Standing Committee on Centre-State relations


Home Minister Rajnath Singh will chair a meeting of the Standing Committee of the Inter-State Council (ISC) to discuss the recommendations made by the Punchhi Commission on Centre-State relations.


  • The meeting would examine the Punchhi Commission’s report and discuss significant issues, including the role of Governors, Centrally-sponsored schemes and financial transfers from the Centre to the states and creation of a unified agricultural market for the nation.

About Punchhi Commission:

  • The Punchhi Commission, notified in 2005, submitted its report in 2010.
  • The Commission, in its report had said that ‘National Security’ as a subject was not specifically listed in any of the three Lists: The Union, the State or the Concurrent List.
  • The subject of security under the Article 352 and under the Emergency Provisions in PartXVIII of the Constitution has been assigned to the Union Government.
  • Though it is an overriding executive power of the Union, in Constitutional practice, ‘Security’ is a subject in which the States and the Union have a common interest and are expected to act in a coordinated manner,” the report noted.
  • The Commission also said that in case of communal riots, which has a potential of causing widespread violence within a territory, “the use of Article 355 may be in order.”

Major Recommendations of Punchhi Commission:

The Punchhi commission provided 312 recommendations in a seven volume report comprising:

  1. Evolution of Centre-state relations
  2. Constitutional scheme of relations, covering recommendations regarding Article 19, Article 355 and 356 and Article 263.
  3. Economic and financial relations and recommendations include upgrading of the planning model to remove regional imbalances.
  4. Recommendations regarding 73rd and 74th amendments and the Sixth Schedule.
  5. Internal security, covering issues like terror, Naxalism, insurgency and communal violence.
  6. Environment issues and resource-sharing, particularly of rivers and minerals
  7. Social development and good governance.
  8. Appointment of Governor: The Punchhi commission recommended that the person who is slated to be a Governor should not have participated in active politics at even local level for at least a couple of years before his appointment.
  9. Removal of Governor: For office of Governor, the doctrine of pleasure should endand should be deleted from the constitution. Governor should not be removed at whim of central government. The report supported the right of the Governor to give sanction for the prosecution of ministers against the advice of the state government.

Centre-State relations:

  • Part XI of the Indian Constitution (Articles 245 through 263) deals with centre-state relations.
  • It covers legislative and administrative relations between states.
  • The financial relationship between the centre and states is covered in Part XII of the Indian Constitution, including Article 280 that deals with the mandate for setting up a periodic Finance Commission.
  • The Constitution of India provides a dual polity with a clear division of powers between the Union and the States, each being supreme within the sphere allotted to it.
  • The relations between centre and state are divides :
  • Legislative relations
  • Administrative relations
  • Financial relations

Administrative relations between Centre and States

  • Union-state administrative relations in India are organized so as to enable the union government to exercise considerable direction & control over administrative machinery of the state.
  • Union government has been armed with the powers of giving directions to state & has been given certain other powers to promote interstate coordination + settle interstate river water disputes.
  • For above purpose, President may appoint interstate councils (Advisory in nature) to effect coordination b/w the states.

Financial relations between Centre and States:

  • The states are almost completely dependent upon the centre for financial support.
  • While proceeds of all the taxes within the state list are entirely retained by the state, proceeds of some of the taxes in union list are allotted wholly or partially to the states.
  • Stamp duties, Duties of excise on medicinal & toilet preparations are mentioned in union list & are levied by central government but collected by state government
  • Taxes levied & collected by union but assigned to states
  • Duties with respect to succession of property other than of agricultural land
  • Estate duty with respect to succession of property other than of agricultural land
  • Terminal taxes on goods or passengers carried by railways, sea or air
  • Taxes on railway’s freight & fare

Grants in aids and loans:

  • Prime objective is promoting welfare of STs & raise administration of scheduled areas
  • Parliament make grants to give financial assistance to states to help overcome budgetary deficits
  • Specific budget grants to states, as in case of jute producing states like WB, Assam, Bihar & Orissa, in lieu of share of Jute export duty, levied by government.
  • Union can make grants for any public purpose for various national development scheme
  • Union provides many other grants to states from time to time which mean states depend greatly on Union to get loans. A state government can only borrow within India & cannot raise a new loan without the consent of Union government, if there is an outstanding on previous loan.
  • Constitution provides for appointment of finance commission by President every 5 years to advise him regarding distribution of resources between union & states & other revenue matters
  • Niti Ayog also plays a vital role in financial relations between centre & states. It decides outlays of the plans for the country which in turn decides amount of money to be given to various states

Cooperative federalism:

  • In exigencies of war, national interest takes precedence over points of centre – state divisions of powers.
  • Substitution of primary police state by welfare state, where varied social services or technological advancement requires huge outlays & state government could not meet them on their own resources.

Why Indian Constitution is said to be federal in form, but unitary in spirit?

The Centre was made more powerful as is revealed from the following facts:

  • Single citizenship
  • A strong centre
  • Single Constitution for Union and States
  • Centre can change name and boundaries of states
  • Single unified judiciary
  • Unitary in emergencies
  • Common All-Indian Services
  • Inequality of representation in the Council of States
  • Appointment of Governor by President
  • Appointment of the High Court Judges by the President.
  • The office of CAG
  • Special powers of council of state over state list
  • Control over state laws
  • Financial Dependence of states

Inter-State Council:

  • The Inter State Council (ISC) is a constitutional body created under the Article 263 of the Constitution in pursuance of the Sarkaria Commission
  • It is a forum to discuss problems between center and states.


  • Prime Minister-Chairman
  • Chief Ministers of all States –Member
  • 3-Chief Ministers of Union Territories having a Legislative Assembly and Administrators of UTs not having a Legislative Assembly – Member
  • 4-Six Union Ministers of Cabinet rank in the Union Council of Ministers nominated by the Prime Minister

Relevance of Inter-State Council:

  • The Inter State Council has also become significant in the backdrop of tensions brewing between Centre and some states regarding resource allocation and disputes related to jurisdiction.
  • It can act as a forum for ironing out these disputes in pursuance of cooperative federalism.
  • The Council can also play a role in exerting moral pressure on the executive to implement some recommendations of the Punchii Commission.
  • It can reach a consensus on role of Governor.
  • It can decide upon the use of article 356 and other such constitutional matters.
  • Bridge trust deficit between centre and states.
  • Promote healthy competition between states.

What has been done to improve the centre-states relations?

The central government took many steps to encourage a federal character to its functioning.

  • A National Development Council was set up in 1952 and a National Integration Council was similarly set up in 1962.
  • Annual conferences were held between the centre and state chief ministers on finance, labour, food and other functional areas.
  • The first constitutional body—called the Inter-State Council (ISC)—was set up in 1990 following the initial recommendation of the First Administrative Reforms Commission (1969), which was endorsed by the Sarkaria Commission on centre-state relations (1988).
  • During the intervening years, there was a gradual centralization that diminished the political, legislative and administrative power of the states.

Way ahead:

  • The interstate council should be further strengthened to become the critical forum for not merely administrative but also political and legislative give and take between the centre and states.
  • It should function in such a manner that it reflects the equal status of states and the centre.
  • Even though the ISC’s mandate is very broad, its aspiration has generally been limited to discussing affirmative action, welfare subjects and administrative efficiency and coordination.


India’s true potential will be achieved only when both the centre and the state are strong. India needs as many forums as it can get to improve implementation efficiency, the Inter-State Council should not be one of them. Along with another constitutionally sanctioned entity, the Finance Commission- the Inter-State Council should be the body that puts the “federation” back in the definition of the Indian nation.

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