Trends in Centre–State Relations

Introduction

India’s federal system has always faced tension between Centre’s supremacy and States’ autonomy. This tension became sharper after the late 1960s when the political scenario changed.

Political Backdrop

• Before 1967: Congress ruled both at Centre and in most States → relations were smooth.
• After 1967 elections: Congress lost in 9 States and became weaker at Centre.
  • Non-Congress governments started opposing centralisation.
  • Demands for State autonomy and more financial powers became louder.
  • This triggered conflicts and debates on federalism.

Major Areas of Tension

The States often complained about:

1. Appointment and dismissal of Governors.
2. Governors acting in a partisan, discriminatory manner.
3. Misuse of Article 356 (President’s Rule).
4. Deployment of Central forces in States.
5. Reservation of State Bills for President’s consideration.
6. Discrimination in financial allocations.
7. Dominant role of Planning Commission in approving projects.
8. Central control over All-India Services.
9. Use of media (radio/TV) for political propaganda.
10. Appointment of enquiry commissions against State CMs.
11. Unfair sharing of finances.
12. Encroachment by Centre into State List.

👉 Clearly, the problem was excessive centralisation vs. demand for autonomy.

Efforts & Demands for Reforms

Administrative Reforms Commission (ARC), 1966–69

• Headed by Morarji Desai (later K. Hanumanthayya).
• Studied Centre–State relations (via a team under M.C. Setalvad).
• 22 recommendations, key ones:
  • Establish Inter-State Council (Art. 263).
  • Appoint non-partisan Governors with long public life experience.
  • Delegate maximum powers to States.
  • Transfer more financial resources to States.
  • Allow deployment of Central Armed Forces in States (even without request).
• Result: Central government took no action.

Rajamannar Committee (Tamil Nadu, 1969)

• Set up by DMK Government, chaired by Dr. P.V. Rajamannar.
• Reported in 1971.
• Identified causes of centralisation:
  1. Certain provisions of the Constitution giving special powers to Centre.
  2. One-party dominance at Centre & States.
  3. States’ financial weakness, dependency on Centre.
  4. Central Planning system & dominance of Planning Commission.
• Key Recommendations:

• Immediate setting up of Inter-State Council.
• Make Finance Commission a permanent body.
• Abolish Planning Commission, replace with statutory body.
• Abolish Articles 356, 357, 365 (President’s Rule).
• Remove “pleasure of Governor” provision.
• Transfer some Union & Concurrent List subjects to State List.
• Give residuary powers to States.
• Abolish All-India Services (IAS, IPS, IFS).
• Centre’s Response: Completely ignored.

Anandpur Sahib Resolution, 1973

• Passed by Akali Dal in Punjab.
• Demands:
  • Centre’s powers restricted to Defence, Foreign Affairs, Communications, and Currency.
  • All residuary powers to States.
  • Make the Constitution “truly federal” with equal authority for States.

West Bengal Memorandum, 1977

• Sent by Communist government to Centre.
• Major Suggestions:
  1. Replace word “Union” with “Federal” in Constitution.
  2. Restrict Centre’s jurisdiction to Defence, Foreign Affairs, Currency, Communications, Economic Co-ordination.
  3. All other subjects (including residuary) → States.
  4. Abolish Articles 356, 357, 360 (President’s Rule & Financial Emergency).
  5. States’ consent mandatory for creation/reorganisation of States.
  6. 75% of total revenue collected by Centre should go to States.
  7. Rajya Sabha to have powers equal to Lok Sabha.
  8. Abolish All-India Services → only Central & State services.
• Centre’s Response: Demands not accepted.

After the demands from States in the 1960s–70s for greater autonomy (Rajamannar Committee, Anandpur Sahib Resolution, West Bengal Memorandum), the Centre finally appointed a formal body to comprehensively review Centre–State relations.

Sarkaria Commission (1983–88)

• Constituted by: Central Government in 1983.
• Chairman: Justice R.S. Sarkaria (retired SC judge).
• Mandate: Examine and review the existing Centre–State arrangements in all spheres and recommend reforms.
• Report Submitted: 1988 (after four extensions).
• Total Recommendations: 247.

Approach of the Commission

• Did not favour structural/constitutional changes.
• Declared existing system basically sound.
• Stressed the need for functional/operational changes, not drastic alterations.
• Key view:
  • “Federalism in India is a functional arrangement for cooperative action, not a static institutional concept.”
  • Strong Centre is necessary to safeguard unity & integrity.
  • But warned: “Over-centralisation leads to blood pressure at the Centre and anaemia at the periphery.”

Key Recommendations of Sarkaria Commission

1. Inter-State Council: Permanent body under Art. 263 (implemented in 1990).
2. Article 356 (President’s Rule): Use sparingly, only in extreme cases.
3. All-India Services: Strengthen existing ones; create more.
4. Residuary Powers:
   • Residuary taxation → Parliament.
   • Other residuary powers → Concurrent List.
5. State Bills: If President withholds assent, reasons must be communicated.
6. National Development Council (NDC): Should be renamed and reconstituted as National Economic and Development Council (NEDC).
7. Zonal Councils: Should be reconstituted and activated.
8. Deployment of Armed Forces: Centre should have the power to deploy without States’ consent, but consultation is desirable.
9. Concurrent List Legislation: Centre should consult States before enacting laws.
10. Appointment of Governors: CM’s consultation should be written into the Constitution.
11. Corporation Tax: Net proceeds may be shared with States.
12. Governor’s Powers:
    • Cannot dismiss Council of Ministers if it enjoys majority in Assembly.
    • Five-year term should not be disturbed except for compelling reasons.
13. Commissions of Enquiry: Not to be set up against a State Minister unless demanded by Parliament.
14. Surcharge on Income Tax: Should be levied only for specific purposes, and for a limited time.
15. Finance Commission vs. Planning Commission: Division of functions should continue.
16. Language Formula: Implement three-language formula uniformly.
17. Radio & TV: No autonomy, but decentralised operations.
18. Rajya Sabha & Reorganisation of States: No change in existing role/powers.
19. Commissioner for Linguistic Minorities: Should be activated.

Implementation Status

• Out of 247 recommendations → 180 implemented.
• Most important implementation: Creation of Inter-State Council in 1990.

✅ Summary:
The Sarkaria Commission struck a balance → It recognised the need for a strong Centre, but also recommended measures to protect States’ autonomy and reduce misuse of Central powers. It remains the most comprehensive review of Centre–State relations in India.

Punchhi Commission (2007–10)

Why the Punchhi Commission was constituted

• Context: Two decades after Sarkaria, India’s polity and economy had changed (liberalisation, new centre–state dynamics, big infrastructure projects, decentralisation push). Centre–State relations needed a fresh review.
• Set up: April 2007, chaired by M. M. Punchhi (ex-CJI).
• Mandate: Examine and review working of Union–State arrangements (legislative, administrative, financial, emergencies, governors, inter-state rivers, Panchayati Raj, local planning, sharing resources, etc.) and recommend changes keeping constitutional framework and practical difficulties in mind.

Key principles the Commission endorsed

• Cooperative federalism is the guiding principle — it must be strengthened to secure unity, good governance and rapid economic growth.
• Avoid doctrinaire centralisation or fragmentation — aim for functional decentralisation with coordination.

Important focus areas

The Commission paid special attention to:

• Centre-State role during communal or social violence.
• Centre-State role in mega projects (e.g., inter-linking rivers).
• Devolution to Panchayats / local bodies and district-level planning.
• Linking Central assistance with State performance.
• Positive discrimination for backward States.
• Fiscal dependence of States on devolution (8th–12th Finance Commissions).
• Feasibility of a Central law enforcement agency for inter-state / national security crimes.
• A legal framework for suo-moto deployment of Central forces where required.

Overarching quantitative output

• Report: Submitted April 2010 — 1,456 pages in 7 volumes.
• Recommendations: Over 310 (major set noted below).

Major recommendations

A. Legislative & Executive cooperation

1. Before Parliament legislates on Concurrent List items, there should be broad agreement (consultation) with States.
2. Union should restrict parliamentary supremacy on state matters — occupy concurrent/overlapping fields only when uniform national policy is demonstrably needed.
3. Inter-State Council — continuous auditing/management role for concurrent/ overlapping matters; strengthen Art.263.

B. Governors, conventions and appointment procedure

4. Strict selection criteria for Governors (eminent, outsider, not partisan, not recently active in politics).
5. Fixed five-year tenure for Governors; remove arbitrary removals.
6. Impeachment-style procedure for removal (procedural safeguards).
7. Governor’s discretionary powers are limited; must act reasonably, in good faith, not arbitrarily.
8. Timelines — Governor should decide within six months whether to assent or reserve a state bill.
9. Clear guidelines for Governor in hung assemblies (priority order: pre-poll coalition → largest single party with support → post-electoral coalition with all partners joining → post-electoral alliance with outside support).
10. Dismissal of CM: Governor should insist on floor test within a prescribed time.

C. Emergencies and limited intervention

11. Limit invocation of Art. 356/352 — use only as last resort; exhaust alternatives.
12. Localised intervention framework (short of Art.356/352) to deal with serious local breakdowns without dissolving assemblies.
13. Incorporate S.R. Bommai principles into constitutional/legal framework to reduce misuse of Art.356.

D. Fiscal federalism and institutions

14. Finance Commission ToR should fairly reflect both Centre and States; involve States in finalising ToR.
15. Institutionalise empowered inter-State fiscal forums (like Empowered Committee of FMs for GST) for other sectors.
16. Convert Finance Commission division in MoF into a full department to serve as a permanent secretariat.
17. Review cesses/surcharges; reduce their share in gross revenue.
18. Annual independent assessment of major fiscal legislations — reports to be tabled in legislatures.
19. Cost-sharing mandate for future Central laws implemented by States (like RTE) — existing laws to be amended for cost-sharing.

E. Administrative coordination & services

20. Create new All-India Services in health, education, engineering and judiciary (to improve standards and coordination).
21. Zonal Councils: reactivate; meet regularly; Inter-State Council secretariat to support them.
22. Forum of CMs (rotational chair) to coordinate in sectors (energy, food, education, health).
23. Planning Commission: continue role but focus on coordination (less micro-management); synchronise FC and Plan periods.

F. Rajya Sabha & representation

24. Improve functioning of Rajya Sabha as representative forum of States; consider removing impediments even if constitutional amendment required.
25. Suggested idea: equality of representation in Rajya Sabha (i.e., seats not strictly population-based) — to balance State power (this is a big/controversial suggestion).

G. Governance & local empowerment

26. Constitutionally define devolution to local bodies (Panchayats / municipalities) — stronger local self-government.
27. District planning & budgeting: promote independent planning at district level.
28. Royalty revision on minerals: automatic revision every 3 years; compensate States for delay.

H. Legal and enforcement architecture

29. Inter-State Trade & Commerce Commission (constitutional) under Art.307 & Entry 42 List I — advisory + executive, decisions binding subject to Supreme Court appeal.
30. Consider legislation under Art.355 to provide a framework for suo-moto deployment of Central forces where necessary.

Noteworthy departures from Sarkaria

• Punchhi is more proactive on empowering States (greater flexibility, more devolution, stronger safeguards around Governors and Art.356).
• More emphasis on institutionalising cooperative mechanisms (Inter-State Council, zonal councils, CM forums, fiscal secretariats).
• Stronger attention to local bodies, district planning and linking Central funds to performance.

Implementation & process

• Report circulated to all stakeholders; comments were sought and are with the Inter-State Council.
• Many recommendations are procedural/constitutional and would need political will/amendments to implement.

Short concluding note

Punchhi is a practical, contemporary blueprint — it accepts a strong Union but insists on greater predictability, safeguards and institutional mechanisms so States are neither coerced nor left helpless. For UPSC, treat Sarkaria (status quo + functional fixes) and Punchhi (cooperative federalism, institutional strengthening) together as the two canonical post-1970 reviews.