Union Public Service Commission (UPSC)

Union Public Service Commission (UPSC)

This article deals with ‘Union Public Service Commission (UPSC) – Indian Polity.’ This is part of our series on ‘Polity’ which is important pillar of GS-2 syllabus . For more articles , you can click here.


  • The Union Public Service Commission (UPSC) serves as the central recruiting agency in India and is responsible for conducting examinations and selecting candidates for various government posts.
  • The Constitution of India directly created this body, highlighting its significance and constitutional mandate.
  • The provisions related to the UPSC are outlined in Articles 315 to 323, which fall under Part XIV of the Indian Constitution.
    • Article 315 establishes the UPSC and outlines its composition, functions, and powers.
    • Articles 316 to 319 detail the appointment, removal, suspension, prohibition to hold office after ceasing to be member and term of office of members of the UPSC, ensuring their independence and impartiality.
    • Article 320 empowers the UPSC to conduct examinations for appointments to civil services and other positions, ensuring a merit-based selection process.
    • Article 321 provides for the power to extend the functions of Public Service Commission.
    • Articles 322 and 323 deal with the expenses and annual reports of the UPSC


  • UPSC consists of a Chairman and other Members appointed by the President of India. 
Union Public Service Commission (UPSC)
  • The Constitution hasn’t specified the strength of the Commission & left the matter to the discretion of the President.
  • No qualifications are prescribed except that one-half of the members of the Commission should be persons who have held office for at least ten years, either under the Government of India or the Government of a state.
  • The Constitution also authorizes the President to determine the conditions of service of the Chairman and other members.  

Term of Chairman and Members

The Chairman and members of the Commission hold office for

  • Term of 6 years or 
  • Until they attain the age of 65 years

Whichever is earlier. 

However, members of the UPSC have the option to relinquish their positions at any time by submitting their resignation to the President of India.

Removal of Chairman and Members

  • The President can remove the Chairman or Members of UPSC.  
    • If he is adjudged insolvent (that is, has gone bankrupt)
    • If he engages in any paid employment outside of his office
    • Infirmity of mind or body
  • The President can also remove them due to misbehaviour. However, in this case, the President has to refer the matter to the Supreme Court for an enquiry and act according to the advice. 


  • The manner of removal of members of the UPSC ensures their independence, as they can only be removed on the grounds mentioned above, safeguarding their security of tenure.
  • Conditions of service for UPSC members cannot be altered to their disadvantage after their appointment, ensuring stability and protection against arbitrary changes.
  • The entire expenses of the UPSC are charged on the Consolidated Fund of India, ensuring financial autonomy.  
  • The Chairman of UPSC (on ceasing to hold office) is not eligible for further employment in the Government of India or a state.
  • Member of UPSC (on ceasing to hold office) is eligible for appointment as the Chairman of UPSC or a State Public Service Commission (SPSC), but not for any other employment in the Government of India or a state.
  • Neither the Chairman nor a member of the UPSC is eligible for reappointment to that office.


  • The UPSC conducts examinations for appointments to the All-India Services, Central Services, and Public Services of centrally administered territories, ensuring merit-based selection.
  • It assists the States in Joint Recruitment for any services for which candidates possessing special qualifications are required.
  • It serves the needs of a state at the request of the State Governor and with the approval of the President of India.
  • It is consulted on matters related to personnel management (like suitability of candidates, promotions, transfers, extension of service etc. of civil servants).
  • The jurisdiction of UPSC can be extended by an act made by the Parliament.

The UPSC annually presents a report on its performance to the President. The President places this report before both Houses of Parliament, along with a memorandum explaining the cases where the advice of the Commission was not accepted and the reasons for such non-acceptance. 


The following matters are kept outside the functional jurisdiction of UPSC. In other words, the UPSC is not consulted 

  1. While making reservations of appointments or posts in favour of any backward class of citizens.
  2. While taking into consideration the claims of SCs & STs in making appointments  
  3. Posts of the highest diplomatic nature and a bulk of group C and D services.
  4. With regard to the selection for temporary  post (less than a year.)

The President holds the authority to exempt certain posts, services, and issues from the jurisdiction of the UPSC. However, any regulations established by the President for this purpose must be presented before both Houses of Parliament for a minimum of 14 days. Parliament retains the power to modify or revoke these regulations as deemed necessary.

Role of UPSC

  • The Constitution visualises the UPSC to be the ‘watchdog of the merit system‘ in India, ensuring that recruitment to various civil services is based on merit and fairness.
  • UPSC’s responsibilities are specifically focused on the selection process. It does not involve itself in matters such as service conditions, cadre management, training, and other administrative aspects. These areas fall under the jurisdiction of the Department of Personnel and Training (DoPT).
  • The recommendations made by UPSC are advisory in nature and are not binding on the government. However, the government is answerable to Parliament if it chooses to deviate from UPSC’s recommendations. 
  • The emergence of the Central Vigilance Commission (CVC) in 1964 affected the role of UPSC in disciplinary matters. This is because both are consulted by the government while taking disciplinary action against a civil servant. However, the UPSC, being an independent constitutional body, has an edge over the CVC, which is a statutory body.

Comptroller and Auditor General (CAG)

Comptroller and Auditor General (CAG)

This article deals with ‘Comptroller and Auditor General (CAG) – Indian Polity.’ This is part of our series on ‘Polity’ which is important pillar of GS-2 syllabus . For more articles , you can click here.


Comptroller and Auditor General (CAG)
  • The Constitution of India (Article 149) provides for an independent office of CAG 
  • CAG is the head of the Indian Audit and Accounts Department
  • CAG is the guardian of the public purse at both levels—Centre and State. 

Appointment and Term

  • CAG is appointed by the President of India by a warrant under his hand and seal. 
  • CAG holds office for a period of six years or up to the age of 65 years, whichever is earlier.  
  • He can also be removed by the President on the same grounds and in the same manner as a judge of the Supreme Court.

To ensure the Independence of Office

  • CAG is provided with the security of tenure. He can be removed by the President only in the same manner as the Judge of the Supreme Court. Thus, the CAG doesn’t hold his office till the pleasure of the President, although the President appoints CAG.
  • CAG is not eligible for further office under the Government of India or any state after he ceases to hold his office (controversy erupted when former CAG Vinod Rai was appointed as Head of Bank Board Bureau )
  • Neither his salary nor his rights regarding leave of absence, pension, or age of retirement can be altered to his disadvantage after his appointment.
  • Administrative expenses of the office of the CAG are charged upon the Consolidated Fund of India.  

System of Auditing in India

  • Articles 148 to 151 of the Indian Constitution institutionalized the Auditing Mechanism and office of CAG. But this system is a continuance of British rule. The same Auditing System is continuing in India.
  • The Comptroller and Auditor General (CAG) of India is a constitutional authority responsible for auditing. CAG operates independently of the Government and reports directly to the Parliament or State Legislatures, thereby ensuring impartiality and objectivity in its auditing processes.
  • The Indian Audit and Accounts Department (IA&AD) is the primary body through which CAG conducts audits. 
CAG and Auditing System in India

Issue with the System

  • CAG (IAAD) conducts Audit on behalf of Parliament. Principally, it should be entirely out of the influence of the Executive. However, the Government of India is the Cadre controlling Authority of the Indian Audit and Accounts Department (IAAD), which is headed by CAG and with whose help CAG conducts audits. This is a continuance of the British Era Model (1937 rules) in which the Executive indirectly controlled CAG.  

Duties and Powers of  the CAG

Article 149

Constitution (Article 149) authorises the Parliament to prescribe the duties and powers of the CAG.  Accordingly, Parliament enacted CAG’s (Duties, Powers and Conditions of Service) Act, 1971. The Act was amended in 1976 to separate accounts from audits in the Central government.

The duties and functions of the CAG  

  • CAG audits the accounts related to all expenditures from 
    • Consolidated Fund of the Union of India and each state 
    • Contingency Fund of the Union of India and each state
    • Public Account of the Union of India and each state  
  • CAG audits the balance sheets of the departments of the Central Government and state governments.
  • CAG can audit the accounts of any other authority when requested by the President or Governor. For example, audit of local bodies

Earlier, CAG used to compile and maintain accounts of the Central Government as well. In 1976, he was relieved of his responsibility to compile and maintain accounts of the Central Government due to the separation of accounts from Audit.

Article 150

  • CAG advises the President with regard to the prescription of the form in which the accounts of the Centre and states shall be kept.

Article 151

  • CAG submits the audit reports related to the accounts of the Centre to the President, who shall, in turn, place them before both Houses of Parliament  

He acts as a guide, friend and philosopher of the Public Accounts Committee of the Parliament.

Role of CAG

  • The role of the CAG is to uphold the Constitution of India and the laws of Parliament in the field of financial administration. The audit reports of the CAG secure accountability in the sphere of financial administration of the executive.  
  • CAG is an agent of the Parliament and conducts an Audit of expenditure on behalf of the Parliament. In addition to legal and regulatory AuditCAG can also conduct the propriety audit; that is, he can look into the ‘wisdom, faithfulness and economy’ of expenditure and comment on the wastefulness and extravagance of such expenditure. However, legal and regulatory Audits are obligatory, but propriety audit is discretionary (but CAG can’t audit Secret service expenditure).
  • The Constitution of India visualises the CAG as the Comptroller as well as the Auditor General. However, in practice, the CAG is fulfilling the role of an Auditor-General only and not that of a Comptroller, as the CAG has no control over the issue of money from the Consolidated Fund and is concerned only at the audit stage when the expenditure has already taken place (unlike Britain)

Problems with CAG

  • Paralysing Unwillingness to Act: The Comptroller and Auditor General’s (CAG) presence in India is often cited as a primary cause of bureaucratic inertia. Officials fear making decisions due to the scrutiny they may face from the CAG, leading to indecision and stagnation in governance processes.
  • Post-Mortem Examination: CAG audits often serve as post-mortem examinations of government expenditures. CAG is concerned only at the audit stage when the expenditure has already taken place
  • Appointment of Generalists: The practice of appointing generalist bureaucrats, such as those from the Indian Administrative Service (IAS), as the CAG is criticized. Many argue that specialists from services like the Indian Audit and Account Service, Indian Economic Service, Indian Statistical Service, or Indian Revenue Service would be better suited for the role due to their expertise in auditing and financial matters. 
  • CAG & Defence:   CAG reports have sometimes been accused of jeopardizing national security, as seen in instances where revelations about defence preparedness were made public. For example, a CAG report in 2017 warned that the Indian Army’s ammunition stock would be depleted within 10 days of the war, potentially compromising the country’s defence capabilities.
  • Issue of Notional Loss: The CAG’s estimation of notional losses, such as in the 2G spectrum case, has been a subject of controversy. These estimates, which are based on assumptions and methodologies that may not always align with legal standards, can lead to inflated figures and subsequent legal challenges. 
  • CAG Activism: Some critics perceive the CAG’s involvement in high-profile cases like the 2G spectrum and Coalgate as examples of activism beyond its mandate. While the CAG’s role is primarily to audit government expenditures and ensure accountability, its involvement in such cases has been seen as overstepping boundaries and encroaching into policy and regulatory domains.
  • Much of the government expenditure is kept out of CAG Audit by Governments. 
    • CAG’s Authority doesn’t extend to Government Corporations created with special laws. Parliament or State Legislature can make provisions regarding Audit within the Act itself. Additionally, new organizational structures in the form of public-private partnerships are also out of the scope of CAG’s Audit. E.g., GMR Airport 
    • NGOs and Private Agencies take up many Government works at delivery points. These private agencies and NGOs are also out of the ambit of CAG.
  • Issue of Redactment: CAG, in the Audit Report of Acquisition of Rafale, redacted, i.e. removed sensitive information from the document citing security concerns expressed by the Government.
  • Politicization of CAG’s office: The politicization of the Comptroller and Auditor General (CAG) post in India has become a subject of concern in recent years. The Constitution of India explicitly states that the CAG should not be given a post-retirement posting, emphasizing the need for the CAG to maintain impartiality and independence from political influence. However, there have been instances where former CAGs have been appointed to positions that raise questions about their independence and neutrality. For example 
    • Former CAG Vinod Rai (who unearthed the Coal Scam) was appointed as Chairman of the Bank Board Bureau.
    • TN Chaturvedi (CAG from 1984 to 89) joined the BJP after retirement and contested the election using BJP’s ticket. He was later made Governor of Kerala too. 
  • Appleby’s Criticism
    • Paul H. Appleby was highly critical of the role of the Comptroller and Auditor General (CAG) in India, going as far as recommending its abolition. 
    • He argued that the institution of the CAG was inherited from colonial rule, implying it may not be suitable for modern governance needs.
    • Appleby criticized the CAG for fostering a paralysing unwillingness to act within government circles, suggesting that its oversight role may stifle decision-making and action.
    • He questioned the competence of auditors to understand the nuances of good administration, asserting that their expertise lies in auditing rather than administration.

Side Topic: Presumptive Loss / 2G Spectrum Case

The theory of presumptive and notional loss involves calculations by the CAG to estimate the potential revenue lost by the Government due to irregularities or lack of adherence to proper procedures in resource allocations, such as natural resources like spectrum and coal.

Using the Theory of Presumptive and Notional Loss 

  • In the case of the 2G Spectrum Allocation, the CAG calculated a notional loss of Rs 1.76 lakh crore due to the use of a “first come, first served” policy instead of an auction, which could have potentially generated higher revenue.
  • In the Coal Scam, the CAG initially estimated a notional loss of ₹10 lakh crore, later revised to Rs 1.86 lakh crore, highlighting discrepancies in the allocation process.

However, in December 2017, a Special CBI Court acquitted A Raja and Kanimozhi and rejected the presumptive loss theory proposed by the CAG. 

It’s also important to recognize that the Government’s objectives extend beyond profit maximization; considerations such as socio-economic factors and job creation also play a significant role in decision-making. 

Hence, CAG has failed to accommodate the changing dynamics of doing business in the LPG Era

Inter-State River Water Disputes

Inter-State River Water Disputes

This article deals with ‘Inter-State River Water Disputes – Indian Polity.’ This is part of our series on ‘Polity’ which is important pillar of GS-2 syllabus. For more articles , you can click here

Constitutional Provisions

Inter-State River Water Disputes

Status of Water in the Constitution

State List Entry 17: Water, that is to say, water supplies, irrigation & canals, etc., subject to provisions of Entry 56 of List 1
Union List Entry 56: Regulation and Development of Inter-State Rivers & River Valleys  

When a water dispute arises between two states, Article 262 is invoked & in pursuance of Article 262, two Acts were passed by the Parliament. 

River Boards Act,1956

The Act is designed to regulate and facilitate the development of inter-state rivers to ensure effective water resource management. The key features of the River Boards Act 1956 are

  • Establishment of River Boards: These boards are instrumental in coordinating efforts to regulate and develop rivers that flow through multiple states.
  • Board Establishment on State Government Request: River Boards are not unilaterally imposed but are established based on requests from State Governments.

Inter-State River Water Disputes Act,1956

The Inter-State River Water Disputes Act of 1956 provides a mechanism for resolving disputes related to the sharing of river waters between different states in India.

  • Initiation of Tribunal: If a Riparian State believes that its interests are adversely affected by the actions or plans of another state, it can request the government of India to establish a Tribunal to address the dispute.
  • Timeline for Tribunal Setup: The government of India is mandated to set up the Tribunal within one year of receiving such a request. 
  • Composition of Tribunal: The Tribunal comprises three members, each of whom must be a Judge of either the Supreme Court or a High Court. 
  • Final and Binding Decision: The decision rendered by the Tribunal holds ultimate authority and is deemed final and binding. The Supreme Court or any other court don’t have any jurisdiction in this regard.  

A total (9) such tribunals have been established till date. Important ones are

  1. Ravi & Beas: Involving Punjab and Haryana, formed in 1986 and still pending the award.
  2. Kaveri:  Involving Karnataka, Tamil Nadu, Kerala & Pondicherry, with time period 1990-2007
  3. Mahanadi: The most recent tribunal, formed in 2018, involving the states of Odisha and Chhattisgarh.

Causes of these Disputes

  • Agriculture and Water Scarcity: Riparian states depend on river water for agriculture. Such issues intensify during low rainfall seasons. Examples include disputes over the Kaveri, Krishna, Ravi, and Beas rivers, primarily revolving around sharing water for agricultural purposes.
  • Multipurpose Projects and Dams: Conflicts often arise between upstream and downstream states regarding multipurpose projects and dams. The Mahanadi issue serves as an illustration of such disputes.
  • River Joining: It is usually done to divert river water from sufficient to deficient river basins, but many issues arise, such as environmental assessment, submergence of surrounding lands, etc. Mahadayi/ Mandovi (Goa vs Karnataka) is an example of such a dispute.
  • Unborn States Share: Disputes arise when a tribunal’s judgment on a contested river involves states that later undergo division or creation. The Krishna water tribunal is an example where the parties were Andhra Pradesh, Maharashtra, and Karnataka. But as the new state Telangana has come into being, it approached the Supreme Court for its right to get a proper share. 

Why Tribunals for Inter-State Water Disputes? 

Article 262 of the Constitution lays down that the Parliament may by law provide for the adjudication of any dispute with respect to any Inter-State River (ISR). Accordingly, the Parliament enacted the Inter-State River Water Dispute Act 1956, which provides for the reference of such a dispute to a Water Tribunal. The said Act bars the Supreme Court or any other Court from exercising jurisdiction in respect of any water dispute.

The main reasons for keeping River Disputes out of the purview of the court’s jurisdiction were that (the whole of the Constituent Assembly agreed that there is a need for Tribunals to settle Inter-State River Disputes (but there wasn’t unanimity on Permanent Tribunal or Temporary Tribunals)) 

  1. Speedy Disposal: The Act ensures the swift resolution of Inter-State River water disputes by making the tribunal’s decision final and binding, thereby avoiding prolonged legal processes.
  2. Technical and Scientific Expertise: Since the resolution of Inter-State River disputes hinges upon heaps of technical and scientific data, the resolution of such disputes by specialized tribunals would allow for a better appreciation of such data.
  3. Flexible and Informal Proceedings: Unlike courts bound by strict legal procedures, tribunal proceedings are relatively informal. This flexibility allows for deliberative decision-making and discretionary measures, fostering the potential for mutually negotiated settlements.

In this context, it can be argued that the rationale behind excluding the jurisdiction of courts was fairly well-intentioned.

Main Problems with Present System and Remedies 

The problem lies elsewhere and has been well documented by many commissions, including the Sarkaria Commission. These include:

  1. Long delays & uncertain time frame: The existing system is plagued by prolonged delays, leading to uncertainty. For example, in the Ravi Beas case, referred to the Tribunal in 1986, the matter is still pending. 
  2. Issue of finality: The Tribunal acts as the arbiter for water disputes between states. Although courts are barred from interfering, matters are still taken to courts through Special Leave Petitions. E.g., the Cauvery Case, where the matter was brought to courts through Special Leave Petitions.  
  3. Enforcement Issues: Inadequate provisions for enforcing Tribunal awards lead to challenges in implementation. There is political resistance and reluctance from states to comply with Tribunal awards due to political considerations.
  4. Politicization of Water Issues: Even after the award is announced, in times of coalition politics, sometimes the centre doesn’t publish it in the gazette. 

Suggestions to improve this

  1. Institutional Changes: Utilize the Inter-State Council as a platform for resolving water conflicts effectively.
  2. Permanent Tribunal: Advocate the establishment of a Permanent Tribunal, a concept supported by Ambedkar during Constitutional Assembly Debates.
  3. Mediation Approach: Reform the current adversarial judicial process to mediation for a mutually acceptable resolution. Mediation has solved a large number of River Disputes, even at the international level. For example, 
    • World Bank played the role of mediator between India and Pakistan in the Indus Treaty.
    • The Vatican became a mediator in solving the Zambezi River dispute involving eleven countries
  4. Declaring Rivers National Property: The establishment of separate corporations on the pattern of the Damodar Valley Corporation may be immensely useful in this direction. 
  5. Bringing Water to Concurrent List: As suggested by the Ashok Chawla Committee, water resources should be included in the concurrent list for better coordination and management.

Proposed Changes in Inter State River Water Disputes Act

The following changes have been proposed in the Inter-State River Water Disputes Act of 1956 to resolve the deficiencies the present mechanism faces.

Single Permanent Tribunal

  • Establish a single, Permanent Tribunal for adjudicating all inter-state river water disputes.
  • Awards will be notified automatically.  
  • Composition of the Tribunal: Chairperson, Vice-Chairperson, and not more than six other Members
  • Members from both judicial (3) and technical backgrounds (3).
  • Even in Constituent Assembly debates, the setting of the Permanent Tribunal to resolve Inter-State River Water Disputes was greatly favoured, and BR Ambedkar was in favour of the Permanent Commission. The act favouring the Temporary Commission was favoured on the basis of experience that such issues would not come up. This is not the case now, and such disputes are rising very frequently.  

Dispute Resolution Committee (DRC)

  • DRC will handle disputes prior to the tribunal, with a resolution timeline of one year.
  • Most disputes will get resolved at the DRC’s level itself. But if the state is not satisfied, it can approach the tribunal.

Data Agency

  • Establish an agency to collect and maintain updated water data in each river basin in the country.
  • The collected data will aid in the timely resolution of water disputes


  • The Tribunal must give a decision within two years, with a possible extension of one more year.
  • The decision of the Tribunal shall be final and binding. 

Case Study: Cauvery Issue

Inter-State River- Case Study of Dispute
1924 The agreement was signed between Madras Presidency and Mysore to build a dam in Mysore. The agreement was valid for 50 years, and it led to the construction of the Krishnaraja Sagar Dam. Note: The agreement was heavily in favour of the Madras Presidency. Mysore was allowed to construct just one dam.
1960s Karnataka wanted to make more dams on Cauvery, but Tamil Nadu didn’t allow it on the basis of the 1924 Agreement.  
1974 The Water Sharing Agreement lapsed after 50 years. Karnataka decided to go ahead with making dams. 4 dams were made by Karnataka in quick succession.  
1986 Tamil Nadu approached the Centre for setting up a Tribunal   
2 June 1990 The Cauvery Water Dispute Tribunal (CWDT), headed by Justice Chittosh Mookerjee, was set after the Supreme Court’s direction.  
2007 CWDT issued its final order, allocating water shares (in tmcft):      – Tamil Nadu: 419      – Karnataka: 270 (Karnataka claimed 312, but CWDT considered earlier agreements)      – Kerala: 30      – Puducherry: 7 Karnataka and Tamil Nadu contested the order in the Supreme Court via Special Leave Petitions (SLPs).   It also recommended the establishment of a Cauvery Management Board. But it was just a recommendation.  
2013 2013 was a drought year. Tamil Nadu moves Supreme Court seeking directions to Water Ministry for Constitution of Cauvery Management Board as Karnataka wasn’t following orders of CWDT.  
2016 The year 2016 was a drought year, with Karnataka not releasing adequate water. Tamil Nadu went to the Supreme Court again. SC ordered the formation of the Cauvery Water Management Board. 

Point to Note – The main issue in this case (& other River Disputes, too) is a shortage of water. Whenever there are drought-like conditions, states start to fight over the division of Rivers.

Financial Relations between Centre and States

Financial Relations between Centre and States

This article deals with ‘Financial Relations between Centre and States – Indian Polity.’ This is part of our series on ‘Polity’ which is important pillar of GS-2 syllabus. For more articles , you can click here


Articles 268 to 293 in Part XII of the Indian constitution deal with financial relations.

Allocation of Taxing Powers

The division of taxing powers is as follows

Parliament Parliament can levy taxes on subjects in the Union List (13 items).
State Legislature State Legislatures can levy taxes on subjects enumerated in the State List (18 items)
Both Both Parliament and State Legislatures can levy taxes on subjects enumerated in the Concurrent List.
Initially, the Concurrent List had no tax entries, but the 101st Amendment Act of 2016 introduced a special provision for GST. Parliament and State Legislatures now have concurrent power to make laws related to GST.
Residuary The residual power of taxation is vested in the Parliament.

There is a difference between the power to levy taxes, collect taxes & appropriate the proceeds of taxes. For example, the income tax is levied and collected by the Centre, but its proceeds are distributed between the Centre and the states.

The Indian Constitution has placed various restrictions on the state’s taxing powers. These are as follows:-

  1. Tax on Professions, Trades, Callings, and Employments: State legislatures can levy taxes on professions, trades, callings, and employments, but there’s a cap of ₹2,500 per year on the total amount imposed on any individual.
  2. Prohibition on Taxing Goods and Services: State legislatures cannot impose tax on goods or services in two instances: (1) when the transaction happens outside the state and (2) when it occurs in the course of import or export.
  3. Tax on Consumption or Sale of Electricity: States have the authority to levy taxes on the consumption or sale of electricity. 
    • No tax can be imposed on electricity consumed or sold to the Centre
    • No tax can be imposed on electricity utilised in the construction, maintenance, or operation of railways  
  4. Tax on Water or Electricity by Interstate Authorities: State legislatures can levy taxes on water or electricity generated, consumed, sold or distributed by authorities established by Parliament for regulating or developing interstate rivers or river valleys.

Distribution of Tax Revenues

Major changes in the scheme to distribute tax revenue between the Centre and the States were introduced by the 80th and 101st Constitutional Amendments. 

80th Constitutional Amendment, 2000 (Alternative Scheme of Devolution)

  • The 80th Amendment was passed to implement the 10th Finance Commission’s suggestion of allocating 29% of specific central taxes and duties to the states. 
  • It was retroactively applied from April 1, 1996, and brought various central taxes, including corporation taxes and customs duties, in line with income tax regarding their constitutional sharing with the states.

101st Constitutional Amendment

  • The 101st Amendment enables the implementation of a new tax system, Goods and Services Tax (GST), in the country. It grants both the Parliament and State Legislatures the authority to enact laws for imposing GST on transactions involving the supply of goods or services.
  • The proceeds of GST are divided between the Center and the state on the recommendation of the GST Council. 

The present situation regarding tax distribution between the Centre and states is as follows

  1. Article 268 (Taxes levied by the Centre but collected and appropriated by States): It includes stamp duties on cheques, bills of exchange, promissory notes, insurance policies, transfer of shares, and similar transactions.
  2. Article 269 (Taxes levied and collected by Centre but assigned to States): There are two categories of taxes under this category
    • Taxes on interstate sale or purchase of goods (excluding newspapers) 
    • Taxes on the consignment of goods in interstate trade.
  3. Article 269-A (Levying and Collecting of GST in the Course of Inter-State Trade): The responsibility for levying and collecting this tax rests with the Centre. However, the distribution of this tax between the Centre and the States is determined by Parliament based on the recommendations of the GST Council.
  4. Article 270 (Taxes Levied and Collected by the Centre but Distributed between the Centre and the States): This category includes all taxes and duties listed in the Union List, excluding those mentioned in Articles 268, 269, and 269-A, surcharge on taxes in Article 271, and specific-purpose cess. Based on the Finance Commission’s recommendation, the President determines the distribution of the net proceeds of these taxes and duties.
  5. Article 271 (Surcharges for the purpose of the Centre): The Parliament has the authority to impose surcharges on certain taxes and duties mentioned in Articles 269 and 270. The funds generated from these surcharges are allocated exclusively to the Centre. However, the Goods and Services Tax (GST) is exempted from such surcharges.
  6. Taxes Levied, Collected, & Retained by the States: These include taxes enumerated in the state list (18 in number). 
Financial Relations between Centre and States

Distribution of Non-tax Revenues

a. The Centre

The primary contributors to the non-tax revenues of the Centre are the following.

Non-tax Revenues of Centre

b. The States

The primary contributors to the non-tax revenues of the States are the following.

Non-tax Revenues of State

Grants-in-Aid to the States

The Centre can give money to States via Grants in Aid. These are of two types

1 . Statutory Grants

  • General Provision: Under Article 275, Parliament can give money to states which need financial assistance on the recommendation of the Finance Commission. They are charged on the Consolidated Fund of India. 
  • Specific Provision: The Constitution has provisions for specific grants aimed at enhancing the well-being of scheduled tribes within a state or improving the administrative standards of scheduled areas in a state, including the State of Assam.

2. Discretionary Grants

  • Under Article 282, the states & centre can make grants even if it is not in their Legislative competence. For example, the Central Funds given on the advice of the Planning Commission.
  • They are discretionary because the centre is under no obligation.
  • These grants serve a dual purpose: firstly, to assist the state in meeting its financial obligations for achieving plan targets, and secondly, to provide the Centre with a means to influence and coordinate state activities in line with the national plan.

3. Other Grants

  • These grants, stipulated by the Constitution, were temporary in nature. 
  • For the initial 10 years following the commencement of the Indian Constitution, a provision of grant was made in lieu of export duties on Jute products to states of Assam, Bihar & Orissa & were charged on Consolidated Fund.

GST Council

  • GST Council is a Constitutional Body made under the provisions of Article 279-A. 
Article 279-A

Membership of GST Council

  • Its membership is as follows 
    1. Headed by Union Finance Minister
    2. Union Minister of State of Finance / Revenue 
    3. 1 Minister from each State and Union Territory with the Legislative Assembly
  • Weighted Voting Powers: 1/3rd of Voting Power is with the Union and 2/3rd with States.
  • In order to implement any decision, at least a three-fourths majority is necessary, which translates into votes of the Union and a minimum concurrence of 20 states.
GST Council

Functions of GST Council

  • Determine the inclusion of Union and State Taxes, Cess, and Surcharge under the GST regime.
  • Establish standard rates for CGST, SGST, and UTGST within the GST framework.
  • Set the effective date for including Crude Oil, Petrol, Diesel, Aviation Turbine Fuel, and LPG under the GST regime, until which the Union and individual States will unilaterally determine Excise and State VAT on these hydrocarbons.
  • Define the categories of ‘Exempted Goods and Services’ under GST.
  • Determine ‘Special Rates’ applicable during calamities, exemplified by the GST Council allowing Kerala in January 2019 to impose a 1% Calamity Cess on Intra-State trade for the subsequent two years for the rehabilitation of flood victims from 2018.
  • Address dispute settlements within this system involving conflicts between states or between a state and the Union.

Finance Commission

  • Article 280 establishes the Finance Commission as a quasi-judicial entity.
  • The President forms the Finance Commission every five years, or sooner if necessary.

The Finance Commission is required to make recommendations to the President of India on the following matters:

  1. Distribution of the divisible pool of taxes between the Centre and states (Vertical Distribution) and among states (Horizontal Distribution).
  2. It provides recommendations on the principles guiding grants-in-aid from the Centre to the states.
  3. The Finance Commission suggests measures to enhance a state’s consolidated fund for supporting Panchayats and municipalities.

It can address any other finance-related matter referred to it by the President.

The Constitution permits the Finance Commission to make broader recommendations in the interest of sound finance.

Protection of State’s Interests

To protect the interest of States, certain bills can be introduced in Parliament only on the recommendation of the President

  1. Bill which imposes or varies any Tax in which states are interested
  2. Bill, which varies the meaning of the expression Agriculture income
  3. Bill, which affects the principle on which money is distributed to state
  4. Bill which imposes any surcharge on any specified tax or duty for the purpose of the centre.

Borrowing and Loans by Centre & States


  • Centre can borrow either within India or outside upon security of the Consolidated Fund of India within the limit fixed by Parliament (no limit fixed yet)
  • State Government can borrow within India (& NOT ABROAD) upon security of the Consolidated Fund of State


  • The central government can make loans to any state or give guarantees regarding loans.
  • The state can’t raise a loan without the consent of the centre if any part of a loan made by the centre to the State or in which the centre has guaranteed is still outstanding.

Effects of Emergencies on Financial Relations

National Emergency

  • During a National Emergency, the President can modify the Constitutional distribution of revenues between the Centre & and the State.
  • Modification continues until the end of the financial year when emergencies cease to operate.

Financial Emergency

During Financial Emergency, the centre can give direction to states

  • Observe specified canons of financial propriety
  • Reduce the salaries & allowances of all classes of persons in states
  • Reserve money bills & financial bills for consideration by the President.

Inter-Government Tax Immunities

There are certain rules of IMMUNITY FROM MUTUAL TAXATION

  1. Property of the centre is exempted from all taxes imposed by the state or any authority within the state like Panchayat, Municipal Corporation, etc.
  2. Property & income of the state is exempted from central taxation.
  3. Property & income of local bodies like panchayat are not exempted from central taxation.

Analysis: Centre-State Financial Issues

  1. Vertical Imbalance in Resource Sharing: The States feel that the resource transfers to them haven’t been commensurate with their growing responsibilities.  
  2. Growing Central Expenditure on Functions in the State List: The 12th Finance Commission estimated that a fifth of the expenditure incurred by the Centre was on subjects that were in the domain of the States. 
  3. Compliance and Enforcement Cost of Central Legislation: There are several Central legislations, the compliance and enforcement costs of which are entirely borne by the States. At present, States are not compensated for the cost of compliance and the revenue loss on account of compliance. 
  4. Impact of Pay Revision by the Central Government on State Finances: The periodic pay revision by the Central Government gives rise to demand on the part of State government employees for a similar pay hike. States have demanded that the Central government should bear at least 50 % of the increase.
  5. Sharing of Offshore Royalty and Sale Proceeds of Spectrum Under the present Constitutional arrangements, offshore royalty accrues entirely to the Centre.  
  6. Profession Tax: it can not exceed Rs. 2,500 per annum. As income and salary levels are increasing, a limit on the professional tax constraints revenue mobilization
  7. FRBM Legislation: The deficit reduction targets are uniform across all States. This ‘one-size-fits-all’ approach has constrained fiscally strong States to raise more resources.  

Article 12 – ‘State’ for the purpose of Constitution

Article 12 – ‘State’ for the purpose of Constitution

This article deals with ‘Article 12 – ‘State’ for the purpose of Constitution – Indian Polity.’ This is part of our series on ‘Polity’ which is important pillar of GS-2 syllabus . For more articles , you can click here.

Article 12

Article 12 defines ‘State’ for the purpose of Part III of constitution- Actions of which can be challenged in courts as a violation of Fundamental Rights.

‘State’ includes

Article 12 - 'State' for the purpose of Constitution
  • Government & Parliament of India
  • Government & Legislature of States
  • All Local Authorities like Panchayat and Municipalities
  • Other Authorities within the Territory of India or under control of the territory of India  

Various Supreme Court judgments have pronounced the following to be within the ambit of the State as well 

  • Statutory and Non-statutory Authorities like LIC, ONGC, SAIL etc.
  • Private body working as an instrument of State.

The most problematic expression in Article 12 is Other Authorities because it is not defined in the constitution or any other statute of India. Consequently, it falls upon the judiciary to construe this term, and it becomes evident that the broader the interpretation of this term, the wider the scope of Fundamental Rights will be.

Judicial History

If we look at the judicial history, the Courts have widened the ambit of the STATE with subsequent Judgements.  

Important Cases

  • The University of Madras vs Shanta Bai (1954): The Supreme Court of India pronounced the Principle of ‘Ejsudem Generis,’ i.e. only those authorities which perform governmental or sovereign functions can be included in Article 12. 
  • In Rajasthan Electricity Board v. Mohan Lal: In the case of Rajasthan Electricity Board v. Mohan Lal, the Supreme Court ruled that the term ‘other authorities’ encompasses any entities established by either the constitution or statutes. This statutory body is not required to be involved in carrying out governmental or sovereign functions.
  • (Landmark Judgement) RD Shetty vs International Airport Authority (1979): The Supreme Court laid down the following tests for authority to be recognized as a STATE
    • The State owns the entire share capital. 
    • Enjoys monopoly status 
    • Department of Government is transferred to the Corporation. 
    • Functional character is governmental in nature. 
    • The body is under deep and pervasive state control.

Other Concern in the era of Privatisation and Liberalisation

  • In the era of LPG, the State is outsourcing its functions to the private authorities.   
  • Hence, where a private entity performs any Public Utility Function, it should come within the purview of Article 12. National Commission to Review the Working of Constitution,2002 has recommended the same. 

Legislative Relations between Centre and States

Legislative Relations between Centre and States

This article deals with ‘Legislative Relations between Centre and States – Indian Polity.’ This is part of our series on ‘Polity’ which is important pillar of GS-2 syllabus. For more articles , you can click here

Distribution of Legislative Subjects

  • India has a federal polity. Federal Polity is a system of governance in which sovereignty is constitutionally shared between the centre & states.
  • As per the Indian Constitution, legislative or law-making powers are not vested in a single tier of government; rather, they have been distributed between the Centre and the States with respect to territory and subject matter. 

Territorial Jurisdiction

  • The Constitution defines the territorial limits of legislative powers. Parliament possesses the authority to enact laws that apply to the entire country or specific regions within its territory. It has extra-territorial legislative powers as well, allowing its laws to apply beyond the borders of India, affecting Indian citizens and their assets worldwide.
  • A State can legislate only for their State, and its laws are not applicable outside the State.

Subject Matter

Legislative Relations between Centre and States

The Seventh Schedule of the Indian Constitution outlines this threefold distribution, specifying legislative subjects allocated to the Centre and the States.

List I (Union List)

  • Parliament has exclusive legislative authority over 100 subjects (originally 97) listed in this category.
  • These subjects pertain to matters of national importance that require uniformity nationwide.
  • Examples include Defence, Atomic Energy, Railways, etc.

List II (State List)

  • State Legislatures possess the exclusive right to legislate on 61 subjects (originally 66).
  • These subjects are of regional and local importance.
  • Examples include Police, Public Health, Agriculture etc.

List III (Concurrent List)

  • The authority to enact laws on 52 subjects (Originally 47) is vested in both the Parliament and State Legislatures 
  • Uniformity in such subjects is desirable but not essential. Hence, Union law provides a broad framework, and state laws can introduce variations.
  • Examples include Education, Marriage, Bankruptcy, and Insolvency.
  • In the conflict between central and State laws, the Rule of Federal Supremacy applies, i.e. central law prevails. But the exception is that if state law was reserved for the President’s approval & has received it, then it prevails.
  • Sarkaria recommendation – Acts on subjects in this list should be made after active consultation with the State government except in cases of extreme urgency.

Residuary Subjects

  • In the USA, Subjects on which the Federal Government can legislate are enumerated in the Constitution & on the rest of the subjects, only states can legislate.
  • Indian system is taken from Canadian system
  • The Government of India Act,1935, has the same system with one change on Residuary Subjects, the Governor

Points worth noting

  • In the USA, Subjects on which the Federal Government can legislate are enumerated in the Constitution & on the rest of the subjects, only states can legislate.
  • Indian system is taken from the Canadian system.
  • The Government of India Act of 1935 has the same system with one change on Residuary Subjects: the Governor General can legislate.

When can Parliament Legislate on State Subjects?

Under special conditions, the Parliament can legislate on subjects included in the State List under some specific circumstances, which are as follows:

When Rajya Sabha passes a resolution that is in the national interest, Parliament should legislate on State Subjects.      

  • Parliament can legislate on state subjects if the Rajya Sabha passes a resolution, supported by at least two-thirds of the members present and voting, stating that it is in the national interest to do so.
  •  At the same time, the State can also legislate upon the same subject, but in case of any inconsistency, the laws of the Centre prevail. 
  • This resolution remains in effect for one year at a time, and any laws enacted by Parliament under this provision have a maximum life of six months after the resolution has expired.

During National Emergency

  • Parliament is vested with the authority to legislate on state subjects during a National Emergency.
  • However, it’s essential to note that laws enacted during a National Emergency become inoperative within six months after the emergency ceases to be operational.

When the State makes a request

  • Parliament can legislate on a state subject if two or more states make a request for the same. The law enacted will be operational in those specific states. Other states may later choose to come under the purview of such legislation.
  • Notable examples include the Wildlife (Protection) Act of 1972 and the Water (Prevention & Control of Pollution) Act, which were initiated based on requests from multiple states.

To implement International Agreements and Treaties

  • Parliament is empowered to legislate on any matter to implement international treaties or agreements.
  • For instance, the United Nations (Privilege and Immunities) Act and the Anti-Hijacking Act of 1960 were enacted by Parliament to fulfil international obligations.

During President’s Rule

  • Laws made during the period of the President’s Rule in a state remain operational even after the President’s Rule ceases to be in effect.
  • This provision ensures continuity and stability in governance during transitions.

Centre’s Control over State Legislature

The Constitution allows this in the following ways.

  1. The governor can reserve certain types of Bills passed by the State Legislature for Presidential Approval. The President has an absolute veto in that situation.
  2. Certain types of bills can be introduced in State legislature only after the previous sanction of the President, although they are in List II of the 7th Schedule (restrictions on Trade & commerce)
  3. Money and Finance Bills require the President’s approval during a Financial Emergency.
  4. The concurrent list’s items are subject to the Doctrine of Federal Supremacy.

Competitive Federalism

Competitive Federalism

This article deals with ‘Competitive Federalism – Indian Polity.’ This is part of our series on ‘Polity’ which is important pillar of GS-2 syllabus . For more articles , you can click here.


Competitive Federalism refers to the concept in which states compete among themselves and also with the Centre for benefits. This idea gained significance in India after the 1990s economic reforms in a free-market economy when states were trying to woo private investment in their territory. 

Competitive Federalism

Different states try to make their own policies in a competing spirit to 

  • Attract more investment, 
  • Provide more jobs to its residents.
  • Increase the standard of life of people living in its territory. 

Competitive Federalism follows the bottom-up approach as it brings change from the states. 

Competitive Federalism in India

  • In India, the government replaced the Planning Commission by establishing NITI Aayog, with one of the mandates to develop Competitive Federalism in India.
  • Indian states are making legal reforms for ease of doing business in their state and attract private companies. E.g., Labour Reforms
    • Gujarat: Making it more difficult for utility workers to go on strike 
    • Karnataka: Allows establishments to be open longer and allows women to work at night.
    • Rajasthan: Allow companies employing up to 300 staffers to lay off workers or close down without getting the government’s prior approval
  • Different states are organizing their investment summits to woo investors to invest in their states. E.g., 
    • Gujarat’s – Vibrant Gujarat 
    • Punjab’s – Progressive Punjab 
  • DIPP is releasing the Ease of Doing Business Report of States

The impact of competition for attracting investments to the states can be understood at two levels.

  • On the one hand, states are under pressure to provide good governance and manage their finances prudently. 
  • On the other hand, they are aware of the negative impact of many of these reform measures on their electoral popularity. 

Cooperative Federalism

Cooperative Federalism

This article deals with ‘Cooperative Federalism – Indian Polity.’ This is part of our series on ‘Polity’ which is important pillar of GS-2 syllabus . For more articles , you can click here.


Cooperative Federalism

The concept of federalism is where the governments at various levels, i.e., central, state, and local levels, work in synergy with each other for the larger public interest, bypassing the differences between them. 

Some Obstacles to Cooperative Federalism in India 

  1. Proclamation of Emergency under Article 356: Post-1977, the arbitrary use of Article 356 to impose President’s Rule in states has been a persistent issue. 
  2. Union Dominance in Legislative Matters: The Union’s dominance in legislating over the concurrent list and its interference in the state list are also in special cases, such as while ratifying international agreements. 
  3. Governor Appointments without State Consultation: States have no say in the appointment of the Governor.
  4. Centrally Sponsored Schemes: The imposition of centrally sponsored schemes under the ‘One-Size-Fits-All’ approach has been a source of tension. States often find themselves obligated to implement schemes without considering regional variations, leading to inefficiencies. 
  5.  Fiscal Responsibility and Budgetary Management (FRBM) Act: Forcing states to follow the dictates of the Fiscal Responsibility and Budgetary Management (FRBM) Act before the basic public services of ordinary citizens in States are met.
  6. Deployment of Paramilitary Forces without State Consent: Instances of deploying paramilitary forces in states without their consent, such as the use of central forces in Jammu and Kashmir
  7. Enquiries against Chief Ministers for Personal Reasons: The initiation of inquiries against Chief Ministers for personal or political reasons has been a source of tension. 
  8. Non-Devolution of Powers to Local Governments: The reluctance of states to devolve powers to local governments, particularly in matters under Schedule XI & XII, remains a hurdle. 

How can we achieve Cooperative Federalism? 

  • Consensus Building: Encouraging dialogue and collaboration among states and the central government. For Example, The Goods and Services Tax (GST) was implemented after extensive deliberations and consensus-building among states.
  • Reactivation of the Inter-State Council: Strengthening the constitutional body will facilitate cooperative decision-making between the Centre and the States.
  • Protection of State Interests: Ensuring that on issues such as international treaties, World Trade Organisation obligations, or environmental concerns, the interests of affected states are safeguarded.
  • Greater devolution of power to states: Ideally, the Union should have only those powers which the state can’t handle and require national unity in the form of matters like defence, communication, foreign policy, etc.  
  • Formation of NITI Aayog after scrapping Planning Commission. NITI Aayog has increased the participation of states in its functioning & decision-making.  
  • States’ Involvement in Governor Appointments: Allowing states to have a say in the appointment and removal of Governors to enhance mutual respect
  • Reform of Schedule XI & XII: Abolish Schedule XI & XII & instead work towards a new local list outlining activities and sub-activities under Local Bodies within Schedule 7 itself. 

Side Note: Reasons for the Rise of Cooperative Federalism post-LPG

  • End of single-party Rule at Centre & emergence of Coalition Politics: The era post-1990 witnessed a shift from a dominant single-party system to a more diversified and collaborative political landscape with multiple parties forming coalitions to govern 
  • Judicial activism, exemplified by landmark cases such as the S R Bommai case, has been instrumental in preventing the Union government from misusing constitutional provisions. The judiciary, acting as the guardian of the Constitution, has consistently intervened to safeguard federal principles. 
  • Active Media:  The active role of media in the post-LPG era has contributed significantly to Cooperative Federalism. Informal and vigilant media have played a crucial role in bringing attention to instances where constitutional provisions are at risk of being manipulated for political gains.

Federal System

Federal System

This article deals with ‘Federal System– Indian Polity.’ This is part of our series on ‘Polity’ which is important pillar of GS-2 syllabus . For more articles , you can click here.


The idea of federalism as an organizing principle between different levels of a state is quite old. Greek city-states had it. Lichchhavi kingdom of northern India in the 6th century BCE is a celebrated example of a republican system.  European Union is a recent example of the idea of federalism being implemented at a trans-national level.  

  • The term “federation” is derived from the Latin word “foedus,” meaning treaty or agreement.
  • A federation can be formed in two ways.
    • Integration, i.e. Coming Together Federation: When two or more weak states come together to form a strong union, e.g., USA.
    • Disintegration, i.e. Holding Together Federation: When a Big unitary state is converted to a federation by granting autonomy to provinces, e.g., Canada and India.
  • Federal Polity is a system of governance in which sovereignty is constitutionally shared between the centre & states.
Federal System

Federal system is adopted so that

The federal system is adopted so that 

  • States & their diversity can flourish with autonomy. 
  • For multicultural societies, federalism is an attractive option.  It enables minorities to become majorities in sub-national units  
  • Political Motives
    • The Federal System provides security from external & internal threats.
    • Additional central assistance, when required, can be provided by the centre in the Federal System.
  • Economic Motives
    • The Federal System provides access to the larger national market 
    • Transfer of resources from other states in case of an underdeveloped state. 
  • India has a Federal system, but the term federation is mentioned nowhere in the constitution; instead, Article 1 describes India as a Union of states

Federalism and Stability of State

Centralized administration often refuses to decentralize, thinking it will undermine its integrity. But the opposite is true. Decentralization leads to stability, and those who refuse to decentralize often crumble under their weight.

Federalism and Stability of State

Difference between Federal and Unitary Government

Federal SystemUnitary System
Federal Polity has a ‘dual government.’ Unitary Polity has a ‘single government.’
 It has a written constitution (must) It may have written (France) or unwritten (Britain) constitution.
There is a division of powers between the centre and the states There is no division of power, as all the powers are vested in the centre
There is a supremacy of the constitution Constitution may be supreme (Japan) or may not be (Britain)
Federal Polity has a rigid constitution Unitary Polity may have a rigid or flexible constitution.
Federal Polity has an independent judiciary Unitary Polity may or may not have an independent judiciary.
Federal Polity has bicameral legislature Unitary Polity may have two houses (Britain) or one house (China)

Federal System in India

  • India is holding together federation different from the USA, which is coming together. 
  • The holding together model was adopted for the sake of the unity of the country & national integration – The constituent assembly prescribed the federalist model so that the country could face the challenges of Centrifugal forces effectively. 

Features of the Indian System of Federation

  • Dual Polity: India follows the concept of a dual polity, with the Union at the Centre and the States at the Periphery.
  • Division of Powers: There is a well-defined division of powers between the Union and the States, elucidated in the 7th Schedule of the Constitution. 
  • Supremacy of the Constitution: The Indian Constitution establishes the supremacy of the Constitution itself. All laws must conform to its provisions, and any law inconsistent with the constitution is declared void. 
  • Rigid Constitution: The constitution is rigid in its structure, and the method of amendment is also rigid. Provisions concerned with federal character can be amended by joint action of state and centre.
  • Independent Judiciary: The judiciary in India is independent and not under the influence of the Union government. 
  • Bicameralism: The Indian Parliament follows a bicameral system, where the Rajya Sabha represents the states of the Indian Federation, and the Lok Sabha represents the Indian people as a whole. 
  • Asymmetric Federalism: India has Asymmetric Federalism in the sense that the rights and responsibilities of all the states are not the same. The special nature and needs of certain regions are defined constitutionally via various sub-clauses of Article 371

Architect of the Indian Constitution, Baba Saheb Ambedkar, believed that for a culturally, ethnically and linguistically diverse and heterogeneous country like India, federalism was the ‘chief mark’, although with a strong unitary bias. This understanding, which was shared by Pt. Jawaharlal Nehru, Sardar Patel and other national leaders, stood at sharp variance with Gandhi’s idea of federalism, who was a votary of decentralization and devolution of power to the lowest unit of Panchayat. 

All federal systems, including the American system, are placed in a tight mould of federalism. No matter the circumstances, it cannot change its form and shape. It can never be unitary. On the other hand, the Indian Constitution can be both unitary and federal according to the requirements of time and circumstances. In normal times, it is framed to work as a federal system. But in times of distress(e.g. National Emergency), it is designed to make it work as a unitary system.

Unitary features of the Indian Constitution

  • Strong Centre: The Indian Constitution leans towards a strong Centre, where the powers are tilted in favour of the Union. 
  • Parliament’s Authority to Change State Boundaries: Parliament holds the unique power to alter state boundaries and names and even create new states.
  • Single Constitution for Union and States: Unlike other federations, India has a single constitution that governs the Union and the states. It ensures a unified legal framework throughout the country. 
  • Flexible Process of Constitutional Amendment: The process of Constitutional Amendment is less rigid than found in other federations.
  • Inequality in State Representation in Rajya Sabha: The Rajya Sabha, the upper house of Parliament, does not guarantee equal representation for states. 
  • Unitary Transition During Emergencies: In times of Emergency, the federal structure temporarily transforms into a unitary one. This shift occurs without the need for a formal Constitutional Amendment.
  • Single Citizenship: There is only single citizenship, i.e. citizenship of India, and no separate citizenship of states.
  •  Unified Judiciary: There is a single judiciary with the Supreme Court at the top that enforces central and state laws.
  • All India Services: The creation of All India Services, such as the IAS, IPS, and IFS, is a unitary feature.
  • Integrated Audit Machinery. CAG audits accounts of both Central and State Governments but is appointed by the President only, and states have no say in his appointment or removal.
  • Office of Governor: The head of state, i.e., the Governor, is nominated by the President and is an agent of the centre in states.
  • Integrated Election Machinery: India maintains a single integrated election machinery for conducting both central and state elections.
  • President’s Absolute Veto: The President has an Absolute Veto over the State Bill if the Governor send any bill to the President for consideration.

Is India a federal state or a Unitary state?

India’s constitutional framework raises the intriguing question: Is India a federal or unitary state? The answer lies in the nuanced understanding of the features embedded in the Indian Constitution.

  • Although there are large unfederal features that are essentially incorporated for the unity and integrity of the country, it is equally important to recognize that all the fundamental federal features are present in the Constitution. The presence of strong unitary elements has led some scholars to categorize India as a “Quasi-federal” state. 
  • Although  Article 1 states that India is a Union of states, this doesn’t mean India isn’t a federation. No particular significance is to be attached to the word union because the word union is used in the Preamble of the USA, too, and citing this, BR Ambedkar said the description of India as a Union, although it is a Federation, does no violence to its usage. 
  • At the time of Independence, traumatized by the partition and violence, the Constituent Assembly wanted to ensure the unity and integrity of the new nation. Hence, the framework departed significantly from all existing models of federalism.  

When India adopted this system, In the absence of any track record of India in federalism and the tendency to compare all federal states with the US model, jurists found it difficult to certify that the system was indeed federal. It was therefore declared ‘Quasi-Federal’. This description is no longer valid today because the federal principle has taken root and further developed on Indian soil.  

After the 73rd & 74th Amendments & formation of the Panchayati Raj, a new era was started in the chapter of Indian Federalism.

Parliamentary System

Parliamentary System

This article deals with ‘Parliamentary System– Indian Polity.’ This is part of our series on ‘Polity’ which is important pillar of GS-2 syllabus . For more articles , you can click here.


In India, there is a Parliamentary form of government at the State and Centre levels.

Centre Article 74 and Article 75 speak about it.
State Article 163 and Article 164 speak about it.

Definition of Parliamentary System

Parliamentary System

Government in which the Executive is responsible to the Legislature for its policies is known as Parliamentary System of Government.

It is also known as

  1. Cabinet System
  2. Responsible Government
  3. Westminster Model of Government

Features of the Parliamentary System

  • The President is the nominal (de jure) head, while the Prime Minister is the real (de facto) Executive.
  • The Party, which secures a majority of seats in Lok Sabha, forms the government.
  • Ministers are collectively responsible to Parliament (i.e. they swim and sink together).
  • Usually, members of the Council of Ministers belong to the same Political party and hence share the same ideology.
  • There is a double membership. Ministers are members of the Executive and legislature.
  • The Prime Minister plays a leadership role, and he is the leader of the council.
  • President can dissolve the lower House on the recommendation of the Prime Minister.

Merits of the Parliamentary System

  • Harmony between the Legislature and Executive as members of Executive are members of the Legislature, too.
  • Government is responsible as it is answerable to Parliament for acts of omission and commission.
  • Prevents despotism as Executive is controlled by various tools like No Confidence Motion, Zero Hour Discussion etc.
  • There is ready alternate government if no-confidence motion is passed against the ruling party.
  • It provides broad representation as the Executive consists of a variety of members

Demerits of the Parliamentary System

  • The government is unstable and stands at the mercy of Legislators.
  • There is no continuity of policies. When government changes, policies also change, which is bad for the economy.
  • The government can become autocratic if the ruling party enjoys an absolute majority.
  • It is against the Principle of Separation of Power.
  • It is not conducive to administrative efficiency as ministers are not experts in their fields.

Why did India Choose the Parliamentary System?

  • Historical Continuity: Familiarity with the system due to its presence in British India.
  • Emphasis on Responsibility: Preference was given to the system that prioritizes responsibility over stability.
  • Recognition of the need to avoid the Legislative-Executive divide, which was necessary for an immature democracy like that of India
  • Fear of an Overly Strong Executive: Constituent Assembly feared too strong Executive
  • Representation in a Diverse Society: In a diverse society like India, this system provides representation to more diverse groups in the Executive
  • Avoidance of Personality Cult: The alternative to the Parliamentary Executive was a Presidential form of government. However, the Presidential Executive puts much emphasis on the President. There is always danger of a personality cult.  

Indian System is different from British System

India Parliamentary SystemBritish Parliamentary System
Republican system Monarchial system
Parliament is not supreme and enjoys limited and  restricted powers due to the written constitution, judicial review and fundamental rights It is based on the Doctrine of Sovereignty of Parliament
PM can be a member of any of the two houses PM should be a member of the Lower house
Non-MP can be appointed as a Minister, but he has to acquire membership within 6 months MP alone can be appointed as Minister
There is no legal responsibility of the Minister The legal responsibility of the Minister is present
There is no Shadow Cabinet Shadow Cabinet is present

Features of the (American) Presidential System 

  • The President in the American Presidential System holds a dual role as both the head of state and head of government. 
  • President is elected by the electoral college for 4 years and can be removed by impeachment.
  • President governs with help of his secretaries who are not elected and are answerable to him only.
  • Advice of secretaries not binding on the President
  • The President and his secretaries are neither answerable to the Congress nor have any membership.
  • The American Presidential System operates on the fundamental principle of the separation of powers in which the executive, legislature & judiciary are independent & separate.

Should India switch over to Presidential System?

Question of changing over to Presidential System has been raised various times

1956 Nehru himself expressed his doubts about whether the Parliamentary System could meet the needs of the times and the complexities of modern administration.
1960s The desirability of a switch-over to the Presidential system was discussed & several eminent men, including a person like JRD Tata, advocated a Presidential system for India.
1967   After Nehru, Congress’s monopoly of power began to be eroded at the level of States. The Presidential model is described as a remedy for all of India’s ills.
Indira’s Reign Demand became the most prominent

Arguments against

  • This issue was sufficiently discussed in the Constituent Assembly, and it made an informed choice after considering both the British and American models.  
  • It would violate the ‘basic structure‘ of the Constitution.
  • Presidential system centralises power in one individual unlike the Parliamentary System, where Prime Minister is first among equals
  • A diverse country like India can only function with consensus-building. But the Presidential System works on a “winner takes it all” approach. 
  • ‘Outside’ talent can be brought into a parliamentary system, too. Examples: C.D. Deshmukh, T.A. Pai, Manmohan Singh etc. 

Arguments in flavor

  • There is no genuine separation of powers as the legislature cannot truly hold the executive accountable since the government wields the majority in the House. 
  • During the time of the coalition government, the government is unstable and stands at the mercy of MPs & MLAs
  • Cabinet posts would not be limited to those who are electable rather than able. Experts can become ministers/secretaries. 
  • Fear that an elected President could become a Caesar/Authoritarian is ill-founded since the President’s power would be balanced by the legislature (including Rajya Sabha) 
  • It is good for diverse country like India because to get Bills passed, President instead of facing a monolithic opposition, would have the opportunity to build issue-based coalitions on different issues.
  • The Parliamentary system was taken from Britain, but conditions similar to Britain do not exist in India. It requires the existence of clearly defined political parties, whereas, in India, a party is all too often a label of convenience. 

The Present Parliamentary System has been tried and tested for nearly 70 years. As a famous saying goes – Why fix a thing which isn’t broken? Rather than changing the system, we should reform thoroughly and cleanse the electoral processes.