interstate relationship, and in this respect it differs from the constitu,
Professor of Law, Banaras Hindu University, Varanasi, India; Visiting Professor

of Law, Sfidasien-Institut der Universitat Heidelberg (May-October, 1967).
Abbreviations: AICC All India Congress Committee; Can.B.R. The Ca-
nadian Bar Review; Can. J1. of Eco. & Pol. Sc. The Canadian journal of Economics
and Political Science; Cornell L.Q. Cornell Law Quarterly; CWC Congress Working
Committee; Harv. L.R. Harvard Law Review; J1. of ILI journal of the Indian Law
Institute; Minn. L.R. Minnesota Law Review; N.Y.U.L.Q.R. New York University
Law Quarterly Review; Yale L.J. Yale Law Journal.
http://www.zaoerv.de
© 1968, Max-Planck-Institut für ausländisches öffentliches Recht und Völkerrecht
302 Jain
tions of the U.S.A., Canada and Australia which contain only skeletal pro-
visions to regulate intergovernmental relationship.
Since its inception, the Indian Federalism bas been called upon to meet
many challenges. To improve. the material well-being of the people, the

country has embarked comprehensive socio-econon,uc planning pervading
on
all aspects of national life, such

as industry, agriculture, land reforms, pop-
ulation control, exploitation of natural resources and provision of such

social services as education, health, housing, etc., and this has necessitated
a complete mobilisation of the country's resources"). Then, India has faced
complications on its borders because of the bellicose attitude of some of its

neighbourS4) and there have been strains within the body politic itself
resulting from internal developments, Mainly because of the language prob-
lem5). These various forces and compulsions have shaped and moulded In-
than Federalism. Further, India has witnessed the significant political phe-
nomenon of one political party the Indian National Congress
-
com- -
pletely dominating the scene since 1947 when it controlled the Central and
all State Governments. This smoothed and facilitated the -working of feder-
alism in its formative period. It stabilized the political and administrative
structure of the country, minimised tensions between various governments
as all owed allegiance to one party, and helped in resolving many questions
informally at party forums. But this situation has undergone a change re-
cently. The fourth general elections held in early 1967 have broken the one
party dominance, or the Congress monolith, and various Political parties

have assumed control of various governments 11). With this development,
an era may be said to have ended in the career of Indian Federalism, and a
1) Art. 1 (1). Besides the States, there are several Union Territories which are under
much closer surveillance of the Central Government.
2) The States are: Andhra Prades ,hl, Assam, Bihar, Gujarat, Haryana, Jammu and Kash-
mir, Kerala, Madhya Pradesh, Madrasl Maharashtra, Mysore, Orissa, Punjab, Rajasthan,
Uttar Pradesh, West Bengal, Nagaland.
3) See sec. IX infra, for planning and federalism.
4) See sec.X infra, for emergency and federalism.
5) See sec. XI infra, for the language problem.
6) These parties range from the extreme left to extreme right. In K,erala and West
Bengal there are coalition governments with predominant leftist orientation. In Uttar
Pradesh, Madhya Pradesh, Bihar and Haryana, non-Congress parties have formed coalition
governments. In Punjab, the coalition government is formed by two parties with a commu-
nal tinge with no articulate economic programme. At the Centre and in the States of
Rajasthan, Andhra Pradesh, Mysore, Maharashtra and Gujarat, the Congress, economically
a centrist partYj has its governments. In Orissa, a rightist coalition government is in office.
In, Madras, a local party based on language chauvinism is in.office. Some of the State
Governments are based on uneasy and. opportunistic alliances with not much in common
except their desire to keep the Congress out -of power. The communists are divided into
several groups from Marxists to rightists. The socialists are divided into two parties.
Some Aspectsl of Indian Federalism 303
new, perhaps a more challenging one, initiated. The new political situation,
is bound to release new forces which may have a profound impact on it. As
one can easily foresee, disputes among the various governments of various
political complexion are bound to arise, and much that has come to be ac-
cepted till now in the area of federalism would perhaps be challenged and
somenew trends initiated. This paper makes an attempt to survey some of
the facets of the growth of Indian Federalism and to identify some of the
problem areas which may call for new reasoned solutions in the new con-
text.
IL Contemporary Federations
The founding fathers built the fabric of Indian Federalism on -three pil-
lars, viz., strong Centre, flexibility, and co-operative federalism. These
a
concepts are not in any way novel as in varying degrees they have come to
be accepted, and translated into practice, in the federations of the U.S.A.,
Canada and Australia.. The framers of the Indian Constitution learned a
good deal from the experiences the problems faced and solutions found
- -
of these federations, and their approach to structuring of Indian Feder-

the
alism was conditioned in good measure by that knowledge. It might there-
fore be worthwhile to have a brief survey of the trends in these federa-
tions as a background to the Indian Federalism.
The American Constitution, drafted in 1787, is the oldest of the contem-
porary federal constitutions. The motivating forces which promoted feder-
alism amongst the several colonies were defence and the felt-need to keep
down economic barriers among them. The U.S. Constitution follows a
simple method of dividing powers between the Centre and the States. It
has only one list enumerating eighteen heads of powers for the Centre,
whose powers are thus specific and include such items as taxation and spend-
ing, payment of debts, regulation of foreign and interstate trade and com-
merce, coinage and currency, war and defence, post office and, post roads,
promotion of science, etc. The Congress is authorised to make a law which
may be "necessary and proper". to carry into execution any of the enumer-
ated powers. Whatever does not belong to the Centre belongs to the States.
From an agricultural community of the 18th century, the U.S.A. has
emerged into an industrial giant of the 20th century. In the meantime, the
political philosophy has changed from laissez jaire to social welfare. The
country has met the challenges of wars and depression. This has been pos-
sible because the Centre, a very small affair to begin with, has grown into
a colossus and dwarfed the States. This transformation has taken place not
304, J-ain
through formal amendments of the Constitution because of the rigidity of

-
the amending process Inot many amendments:.have culminated so far but -
through the process of -judicial interpretation. The judiciary helped the

Centre first by protecting it from hostile State action 7) and then conceded
greater latitude to it by interpreting broadly its enumerated powers in. re-
sponse to the demands of the times. The commerce power has given to,the
Centre control over the economic. life of the nation;it can regulate not only
interstate commerce, but to somelextent even the intrastate commerce insor
far as the two are intermixed. At the same time, States have been restricted
from interfering with the, flow.of trade and traffic over State. boundaries
Without this, America could not have industria,lised itself in such a phenom-
enal man ner. Big corporations having their operations throughout the
country would not have grown had the States', power to interfere with them
not, been kept. incheck. The Centre has full control over foreign affairs, and
can implement a treaty, ratified, by.tho Senate, irrespective, of the fact

whether its subject-m.atter falls within its, enumerated powers or not. With-
i
out this, the U.S.A.- would -not have gained a prim acy in the international
sphere 9),_ The defence and war power enables the.Centre t6 take any step
which may appear to promote,defence effOrtIO). Taxing powers have been
be broad-based and the Centre is thus in, a. position to raise vast
found' to
amounts of revenue"). Abroad interpretation of its spending power has

enabled it to finance even the S,tate:activities and thus the vast, programme
of Central, grants -to the, States has been built, up 1, 2) The mechanism
of
grants has helped the States in providing better services to the people than
what their own resources wpuld'vermit, and it has enabled the Centre to
7) McCulloch v. Maryland, 4 Wheat. 316 (1819); 'note 12.3 infra.

8) N.L.R.R. v. Jones Laughlin 510 U.S. 1;,U.S. v. Darby, 312 U.S. 100; Wickard
v. Filburn, 317: U.S. 11; Oklahoma v. Atkinson, 313 UiS. 508;'N.L.R.B. v. Denver Build-
ing _& Construction Trade Council,,, 341 U.S., 675; American Power and Light Co. Y.
S.E.C., 67 S.Ct. 133 (1946).
9) Missouri v. Holland,'252 U.S. 4,16'(1920);, Hauenstein v. Lynbam, 100 U.S. 483; the
Curtiss Wright Case, 299 U.S. 304...
10) The Minnes ,ota Moratorium Case, 290 U.S.,398; Yakys V. U.S., 321 U.S. 414;
Bowles v. Willingham, 321 U.S. 503; Steuart & Brolnc. v. Bowles, 322 U.S. 598-
11) Pacific.Ins. Co. v. Soule, 7,1Wall. 433;: .Seboley v. 'Rew, B Wall. 3,31; Flint v.
Stone Tracy Co.l. 220 U.S. 107. The taxing power has been used for regulatory purposes as
well, cf. Cv. s,h m a n, Social and- Economic Control through Federal Taxation, 23 Cor-
nell L.Q. 1 (1937); Carter v. Carter Coal, Co., 298 U.S. 238; U.S. v. Butler, 297 U.S. 1.
_12) P a t t e r s o n, The General Welfare Clause, 30 Mirin.L.R. 43; C o r w i n., The
Spending Power ofCongress, 36 Harv.-L.R. 548;, U.S. v. Butler, 297 U.S.1; Helvering v.
Davis, 301 U.S.,619; Clmelandv. U.S., 323 U.S. 329; J a i n, Federal Grants-in-aid in the
U.S.A., 5 Vyavahara Nirnaya (1956), 245-301. In 1960, the Centre gave to the States
nearly $ 6,4 billion as grants, Compendium of the State Government Finances in 1960,
Table I. The amount. has been incre'a sing since then.
Some Aspects of Indian Federalism 305
influence an area of governmental operations much larger than its own
enumerated powers. A kind of Centre-State partnership to promote people's

welfare has thus come into existence which has transformed the whole con-
cept and character of federalism. In the beginning, the Centre-State rela-
tionship was that of competition, each trying to claim more powers for
itself, but this has now given place to co-operative federalism 13). The States,
though by no means unimportant in the country's constitutional and ad-
ministrative processes, have however come to occupy a position somewhat
inferior to the Central Government whose primacy is now an established
fact.
In Canada, the growth of federalism has been too-much influenced by
the existence of bi-racialism and bi-linguism, English and French. The
English-speaking people, majority in the country, want a strong centre,
a
but the French-speaking people, who are a minority of the entire country but
a majority in Quebec, desire the Centre to be weak and the Provinces strong,
so that their language and culture are preserved 14) The scheme of distribu-
tion of powers between the Centre and Provinces has given rise to a bulky
case-law. The framers of the Constitution (The British North America Act,
1867) wanted give a primacy to the Centre so that it could deal with all
to
matters of national importance leaving to the Provinces merely matters of
local interest. But the judicial interpretation has not followed this historical
approach. The Privy Council, influenced by the aspirations of the French,
so interpreted the British North America Act as to shift the balance of power
in favour of the Provinces. In peace time, the Centre's general power to
legis-
late for the "peace, order and good government" of Canada becomes more
or less functionless '5). The Centre is cabined within the area of its enumer-
ated heads in sec. 91 of the Act; the Provinces' power over "property and
civil rights" is given a broad connotation so as to include not only the
ground left out of the Centre's enumerated heads, but even to affect some
of these heads themselves resulting in their being interpreted narrowly so as
13) C o r w i n, National-State Co-operation, 46 Yale L.J. (1946), 599; L. A. W a r -
s o f
f, Federalism Re-examined, 18 N.Y.U.L.Q.R. 533; C o r w i n, A Constitution of
Powers in a Secular State, 23; Schwartz, American Constitutional Law, 163-178;
Report of the Commission on Intergovernmental Relations (1955), 28; Ed. M c W h i n -
n e y, Comparative Federalism; J a i n, Federalism in India, 6 J1. of ILI (1965), 355.
14) D e h e m ft W o I f e The Principles of Federal Finance and the Canadian Case,

21 Can. JI. of Eco. & Pol. Sc. 64, 69; S c o t t Centralisation and Decentralisation, 29
Can. B.R., 1095, 1100; S c o t t French Canada and Canadian Federalism, in: Evolving
Canadian Federalism, pp. 54-91; Trembay Report (1956).
15) Bora L a s k i n, Peace, Order and Good Government Re-examined, 25 Can. B.R.
1054; S c o t t op. cit., note 14.
20 Za6RV Bd. 28/2
306 Jain
to give a wide meaning to the "property and civil rights"16). The Provin-
ces have thus come to have extensive powers in such fields as businessl labour,
social services, roads, conservation and development 1"). It is only in the times
of an emergency of war that the Centres generIal power becomes omni-
this extent, the designs of the founding fathers may be said
18
potent and, to
to have been respected, but during peace-time the Centre finds, itself handi7
capped in several ways. It cannot implement through legislation any treaty
with a foreign country if its subject-matter falls outside the enumerated
heads 11). The Centre's limited capacity to meet the socio-economic problems
of an industrial society was very, demonstrably brought holneduring the
depression of the 30's when a good deal of Bennet's new deal was judicially
held to be unconstitutiona 120) The development of Canadian Federalism
has been in striking contrast with that of the American Federalism. In the
latter, the Centre designed to have, limited powers has grown into a colossus,
while in the former, the Centre designed to be strong has turned out to have
only restrictive capacity to deal with the problems of a fast developing
economy. On the other hand, some of the Provinces, at any rate,, find it
difficult discharge their functions with their limited financial capacity.
to
This imbalance is sought to be rectified through various expedients, viz.

delegation of legislative power by Parliament or a Provincial Legislature
22
to a subordinate agency of the other 21); referential legislation and a lim-
ited growth of co-operative federaliSM23); Central grants-in-aid to 'the
Provinces. These techniques have inducted some flexibility. into an other-
wise rigid constitution, whose amendment is extremely
difficult owing to
16) Snider's case, 1925 A.C. 396; The Weekly Rest case, 1937 A.C. 326; Att. Gen. for
Br. ColiV* Att. Gen. for Canada, 1937 A.C. 377.
17) Dehern & Wolf e, op. cit. supra note 14.
18) Supra note 14.

Labour Conventions case, 1937 A.C. 326.
19)
Labour Conventions case, supra; the Weekly Rest case, supra; Att. Gen. for Canada
20)
v. Att. Gen. for Ontario, 1937 A.C. 355, in which. a scheme
of compulsory unemployment
insurance was declared unconstitutional. Also see, S rn i I e y, The Two Themes of Cana-
than Federalism, 31 Can. J1. of Eco. & Pol. SC., 80; S in i I e y, The Rowell-Sirois Rep.,
Provincial Autonomy and Post War Canadian Federalism, 27 ibid., 54; P e r r y, What
Price Provincial Autonomy? ibid., 432.
21) Ifiter-delegation of legislative powers between Parliament and provincial legislature
has been held to be unconstitutional, but that on subordinate agencies has been upheld:
A.G.N.S. v. A.G., Canada, 1951 SCR 31; P.E.I. Potato Marketing Board v. Willis, 1952
(2) SCR 392 and 30 Can.B.R. 1050.
22) Lord's Day Alliance of Canada v. A.G.B.C., 1959 SCR 497.
23) Many Dominion-Provincial Conferences are held. A Commission on Bilinguisin
and Bi-culturism has been appointed; larger funds are made available to the provinces
for economic development, Alexander, A Constitutional Strait jacket for Canada,
43 Can. B.R. 262, 306.
the opposition to any shift of balance of power in favour of the Centre by

the French-speaking Quebec 24).
Australia, the Centre has specified functionS24 but, on the whole, the
In
judiciary has given them an expansive interpretation. Under its defence

power, the Centre assumes a very dominating position during a war 26). It
has full control over external affairs and
can implement any treaty, it may
choose to enter, with

foreign country27). Its powers over commerce and
a
arbitration of industrial disputes give it power to deal with problems of

interstate trade and commerce 28) There is, however, a feeling that in peace-
time, the Centre lacks adequate power to deal with socio-economic prob-
lems facing the country and efforts to amend the Constitution to correct the
lacuna have not succeeded because of an extremely rigid process of con-
stitutional amendment 29) The country has however made notable contri-
bution the concept of co-operative federalism by evolvin& a system of
to
fiscal grants to those States which are in need of help through the agency
of the Commonwealth Grants Commission") and also by creating a Loan
Council for coordinating borrowing by the various governments3l).
A careful study of the trends in the above-mentioned federal systems
enabled the framers of the Indian Constitution to draw a number of les-
24) It has been agreed that

amendments to the B.N.A.Act would now be made by a
unanimous of Parliament and all provincial legislatures. For a criticism of this
consent
formula, A I e x a n d e r op. cit. supra note 23. This formula of unanimity will make
the Act practically unamendable because of Quebec's uncompromising attitude.
25) These include inter alia trade and commerce, taxation and finance, defence,
external affairs, marriage and divorce, some aspects of criminal law, communications
and social services, etc.
26) Farey Burvett, 21 C.L.R. 433; Dawson v. Commonwealth, 73 C.L.R. 157; Marcus
v.
Clarke v. The Commonwealth, 87 C.L.R. 177.

27) The King v. Burgess, ex. p. Henry, 55 C.L.R. 608.
28) E I s e M i t c h e I I Essays on the Australian Constitution '(1961), 129-155,
-
221-246.
2') The scope of the Centre's spending power remains a matter of doubt, The Phar-
maceutical Case, 71 C.L.R. 237. Also, E v a t t, Post-War Reconstruction and the Con
stitution in: Post War Reconstruction in Australia, 238-262. In 1959, a Jt. Parliamen-
tary Committee reIported on the adjustments which should be made in the Constitution
to bring it more in line with the present-day needs, but nothing came out of it.
30) It was created by the Commonwealth Parliament in 1933 as the States of Tas-
mania, Western Australia and South Australia needed annual grants and it was thought
necessary to have an autonomous body to study the issue and make recommendations free
from political influence. The commission submits an annual report on the grants payable
by the Centre to the deficit States, now two.
31) The Loan Council was created in 1927. It consists of the Prime Ministers of the
Centre and the States. Each State has one vote while the Centre has two and a casting
votes. Its purpose is to co-ordinate loan programmes of all governments, and all bor-
rowings are arranged by the Centre and distributed among the various governments ac-
cording to an agreed formula.
308 J a i n
sons. First ofall, in each federation need has been felt to have a strong
Centre deal with war-emergency or the socio-economic problems of an
to
industrial society, and this need has been fulfilled in varying degrees in
various countries. prevailing federal systems are extremely
Secondly, the
rigid, and formal amendments to the respective constitutions have been
difficult, creating a need to introduce flexibility through various expedients

to meet contemporary needs. In the U.S.A. and Australia, the judiciary has
helped in giving an interpretation to the Centre's powers so as to enable it

to meet the problems of the day, but this has not obviated the need to amend
the Constitution which has proved to be extremely difficult. Lastly, the

growth of the concept of co-operative federalism in varying degrees in each
country is a phenomenon of the day, which helps a federal system,
with its
divided jurisdiction, to solve many problems which have arisen as a result
of the philosophy of a social welfare State. It is therefore not surprising that
the founding fathers should have designed the Indian federal structure on
the three concepts of a strong Centre, flexible federation, and co-operative
federalism. However, in fashioning the. system, they not only adopted some
of the expedients prevalent in other countries but also showed originality by
devising some new techniques of,their own which can be characterised as a
distinct Indian contribution to the practices of federalism in general.
Apart from the experiences of other countries suggesting a strong Centre,

there were some very good indigenous reasons in India for the same 32) The
past history of India conclusively establishes that
the absence of a strong
Centre leads to a disintegration of the country. Memories of one partition
on the eve of independence were very fresh, and this warranted
the taking
of adequate precautions to ensure unity and prevent any fissiparous tenden-
cies. There was also the problem of defence looming large on the horizon
due to the not -so friendly attitude of Pakistan. Above all, India is an under-
developed country whose socio-economic progress has been retarded for
centuries. The framers of the Constitution foresaw that the country would
have to force the pace of economic development so as to compress into deca-
des the progress of centuries, and this could be done effectively by mobilis-
ing national resources and using
them properly under Central leadership.
A unitary constitution could not have been adopted because of the vastness.
of the country and the variety of its people and, therefore, the next best
course was to have a federal structure with a strong Centre. The approach
of the fathers was thus pragmatic, keeping in view the unity and welfare of
the country as the objectives to be promoted. The accent on the Centre was
Indian Constitutional Law, 329-333; Granville Austin, The

32) Jain,
Indian Constitution -
Cornerstone of a Nation, 186-194.
facilitatedby two factors the historical background of the country and

-
the existence of one unified all India political party. For a long. period be-
fore independence, British India had been governed as a unitary entity, and
although in 1937 federalism was sought to be introduced under the Govern-
ment of India Act, 1935, it never worked in practice as, under the impact
of the Second World War, India was administered more as a unitary, rather
than a federal, country under the
emergency powers of the Centre. In fact,
as regards British India, the movement may be said to be from, unity to
union, from unitarism to federalism. But, at the same time, a reverse process
was also undertaken, namely that of integration of the princely India 33)
with the rest of the country. The present-day Indian federalism is thus the
pro-duct of two processes, that of disintegration of British India from a
unitary to a federal system and that of assimilating the hitherto autonomous
princely India with the rest of the country. As to the political party, be-
cause of the national struggle for independence against the British, Congress
had built up a broad mass organisation spreading throughout the country,
and all the governments at the time of the making of the Constitution owed
allegiance to it and it was the predominant'party in the Constituent Assem-
bly.
The strength of the Centre lies in its large legislative and financial pow-
ers, in its emergency powers and in its control over State Legislation in
certain situations. The flexibility of federalism lies in certain expedients
which can be used to mitigate the proverbial rigidity of a federal system
and to increase the Centre's powers as a temporary adjustment if a situation
so demands. As noted above, in other federations, the Centre has felt handi-
capped at times to take effective action to meet the socio-economic needs;
this is sought to be avoided in India by having built-in mechanism to enable
the Centre to get more powers without resorting to a formal amendment of
the Constitution. Even the method of amending the Constitution is rather
flexible 34). In its federal features, it can be amended by each house of Par-
liament passing a bill by a special majority 35) and on the same being ratified
by one-half of the State Legislatures and receiving the President's assent.
Although it may be that, in the changed political complexion of the country,
33) The Princely India consisted of nearly 580 units. The process of their integration
has been retold by M e n o n in his The Story of the Integration of the Indian States (1956).
34) This refers only to amending of the Constitution in its federal aspects and not
to the Fundamental Rights. Recently, the Supreme Court has declared by a
majority
that the Fundamental Rights are unamendable, I. Golaknatb v. Union of India (1967).
Art. 368. The amending bill needs to be passed in each house of Parliament by a
majority of the total membership of the h6use and by a majority of not less than two-
thirds of the members of the house present and voting.
310 Jain
the needed State concurrence may be difficult to obtain to a proposed

amendment; yet, the whole, this Procedure would not prove as intrac-
on
table as the amending procedures in Australia and the U.S.A. The concept
of co-operative federalism has been worked out in a number of ways as
discussed later. There is also the judiciary with powers to .interpret the
Constitution and thus to draw the necessary balance in accordance with the
needs of the times. But, it needs to be stated that this should not lead to the
impression that States are completely subservient to the Centre-They have
their own powers; they do not exist at the sufferance of the Centre but
claim their status from the Constitution, and many conventions have been
evolved making them more autonomous in practice than what they look to
be in theory. Then, the political forces, recently released, have also cabined
the Central initiative to some extent because it is more expedient for the
rather than always threaten its
carry the States along to use
Centre to re-
might therefore be were to misleading if one take his ideas

serve powers. It
the Indian Federalism merely from the constitutional text. For draw-
about
balanced has search for practices and operating forces
ing a picture, one to
underneath the surface of the formal constitutional provisions.
Ill. Legislative Relations
The pivotal point in a federation is -the allocation of law-making powe.rs

between the Centre and the constituent units. As compared to the schemes
adopted for the purpose in the Constitutions of the U.S.A., Canada and
Australia, the Indian scheme is a very elaborate affair"). There are three
lists: List I containsmatters with respect to which the Centre has exclusive
right make
to laws; List II enumerates matters for exclusive legislation by
the States; and List III contains matters for concurrent law-making of both
the Centre and the States. Matters in List I are such which need a uniform
law for the whole country; those in List 11 admit of local variations, while
in List III fall matters where local treatment may be found wanting and
uniformity have to be secured. Each of the three Lists is elaborate and
may
contains a number of entries. There are 97 entries in List 1, 66 in List II
and 47 in List III.
The Centre has been given extensive powers of legislation over such,
matters as defence, foreign Iaffairs, many forms. of communications, cur-
rency, taxation, foreign

and interstate trade and commerce, incorporation
of trading companies, banking and insurance, industries, mines, some educa-
Art. 246, sch. VII. For details, J a i n, Indian Constitutional Law, 228-269.
36)
tional institutions, some aspects of education and health. The Concurrent

List contains inter alia, general laws 37), public welfare, labour matters,
trade monopolies, regulation of essential commodities, economic and social
planning. As a matter of abundant precaution, List I contains 7 entries re-
lating to defence and 12 entries relating to foreign affairs. In other coun-
tries, only one entry is found about each of these matters but in India it has
been ensured beyond doubt that the Centre has complete jurisdiction on all
aspects of these matters. Centre's power over foreign affairs has been further
strengthened by laying down in a separate provision-31) that it can make
any law to implement any treaty, agreement or convention with any other
country, or any decision made at an international conference, association or,
body. This has been done to avoid any difficulty as has arisen for the Cen-
tral Government in Canada 39) in this area.
In the economic area, the Centr&s primacy has been ensured. Thus in such
fields companies, banking and insurance there are uniform Central laws.
as
It has complete, control over foreign trade which is exercised through the
Imports and Exports (Control) Act, 1947. It can take under its controlany
industry the relevant entry is very flexible 40) and it has exercised this
-
-
power by bringing under its regulation a number of industries through the

Industries (Development and Regulation) Act, 1951. Similarly, the Centre
can regulate mines and minerals to any extent it wantS41 and it has exer-
cised this power by enacting the Mines and Minerals (Development and
Regulation) Act, 1957, under which the authority to grant mining leases
rests with the States subject to an appeal to the Centre and also the rates of
royalties for minerals payable to the States are to be fixed by the Centre.
Under the Oilfields (Regulation and Development) Act, 1948, the Centre
has taken under its control the regulation of oilfields and development of
mineral oil resources. The granting of mining leases in respect of any mineral
oil is to be regulated under the rules made by the Centre 42). In exercise of
37) Such laws are criminal law and procedure, laws relating to marriage, divorce,
property, contracts, torts, evidence, civil procedure, etc. There is thus a uniformity in the
country in respect of these laws.
") Art. 253.
'9) Note 19, supra.
40) Entry 52, List Iruns as "Industries, the control of which by the Union is declared
by Parliament by law to be expedient in the public interest".
41) The relevant entries are 53 and 54 in List I which run as: "Regulation and devel-
opment of oilfields and mineral oil resources; petroleum and petroleum products; other
liquids and substances declared by Parliament by law to be dangerously inflammable",
and "Regulation of Mines and mineral development to the extent to which such
regu-
lation and development under the control of the Union is declared by Parliament by law
to be expedient in the public interest".
42) In 1962, the Central Government modified the Petroleum Rules framed by it
319 J a n
its power in the Concurrent LiSt43), the Centre has enacted the Essential
Commodities Act, 1955, to regulate trade and commerce in many es.sential
commodities. This is only illustrative of the amount of economic legislation
which the Centre has enacted in India.
The Centre also has the residuary field, i.e. the unspecified area left over
after all the entries have been accounted for"). This, though of not much
practical significance immediately in view of exhaustive enumerations in
the Lists, may yet assume importance in future with new technological
developments taking place. Further, the entries in List I have a: primacy

over the entries in the other two. Lists, and those in the Concurrent List over
the entries in the State List. Then, in case of repugnancy between a Central
law and a State law, the former prevails over the latter 1). All this ensures
4.
Centre's strength as against the States.

The States' powers of legislation, on the other hand, though not so broad
as that of the Centre, are nevertheless significant and
touch the people per-
haps more intimately. They have to Maintain law and order. Agriculture and
irrigation, on which depends the whole future prosperity of the country,
fall within their domain. They, can regulate industry and mines after what
has been left over by the Centre. Education is their preserve and the Cen-
tre's powers, in the area are limited 46). Health falls in their jurisdiction as
well as roads, water ways, trade and commerce. They can legislate in the
concurrent field to the extesit left unoccupied by the Centre, and even
when
the Centre has made a law on any matter, a State, law can be kept alive,
although inconsistent with the Central law, by the of
expedient presidential
47
assent
the distribution of powers in a federation between the Centre

Usually,
and the States is rigid. The balance drawn between the two governments
cannot be disturbed unilaterally by one of them. The process
of constitu-
under the Act to bar State Government from taking any step to interfere with oil
a
exploration in its The State of Assam and the Oil India Ltd. have agreed at cer-
areas.
tain rates of royalty which were later reduced by the Centre-in view of developments
relating to international oil prices. The Assam Government insisted on the old ,rates. Under
the old rules, it could cancel exploration rights of Oil India. The modification of the
rules curtailed this of the State. The matter of royalty was discussed later between
power
the Centre and the State.
43) Entry 33, List III. Some of the essential commodities are: coal, food, cotton, tex-
tiles, jute, iron and steel, petrol, etc., see M. P. J a in, Administrative Process Under
the Essential Commodities Act (1955), an ILI publication.
44) Entry 97, List I read with art. 248.
45) Art. 254.
46) Infra.
47) Art. 254 (2).
tional amendment is also rigid and not capable of being effectuated easily.
Gradual adjustments in the balance of powers are effected by the process of
judicial interpretation, but there are times when it fails to rise to the occa-
sion and make the needed adjustments to meet given situations. To some
extent, rigidity of the federal systems has been mitigated by techniques of
co-operative federalism, but these techniques are of limited, efficacy and are
resorted to because better and more effective methods are not available.
There have been times in the federations of the U.S.A., Canada and Austra-
lia, when lack of necessary powers in the Centre has been keenly felt as
pressing problems have demanded solutionS48). India in this respect breaks
new ground as the Constitution contains a few. unique provisions, not to be
found in other constitutions, for making temporary adjustments in the

Centre-State distribution of Powers which introduce an element of flexi-
bility in an inherently rigid federal structure.
First of all, the long concurrent List, on the model of Australia, reduces
to some extent the barriers which otherwise would arise if the two levels of
government were to have only exclusive powers. In this area again, a further
measure of'flexibility has been introduced by providing for a method of
keeping a State law alive in the face of a Central law 49).
Secondly, two or more States can delegate power to Parliament to legis-
late on a specified State matter 50). This provision has been borrowed from
Australia 51), but the
interesting fact remains that while it has not been used
at all in Australia, it has been used in India quite a few times. As for
example, States of Bihar and Bengal authorised Parliament to legislate for
setting up the Damodar Valley Corporation 52) Again, a number of States
delegated to the Centre power to enact a law to regulate prize competitions,
a State subject, but for which a uniform all-India law was needed because
usually these competitions were run by out-of-state journals which a State

law could not touch. The expedient was used again for enabling the Centre
to enact a comprehensive law levying estate duty on agricultural as well
as'non-agricultural property. jurisdiction in this respect is fragmented

under the Constitution; while agricultural property falls within the State
sphere, the non-agricultural property is under Central ambit. It was felt
that it would be inequitable to tax only non-agricultural property and not
48) Sec. II supra.
49) Note 47 supra.
50) Art. 252. This is doneby the State Legislatures passing resolutions for the purpose.
51) Sec. 51 (XXXVII) of the Commonwealth of Australia Constitution Act, 1900.
52) See XII supra.
314 J a i n
the other. There were problems of aggregatioIn of the assessees entire prop-
erty-for tax purposes, and so a Central law was thought to be a desideratum.
Thirdly, under an emergency, the Centre gets powers to legislate in the

State sphere5').
Fourthly, by a resolution passed by the Council of States 54) supported
by two-thirds of the members present and voting, the Centre can take power
to legislate on a State matter for a year, and each time the Council passes
the resolution, the power can be extended by a year. This unparalleled

provision has been used a few times but not too often"). The theory under-
lying the provision is that the Council represents the States as such as it is
elected by the State Legislatures on the basis of proportional representation,
more or less. on a population basis"). The House thus reflects
the Political
forces in the country, and if too many States are opposed, then it may be
difficult to mobilise necessary support in the House for passing the resolu-
tion for making temporary adjustment. But then, it is also a fact that the
House is divided on party basis and voting has never taken place.on.a State
basis, and, therefore, if the ruling party can muster the needed strength, it can
have the resolution carried through. The procedure is of strictly temporary
efficacy as the resolution's effect is limited to one year. If past experience
is any guide,, this method will be resorted to only when national interest
demonstrably so demands and to, tide over a situation of a temporary
nature. Lastly, certain entries in the Union List have been so worded as to
make the. ambit of the Central power flexible, enabling Parliament to
legislate to the extent necessary in a given situation leaving the rest of the
area tothe States 57).
Then, even in the field open to the States, the Centre can control State
Legislation in certain areas. Thus a State law compulsorily acquiring or
53) Sec. X infra.

It is the upper chamber of the Parliament at the Centre and is composed of mem-
54)
hers elected by the State Legislatures.
make
5r,) In 1950, the Council passed the necessary resolution to enable Parliament to
laws with respect to entries 26 and 27 of List II which refer to trade and commerce
within the State and production, supply and distribution of goods subject to entry 33 in,
List III. As a result, Parliament enacted the Supply and Prices of Goods Act, 1950.
56) For details, J a in, op. cit. supra note 32, 16-21.
57) Noties 40 and 41, supra. Other entries of this kind are: 7. Industries declared by
Parliament by law to.be necessary for the purpose of defence or for the prosecution of
war; 23. Highways declared by Parliament to be national highways; 27. Ports declared
by Parliament to be major ports; 56. Regulation of development of interstate rivers and
river valleys to the extent the same is declared by Parliament to be expedient in public
interest; 62. and 63. Institutions declared by Parliament to be of national importance; 67.
Ancient monuments declared by Parliament to be of national importance.
Some AsPects of Indian Federalism 315
requisitioningproperty needs the President's assent to be valid. This pro-

vision enables the Centre to keep under control State power to acquire
property and ensures payment of compensation for the same 511). Again,
certain types of land-legislation have been freed from the restriction of
fundamental rights, but a State law can claim this immunity only if the
President assents to it 19). This ensures that only a justifiable use is made of
the legislative power by the States. Central assent is also needed when a
State law endangers the constitutional position of the High Court or im-
poses a tax in respect of water or electricity stored, generated, consumed
or sold by an interstate river authority constituted by Parliament"") or
imposes reasonable restrictions on freedom of trade, commerce and inter-
course within the State"'). These are specific situations where Central
assent to State Legislation is necessary for its validity. But, then a general
provision authorises the State Governor to reserve a bill passed by the

State Legislature for presidential consideration and assent 62).
No norms have been laid down in the Constitution as to when. the
Governorcan exercise this power, or can when the President
to give refuse
his assent to a State bill, and, on its face, it appears to be a blanket power.
The Governor is a nominee of the Centre. It has not been made clear
whether the Governor is to act in this matter on the advice of the State
Ministers or on his own responsibility. Obviously, it is difficult to think
that the State Ministers will give him such advice, and, therefore, he will
act either on his own initiative or on the d i c t a t e of the Centre.
A few illustrations as to how these provisions have operated in practice

so far may be interesting. The State of Punjab passed the Temporary
Tax Bill which levied 1 O/o surcharge on sales tax and also increased pas-
senger and freight tax. The Centre raised objections and refused assent
because the effect of the measure was to levy 8 O/o tax on luxury goods as
against the ceiling of 7 O/o fixed by the Chief Ministers' Conference; be-
cause it levied a tax of 3 O/o on goods declared essential on which only a
2 O/o sales tax was permissible under the Central law 63) and because the
Punjab Government should give necessary assurances to the Centre that
it would share the enhanced revenue from the passenger tax with the
Union Territory of Himachal Pradesh. The Centre signified its assent to

the measure when Punjab agreed to remove the lacunae pointed out. In
58) Art. 31 (3).

-19) First Proviso to art. 31 A.
60) Proviso to art. 200, and art. 288 (2).
61) Art. 304 (b).
62) Art. 200 and art. 201. J a in, op. cit. sttpra note 32, 261-263.
63) The Central Sales Tax Act, 1956.
316 Jain
1961, the Centre refused assent to the Madhya Pradesh Panchayat Raj Bill,
1960, which provided for nominated village panchayats to be set up for a
year. The Centre took the view that the system of nomination was a nega-
tion of the concept of the panchayats. Perhaps the most debatable case so
far has been that of the Kerala Education Bill. In 1957, the Communist
Government of Kerala64) sponsored through the legislature the bill to
provide for the better organisation and development of educational insti-
tutions in the State. The measure raised a stormof protest in the State,
and the Governor reserved the same for presidential assent. The Centre,
in order to keep the matter above
partisan politics, sought the advice of
the Supreme Court which reported that some. provisions of the bill -in-
fringed the fundamental right guaranteed by ar t. 30 (1)6.1) The bill was
returned to the State for necessary modifications in the light of the Supreme
Court"s opinion. Recently, the Bengal Legislature enacted a bill to take
over the management of the Calcutta Tramway Company, an English Con-
cern, for three years") to which the Centre has accorded its assent.
There is no doubt that these provisions in the Constitution requiring
Central assent to State Legislation do detract, to some extent, from the auton-
omy of the States. In the present-day political situation, there is also in-
herent in these provisions a seed of Centre-State conflict, for with various
political parties in office, there is bound to be a difference of policies
amongst the various governments. The 'Centre has therefore to be careful
in exercising its powers and should veto a State Legislation only. in very
clear cases, like inconsistency with. a Central law, or infringement of the
Constitution, or infringement of the established national policies like the
industrial policy, etc. 6*1). The Centre cannot act as if in a vacuum, or with
64) Also see, sec. X infra.

65) In re Kerala Education Bill, AIR 1958 SC 956. Another piece of legislation of
the same period was the Kerala Agrarian Relations Bill, enacted by the Legislature on
December 21, 1957, and reserved by the governor for presidential assent. It was returned
by the Centre suggesting some modifications therein which were made in October 1960,
and the bill then received presidential assent in early 1961. The bill had been reserved
under arts. 31 (3) and 31 A, notes 58 and 59 *The Act raised two Supreme Court cases:
Purusbotbaman v. State of Kerala, AIR 1962 SC 694 and K. Kunhikoman v. State of
Kerala, ibid., 723. In the latter case, the Act was held invalid under arts. 14 and 31 A.
66) The Bengal Government had earlier asked the company not to raise tramway
fares without consulting it as this often led to public hostility. The company declared
that it was unable to pay its employees salaries for July, 1967, in the absence of an
immediate interim increase in fares. The Government then moved to take over the
management of the company. After three years, it would revert to the old management.
The bill needed presidential assent under art. 31 A. See notes 58 and 59 supra.
67) The Industrial Policy Resolution of the Government of India, 1956, reserves
certain industrial area for government, some area for private enterprise, and some for
both.
impunity; there is a strong opposition in Parliament which will keep

under check the exercise of its powers by the Central Government. But
there may arise a situation, as for instance, a State Government embarking
on alarge scale nationalisation, which the Centre may feel, goes against the
economic interests of the country, and then it may have to set its foot
down. Much depends on the political reality of the situation. If past
practiceis any guide, especially the. Kerala case, then it can be assumed
that the Centre will be wary in exercising its controlling
powers over
State Legislation unless there is no, way out""). On an average, the Centre
assents to nearly 100 State bills every year 69).
There apprehension that having three elaborate Lists enumerat-
was an
ing over 200 entries

might generate large-scale litigation and raise formi-
dable problems of interpretation 70). On the whole, however, these appre-
hensions have been found be without substance, and there has not been
to
very significant litigation in this area. The leading cases in this area are
still those which arose under the Government of India Act, 1935, and the
interpretative norms laid down therein are still followed by and large by
the courts because the structure of distribution of powers under the Con-
stitution remains basically the same as under the Act of 1935. Speaking
generally, the courts have been able to uphold by and large the legislation
impugned; the challenges to the Central laws have been much fewer than
those to the State Legislation and, on the whole, the courts have been liberal
towards the Centre's powers7l).
Three types of controversies may be identified in the area of Centre-
State distribution of powers. First of all, there may arise a question of
interpreting an entry to spell out its proper ambit in order to determine
whether a piece of legislation falls within the entry or outside it. To illustrate,
611) In the U.S.A. and Australia, the Centre has no control over State Legislation.
In Canada, the Lt. Governor of a Province may reserve a provincial bill for the consent
of the Centre, a provision analogous to art. 200, or the Centre can disallow a provincial
legislation within a year of its This power has now fallen into disuse. There
enactment.
is no power in the Central Government in India to disallow a State Act after it has
come into force. At times, Central Legislation

may confer rule-making power on the
States subject to the stipulation that the rules receive the previous sanction of the Centre,
e.g., sec. 115 (7) of the States' Reorganisation Act, 1956. C. K. Appanna v. State of Mysore,
AIR 1965 Mys. 19 and N. Raghavendra Rao v. Dy. Commr., Soutb Kanara, AIR 1965
SC 136.
69) Figures are: 1957 -116; 1958 -117 and 1960 -146; 1966 -67, 115 bills and 35
governors' ordinances.
70) Jennings, Some Characteristics of the Indian Constitution (1960), see note 36
supra.
71) See cases cited in note 75 infra. Also, West Bengal v. Union of India, discussed
in sec. VII infra.
318 Jain
a State can a tax on entry of goods into a "local area" for consump-
levy
tion-, use or sale therein 72) A State imposes a tax on entry of sugar-cane
into a sugar factory for consumption. The question is whether a sugar
factory is a "local area" envisaged by the entry in question. The Supreme
Court has held that the term "local area"
signifies "an area administered
by a local body like a municipality, etc." and the factory could not be
treated as a "local area"' with the result that the tax falls outside the entry.
The general, norm Of interpretation, however, is to interpret an entry
broadly bringing.within its scope all incidental and ancillary matters as
well, the reason for this approach being that the legislative entries set up
"
a "machinery of government" aqd are "heads of legislation 73).
Secondly, various. entries in different Lists may appear to overlap, and

there arises the question of finding an interrelation among them. To take
an example, "Duties of excise" in the Central List, if interpreted broadly,
would comprise "sales tax" in the State List. Does it mean that the States
cannot levy sales tax? The courts have held that in of such conflict, case
a harmony should be established among the various entries, if possible, by

restricting the ambit of the broader entry in favour of the narrower,one so
that the latter is not eaten away by the former. Thus the phrase "duties
of excise" should be interpreted so as to exclude "sales tax
"
74) Here the
State power is preserved, but the same principle is, also applied to curtail
75
a State general power in favour of a Central specific power A Uni-
versity prescribed Hindi and Gujarati as the sole media of instruction in

place English. "Education", is a State matter, but "maintenance and co-
of
ordination of standards in university. education" is a Central matter. The
court held that the State power could not be so broadly interpreted, as to
negative the Central restricted power; the States. cannot, therefore, enact
any legislation so as to affect the Central power, and, since prescribing
Hindi and Gujarati as the sole media was bound to affect.the standard of
university education adversely, it fell outside the State as well as the uni-
versity'S sphere.
Thirdly, a law may appear to relate to an entry in one List and also to
an entry in another List, and this raises the question whether the law has
been validly enacted by the legislature -having the power. For example, a
72) Diamond Sugar Mills v. State of U.P., AIR 1961 SC 651. The relevant entry is 52
in List II.
73) United Provinces v. Atiqua Begum, AIR 1941 FC 16, 25; Sbri Ram Ram Narain
v. of Bombay, AIR 1959 SC 459.
State
74) in re the Central Provinces and Berar Act No. XIV of 1938, 1939 FCR 18, 49.
75) University of Gujarat v. Sbri Krisbna R. Madbolkar, AIR 1963 SC 703; Cbitra-
lekba v. State of Mysore, AIR 1964 SC 1823.
State made law to scale down debts owed by agriculturists may affect
promissory notes.by executed them. Now agricultural
indebtedness is a
State subject while the topic of "promissory notes" falls within the Central
legislative sphere. In such a situation, the courts apply the principle of
pith and substance; they determine the true nature and character of the
law in question so as to decide under what entry the law falls. In thein-
76
stant case the impugned Act deals with agricultural indebtedness pri-
marily, with
promissory notes only secondarily, and so the law falls within
the State sphere. The doctrine of pith and substance gives quite a good deal
of manoeuvrability to the court and out of a number of choices open. to
it, it would usually accept that which favours the law in question 77).
On the whole, the scheme of distribution of powers may be said to have
functioned well so far, and only two amendments have had to be made
to it to meet new situations. The Third Amendment of the Constitution
made in 1955 re-drafted entry 33 in List III so as to enable the Centre to
enact a law to regulate trade and commerce in certain essential commodities
in short supply like food, sugar, cotton, etc 78) The Sixth Amendment
made in 1956 added entry 92 A to List I so as to enable the Centre to tax
interstate sales which were going tax-free to the detriment of the intrastate
trade and commerce 79). From time to time, more amendments have been
mooted but to Following
no avail. the Gujarat University Case,"), the
Centre proposed that. university education be placed in the concurrent List
so that it could undertake greater responsibilities in that sector, but due to
the opposition of the States it could not materialise and the proposal was
never brought forward formally on the floor of the Parliament. This
shows that the Centre cannot amend the legislative Lists without the con-
currence of the States. Another proposal has been to transfer motor taxa-
tion to the concurrent List from the State list so that motor tax structure,
which at present varies from State to State and thus hampers development
76) Prafulla Kumar v. Bank of Khu1na, 74 IA 23. The doctrine has been borrowed
from Canada, see e.g., Citizens Insurance Co. v. Parsons, 7 A.C.580.
77) For example, a law banning the use of loud speakers at night is a law dealing
with public health or with communications. Being alaw, the court held it valid
State
as falling under the subject of public health, State of Rajastban v. Chawla, AIR 1959
SC 544.
711) For details see, J a in, op. cit. supra note 32, 632-3.
79) For details, ibid., 635-6.
80) Note 75 supra. The Government of India appointed a committee of members of
Parliament, known as the Sapru Committee, to suggest steps to be taken so that the
Centre could assume greater responsibility in the field of higher education. The committee
suggested an amendment of the Constitution mentioned above, see Report of the Com-
mittee (1964), Ministry of Education, Government of India.
320 J a i n
of transport, may be rationalised 111). On the other hand, recently,

motor
in the new political atmosphere, Chief Ministers of Madras and Kerala

have expressed sentiments that the Centre has too many, and the States too
few, powers and that the States should be given more powers. But, as yet,
these ideas remain vague and nebulous, and no concrete suggestions have
been formulated regarding what powers should be given to the States. For
the present, it is extremely doubtful whether any change would be made
in the scheme of distribution.of powers either in favour of the States or
that of the Centre.
IV. Financial Relationsbip
Theordering of the Centre-State financial relationship in a federal

polity constitutes a complicated exercise, for the crux of the matter is to
allocate resources levels of governments so as to enable each
amongst two
of them to find funds adequate for its needs. An imbalance in the func-
tion-resource equation at any level cannot lead to good government and
this is bound to create tension in the federal system. A viable scheme of
Centre-State financial relationship therefore is a sine qua non for a proper
functioning of a federal polity as a whole.
The framers of the Indian Constitution drew an elaborate scheme in
this regard 82). While doing so, they sought to avoid some of the difficulties
faced in other federations in this area and adopted some of the techniques
developed therein. The Indian'Constitution demarcates the taxing powers
of the Centre and the States; taxes of a local nature have been given to the
States'13); taxestax-base extending through more than one State, or
with a
which should be levied on an uniform basis in the country and should not
vary from State to State, or which can
be collected more conveniently by the
Centre rather than the States, have gone to the Centre 84) A beneficial
before
81) Memorandum of the Ministry of Transport, Government of India, placed
the Transport Development Council, July 27, 1966. Report of the Road Transport
Taxation Enquiry Committee, placed on the table of the Lok Sabha on March 21, 1967.
India (1950-67):
82) For details refer to J a i n Central-State Fiscal Relationship in
A Study of ani Aspect of Indian Federalism, in: jahrbuch des Offentlichen Rechts, vol. 16.
and estate duty
83) State Taxes are: Land revenue, tax on agricultural income, death
on agricultural property, tax on buildings, taxes on mineral rights,: excise
lands and
duties on liquors, opium, etc., consumption and sale of electricity, sales
octroi, tax on
tax, tax on advertisements, tax on goods

and passengers carried by road or inland
waterways, motor vehicles tax, tax on
animals and boats, tolls, profession tax, capitation
tax, entertainments tax, etc. (Entries 45. to 63,
List II).
84) Taxes available to the Centre are: Tax on non-agricultural income, customs duties,
excise duties, corporation tax, capital tax, estate and death duties, terminal taxes, stamp
in
duty, tax on sale or purchase of newspapers, interstate sales tax, tax on transactions
stock exchanges (Entries 82-92 A, List I).
result of this scheme is to avoid all problems of multiple and

overlapping
taxation which arise in other federations and which make for
complications
both for the tax-payer and the tax-collector. But it has raised a problem,
viz., that the taxes which have gone to the States are inelastic and hardly
suffice to meet their needs. The fathers realised this and sought to augment
State resources by providing for transfer of funds to them from the Centre
through the techniques of tax-sharing and grants. Tax-sharing envisages
that the Centre shares some of its taxes with the States. Income-tax is com-
pulsorily, and excise voluntarily, sharable. The Centre is also required to

make grants to those States which need help 85) An autonomous finance
commission is appointed every five years to make recommendations as to
tax-sharing and fiscal-need grants. Since 1950, when the Constitution was
made effective, four such commissions have made recommendations on
these points resulting in a larger transfer of Central funds to the States each
time. 75 O/o of the income-tax revenue and 20 O/o of the excise revenue are
now transferred to the States. The fiscal-need grants have also expanded
mani-fold over the time"'). In fixing the State shares in the Central funds,
the commission has kept in view the importance, of reducing regional dis-
parities that the poor States are enabled to provide services comparable
so
to the rich States. India has borrowed the idea of the finance commission
from Australia 87 but, whereas the Australian body is concerned merely with
making annual fiscal-need grants to two States, the Indian body has a more
extensive function discharge it goes into the area of tax-sharing and

to as
provides for fiscal-need grants for a large number of States. The finance
commission ensures that funds would flow from the Centre to the States
without political pressures and
on objective criteria. It also introduces flexi-
bility into the system as the flow of Central funds can be adjusted
every
five years. Besides the fiscal-need grants, the Constitution also provides
for specific purpose grants which are given outside the finance commission,
at the discretion of the Centre, for such State activities as the Centre
may
want to promote to achieve desired national goals I'll). These
grants have
increased mani-fold under the impetus of planning and have dwarfed the
1") Art. 275 (1).

86) From Rs. 50.5 million made by the first commission, fiscal-need grants have
expanded to Rs. 1220 million annually as suggested by the fourth commission, J a in,
note 82 supra.
87
Note 30 supra.
88) Art. 282 runs as follows: "The Union or a State may make any grants for any
public purposes, notwithstanding that the purpose is not one with respect to which
Parliament or the Legislature of the'State, as the case may be, may make laws".
21 ZabRV Bd. 28/2
322 Jain
fiscal-need grants and are made on the recommendation of the planning

commission.
But- the compulsions of planning have cast a shadow on the smooth
operation of the Centre-State fiscal relationship. For one thing, there is
an overlap of functions between the planning and finance commissions, and
the truth is that to-day more funds pass to the States under the former than
under the latter, and so the finance commission has been overshadowed by
an extra-constitutional body89). Further, in spite of the massive Central
assistance the States, the finances of most of them are in a none-too-

to
happy position which results in deficit budgets: and over-drafts on the

Reserve Bank, and the States continuously pressurize the Centre for more
and more funds. After the recent elections,, some States have propounded
the thesis that their taxing powers should be increased. The main difficulty
in the Centre-State finances arises because of the large outlays needed for
development and the limited taxing capacity of the people. The fact also
remains that the States have not yet fully utilised whatever tax resources are
open to them. Even before the recent elections, States were chary of tax-
ing the rural sector because of political implications 10). The newly installed
State Governments, on the other hand, have even gone to the extent of
reducing some taxes and committing more expenditure and thus producing
larger deficits in their budgets 91).. It is extremely doubtful if re-allocation
of taxing powers will provide any solution to the difficulties of the States.
First of all, it is not easy to see what Central taxes can be transferred to
the States. As things are, except customs and

corporation, tax which are ex-
clusively Central, all other Central taxes are either shared or fully utilised
by the States 92) and it is unthinkable that customs or corporation tax can
811) For planning and planning commission, see IX infra.

90) The planning and finance commissions have both commented on this aspect of
the problem from time to time: Report of the Second Finance Commission, 26-33; of
the Third Finance Commission, 38. For a circular by the planning commission to the
States drawing their attention to this matter, see Times of India, November 20, 1963;
J a i n, Federalism in India, op. cit., ntpra note 13,362 note 23.
91) At a conference of the Central and State Finance Ministers held soon after the
fourth general elections, the Central Finance Minister appealled to the States not to give
up important sources of revenue and also to avoid deficit financing to avoid inflation
in the country. A survey of the State budgets for the year 1967/68, however, shows that,
on the whole, States propose to incur a deficit financing amounting to Rs. 1250 million.
They have gone for bigger development outlay but at the same time abolished or reduced
such taxes as land revenue or urban land tax or granted some other concessions to this
or that classof people.
92) Some taxes like estate duty, terminal tax, etc. are collected by the Centre but
assigned wholly to the States, while such taxes as stamp duties, tax on interstate sales
are levied by the Centre but collected by the States.
be transferred to the States. The transfer of any other tax would not in-
crease the
taxing capacity of the States. Further, care has also to be taken
that problems of multiple and over-lapping taxation do not arise. Nor can
it be that the States would dispense with the Central assistance in the near
future, certainly not the poor States where taxing capacity is low. If that
is so, there is no purpose served by resorting to a solution which reduces
Central capacity to help the States without increasing their own capacity
considerably. The solution lies in a more effective husbanding of available
resources and their wise use. More will be said about this in the later section
on planning which has an intimate relation with the problems considered
here 93).
V. Administrative Relationship
In the modern era, which is characterised as the administrative age, the

need for an effective administration
cannot be over-emphasized in India,
much more so in the context of

planning which requires sustained admin-
istrative effort, initiative and enterprise, on a large scale, to complete the
plan programmes within a fixed time. The Indian Constitution lays down
a flexible scheme of allocation of Central-State administrative responsi-
bility which permits all kinds of co-operative arrangements between the
governments as may be deemed desirable The Centre can administer any
94
activity in its exclusive field, or leave it to the States; the States administer
matters in their exclusive area but, by agreement, may leave any of their
functions to the Central administration; matters in the concurrent field are
ordinarily administered by the States but parliament can by law enable

the Centre to take up any of them under its administration. A government
can carry on any commercial or industrial activity, but if it falls outside
its legislative domain, it would be subject to the laws made by the other
government having power to do S095) The States are not to hamper or
impede the Centre in exercising its executive powers; they have to exercise
their executive powers as to comply with the laws made by the Parliament,
and the Centre can give necessary directions the States for these pur-
to
poses. The Centre can direct the States to construct and maintain means of
communications of national military importance or for protecting the

or
railways, the cost of this being defrayed by the Centre. A special obliga-
tion has been placed on the Centre to look after the welfare of the minor
9 On planning and planning commission, see sec. IX infra.

94) For details, see, J a i n note 32 supra, 309-314.
9') Art. 298.
324 Jain
ities, and, therefore, it can direct the States to draw up and execute
schemes for the welfare'of the scheduled tribes") or to provide facilities

for instructionin the mother tongue at the primary stage to the children of
the linguistic minorities 97).
Some of the above provisions are unique in the sense that no such
parallel provisions exist in other federations. These provisions are the pro-
duct of special needs of the country and are designed to avoid the diffi-
culties.arising in other federations by a rigid demarcation of functions. In
practice, the Centre confines its administration to some matters in the
exclusive List, e.g., defence, foreign affairs, railways, collection of taxes
and regulation of foreign trade,, foreign exchange, or industries declared
to be of national importance, etc. Quite a few of its exclusive functions are
administered. through the States,, e.g., till recently, passports were issued by
the States, but this task has now been centralised; policing of some of the in-
ternational borders still rests with the States; it is only recently that the
Centre has set up a border roads organisation to construct roads in the bor-
der areas. Another conspicuous illustration of the States exercising adminis-
trative function in an exclusively Central area is under the Central Sales Tax
Act, 1956; interstate sales tax though levied by the Centre is collected and
assessed by the States. In the concurrent area, even when the Centre seeks to
legislate on a matter, administration is mostly left to the States. Even if

the Centre assumes powers in its hands under the law, it delegates most of
them the States. Thus, under the Essential Commodities Act, 1955, the
on
power to regulate essential commodities has been centralised, but only

textiles, sugar, iron and steel are under the Centre's direct administration,
the rest being left with the States subject to such directions as may be given
to them by the Centre"). In some cases, the Centre may reserve power to
hear appeals from administrative decisions made'by the States"). The

States, however, carry out their -
own exclusive functions themselves and
delegation by them of any such responsibility on the Centre is very rare'00).
It will thus be seen. that most of the administration' at the grass roots vests
in the States. A large sector of five-year plans falls to their administration, and
96) Art. 339.

97) Art. 350 A.
98) A few central statutes confer rule-making powers on the States, e.g., the. Indus-
trial Disputes Act, 1947.
99) E.g., the Mining Concession Rules, 1949. Shriram jhunibunwala v. State of Bombay,
AIR 1962 SC 670; Madan Gopal v. Secretary, Goot. of Orissa, AIR 1962 SC 1513.
100) One such example is the construction of the Hirakud Dam by the Centre on
behalf of the Orissa State. For details see, N. B. Singb v. Duryodhan, AIR 1959 Orissa.
58, 65.
success of many all-India policies depends on the -effectiveness with which

the States administer them. The law enforcement machinery is almost en-
tirely with the States, and many a time, the efficacy of the Central laws
is diluted by indifferent enforcement. This great dependence of the Centre
on the States for purposes of administration has been characterised as a
weakness of the Indian Federalism. To some extent, even the failure of five-
year plans in some sectors may be ascribed to the intertia of the States.
The Centre's power to make the States move is limited; it can. hold con-
ferences, try to pursuade them, give them financial inducements through

grants-in-aid, but even when it has power to issue directions, that power
is not usually exercised. The pattern of administrative relationship woven
around the grants-in-aid remains, by and large, vague as not much pub-
lished information is available. What arrangements for supervision, con-
trol and. auditing of accounts are made, what sanctions are exercised in
case of use of money for purposes other than those sought to be aided, all
these are questions on which information is lacking at present. No complete

study has yet been made of the maze of administrative relationship which
has come into existence under the large number of Central statutes 101).
Time appears to have come for serious thought being given to the prob-
lems of Central-State administrative relationship. When the Congress party
was dominant in the country, some cohesion could be applied through
the party mechanism and the States made to discharge their tasks. But that
mechanism has ceased to be available now, and there may be embarrassing
moments for the Centre when a State Government of
a different political
complexion may not want to give its
co-operation to it. Recently, such a
case has occurred. For the Central jobs, a system of police verification of
the antecedents of the applicants has been in vogue for long and this was
done by the State police. Now Kerala has refused to undertake this work
for the Centre. Examples may multiply in future when the Centre may find
itself handicapped in carrying out its responsibilities due to resistance shown
by the States. There may be several lines of adjustment in this area, viz., to
federalise administration of more important functions: to strengthen the
technique of grants-in-aid. In the U.S.A., grants-in-aid have been used
to stimulate State activities in various fields and also improve per-
formance by the States, because usually the Central administration intro-

duces some kind of supervision over the State functioning in the aided
101) For a criticism of the present-day administrative system, Paul Appleby,

Public Administration in India -
Report of a Survey, 9, 10, 17, 22. In a comment in the

Times of India, October 21, 1963, it was stated that States had accepted money from
the Centre for industrial housing, but houses constructed were either lying vacant or
were occupied by ineligible persons, J a i n op. cit. supra note 13, at 3 74.
326 Jain
field 101). Another important aspect to consider is that the States' adminis-
trative machinery itself needs to be strengthened. It is necessary for the
future well-being of the Indian federation that the States be in a position to
discharge their tasks well. It, therefore, means that the quality of their
administration has to be improved because many programmes, on which the

well-being of the people so much depends, fall in their administrative area.
A method now in use is to have a few all-India services, recruitment to
which is made by Public Service Commission and officers of such

the Union
Iservices are placed in the States' adm'inistration,103). It may be advisable, to
institute many more such services as the quality Of the people joining them
is much better than those who go to exclusively State services 104). In the
U.S.A., a good deal of thought is at present being given to the question of
finding ways and means of improving the State administrative machinery,
and the problem in India is no les§ crucial.
VI. Intergovernmental Disputes
number of governments function within a polity as they do in

'When a
a federation, areas of tensions, differences and disputes are bound to

arise
between them from time to time, and it, therefore, becomes necessary to have
some mechanism to resolve these disputes in order to smooth the working
of the federation. The Indian Constitution makes a fewprovisions with
this in view. If the controversy has legal overtones, resort to the judiciary
may help. For this purpose, the Supreme Court of

India has been given
original jurisdiction in any dispute between two governments 101). This pro-
vision can be invoked to dispute involving a question of fact or
resolve 4
law but can hardly be suitable forresolving disputes with political over-
tones. Up to date, it has been, invoked only once in the famous case, West
102) Jain, note 13 supra,)72-375. Also, Report of the Commission on Inter-

governmental Relations, 126.
103) An outstanding example of this is the Indian Administrative Service. The services
in India are of three categories exclusively Central, exclusively State and Joint Central
-
and State services.

104) Such service can be created by Parliament passing a law after the Council of
a
States declares in a resolution supported by at least two-thirds of the members present
and voting that the creation of an all-India service common to the Centre and the States
is necessary or expedient in the national interest. The Centre, however, does not move
in this matter without having obtained a general State consensus for creation of such a
service, and this is not forthcoming easily. Such services are now envisaged in the areas
of health, forest and education.
105) Art. 131.
Bengal v. Union of India 106). Originally, the case was filed by the State of
West Bengal against the Central Government, but it developed into a full
scale controversy between the Centre and the States as many of them inter-
vened to support the point of view of Bengal. Another method to take
recourse to the judiciary in the matter of
intergovernmental disputes is by
invoking the
Supreme advisory jurisdiction. A question of law or
Court's
fact of public importance may be referred to the court for its advice by the
President. The court holds a hearing and delivers its opinion in the open
court 107). This provision has been taken recourse to several times, as for
example, in the Kerala case 1011) and the Sea Customs case 119). Most of the
constitutional controversies, however, arise in India on the initiative Of
private parties who seek to challenge the government action infringing
their rights or interests. Many a time, such cases are blown up into a full
scale intergovernmental controversy. Thus in Bengal Immunity Co. v.
State of Bihar 111), in which the question of the power of a State to levy
sales tax on an out-of-State sale was involved, the State of 'West Bengal
intervened in support of the appellant who challenged such a power while
a number of other States supported the view of Bihar which claimed such
a power to levy the tax.
As a matter of practice, when an important case comes before the Su-
preme. Court, it may itself issue notices to the Attorney-General of India and
Advocates-General of States inviting them to place their respective points
of view before the court so that the matter may be decided after all its
aspects have been argued and considered.
India has a number of interstate rivers and river valleys. 'With the accent
on development ofirrigation and power-resources by training these rivers,
it was anticipated that some disputes might arise among the States about
sharing the waters of these rivers. The Constitution therefore makes special
provisions for resolving such disputes. Power has been given to Parliament
to provide by law for the adjudication of any dispute or complaint with
respect to the use, distribution or control of the waters of any interstate

river and river valley and to bar the courts from taking cognisance of any
such dispute"'). Under this provision, Parliament has enacted two Acts.
The River Boards Act, 1956, provides for the establishment of river boards
for regulation and development of interstate rivers and river valleys, by
106) Sec. VII infra.

107) Art. 143.
108) Supra note 65.
109) See sec. VII infra.
110) AIR 1955 SC 661.
Art. 262. Also entry 56, List I, note 57 supra.
328 J a i n
the Central Government, on a request being received from State Govern-

ments or otherwise, and for advising the governments concerned in matters
concerning regulation government of aninterstate river or river valley.

or
The board may also advise the governments concerned to resolve their con-
flicts by co-ordination of their activities, may prepare schemes for regulat-
ing or developing the interstate river or river valley, may allocate among
the governments the costs of executing any such scheme and may watch the
progress of the measures undertaken by the governments concerned. The
Inter-State Water Disputes Act, 1956, provides for adjudication of disputes
relating to waters of interstate rivers and river valleYs. When such a dispute
arises, a State may request the Centre to refer the same to a tribunal for
adjudication. The tribunal appointed by the Centre consists of a person
nominated by the Chief justice of India from amongst the present or ex-
judges of the Supreme or High Courts. The tribunal may appoint two or
more persons advise it. The tribunal submits its report to the
as assessors to
Central Government which on publication becomes binding on the parties

concerned. A matter referable to a tribunal or a river boardis not to be
within the jurisdiction of any court. In spite of the existence of such detailed
provisions for resolution of disputes, several disputes concerning interstate
rivers have remained pending for long amongst the various States. Six such
disputes may be identified, viz., Narmada water dispute among Maharashtra,
Gujarat, Madhya Pradesh and Rajasthan 112) ; Krishna-Godavari dispute,
among Andhra Pradesh, Madhya Pradesh, Maharashtra, Mysore and
Orissa; Cauvery River dispute between Madras and Mysore; dispute regard-
ing east and west flowing rivers in Kerala among Kerala, Madras and My-
sore; Keolari Nadi dispute between Madhya Pradesh and Uttar Pradesh,
and Tungabhadra River dispute between Andhra. Pradesh and Mysore. The
surpri ,sing part of the whole situation is that the machinery provided in the
two Acts has yet been resorted to and in the meantime execution of
not
important river valley projects is held up to the national detriment. The

Government of India's view is that it will be better to arrive at an amicable
settlement of thesedisputes among the States concerned and that arbitra-
to only as a last resort.
tion should be resorted
A machinery similar to the tribunal mentioned above has been provided
for resolution of disputes among the governments under the Damodar
Valley Corporation Act '"), This machinery has been put into operation twice.
112) The Centre set up a committee to draw a master plan for development of the
Narmada valley.
113) Sec. X11 infra. Two tribunals have been appointed; once justice Jagannadhadas
and atanother time Justice Rajamannar sat on these Tribunals. Allocation of expend-
iture of the corporation has been the subject of arbitration.
The Constitution guarantees freedom of trade and commerce 114) Parlia-

ment has been authorised to appoint by law an appropriate authority for
carrying out the purposes of these constitutional provisions and confer on
it necessary powers and duties for the purpose'15). This would facilitate
creation of a suitable mechanism for resolving disputes among the States
regarding free flow of trade and commerce over State boundaries. One
suchbody already created is the Interstate Transport Commission under the
Motor Vehicles Act which consists of a chairman and two members and
its purpose is to develop, co-ordinate and regulate the operation of transport
vehicles in an interstate area or route. It may prepare schemes for the pur-
pose, settle disputes, grant, revoke and suspend permits for an interstate
route or area or the interested State transport authorities
issue directions to
for the purpose. The commission associates with it a representative from

each of the States interested in an area or route"").
Another mechanism envisaged by the Constitution for smoothing inter-
governmental relationship is the Interstate Council which may be appointed
by the President and may be charged with the duty of inquiring into and
advising upon disputes between States, investigating and discussing subjects
in which States or the Centre may be interested, and making recommenda-
tions upon any such subject, particularly, for better co-ordination of policy
and action thereon. The provision is a general one and any number of such
bodies having various functions in different areas may be appointed. The
Council is designed to be an advisory body with no authority to give any
binding decisions 117).
Apart from these constitutional provisions, an instrumentality very
widely used to resolve complicated issues has been that of commissions
under the Commissions of Inquiry Act. These commissions study the prob-
lems referred to them, hear evidence and such parties as may be interested
in the issues, and then make their reports to the Government which takes
final decisions. A number of commissions have been appointed for the pur-
pose of smoothing the,process of linguistic re-organisation of the country.
Although, under the Constitution, Parliament has full power to take any
decisions it wants in this matter""), in reality it is more of a responsibility
than a power and has brought the Centre under heavy strains and pressures
from various linguistic groups. Parliament cannot act in a vacuum or with
114) Sec. VIII infra.

115) Art. 307.
116) Sec., 63 A of the Motor Vehicles Act, 1939; S.O. 188 of March 8, 1958, of the
Ministry of Transport and Communications appointing the tribunal.
117) Art. 263. See note 190 infra.
118) Sec. XI infra.
330 J a i n
impunity, and it has to take into consideration the sentiments of the people
in deciding the issues involved. Often, conflicting claims are made, and
this places a heavy responsibility on theC,entre and often exposes it to pres-
sures and criticism from interested
parties. It has been found advisable'that
before taking any decision on such emotionally surcharged issues, an inde-
pendent commission should conduct a thorough inquiry after hearing all
opinions and make its report. The most important of such was
appointed in 1955 to consider and report on the thorough-going linguistic

re-organisation of the country. Another commission was appointed in 1966
to go into the question of settling for the two proposed States
of Punjab and Haryana out of the erstwhile State of Punjab. Another com-
mission is now looking into. the boundary disputes between Maharashtra and
Mysore and between Mysore and Kerala. This problem has been so intrac-
table that the Chief Ministers themselves couldnot resolve it after several
meetings, and ultimately the Central Government had appoint the com-
to
mission 119). All these commissions have been under the chairmanship of the
sitting or retired Supreme Court judges so that their objectivity and non-
partisanship may not be in doubt.
With the re-organisatign of the States on linguistic bas ,is, they have devel-
oped a sharper sense of identity which has made intergovernmental disputes
rather more bitter. There have been controversies between the Centre and
the States, and these belong mainly to the realm of planning and develop-
ment, a topic considered in a separate section. There have been interstate
disputes between the States surplus, and deficit in food, border disputes as
mentioned above,. disputes. rega'rding interstate river waters (mentioned
above), and disputes regarding sharing of electricity and the like. One of
the features of the Indian federalism is that the States find it almost impos-
sible to resolve their disputes among themselves. The instrumentality of
interstate compacts, which has come to be used so much in the U.S.A., does
not function very much,in India at present as every State wants to have its
own way in every dispute. Sooner or later, therefore, the interstate dispute
The commission consists of ex-Chief justice Mahajan and was app .ointed on
October 17, 1966. Because of the complexities of phrasing terms of reference in such a
way as would satisfy both the Chief Ministers, no terms of reference were given to the
commission except to say.generally that the commission should take "into consideration
the fundamental basis of the reorganisation of States with a view to solving the
existing border disputes", between the States concerned.. Mysore-Maharashtra dispute
relates to a wide belt of territory, now a part of Mysore, but which Maharashtra claims
is predominantly Marathi-speaking. On the other hand, Mysore claims. some parts of
Sholapur district from Maharashtra on the ground of its being Kannada speaking. Simi-
larly, Mysore claims Kasargod area from Kerala. These disputes have been pending
since 1957.
lands in the lap of the Centre for finding a solution, which puts the Centre
under a great strain and makes its position vulnerable as well, as
it is bound
to be criticised
by those who would feel dissatisfied with whatever the deci"
sion taken.When the Congress was dominant, the party machinery also sought
to smooth the process and find formulae which might be acceptable to the
contending parties. In 1965, the general body of the party discussed the
question of interstate wrangles and resolved that a machinery be evolved for
resolving such
disputes with power to give final decisions 120). Of course,
there can be
single machinery for settling all kinds of disputes, and the
no
fact also remains that in some cases, the existing machinery has not been used,
e. g., interstate rivers disputes. But the idea underlying the resolution is
sound insofar as it leads to an. objective solution of disputes by a non politi- -
cal body and spares the Central Government from some pressures. But no
action has been taken so far to give concrete shape to this resolution. In the
meantime, the political situation has undergone a change. It means that in
future the party machinery which could hitherto play some role would not
now be available as v arious State Governments owe allegiance to various
political parties; it may also lead to more bitter and open espousal of their
respective points of view by the States in their disputes with the neighbours.
Although, till now, the Congress Organisation did seek to smooth the inter-
governmental relationship to some extent"'), there was also a weakness in
the procedure, viz., many a time decisions were based on ad hoc bases and
inarticulate political premises, e. g., interests of the party itself, personality
and standing of the Chief Minister concerned, and this stood in the way of
evolution of objective norms for settling disputes. In the new context, all
this has to change. It is therefore worth considering whether or not it will be
helpful to have in interstate Council, an expert non-political body, to
keep the intergovernmental relationship under constant review and study
problems on objective and dispassionate basis and project solutions of major
issues. The body would be advisory but its findings and suggestions may find
a greater acceptability because of its freedom from political considerations.
The nearest model to this is to be found in the U.S.A. which has set up an
Advisory Intergovernmental Relations in 1959 which func-

Commission on
tions in an advisory capacity and has the following purposes and duties: to
bring together representatives of Central, State and local governments to
120
AICC meeting on July 24, 1965.
121) The formula for the commission for resolving Mysore-Maharashtra dispute was
evolved the meeting of the Congress 'Working Committee on October 9, 1966, and the
at
Government of India adopted the same. Similarly, the question of partitioning Punjab
was first resolved at the meeting of the CWC and then accepted by the Central Govern-
ment.
332 Jain
consider common problems; to provide a forum fordiscussing the adminis-

tration and co-ordination of federal grant programmes requiring, intergov-
ernmental co-operation; to give critical attention to controls involve in the
administration of federal grant programmes; to make available technical
assistance to the executive and legislative branches of the federal government
in the review of proposed legislation to determine its over-all effect on the
federal system; to encourage discussion and studyof emerging public prob-
lems likely to require intergovernmental co-operation; to recommend within
the framework, of the constitution, the most desirable allocation of govern-
mental functions, responsibilities and revenues among several levels of gov-
ernment; to recommend methods for co-ordinating and simplifying tax laws
and, administrative practices to achieve a more orderly and less competitive
fiscal relationship between the governments. The main function of the com-
mission is to increase the effectiveness of the federal system. It has studied
a number of problems, has published a number,
of reports, has promoted the
idea of cooperative federalism.,and has exercised healthy influence and im-
thinks that improvements
pact on congressional legislation. The commission
in the. federal system can be brought about by debating various alterna-
tives 122). Some such body, to study and suggest various alternative solutions
to the issues causing friction in intergovernmental relationship,
is called for
in India as well.
VII. Intergovernmental Immunities
The doctrine of immunity of instrumentalities, applied in all federations

to some extent, may be characterised as the doctrine
of good neighbourliness.
With two tiers of government having autonomous powers working side by
side in the same community, it is possible that their operations may cross
and intersect each other at some points., Sometimes, powers of one govern-
exercised in hindrance the activities of
may be
ment a manner as to cause to
the other. It is to avoid some of these contingencies, which may otherwise

cause irritations amongst the governments in, a federation, that the doctrine
of immunity has been evolved. It. was first expounded by the U.S. Supreme
Court in McCullocb v. Maryland 12S) to protect the Central Government,
then rather a'weak entity, from hostile action of the State Governments. A
State tax levied on the operations'of the Bank of the U.S. created by the
held bad. The doctrine read impliedly into the Constitu-
Congress was was
tion as there was no explicit, mention of it in any provision. Fifty years later,
W i g h t, Public Administratibn Review (1965), 193.

122) r
123) 4 Wheat. 316 (1819).
the doctrine was applied, on a reciprocal basis, in favour of the States by

immunizing State officials from the Central income-tax 124). In course of
time, the doctrine was taken to great lengths; not only the government instru-
mentalities, but even private persons dealingwith a government as suppliers,
contractors or creditors were held immune from taxation by the, other gov-
ernment in respect of their transactions with the government 125 Butthen
the courts realised that the doctrine of immunity was interfering too much
with government activities and that it. had created a class of privileged
people who were non-tax payers without any consequent benefit to the gov-
emment concerned. So, the doctrine came to be re-appraised and its scope
was curtailed and taxation by one government of employees and business
activities of the other came to be judicially permitted 121).

In India, the doctrine of immunity has been incorporated into the Con-
stitution to a limited degree. Property of the Central Government, whether
used for businessor government purposes, is immune from the State taxation
except where Parliament provides otherwise. On a reciprocal basis, the

Centre is barred from levying a tax on State property and income, excluding
the property used for trade or business or income derived therefrom, but
Parliament may declare any trade or business as incidental to government
and thus make it immune from the Central taxation. There is an interesting
difference between the exemptions granted to the Centre and the States from
each other. While all types of property of the Centre are exempt from the
State taxation, commercial property of the States is not so exempt from the
Central taxation. Also, while State income is exempt from the Central taxa-
tion, a similar
immunity has not been extended to the income of the Centre
from the State taxation, the reason being that the States have no power to
tax income except agricultural income, and so the Centre needs no such
protection 127). A few other restrictions imposed on the States may be noted.
A State law levying a tax in respect of water or electricity stored, generated,
consumed, distributed or sold by any authority established under a law of
Parliament, needs the assent of the Centre 128) Generally, the States are to
exercise their executive power so as to comply with the Central laws and
124) Collector v. Day, 11 Wall. 113 (1871).

125) C or w in, Ile Constitution and 'What it means to-day, 23 (1946); Indian
Motorcycle Co. v. U.S., 283 U.S. 570.
126) Soutb Carolina v. U.S., 199 U.S. 437; Helvering v. Gerbardt, 304 U.S.405; New
York v.U.S., 326 U.S. 572.
127) Arts. 285 and 289; J a i n op. cit. supra note 32, 289-296.
1211)Art. 288; also, note 60 stipra. Similarly, the States are barred- from levying a tax
on electricity consumed by the Government of India or consumed in running railways
by that Government except to the extent provided by law by Parliament.
334 Jain
are not to impede or prejudice the exercise of the Union executive power 129),
and the Central Government is entitled to give any directions to a State for
the purpose, The Centre can thus remove any Obstruction caused by a State
in the way of its exercising its legislative or executive power. As a matter of
abundant caution, it has been laid down that when a government carries
on a business outside its law-making powers, it would be subject to the law-
making powers of the other government having such powers 110).

The courts in India have refused to extend the area of exemptions in fa-
vour of the Centre or the States beyond what the above-mentioned provi-
sions specifically lay down. The matter was raised in the leading case, West
Bengal v. Union of India 131) The Union Parliament enacted the Coal Bear-
ing Areas (Acquisition and Development) Act, 1957, authorising the Centre,
to acquire coal bearing lands including those vested in the States. The
validity of the Act was challenged by the State of West Bengal, the main
issue being whether the Centre could acquire State-owned lands. By a
majority, the court ruled that it could. Under entry 42, List III, Parliament
has power to legislate with respect to acquisition and requisitioning of prop-
erty. The power is plenary and is subject to express, and not any implied,
interdicts. The court read any restriction on this power
refused to on the
ground of the doctrine of immunity of instrumentalities 132).
In re Sea Customs Act, S. 20 (2) 133), the question raised was whether
exemption granted to the State property from Central taxation would extend
to immunize imports and manufactures by the States from Central customs
or excise duties. Answering in the negative, the court held that the constitu-
tional exemption in regard to the State property extended to a tax levied

directly on property and did not cover a tax affecting the State property
indirectly. The duties of customs, held the court, were not a tax on property
but an imports which formed an essential aspect of the Central
impost on
power to regulate foreign trade. Similarly, excise is not a tax on property

but on the process of manufacture and production. In taking this approach,
the court was helped by similar views propounded by the courts in Canada
and Australia 134).
129) Arts. 256 and 257; supra sec. V.

130) Art. 298; note 95 supra.
*131) AIR 1963 SC 1241.
132) justice Subbarao, in his dissenting judgment pleaded for the operation of the
implied doctrine that the Centre and the States "cannot encroach upon the governmental:
functions or instrumentalities of the other, unless the Constitution expressly provides for
such interference".
1311) AIR 1963 SC 1760.
134) In Canada, implied theory of immunity was rejected by the Privy Council, Bank
of Toronto v. Lambe, 1887 A.C. 575. In Australia the High Court first applied the doc-
The scope of exemption of State income from Central taxation was
tested in Andhra Pradesh State R.T. Corp. v. Income-tax Officer'35), in

which the court held that a corporation had
of its own, distinct
a personality
from its shareholders and so also from its creator, the State. Therefore, the
income derived by a corporation could not be regarded as the income of the
State, and the constitutional provision exempting State income from Central
taxation could not be extended to grant exemption to the income of a cor-
poration. It made no difference that under the relevant law the corporation
was required to turn over a part of its income to the State to be spent on
road development, as this did not render the corporation's income as that of
the, State. The above cases reveal that the judicial attitude has been to inter-
pret the exemptions from Central taxation granted to the States rather re-
strictively so as not to hamper the Centre in the collection of its tax-revenue.
Vice-versa, a similar interpretation would be placed on the exemption grant-
ed to the Centre from State taxation, but the matter has not been tested in a
court as yet.
VIII. Interstate Trade, Commerce and Intercourse
No federal country has a uniform o an even economy, land the constit-

,r
uent units in which it happens to be divided usually have varied economic
patterns. Some'of them may be
agricultural, while others may be industrial;
some of them may produce raw materials or other primary goods, but the
processing and manufacturing industries may be located in other places out-
side these States, because of more favourable commercial, geographical or
economic factors, e. g., availability of labour or power, or ready markets,
I
etc. This situation creates the danger that the units, taking a narrow and
parochial view of their interests, rather than a broad based view of national
interests, may seek to create barrim in the way of flow of trade and com-
merce over their boundaries, discriminate between indigenously-produced
goods and those produced outside, deny access to raw materials to outsiders,
or impose discriminatory taxes on
entry of goods from outside. Each federal
constitution contains some provisions to contain such dangers, to minimise
the possibility of creation of local barriers on national economic activity,
trine but then rejected it: Amalgamated Society of Engineers v. Adelaide Steamship Co.,
28 C.L.R. 129. In both countries, property of governments are exempted from taxation,
but this has been held as not exempting imports from levy of customs duty: Att. Gen. of
Br. Columbia v. Att. Gen. of Canada, 1924 AC 222; Att. Gen. of N.S.W. v. Collector
of Customs, 5 C.L.R. 818. Also, M. P. J a i n & S.N. J a i n, Intergovernmental Tax
Immunities in India, 2 J1. of ILI, 101 (1960).
135) AIR 1964 SC 1486.
336 Jain
and help in the development of the whole country as one economic unit
to
transcending local boundaries. These constitutional formulae have helped

in the development ofthese countries into:highly industrialised societies with
high standards of living 136).
The founding fatherswere acutely aware of these dangers in India.. They
realised that political unity of the country needed to be.strengthened by
economic unity as well, for India could make progress only as- one single
economic unit where the 'constituent, States would not compete, between
themselves, but co-operate with- each other in commercial and economic
matters. They therefore, took care to make provisions with, this end in view.
The scheme of distribution of powers has been drawn in such a way as to

give to the Centre broad powers in, the economic field 137) Interstate trade
and commerce is a matter within the exclusive law-making jurisdiction of
the Centre'31), while the
States have power only on trade and commerce
within the State 119), and even this is subject to entry 3 3 in List 111140) Fur-
ther, interstate salestax is a Central matter 141), the States being confined to
levying tax only on within-the-state sales. Further, art. 301 declares trade,
commerce and intercourse' throughout the country to. be free. But as no free-
dom can be absolute, restrictions can be placed by Parliament and the State
Legislatures subject to certain conditions. No preference can be givento one
State over the other, and no discrimination can be made between one State
and another, by virtue of 'any entry relating to trade and commerce. How-
ever, the rigours of this limitation: have been relaxed in f avour of Parlia-
ment; it can give p reference'toone State, or discriminate between the States
if it becomes necessary to do so: to deal with a situation arising from scarcity
of goods in any part of India. Thus, if Parliament is faced with the task of
alleviating scarcity of any type of'goods in any part of India,'it can make a
law preferring that area over the rest of the country for the purpose in view.
Besides the above limitations, States.. function under a few more. A State
cannot impose on go.ods imported,,from other States a tax higher than that
136) Notes 8 and 28 and sec. 11 supra. Australia has sec. 92 which makes interstate
trade, commerce and intercourse free. For details, J a in, op. cit. note 32, 574-5. In
Canada, regulation of trade and commerce is a Central subject but this entry in sec. 91
has been interpreted somewhat restrictively because of the provincial power over "prop-
erty and civil rights"; Citizens Ins. Co. v. Parsons, 7 AC 96;. Att. Gen. for Canada v.
Att. Gen. for Alberta, (1916) 1 AC Att.' Gen. for Ontariox. Att. Gen. for Canada,
1937 AC 405.
137) Sec. III supra.
1311) Entry 42, List 1.
139) Entry 26, List Il.
Note 78 supra.
141) Note 79 sxpra.
levied on similar goods manufactured within the State concerned. Further,

it may impose reasonable restrictions on the freedom of trade, commerce
and intercourse with or within the State in the public interest only if the
relevant bill for the purpose has received the prior sanction of the Centre
before it is introduced in the State Legislature. It is thus ensured that any
State Legislation undertaken by a State under pressure from regional eco-
nomic interests should be examined by the Centre from a national point of
view. This mechanism seeks to draw a balance between national and region
al economic interests. An advantage of the provision is that it makes the
Centre, rather than the arbiter of what restrictions the States can
courts, the
be allowed to impose on trade and commerce. This would avoid the confusing
case-law which has arisen in other countries around this point 142) These
restrictions on the State power have been applied by the courts in a number
of cases to declare State Legislation invalid. A State law levying a sales tax
on imported goods while the indigenous goods were not so subject has been
held to be invalid 143). In the famous Atiabari case-44), a tax levied by the
State of Assam without the approval of the Centre on the carriage of tea by
road or inland waterways within the State was held to be invalid. The tax,
being levied on the movement or transportation of goods, imposed a restric-
tion on the freedom of trade and commerc e and this could not be done with-
out satisfying the constitutional requirement of Central assent. The
Consti-
tution also provides for the appointment of an authority by Parliament to
effectuate the constitutional provisions, regarding freedom of trade and com-

merce 145).
In spite of these provisions, certain trade barriers have, however, come
into existence yet assumed any significant pro-

although the problem has not
portions. At times, the cumulative incidence of a centrally-imposed inter-

state sales tax and the State levied sales tax on internal sales of a commodity
makes it more costly than when it would be if it had not moved in inter-
state sale. At times, the State sales tax laws discriminate against outside
goods, or exempt the sale of raw materials to in-state producers while levy-
ing sales tax. on their supply to out-of-state producers. For example, the
States having bauxite do not want to let it go outside the State for produc-
tion of aluminium to where electricity is available or vice-versa. These
restraints are not always created by law but by administrative procedures
which become difficult to be challenged in courts. Perhaps, the time appears
142) Notes 8, 61 and 136 supra.

Bhai lal Bbai v. Madhya Pradesh, AIR 1956 Bom. 21; Siddique
143) v. Madhya
Bharat, AIR 1956 MB 214; Bharat Automobile v. Assam, AIR 1957 Ass. 1.
144) Atiabari Tea Co. v. State of Assam, AIR 1961 SC 232.
145) Notes 115 and 116 supra.
22 Za6RV Bd. 28/2
338 Jain
to have come when Parliament should set up the authority envisaged by the
Constitution to look into all these trade barriers. The matter has assumed
importance in view of the new political fragmentation ofthe country where
interstate competition might become keener due to the varied political
complexion of the State Governments 146
Mention may be made here of the food problem, a. peculiarly Indian
problem, which raises a good deal of tension in the federal structure between
surplus and deficit States and between the Centre and the States. India has
been facing shortage of food for some time now. Some of the States are
surplus while others deficit; the deficit States clamour that there should be
free movement of food in the country sothat all share in what the country
has. The surplus States do not like, this; they want to export only the surplus
after they have met the needs of their people. In a surplus State, people get
enough food while in a neighboUring deficit State people get much less, and
this makes interstate relationship sour. The deficit States then pressurize the
Centre to supply them with food, but the Centre can do so to the extent it
can get food by imports and from the surplus States, and so the Centre-
State relations get somewhat bitter. At present, each State is treated as afood
zone by itself 147), and of food
private account from one zone
movement on
to another is prohibited. Food moves fromthe surplus to the deficit zones on
government account only. From a legal and constitutional point of view,

the position is that under the constitutional provisions mentioned above
guaranteeing freedom of trade, commerce and intercourse, no State can
impose restrictions on the export of, food without the Central assent. The
position of the Centre is further re-inforced by entry 33, List III, under
which the Centre has legislative power over food, an essential commodity.
The Essential Commodities Act, 1955, confers all the powers on the Centre
for the purpose and the States exercise only such powers in the matter of
movement, trade and commerce in food
as the Centre may permit to them.
Therefore, there is no in the way of the Centre removing all

difficulty
restrictions on the movement of food from one State to another. But wheth-
er it is expedient to do so is a different question. Being a politically explo-
146) generally ILI, Interstate Trade Barriers and Sales Tax Laws in India. Disputes
See
arise at regarding operation of buses on interstate routes. One such dispute arose
times
between Delhi and Uttar Pradesh. At times, States want to ban export of goods, in which
they have a surplus, to conserve internal supplies, and the Centre may have to veto this.
Thus recently the Centre refused to consent to Gujarat's suggestion to ban export of
groundnut oil, as this would have greatly inconvenienced the States depending on the
commodity. The Chairman of the Aluminium. Corp. of India has complained of the unhelp-
ful State attitude resulting in less production of aluminium, October 20, 1966.
147) The food zones are established by the Centre Under the provisions of the Essen-
tial Commodities Act, 1955. For details, see J a i n, note 43 supra.
sive matter, the Centre does not want to do anything unilaterally without
consulting the States, and all the surplus States want zones, to stay. There is
other independent opinion as well in favour of the zones, for, so the argu-
ment runs, in view of the over-all shortage of food, the result of a free
movement of food would be that the areas of high purchasing power would
suck most of the food, creating pockets of distress even in the surplus States.
Though the Centre is armed with all the necessary legal powers, it does
not want to act unilaterally and must carry the States along with it 1411). The
procurement of food depends on the States; the Centre does not have any
machinery of its own for the purpose. Agriculture is a State subject and the
Centre depends on the States to maximise food production. Conferences of
the Central and State food ministers are held from time to time to evolve
policies for the maximisation of production and procurement of food. Re-
cently, the Centre has announced a scheme of bonuses payable to the sur-
plus States for food exported to the deficit States. Food and agriculture thus.
constitute an area where the highest degree of co-operation and common
approach between the Centre and the States are needed.
Another problem existing in India is the discrimination, which some States
indulge into at times, between the local people and those coming from
outside in matters of employment, services, trade, etc. The tendency, if not
checked, may affect the very vitals of the federation. The framers of the
Indian Constitution, foreseeing the danger, did make a number of provisions
in the Constitution to meet such a problem. Art. 14 in a general way bars
discrimination by the government. Art. 15 specifically bars the government
from discriminating against any citizen of India on grounds only of religion,
race, caste, sex or place of birth. Art. 16 debars a State from indulging in dis-
crimination in matters of employment on grounds only of religion, race,
caste, sex, descent, place of birth or residence. Other rights guaranteed are
the right to move freely throughout the territory of India, the right to.reside
or settle in any part of the country, and the freedom to carry on trade or
commerce, subject to reasonable restrictions being imposed by the govern-
ment in the interests of the general public. Without going into the rami-
1411) At a conference of the food ministers of the Centre and the States held on Sep-
tember 27, 1967, at New Delhi, the decision to keep the food zones has again been reiterat-
ed on the ground that the State-wise zones would help in vigorous procurement of food-
grains from the farmers. The surplus States have, however, agreed to make available the
surplus food for export to the deficit States. But there is always a discrepancy between
the Central and the State estimates of how much surplus there is, as naturally each sur-
plus State seeks to keep down the estimates of its surplus. On the other hand, the estimates
of how much a deficit State needs also differ between the Centre and the State concerned,
as the latter wants to bolster up its deficit to get as much food as possible.
340 J a i n
fications of these various constitutional suffice it to say that

149
provisions
in most of the situations discriminatory laws made by the States between
non-residents and residents in matters of trade or employment would in-
fringe one or the other of these provisions and be thus bad. But the fact
remains that many a time some discrimination is indulged into not through
law but through other means, e.g., persuading or pressuring the industries
in the State employ local people as far as possible. At times even the in-
to
dustries established by the Centre have been pressured to employ local

people. Most of these difficulties arise, no doubt, because of the limited
employment potential and would tend to disappear to some extent with the
economic development of the country. Some of the discriminations may even
escape the net of the constitutional prohibitions as is illustrated by Joshi v.
State of Madhya Bharat 150). The residents of Madhya Bharat were exempt
from payment of a capitation fee to the medical college while non-residents
were required to pay the same. The Supreme Court refused to hold it uncon-
stitutional, because the ground of exemption from payment of the fee was
r e s i d e n c e and not b i r t h while art. 15 outlawed discrimination only
on the ground of b i r t h and n o t r e s i d e n c e, residence and birth being
two distinct concepts with different connotations both in law and fact.
IX. Planning
Since Independence, planning a major occupation of the gov-
has been
ernments in India, and deep impact on the evolution of Indian
it has had a
Federalism. India is economically an underdeveloped country; literacy is

low, agriculture is in backwaters, living standards are poor as per capita
income is meagre. With limited resources and large demands for develop-
ment, it becomes inevitable to resort to planning so that available resour-
ces might be utilised with the maximum effect. The Constitution does not
lay down any articulate economic policy or philosophy, but its main
thrust is towards economic democracy and welfare State without which,
political democracy would be meaningless to large segments of the people.
In the directive principles, the Constitution obligates the State to promote
the welfare of the people by securing and protecting effectively a social
order in which justice, social, economic and political, shall inform the
institutions of the national life; the State is to formulate policy to secure
to its citizens an adequate means of livelihood, to secure that ownership
and control of the material resources of the community are so distributed

as best to subserve the common good, and to secure that the operation of
149) J a i n, op. cit. note 32, 358-385. 150) AIR 1955 SC 334.
the economic system does not result in concentration of wealth and means
of production to the common detriment. A living wage, decent standard
of life and full enjoyment of leisure and social and cultural opportunities
should be secured to all workers, agricultural or industrial; education,
health, unemployment and other welfare benefits
are to be provided by
the State "within the limits of its economic

capacity and development" 151).
The Central and State Governments are thus placed under an obligation
to play a creative role towards achieving these goals.
Though planning was in the air at the time of the constitution-making,

and the scheme of distribution of powers was drafted with an eye- on
that 152), the Constitution does planning machinery. In 1950,

not set up any
the Government of India set-up the planning commission by its resolution to
discharge the following functions: (1) to make an assessment of the material,
capital and human resources of the country and investigate the possibilities
of augmenting such of these resources as are found to be deficient in rela-
tion to the nation's requirements; (2) to formulate a plan for the most
effective and balanced utilisation of the country's resources; (3) on a deter-
mination of priorities, to define the stages in which the plan should be
carried out and propose the allocation of resources for the due completion
of each stage; (4) to indicate the factors which are tending to retard eco-
nomic development and determine the conditions which, in view of the
current social and political situation, should be established for the successful
execution of the plan; (5) to determine the nature of the machinery which
will be necessary for securing the successful implementation of each stage
of the plan in all its aspects; (6) to appraise from time to time the progress
achieved in the execution of each stage of the plan and recommend the adjust-
ments of policy and measures that such appraisal might show to be neces-
sary; and (7) to make such interim and ancillary recommendations as might
be appropriate on a consideration of the prevailing economic conditions,
current policies, measures and development programmes, or on an exami-
nation of such specific problems as may be referred to it for advice by the

Central or State Governments. The planning commission consists of the
Prime Minister as Chairman, a few Central Ministers and a few non-offi-
cials appointed for their expertise in matters with which the commission
has deal. The role of the commission is envisaged to be advisory.
to
Planning has been unified and comprehensive in India. The plans deal
not only with the Central subjects but also with State subjects. The planning
commission, which formulates the plans, though it includes members of
151) Arts. 36-51. These principles are not legally enforceable.

342 Jain
the Central cabinet, has no State representation as such. It has all along
been a body nominated by the Centre without consulting the States. How-
ever, to give a sense of participation to the States in the decision-making
process relating to planning, the national development council was set-up
in 1952, consisting of the Prime Minister Chairman, all State Chief
as
Ministers and members of the planning commission 153) The functions of

the council have been laid down as "to strengthen and mobilise the efforts
and resources of the nation support of the plans,, to promote common
in
economic policies in all vital spheres and to ensure the balanced and rapid
development of all parts of the country".
The pattern of plan formulation is somewhat as follows. Each State
formulates a plan for itself for a five year period and submits it to the
planning commission. The Commission discusses the plans with the State
representatives, and after pruning and adjusting the plans in the light of
resources and priorities and including the Central plans, evolves a master
plan for the whole country for a five year period. The plan is broadly
divided into two sections industrial development and economic and
-
social services. The former is more or less entirely the responsibility of the
Centre, and the role of the States in.the process of industrialisation hitherto
has been subsidiary.
y The economic and social services aremostly those which
fall within the State sphere, like education, health, agriculture, co-operation,
welfare, housing, etc. In this segment there are the State programmes
social
and the Central programmes. Both are administered through the States,
but the Centre participates to a much larger extent financially in the Cen-
tral than the State programmes. In this area, the Centre helps the States
through conditional grants given on the advice of the planning commission
usually on a matching basis'"). The five year plan is broken into annual
plans. Each year, the planning commission discusses with each State its per-
formance of the last year, the resources of the State and the quantum of
Central assistance for the next year. An objective of this annual survey is
to ensure that the States make an adequate tax-effort to raise the resources
promised for implementing the plan programmes.

A few significant features of the planning process may be underlined.
The planning commission and other planning processes, including the na-
tional development council,_are based not on any law but on executive de-
153) The Central Ministers, who are members of the planning commission, ipso facto
become members of the national development council. Besides, other Central Ministers
and State Ministers may also be invited to attend the council's meeting as and when
their presence is considered necessary.
154) These grants are given under art. 282, sec. IV note 88 supra.
cisions taken by the Centre. Although there is, in the Concurrent List, an
entry "social and economic planning", no legislation has been enacted

-under it setting up the planning machinery. In the concurrent field, under
the Constitution, executive power lies with the States',15) till Parliament
by making a law takes over such power in relation to a particular matter.
Therefore, the executive power in relation to social and economic planning
constitutionally rests with the States in the absence of a law. But, in prac-
tice, the planning commission exercises such power most effectively. This
is one of those cases where practices have developed not always consistent
with the intentions of the Constitution. It is considered necessary to leave
the situation as it is in the interests of
flexibility.
Envisaged as anadvisory body, the planning commission, in course of
time, has grown into a huge bureaucratic machine and has assumed the role
of a super "economic cabinet", parallel in many matters to the Central
cabinet and not only advising the Centre, but in its own right determining
socio-economic policies, objectives, and programmes, allocating resources
and even interfering with day to day administration. Though in theory
the responsibility to take final decisions rests with the Central and State Gov-
ernments, yet, in practice, their roles have become more or less reduced to
implementing decisions taken by the commission. An overlap between the
planning and finance commissions in the area of federal-state fiscal rela-
tionship has already been pointed Out 156). In its report the Estimates Com-
mittee of the House of the People criticised this role of the commission 157).
The emergence of the commission into a deciding authority was made
possible because of the association of the Prime Minister and a few im-
portant Central Cabinet Ministers. Now the commission is being re-organ-
ised. It will.be cut down to size and made to function more as an advisory,
rather than a decision-making, body. The Prime Minister will continue to
be its chairman but no other Central Minister, except the finance minister,
will now be its member formally. Other ministers may be invited as and
when matters pertaining to their departments are discussed by the com-
mission. D. R. Gadgil, an eminent economist, who has been a critique of
the commission-s power complex, of the neglect of its main functions and
of the needless extension of its activities into many irrelevant fields, has
now been appointed as the Deputy Chairman of the commission, and,
therefore, it may be expected that the role of the commission will undergo
a change in course of time.
155) Sec. V supra.

151) Sec. IV supra.
157) XXI Rep., Second Lok Sabha.
344 Jain
Till now, the States have not played a significant role in the formulation
of plans. Their role has mainly been that of implementing the decisions
made by the planning commission and the Central Government. Even the
major burden of financing the plan has been carried on by the Centre 158).
Although the national development council is envisaged to have wide and
comprehensive functions to be the supreme body in matters of planning
and development, having as its objectives promotion of central-state co-
operation and co-ordination in planning, securing an uniformity of approach
and outlook in the working Of national plans and resolving conflicting
views between the Centre and the States, and it approves the plan before it
is placed before Parliament yet, in practice, this body has not made any
effective contribution to the shaping and moulding of plan policies. With
all its facade, it has mostly acted as a body registering decisions arrived at
by the Central Government and -the planning commission. It usually meets
for a couple of days at irregular intervals and its deliberations are there-
fore bound to be perfunctory. A convention has come into existence that
its decisions are binding on all governments. Differences between the plan-
ning commission and a State over allocations are also referred to the coun-
cil, but in all these matters it has invariably followed the lead given by the
Centre and the commission. The plans have been discussed in Parliament
but not in the. State Legislatures. The plans of each State, are, no doubt,
discussed by the commission 'with the State concerned, but the States as
such have not influenced much the over-all planning,processes and policies.
Because of the centralised. planning, the Centre has come to have a lot
of influence in the area reserved to the States under the Constitution. Most
of the State plans help and, therefore, have to. be discussed
need Central
with, and scrutinised by the planning commission. Then, the Centre also
sponsors its own programmes in the State sphere which though
administered
through the States are financed more liberally by the Centre. There is a
discussion between the States and the planning commission before the
formulation of the plan, and then every year, to maintain flexibility and
effective management, each plan is broken up into annual plans. It means
158) Some of the statistics from the annual plan of 1967/68, just released, may be
interesting in this connexion. The total governmental expenditure during the year is envis-
aged to be Rs ,2,2460 millions divided as follows: Central sector: Rs 1,1720 millions; State
sector: Rs 1,0100 millions and Union Territories: Rs 640 millions. The State sector is pro-
posed to be financed as follows: Central assistance: Rs 5900 millions; State contribution:
Rs 3660 millions; and not yet accounted for Rs 540 millions. Thus the effective State plan
is Rs 9560 millions out of which the Centre is to contribute nearly 62"/o and the States
38 O/o. Even this State contribution consists of tax-sharing and fiscal-ne.ed grants from the
Centre which the States receive through the Finance Commission. Taking the whole plan
of Rs 2,2460 millions, the Centre has to find Rs 1,8260 millions, i.e., 82"/o of total outlay.
that each State must approach the planning commission each year and the
commission, after scrutinising plan performance and resources raised by
the State, will allot Central assistance to itfor the
year. The Central assis-
tance is given in the form of loans and grants-in-aid. The
grants are on a
matching basis and are a means of securing central-state coordination to
promote plan programmes. But all this compromisis to a great deal the free-
dom of action of the States. Through this mechanism, the Centre is able to
make an inroad into the State sphere. Many a time, the States accept the cen-
trally-sponsored schemes, even though not entirely relevant to their local
circumstances, because of the financial inducement attached, for to refuse
the scheme would amount forgoing

to the money which might not be
politically expedient. The system has worked hitherto because of two im-
portant factors: one party control in, the Centre and the States and the
Central. assistance. Control by one party was a great co-ordinating, cohesive
factor, and it smoothed the planning processes a great deal, as the States
.owing -allegiance to the Congress invariably fell in line with the Congress-
led Centre, maybe sometimes after a show of protest. Then, for more than
60 O/o of their plan expenditure, the States depend on the Central grants
and loans through planning commission, and this is in addition to what
they get through the finance commission. This also gives a great leverage
to the Centre. One party control has now disappeared as different political
parties have come on the scene, and this is bound to have its repercussions
on the planning processes. Naturally, the States will now claim a much
'more active participation with plan formulation; and the result of this
may be an activation of the national development council which may now
become the focus ofplanning. Its discussions may become more meaningful
as the States be expected toIaccept formulations of the planning
cannot now
commission uncritically. Secondly, the States may be expected to claim

more freedom in ordering their plans in their own sphere. Though they
would still depend on the Central assistance, yet they would want less
Central control and scrutiny of their programmes. Thirdly, financing of
the plan may undergo some changes and the pattern of grants may have to be
made more flexible than what it is today.
Even with one party control and the habit of the States to follow the lead
given by the Centre, there were certain areas of central-state friction. Prac-
tically, each State wanted to be industrialised rapidly and pressurised the

Centre to locate some of its industrial plants therein. The"debate was even
carried on publicly 1-11). Then, each State wanted to have big plans and
159) As for example, each of the States of Madras, Mysore, Andhra Pradesh and
Madhya Pradesh is pressurising the Centre to set up a steel mill.
346 Jain
large assistance from the Centre. A point of debate was with regard to the
basis on which the Central allocations should be made to the States, and
population was being espoused as the basis for the purpose by the populous
State, but the less populous States did not agree with this. No State, on the
other hand, wanted to raise adequate resources by itself because of political
considerations. They all wanted the Centre to help them out. Even when
the States promised to raise certain resources, they invariably failed to do
so. The implementation of the plan programmes by the States left much
to be desired. The targets set in the. plan were hardly ever reached while
the expense always overshot the plan amounts. Then the States did not
very much like the centrally-.sponsored schemes in their area. Their view
was that the Centre should give money to them for implementing their
programmes, rather than sponsor any programme of its own. They did not
like the rigidity which went along with the Central programmes, as the
money available had to be used only for the purposes sanctioned and could
not be re-allocated to other, even though related programmes. The States
did not like the matching basis on which Central grants are, given, for it
means that in order to get Central funds they should themselves. raise a
certain percentage of the expenditure. The Central Ministries, however,

maintained that some of the programmes were of national importance, like
family planning, and that if -the Centre did not sponsor and supervise these
programmes, then national interests would suffer. On the other hand, there
were complaints made by many that there was too much laxity in the
Central grants, that there were no adequate safeguards for the proper use
of funds. Some of'these problems will now be debated more intensely and
would need solutions in the near future. The effective use of the national
development council as a forumfor exchange of ideas on these controversial
matters, and the laying down of norms for regulating these matters through
that body may be helpful. The council can serve as an effective clearing
house of ideas and a co-ordinating link between the Centre and the States.
It is also possible that with a more active participation of the States in the
plan-making, implementation of the plan programmes by them may im-

prove because they may feel a greater commitment to fulfilling the pro-
grammes to which they themselves are parties, rather than feeling that they
are carrying out the dictates of a Central body without much involvement.
Another change may be made in the emphasis of planning. The Centre
may confine itself in future to its own plans in its sphere and only to those
programmes in the State sphere which are absolutely essential to the na-
tional interests and need a uniformity of approach throughout the country.

This will mean that, by and large, the States would have freedom to order
their plans for their sphere of action. This will reduce pressures on the
Centre as well as chances of confrontation between the Centre and the
States.
Although, in the present-day political spectrum of the country, some
of the established practices in the area of planning are going to be chal-
lenged by the States resulting in some adjustments, and although there is
scope for greater initiative and participation in the decision-making pro-
cesS by the States in matters of planning, it is important for the country's
rapid growth that outlook be still national rather than regional. Too much
regionalism in this area will retard national growth. It is also to be remem-
bered that even in other countries, which were designed to be more federal
than India ever was, the Centre has come to play a dominating role in the
affairs of the country and grants have become an accepted vehicle of the
Centre-State co-ordination and co-operation 160). This means that in India,
subject to some adjustments necessitated by recent political developments,
the Centre should still play a dominant role. It is necessary to look upon the
whole matter as that of the Centre-State partnership and co-operationl
rather than as one of subordinate relationship, or as one of confrontation,
between the Centre and the States. This is in line with the developments in
other federal countries. It may, however, be emphasized that as yet there is
no historical parallel in federal planning anywhere in the world, and thus in
this respect India's experiment is unique and she has to find its own solu-
tions to problems arising in a federal system from the pressures of socio-
economic planning on a grand scale.
X. Emergency
"Federalism as a system of counterpoise is no longer viable in the field of

war-making" and that there is "incomparability between the requirements
of total war and principles thus far deemed to be fundamental to govern-
ment under the Constitution". During the second world war crisis, the con-
stitutions of the U.S.A., Canada and Australia underwent a metamorphosis;

the behaviour of federalism during the war was very different from its peace-
time, normal, behaviour; the Central Government's powers received a broad
judicial interpretation so that it could have at its all powers neces-
disposal
sary to make the war-effort'61). Accordingly, the Indian Constitution also
160) Sec. II supra.

111) Notes 10, 18, and 26 supra. Also, C o r w i n Total War and the Constitution, 70,
130.
348 Jain
makes some emergency provisions under which normal, peace-time feder-

alism is adapted to the demands of the emergency. A unique feature of
these provisions, however, is that instead of relying on the judiciary to
effect necessary adjustments in the Centre-State power balance, they pro-
vide a simpler mechanism for the purpose, of executive determination sub-
ject to parliamentary control. A reason for this approach may be that,
owing to elaborate nature of the distribution of powers'62), there was not
much room left for the judiciary to make necessary adjustments in emer-
gency situations. Moreover, the emergency provisions in India envisage
certain situations which are not to be found in any other federal constitution.
First ofall, the President may issue a proclamation of emergency when
he is satisfied that there is a threat to the security of the country either by
external aggression or internal disorder
a concept which is parallel to
-
the war-time emergency. The Presidenes satisfaction is not justiciable but

is subject to parliamentary control through the council of ministers. The
democratic control is further strengthened by the requirement that the
proclamation be laid before both houses of Parliament and, unless approved
by them, it cannot be operative for more than two months. The effect of
the proclamation on federalism is that the Centre becomes entitled to enact
a law on any matter even if it falls in'the exclusive State List. The State
Legislatures continue function, but a Central law will override a State
to
law even on an exclusively State matter. Further, the constitutional pro-

visions regarding the distribution of revenue between the Centre and the
States 163) can be modified by a presidential order, and the Centre also
becomes entitled to give directions to the States as to. how their executive
power is to be exercised "'14). On October 26, 1962, when the Chinese troops
had crossed the Sela pass in the North and were threatening the Assam
foot-hills, a proclamation of emergency was issued. A few Acts were en-
actedto meet the situation, the most conspicuous of which has been the
Defence of India Act which confers extensive rule-making powers on the

Central Government to meet various situations and contingencies "15). In
no other way has the federal balance been affected by the emergency. The
effect of the proclamation of emergency on the fundamental rights has not
been considered here as it is beyond the scope of this paper.
Secondly, a financial emergency may be declared if the president is

163) Sec. IV supra.
164) Sec. V supra. Arts. 352, 353, 354.
165) Other Acts enIacted have been: The Emergenc
y Risks (Factories) Insurance Act,
1962; the Emergency Risks (Goods) Insurance Act, 1962.
satisfied that a situation has arisen threatening the financial stability or
credit of the country. The proclamation is subject to parliamentary ap-

proval. The Centre becomes entitled to give directions to any State to
observe such canons of financial propriety as may be specified in the direc-
tions. Directions may also be given for such purposes as reducing salaries
and allowances of any categories of persons serving in a State or requiring

that all money or financial bills or those involving expenditu,re shall be
reserved for the President's consideration after being passed by the State
Legislature. The salaries and allowances of persons in the service of the
Union can necessary""). It will be noticed that financial
also be reduced if
emergency increases the Central the States in financial

supervision over
matters. Perhaps, the idea of such an emergency was adopted by the framers
of the Constitution from the experiences of other federations during the

depression of the 30's when the Central Governments in the U.S.A. and
Canada found themselves hampered in taking effective action to meet the
situation 16"). Till now, there has not been any occasion for the invocation
of this provision in India.
Thirdly, the Indian Constitution envisages an emergency arising be-
cause of the failure of the constitutional machinery in a State. Under the
U.S. Constitution, the Centre guarantees to every State a republican form
of government, protects each of them against invasion, and on application
of the legislature or (when legislature cannot be convened)
the executive
against domestic violence. Recently, under this provision, the Central Gov-
ernment sent its forces into Detroit, State of Michigan, on a request of the
Governor, to contain the racial violence. A similar provision is to be found

in Australia -1611). Parallel to these provisions there is art. 355 in the Indian
Constitution which obligates the Union to protect every State against
external aggression or internal disturbance and to ensure that the govern-
ment of each State is carried on in "accordance with the provisions of the
Constitution". The first limb of this provision, that of protecting the States,
does not stipulate any State request to the Centre for sending its forces into
a State to counter breakdown of law and order as is to be found in parallel
provisions in the United States and Australia. It would, therefore, mean

that, while the Centre may be under an obligation to send its forces when
166) Art. 360.

Sec. 11 supra.
167)
Sec. 119 of the Commonwealth of Australia Constitution Act, 1900 says, "the
'168)
Commonwealth shall protect every State against invasion and, on application of the
executive government of the State, against domestic violence". There appears to be no
parallel provision in Canada.
350 J a i n
so requested by a State, it is not bound, to wait till that request is received;

if the situation warrants, the Centre can act suo .motm. Though ordinarliy,
the Centre should not act without a State request, and it may be a good
policy not to get involved in local matters, yet, there is no doubt that the
Centre can act unilaterally if it feels that such a step is necessary in the
interest of maintenance of law and order in a State. This is further re-in-

forced by the provision, mentioned above, to declare emergency when
there is internal breakdown of law and order in any part of the country,
and that envisages the taking of all steps thought to be necessary by the
Centre for maintaining law and order in any part -of the country..
To enable the Centre to discharge its obligation to see that the State
Governments are carried on in accordance with the provisions of the

Constitution, and this be it noted is a unique feature of the Indian
Constitution, the Centre is authorised to take over the administration
of a State if it is satisfied that it cannot be carried according to the
on
Constitution 169) This can be done under a presidential proclamation

which can be issued either the report of the Governor concerned
on or
through information received otherwise. The proclamation is subject

to
parliamentary control; it needs approval of both houses if it is to subsist

beyond two months and then again after every six months, and it can re-
main in force for a maximum period of three years. It is of interest to
note that the Centre's power to issue a proclamation of failure of machin-
ery in a State is controlled than its power to issue a

more rigorously
proclamation general emergency which neither needs repeated parlia-
of
mentary approval after every six months nor is subject to any maximum
time-limit. When the Centre takes over the State administration, the gov-
ernor of the State acts as a delegate of the Centre, the council of ministers
does not remain in office, the State Legislature may either be suspended
or dissolved, and the legislative power for the State vests in Parliament.
But, Parliament may not possibly find the necessary time for this
as
purpose, the expedient adopted is to enact a law delegating law-making

power for the State concerned on the President, i. e. the
Central executive
with which is associated committee of members of Parliament. The Acts,
a
known as the Presidents Acts, are laid before Parliament which can direct
any modifications therein.
This provision has had to be invoked, and governance of several States
assumed by the Centre, several times. Primarily, this has been done when a
council of ministers commanding majority support in the State Legislature
169) Art. 356
could not possibly be had in office 1,'70). In such cases, the Centre has inter-
vened temporarily, fresh elections held as soon as possible and responsible
council of ministers installed in office. But there has been one dramatic and
controversial of this power of, the Centre which may be cited here be-
use
cause of its relevanceto the present political situation in the

country. As a
result of the general elections in 1957, a communist government took office
in Kerala enjoying a majority of two in a -house of 127 members. Though
the government continued to enjoy this support, outside the legislature the
public opinion became hostile to it. Accusations were made that the gov-
ernment was subverting the Constitution by transplanting communist cells
in police and administration, .was using co-operatives for consolidating the
party and was indoctrinating the students. A public agitation was started
against the government threatening law and order, and in the meantime the
financial position of the State also deteriorated. The Prime Minister of India
suggested to the State Chief Minister to resign and seek fresh mandate from
the electorate, but he did not heed this advice. At last, under public clamour,
the Centre intervened, dismissed the ministry, dissolved the legislature and
organised fresh elections which resulted in the defeat of the Communist
Party at the polls. Except for the Kerala episode, the Centre has not till
now interfered with a ministry enjoying confidence of the house. The
Centre's action in Kerala was approved by all political parties except, of
course, the communists. The Kerala case also raised, in an acute form, the
question of implication of the words "in accordance with the provisions
of the Constitution" in art. 355, noted above. Do these words Mean only
the letter of the Constitution, or do they also include the democratic spirit,
conventions and fundamental assumptions on which the Constitution is
based? If only the former, then obviously the Kerala Government was being
carried on according to the Constitution as it enjoyed a majority in the
legislature. But if the latter be the correct view, then the government in
Kerala was not being carried on according to the Constitution, for the
forms were being used to destroy the spirit of the Constitution. The Centre
took this view in justification of its action. It is difficult to argue that the
Centre should be a passive spectator when the whole constitutional fabric is
being subverted in a State. It will be safe to argue that the Centre will be
justified in intervening in a State in case of political break down, gross
mismanagement of affairs or abuse of its powers by a State Government.
The Centre's action can be justified by saying that temporarily a bigger
democracy takes over a smaller democracy. But this places at once, in the
170) Punjab (1951); Pepsu (1953); Andhra (1954); Travancore-Cochin (1956); Orissa
(1961); Kerala (1964) and again in 1965; Rajasthan (1967).
352 Jain
hands of the Centre, a great power vis-a-vis the States, as well as a great
responsibility. The restraints on the use of this power are its own sense of
prudence and judgment of the Central Government and the political realities
of the situation. The action of the Centre ,is bound to be criticised by inter-
ested political parties as mala fide unwarranted exercise of its power.
or as an
In the present-day political fragmentIation of the country with various

political parties holding power, there is a danger that confrontation of
political parties may lead to a confrontation of the Centre and the States'
which may ultimately result in resumption of some State Governments by
the Centre. The Centre will need all the prudence, caution and tact in judg-
ing when it should intervene..Greater opposition in Parliament also induc-
es the necessity of caution., The Centre has a grave responsibility and it
needs to act with circumspection and only when it is politically feasible,

possible and justifiable, otherwise it may be accused of subverting the federal
fabric of the Constitution which permits of various political parties being in
power in various States and the Centre"').
Three side issues may be considered at this stage. The first relates to the
position of a State governor. The office has suddenly come into limelight in
the new political, situation, for the governor has to act in certain situations
as the balance-wheel of the Centre-State relationship. A governor has a
dual capacity He is the head of the State as well as a representative of the
Centre. Ordinarily, he acts on the advice of his council of ministers, yet

there are areas where he may have to act on his own judgment. The question
of his reserving State bills for the Central assent is one such area, for
obviously no State ministry is going to advise him to do S0172) Another
similar area is his making a report to the Centre on the question whether
or not the State Government is being carried on in accordance with the
Constitution 173). As such a report may be against the State ministry in
office, it Will be mainly a question for the governor's own judgment whether
warrants such a report from him. After the fourth general elec-
the situation
tions, State governors were called upon to decide between the claims
some
and counterclaims of political parties that they enjoyed a majority in the
171) The Prime Minister, Mrs. Indira Gandhi, has assured the State Chief Ministers that
the Centre would continue to play its part and try to minimise whatever tensions there
might be between the Centre and the States and help the State'Governments no matter what
their composition. "We are not interested in topling governments. We are genuinely in-
terested in seeing that work is done. In that, we certainly want to help in every way we
can. At the same time, I would ask for your co-operation also". Hindu Weekly Review,
July 10, 1967, p. 2.
172) Note 62 supra.
173) Note 169 supra.
legislature and thus had a right to form the government. The governor has
to perform such a task himself, according to his own light 174) Recently, the
Law Ministry of the Centre has taken the view that the governor is not
-
bound to prorogue or dissolve a State Legislature on the advice of a defeated

chief minister and that the governor can exercise his discretion whether to
call the leader of opposition to form the ministry or hold fresh elections.
By and large, the Centre has left the governors free to. exercise their powers,
yet, at times,. governors do hold consultations with the Central ministers.
It remains a matter shrouded in doubt whether the Centre can direct a
governor to act in a particular manner. The position of a governor is rather
delicate when he heads a State with a government of political complexion
different from the Central Government, for there appearto begreat diffi-
culties in the way of a governor ignoring a Central directive if the Centre
issues one. These circumstances raise problems with regard to the appoint-
ment of a State governor. The Constitution gives a carte blanche to the
Centre in the matter of appointing State governor, but, over the time, a
a
practice has developed to consult the State Chief Minister before making an
appointment"15). So far, with one party dominance, this consultation was
more of a formality and no difficulties ever arose in this regard, but in the
changed situation, difficulties may now arise. The Centre would like to
have a person as governor inwhose judgment and independence it may

have confidence; at the same time, a State Government would like to have
a person as governor who would not be too much biased in favour of the
Centre. Therefore, a person enjoying confidence of both, the Centre and
the State Government concerned, has to be appointed as the governor. The
Centre should not force a person upon a State against its wishes; otherwise
relations between the governor and the State Government will become
174) The Rajasthan Governor, Sampurnanand, decided that he would ignore the inde-
pendent members of the Legislature for the purposes of assessing as to which political
party had a majority. This led to a public furore and the imposition of thePresidenes
rule for nearly two months. After the retirement of Sampurnanand, the new Governor
himself undertook the task of assessing the real position by talking to the members of
the Legislature. Recently the Bihar Governor has held that a person who is not a member
of the State Legislature cannot be the chief minister and has thus refused to instal a new
ministry in office of a new party which claims a majority in the Legislature but whose
leader is not yet a member of the State Legislature. This decision of the Governor, taken
on the advice of the advocate-general of the State, does not appear to be correct in view
of art. 164 (4) which permits a non-member to be a minister for six months. It can be
seen that mostly the governors have acted on their own judgment without any interference
from the Central Government, for in the case of Bihar, the Governor is an. ex-Congress-
man and yet he refused to give a chance to the new party which has the backing of the
Congress party.
175) Arts. 155 and 156.
23 Za6RV Bd. 28/2
354 Jain
sour. At the same time, 'State Government can,claim a final say in the
no
matter and claim that only its nominee, and no one else, should be appointed
as the governor. After all, the governor has certain functions to discharge
independently of the State Government in office and the Centre has been
vested under the Constitution with the ultimate responsibility to see that
the States function according to the Constitution,
Another question relates to discussions on the floor of Parliament regard-
ing State matters. There are certain occasions when Parliament has to
discuss State matters, e. g., imposition of the Centre's rule in a State as the
parliamentary ratification. But, discussions are com-
Centre's action needs
monly raised in Parliament from day to day on matters falling in the State
sphere which would appear to be against the federal nature of the Constitu-
tion. The usual method to.raise such a discussion is through an adjourn-
ment motion on a matter public importance, and although many such

of
motions are declared inadmissible, yet a miniature discussion does take place
because the mover of the motion will argue as to why his motion should be
admitted and the government will oppose the same. Recently, a very inter-
esting discussion took place in the House of People -on a State matter. The
governor of a State prorogued the State Legislature on
the advice of the
chief minister whose majority was in, doubt because a few of his supporters,
had crossed the floor. The opposition parties in the House of People brought
an adjournment motion charging the Central Government that it had direct-
ed the governor, to prorogue the house and thus deny 'a chance to the opposi-
tion in the State from forming the government. The Central Government,
agreeing to have the matter discussed, -repudiated any suggestion of having
directed the governor one way or another. The Home Minister maintained
that, as the constitutional head of the State, the governor had acted on the
advice of the chief minister and the Centre. had not issued any directive to
him. One may look forward to such discussions in Parliament in the future
as well.
Lastly, a question of great interest is whether the Centre has any respon-
sibility to take action when charges of corruption are made against a State
Chief Minister. Till now, the, position was not very, difficult as the same
political Party Was involved at the Centre and the States. The Centre
appointed a commission. of inquiry to go into charges against the chief
minister of Punjab 17"), and because of an adverse report of the commission,
Das.
176) It is known as the Das commission as it consisted of ex-Chief justice S.R.
Under the Commissions of Inquiry Act, the Central Government can appoint a commission
to enquire into a definite matter of public importance.
The commission after hearing
evidence and arguments reported whether charges against the chief Minister were proved
or not. It did not recommend any action.to be
taken against him.
the chief minister resigned. In Orissa, the chief minister resigned when a
committee of the Central cabinet held, on a report from the Central Bureau
of Investigation, that he had been guilty of administrative impropriety. In
both these cases, the chief ministers belonged to the Congress Party to
which the Centre also owed allegiance. In these cases, the line of division
between the party and the government was somewhat blurred. The question
may now take an important aspect in the new political context. While
previously the motivations behind the action by the Centre might have been
interpreted as an attempt to clear the image of the party, to,day such an
action may be interpreted as an attempt to tarnish the image of the party
in office in the State concerned. The Central responsibility in the matter
can, however, be spelled out of arts. 355 and 356 mentioned above. It will
be necessary to evolve certain norms for this matter so that political con-
siderations are kept aside and the Centre-State relationship in the sensitive
area is placed on an objective, non-party and non-political basis so that
democracy and federalism can flourish in the country. The matter indeed is
full of difficulties.
XI. The Language Problem
The language problem constitutes to-day a divisive influence in the

Indian polity. India has two main linguistic groups, the Indo-Aryan and
Dravidian, spoken by nearly 75 O/o and 24 O/o of the people respectively. Out
of the 11 languages comprised in the first group, Hindi is spoken by nearly
42 O/o of the people, and out of the 4 languages in the second group, Telugu
is spoken by nearly 0 O/o 177). Some of these languages are very old, have a
rich cultural and literary heritage, and are spoken, in absolute terms, by a
larger number of people than many modern languages in the world. Each
of them prevails in fairly compact area. During the British rule, English
was the language of administration, instruction, examination, communi-
cation amongst the elite, and on an all-India basis. As a result, the indigenous
languages languished and never properly developed. In spite of its pre-
eminent position, however, English was spoken only by a microscopic
minority of people and could never become a mass language. When independ-
ent India adopted democratic government based on adult suffrage, reten-
tion of English as the language of administration appeared to be an ana-

chronism for that would have effectively cut off vast numbers of people
177) The Indo-Aryan languages are derivatives from Sanskrit and are Assamese, Ben-
gali, Gujarati, Hindi, Marathi, Oriya, Punjabi, Sanskrit, Urdu, Kashmiri and Sindhi. The
Dravidian languages are Telugu, Tamil, Malayalam and Kannada and are prevalent in the
South India. Two minor language groups are Austro-Asiatic and Tibeto-Chinese.
356 Jain
from any real participation in country's affairs making democracy meaning-

less. An Indian language had to take its place and the choice fell on Hindi
for the simple reason that it was spoken by the largest single group'in,the
country. But a& the intelligentsia was accustomed to thinking, and speaking
in English and as there was Also the problem of non-Hindi speaking people,
it was decided to have
a 15-year transitory period and during the transi-
tion to English for the official purposes of the Centre. The 15-year
continue
period was not, however, envisaged as an absolute deadline; Parliament
was. authorised to enact a law to provide for the use of English, for specified
purposes, if necessary, even after that period. To facilitate the change-over
from English to Hindi, Provision was Made in 1955 for appointing an offi-
cial language commission, consisting of people from all regional languages,
to Make recommendations for progressive use of Hindi for the Centre's
official purposes, restricting the use of English for any such purpose and for
the use of language (English, Hindi or the official language in a State) in
the Supreme Court and High Courts 1711). The recommendations of the
commission were to be examined by a parliamentary committee, elected
through proportional representation, and then the Government of India,
was to take necessary action. The Constitution also directs that Hindi
should be developed So that it may serve as a medium of expression for
all elements of the composite culture of India and to secure its enrich-
ment by assimilating without interfering with its genius, forms, style and
expressions used in Hindustani and in other regional languages and by draw-
ing for its Vocabulary primarily on Sanskrit and secondarily on other Ian-
guages. The Constitution also provides for promoting development of the
regional languages which are mentioned in a schedule""). These languages
were to be representated on the commission mentioned above and have to be
used for drawing words for developing Hindi. The States have been author-
ised to adopt a regional language or Hindi for their official purposes. As
regards the federal problem of communication between the various govern-
ments, Hindi is to be used. Provisions have also been made in the Constitu-
tion for linguistic change-over in the Supreme Court and the High Courts
and in the field of legislation. The idea underlying these provisions is that
the change-over in these spheres has to -be grad u'al and. approach has to be
flexible and cautious. A careful analysis of the above provisions would show
178) The commission was required to keep in view the industrial, cultural,and scientific
advancement of India and the just claims and interests of non-Hindi persons in regard to
public services.
179) The following languages are mentioned in the VIII Schedule: Ass Bengali,
I
Gujarati, Hindi, Kannada, Kashmiri, Malayalam, Marathi, Oriya, Punjabi, 'Sanskrit,

Tamil, Telugu, Vrduand Sindhi.
that a number of built-in safeguards have been provided for the non-Hindi
speaking people 180).
These constitutional provisions, though adopted with a near unanimity
in the Constituent Assembly, did not, however, give a quietus to the lan-
guage problem which has tended to erupt again and again during the past
seventeen years. A major apprehension of the non-Hindi speaking people is
that the adoption of Hindi will give an edge to the Hindi-speaking people
in the affairs of the Union and, more importantly, in the Union services in
which today the non-Hindi People enjoy a major share. The Official Lan-
guage Commission,was appointed in 1955; it reported in 1957 favouring a
change-over to. Hindi in 1965. Its recommendations, after being scrutined
by a parliamentary committee, led to the enactment of the Official Languages
Act, 1963, laying down that English "may" continue to be used in addition to
Hindi, even after January 26, 1965. It also provides for appointing a parlia-
mentary committee some time after January 26,1975, to be elected on theba-
sis of proportional representation by the two Houses of Parliament, to review
the progress made in the use of Hindi for official purposes of the Union. Pro-
visions have been made for Hindi translations of laws made in English and
English translations of laws made in regional languages. A governor of a
State can, with the
previous sanction of the President, authorise the use of
Hindi or regional language in the High Court concerned in addition to
English, but an English translation of the judgment delivered is also to be
issued. In this way, the Centre is to decide finally whether a change-over
from English to Hindi or regional language is to be permitted in a partic-
ular High Court. Since the commission-s recommendations in 1957, non-
Hindi speaking people have been agitating for the continued use of English,
and Prime Minister Nehru gave an assurance to them that English would be
continued as an associate official language of the Union as long as they
would want. Presently, the Government of India is considering developing
a satisfactory amendment to the Act giving statutory force to this assur-
ance 181). Another step being contemplated to allay apprehensions of the non-
Hindi speaking people with regard to the Union services is to hold com-
petitive examinations for the same in all recognised regional languages so
that none has an undue advantage over the other.
The language problem has also manifested itself in another way, viz.,
the linguistic re-organisation of the country. Much before independence, the
Congress had accepted this policy. Several provinces contained several lin-
guistic minorities, and several linguistic groups were scattered over a number
180) Arts. 343-349, 351.

It is also proposed to permit use of English for intergovernmental communications.
358 Jain
of provinces. These factors created difficulties in administration and so

linguistic re-organisation was thought to be the way out. When independence
came, the leaders began to be assailed with doubts over the wisdom of this policy
as they were. afraid that linguistic chauvinism might generate parochial tend-
encies resulting in the weakening of the country. But the die had been cast;
each language group wanted its autonomy so that it could develop its lan-
guage and preserve its culture. A major re-organisation of the country thus
took place in 1956 182) but that was not the end of the problem, and it has
posed a challenge to the Central Government since then. Bynow, the whole
country has been divided into States based on languages, but some issues still
remain to be solved, e. g., Maharashtra-Mysore dispute regarding some bor-
der areas '83), claim to Chandigarh, presently a Union Territory and which
serves as the capital,for both the States, by Tunjab and Haryana. Another
tricky problem, at present engaging the attention of. -the Centre, is the re-
organisation of Assam, a State which consists of hillsmen and plainsmen and
the former desire a more autonomous status for their cultural and economic
development 1114). There are other groups like Mizos and Nagas asserting their
identity more and more and their problem is also receiving attention. During
the British days, administration of some of these areas was only nominal,
and the demand for preservation of identity by these peoples is also to be
looked at in the context of the efforts now being made to bring these areas in
a closer integral relationship with the rest of the country.
The re-organisation of the States on a linguistic basis has led each State.
to adopt the regional language as the official language. As each State has
one predominant language group, it is easier to run the administration in
that language. There is the difficult question of medium of instruction. The

Constitution lays down no formula for this purpose.Legislatively, the pow-
er vests in the States to decide what should be the medium of instruction sub-
ject to the over-all limitation that it should not, result in the falling of stand-
ards: in the university education 11135 As a policy-decision it appears to be
now accepted that regional languages should replace English. At the same
182) Sec. VI sitpra.

188) ibid.
184) Various suggestions have been put forward for this purpose. Nehru proposed a
Scottish pattern of set-up for the hillsmen. The Pataskar Commission looked into this
formula with a view to give more opportunity to the Hill people in Assam to express
themselves and maintain their identity. This did n-ot satisfy the hill people. Then the idea
of organising Assam as a sub-federation of two areas was put forth. The plainsmen
oppose this solution. The hillsmen want either this or a separate State of their own. A
difficulty in the situation is that even hillsmen are not uniform and there are divisions
among them, and each group wants its identity to be preserved.,
185) Note 75 supra.
time there is a danger that too much stress on regional languages might
weaken the channels of communication between the various language groups
and thus weaken the unity of the country. To mitigate this difficulty, a
three-lang,uage formula is being sponsored which means that students should
study the regional, the Union and an international language.
The re-organisation of States on a linguistic basis threw out the problem
of linguistic minorities. Though each State has one major language group, yet
people of other languages are not completely absent. It is now Provided in
the Constitution that each State would provide adequate facilities for in-
struction in the mother tongue at the primary stage of education to the chil-
dren of linguistic minorities. To ensure a due observance of this provision,
the Centre has power to issue necessary directions to, a State for the purpose.
Further, to protect the interests of linguistic minorities, a Special Officer for
Linguistic Minorities, has also been appointed. His duty is to investigate all
matters relating to safeguards provided for linguistic minorities under the
Constitution and to report to the President upon such matters and this report
is laid before Parliament 186). Another institution where problems of linguis-

tic minorities may be discussed and adjusted amongst the neighbouring Stat-
es is the zonal council I'll).
Federalism in India is unique challenge which it has never faced

to meet a
before. It has to succeed in India as a mechanism to bind together a number

of language groups. In other federations, the problem of such dimensions
has not been encountered. Switzerland is a small, well-developed country
and has three official languages. No language problem arises in the United
States or Australia. Canada has a bilingual population, and both French and
English are recognised as official languages. The U.S.S.R. has a polyglot
population, but the Russian language has always been the language of politics,
education and administration and it enjoys a special status in the country
though other languages are also encouraged. India's problem is sui generis as
it does not approximate any of the models mentioned here and, therefore, it
will have to find its own solutions. Federalism in India has to play the great
role of maintaining unity among diversity, but, although the challenge may
be big, the task is not alien to the concept of federalism which is historically
designed to drawing a balance between local particularism and national
consciousness.
186) The President of India can direct a State to recognise a language used by a sub-
stantial proportion of the State population (art. 347). A person can give representation
for redress of his grievances to the Union or a State in any of the languages used in the
Union or in the State, as the case may be (art. 350).
187) For zonal council see next section.
360 J a i n
XIL Co-operative Federalism
In common co-operative federalism emer-

with the dominant theme of
in has a number of instru-
other, federations"""), India
developed too
ging
mentalities and techniques for, pro Ig intergovernmental co-operation.
Reference has been made to some of these in, the previous pages 189), but a
few more may. be noted here-Under the constitutional provision pertaining
to
I
advisory bodies have been established
interstate council 190), two (1) -
the Central Council of Health. consisting of Union and,State Health Min-

isters and (2) the Central Council of Local, Self-Government consisting of
the Central Minister of Health and the State Ministers for Local Self-Gov-
ernment and Village Panchayats. Under an Act of Parliament 191), five
zonal
councils established in 1956 to counter the apprehended lack, of co-
were
operation and communication amongst the-linguistic States, The Northern

Zonal Council consists of the States of Punjab, Haryana, Rajasthan, Jammu
and Kashmir, and the Union, Territories of Delhi and Himachal Pradesh;
the IEastern Council comprises the.States of Bihar, West Bengal, Orissa,
Assam, Nagaland, and the Union Territories of Manipur and Tripura; the
Western Council includes the States of Maharashtra and Guj arat; the Central
Council the States of Uttar Pradesh and Madhya Pradesh and
comprises
the Southern Zonal includes the four southern States of Andhra
Council
Pradesh, Madras, Mysore and Kerala. Each council is.composed of the
Central Home Minister as chairman, each of the State Chief Ministers acting
as vice-chairman in rotation for a year, two other
ministers from each State
and two members from each Union Territory. Each council has certain offi-
cial advisers with a right to participate'in discussions without vote. Gener-
zonal advisory body, can

council, which is matter in discuss any
ally, a an
which some States, or the Centre and a State, may be interested; more parti-
cularly, it can discuss matters of common interest in the. area of economic
"I") Notes 13, 23, 30, 31 supra. C defines co-operatIive federalism as: "The.
o r w i n
as mutually complementary parts

of a
States and National Government are regarded
mechanism all of whose intended to realize the current
single governmental powers a re
their applicability to the problems in hand", The
purposes of government according to
Constitution of the U.S.A., Senate Document (1953), 14.
189) Some,like the Finance Commissionand Interstate Council, are prescribed by the
note 117, supra. Some, like the Interstate Transport Commission,
constitution, sec. IViand
function under parliamentary legislation, notes 115 and 116 supra, and some, like the
planning commission and the. national development council, wo rk under executive deci-
sions, part IX supra.
190) Art. 263; note 117 supra.
191) The States Reorganisation Act, 1956.
and social planning, border disputes, linguistic minorities, interstate trans-

port, or any matter arising out of the re-organisation of States. The council
may advise the Centre and the States as to the action to be taken in any such
matter. Provisions have been made for each council to have a secretariat and
for several councils hold joint meetings to discuss matters of. common
to
interest. Voting at the council meeting is member-wise and not state-wise,

t. e. members representing a State can vote individually according to their
own ideas and do not have to vote as a unit. These bodies have no executive
or legislativefunctions. Their sole aim is to promote interstate co-operation
by bringing together the States in a region so that they may discuss their
common problems and suggest joint action to solve these problems. Associa-
tion of a Central Minister helps in promoting consultation and mutual under-

standing between the Centre and the States in a region. These, councils,
although they do not have many spectacular achievements to their credit,
have, nevertheless, helped in developing a common approach to some regional
problems, e. g., the southern council has been able to devise a system of
safeguards for linguistic minorities in each State; the northern body has been
devoting its attention to the development of the crucial hilly areas in the
region, to introducing uniform rates of sales tax to promote interstate trade
and commerce, and to introducing common training programmes for the
administrative services; the eastern zonal council has agreed to form a
common reserve police and a standing committee to review implementation
of minority safeguards. These bodies provide forums for development of a

community of interests transcending differences and rivalries amongst
neighbouring States.
A body of great importance in the field of university education is the
University Grants Commission. According to the Constitution 192), university
education is a State subject, but co-ordination and maintenance of standards
in this area is a Central charge and it is to fulfil this function that the Centre
has created the commission with broad powers. It can enquire into financial
needs of the universities, allocate grants to the central universities, and to
the State universities for development or for a specified purpose, recom-
mend measures to improve university education and advise a university
upon action to be taken for this purpose, advise the Central or a State Gov-
ernment on allocation of any grant to universities for any general or speci-
fied purpose out of the Central or State funds, advise on establishing a new
university, collect information regarding university education in India and
abroad, require a university to furnish it with information regarding its
362 Jain
financial position, standards of teaching, examination and courses of study,

advise on any question referred to it and perform such other functions to
advance the cause of higher education -as may be incidental or conducive

to discharging its functions. The commission can inspect a university for
ascertaining its financial needs or teaching standards, recommend to the

university action to be taken, and withhold grants if the university, fails
to comply with its recommendations. The funds of the commission come
from the Centre. A distinction is drawn for purpose of grants between the
Central and the State universities; for'the former, the commission grants
funds both for maintenance and development, but for the latter it can do
so only for development, maintenance being a charge on the State Govern-
ment concerned.. The commission is an autonomous body and mitigates the

difficulties which may otherwise arise in the field of university education
because of its being a matter. The commission ensures that a mini-
mum standard will be maintained by each university. In the ultimate analy-
sis, the sanction behind the commission is financial as it can withhold grants
from adefaulting university. It is also an instrument through which the
Centre supplement the financial resources of the State universities. But
can
the efficacy 6f the commission depends on how much funds it has to disburse
among the universities. Paucity of funds has been a limiting factor. Further,
the commission's efficacy is also restricted by the requirement that it can
give funds to the State universities only for development and these univer-
sities have therefore to look to the State Governments for sizable funds for
their maintenance, and the commission's grants can be frustrated by a
even
State not matching thegrants which is usually a condition attached by the

commission for its grants to the State universities. To the extent these inhibi-
tions can be removed from the commission, to that extent its influence in the
area of the university education can be strengthened.

The Damodar Valley Corporation, a joint enterprise of the Centre and
the two States of Bihar and West Bengal, has been established under a
Central law 193) to develop the interstate valley of the Damodar River for
irrigation, power and flood control. The corporation consists of three mem-
bers appointed by the Central Government in consultation with the State
Governments. In discharge of its functions, the corporation is to be guided
by instructions on questions of policy issued by the Centre. The corporation's
annual reports are laid before Parliament and the two State Legislatures. A
basis for of the programmes executed by the corporation
apportioning costs
among various governments has been laid down in the Act. In case of a
dispute, the matter is to be referred to an arbitrator appointed by. the Chief

justice of India and the arbitrator's decision is to be final.
The above is only an illustrative, and not an exhaustive, description of
the various bodies and institutions of intergovernmental co-operation func-
tioning under the Constitution, the statutes. and the administrative prac-
tices. Besides, conferences of the Central and State Ministers are held from
time to time to discuss many matters of the Central-State relationship, and
thus understanding and co-operation amongst the variou Is governments is
sought to be promoted to achieve the desired national goals 194) Reference
has already been made to the role of the Congress Party as a medium of
cohesion amongst the various govemments"15), but this instrumentality is
now no longer available in the changed political context of the
country.
Needless to say that India can successfully face its many problems only
when the Central and State Governments pull their weight together. When
the Congress dominated the scene, intergovernmental frictions were kept
in a low key, but in the new variegated political context, for sometime to
come, there may be a tendency in State Governments to bolster up these
differences and bring them into the open; there may be a greater emphasis
on regional problems; and some governments
may play for political ad-
vantage rather than try to solve the issues before the nation, in a constructive
manner. In a federation, it is not unusual to have several political parties
controlling various governments. To some extent, federalism may be

likened to the fundamental
rights. just as the fundamental rights safeguard
individual freedom against encroachment by the government, so also
federalism seeks to maintain local identity against national policies. But
then a balance has to be drawn between the two; regionalism cannot be
pressed beyond the point when it becomes a threat to national integrity.
This essential point has to be kept in view by the State Governments in
shaping and moulding their
relationship with the Centre. For years to
come, the Centre has play a dynamic role of leadership if the country
to
is to make rapid strides. Though the Constitution provides adequate powers

to the Centre to fulfil its role, yet, in actual practice, the Centre can main-
tain its dynamism and initiative not through a show of its powers which -
should be exercised only as a last resort in a demonstrable necessity but on -
the co-operation of the States secured through the process of discussion, per-
suasion and compromises. All governments have appreciate the essential
to
point that they are not independent but interdependent, that they should act
not at cross-purposes but in union for the maximisation of the common good.
194) Sec. IX supra.

195) Sec. I supra.

Indian Federalism

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Some Aspects of Indian Federalism

ism. India, says the Constitution, is to be a Union of States&apos;). India has a

Central Government and 17 State GovernmentS2) At both levels, parlia-

Professor of Law, Banaras Hindu University, Varanasi, India; Visiting Professor

many challenges. To improve. the material well-being of the people, the

all aspects of national life, such

ulation control, exploitation of natural resources and provision of such

complications on its borders because of the bellicose attitude of some of its

party dominance, or the Congress monolith, and various Political parties

of these federations, and their approach to structuring of Indian Feder-

through formal amendments of the Constitution because of the rigidity of

the amending process Inot many amendments:.have culminated so far but -

through the process of -judicial interpretation. The judiciary helped the

can implement a treaty, ratified, by.tho Senate, irrespective, of the fact

amounts of revenue&quot;). Abroad interpretation of its spending power has

7) McCulloch v. Maryland, 4 Wheat. 316 (1819); &apos;note 12.3 infra.

influence an area of governmental operations much larger than its own

enumerated powers. A kind of Centre-State partnership to promote people&apos;s

matters of national importance leaving to the Provinces merely matters of

13) C o r w i n, National-State Co-operation, 46 Yale L.J. (1946), 599; L. A. W a r -

n e y, Comparative Federalism; J a i n, Federalism in India, 6 J1. of ILI (1965), 355.

14) D e h e m ft W o I f e The Principles of Federal Finance and the Canadian Case,

20 Za6RV Bd. 28/2

This imbalance is sought to be rectified through various expedients, viz.

18) Supra note 14.

the opposition to any shift of balance of power in favour of the Centre by

judiciary has given them an expansive interpretation. Under its defence

choose to enter, with

arbitration of industrial disputes give it power to deal with problems of

24) It has been agreed that

Clarke v. The Commonwealth, 87 C.L.R. 177.

difficult, creating a need to introduce flexibility through various expedients

helped in giving an interpretation to the Centre&apos;s powers so as to enable it

the Constitution which has proved to be extremely difficult. Lastly, the

Apart from the experiences of other countries suggesting a strong Centre,

Indian Constitutional Law, 329-333; Granville Austin, The

facilitatedby two factors the historical background of the country and

unitary to a federal system and that of assimilating the hitherto autonomous

the needed State concurrence may be difficult to obtain to a proposed

might therefore be were to misleading if one take his ideas

underneath the surface of the formal constitutional provisions.

Ill. Legislative Relations

The pivotal point in a federation is -the allocation of law-making powe.rs

rency, taxation, foreign

tional institutions, some aspects of education and health. The Concurrent

power by bringing under its regulation a number of industries through the

developments taking place. Further, the entries in List I have a: primacy

Centre&apos;s strength as against the States.

the distribution of powers in a federation between the Centre

found in other constitutions, for making temporary adjustments in the

usually these competitions were run by out-of-state journals which a State

as&apos;non-agricultural property. jurisdiction in this respect is fragmented

48) Sec. II supra.

49) Note 47 supra.

51) Sec. 51 (XXXVII) of the Commonwealth of Australia Constitution Act, 1900.

52) See XII supra.

Thirdly, under an emergency, the Centre gets powers to legislate in the

the resolution, the power can be extended by a year. This unparalleled

53) Sec. X infra.

ism. India, says the Constitution, is to be a Union of States'). India has a

amounts of revenue"). Abroad interpretation of its spending power has

7) McCulloch v. Maryland, 4 Wheat. 316 (1819); 'note 12.3 infra.

enumerated powers. A kind of Centre-State partnership to promote people's

helped in giving an interpretation to the Centre's powers so as to enable it

Centre's strength as against the States.

as'non-agricultural property. jurisdiction in this respect is fragmented

requisitioningproperty needs the President's assent to be valid. This pro-

1") Art. 275 (1).

schemes for the welfare'of the scheduled tribes") or to provide facilities

hear appeals from administrative decisions made'by the States"). The