UNION STATE FINANCIAL RELATIONS
Objectives of the course
The Indian Constitution adopts federal government for various
reasons. Power is divided between the Union and the States in such a way
that matters of national importance are entrusted to the Centre and matters of
local importance are left to the States. The Constitution departs from the
model of classical federalism in many ways. This departure was made to suit
the peculiar Indian circumstances. However, the constitutional provisions
were in practice further distorted so as to make the states totally subservient
to the Centre. Distribution of fiscal power is the nerve center of the federal
system. In this paper a student will be made conscious of various aspects of
federal principle, and their working in the Indian context with a view to
ultimately assessing the Indian experience critically. He must clearly
understand various emerging forces such as regionalism, sub national
loyalties and nationalism. He should be able to see the working of the
constitutional process as a vital element of the political economy.
The following syllabus prepared with this perspective will be spread
over a period of one year.
1. Federalism Essentials
1.1 Models of Federal Government U.S.A., Australia, Canada
1.2 Difference, between federation and confederation.
1.3 Evolution of federal government in India
1.3.1 Colonial Impact on distribution of power.
1.3.2 Indian Federalism Model for Indigenous suitability,
requisite and stability.
2. Distribution of Legislative Power/Administrative Power
2.1 Indian Constitution Priority of Central rule over State.
2.2 Centre State relations.
2.3 Factors responsible for subordination of States.
2.4 Role of Government Constitutional provision and political
2.5 Administrative relations Instruction from Centre, All India
2.6 Recommendations of various commissions and committees on
Centre State relations.
3. Distribution of Fiscal Power
3.1 Scheme of Allocation of taxing power.
3.2 Extent of Union power of taxation.
3.3 Residuary power inclusion of fiscal power
3.4 Tax reforms.
4. Restrictions of Fiscal Power
4.1 Fundamental Rights.
4.2 Inter Government tax immunities.
4.3 Difference between tax and fee.
5. Difference between tax and fee
5.1 Distribution of Tax Revenues.
5.2 Tax sharing under the Constitution.
5.3 Finance Commission Specific purpose grants (Article 282).
5.4 Role of Extra constitutional Agencies Planning Commission.
6. Borrowing Power of the State
6.1 Source of borrowing National and International.
6.2 Borrowing by the Government of India.
6.3 Borrowing by the States – Limitation.
7. Inter State Trade and Commerce
7.1 Freedom of Inter State trade and Commerce.
7.2 Restrictions on legislative power of the Union and States will
trade and commerce.
7.3 State Monopoly v. barriers free trade, commerce and
occupation Constitutional provisions.
8. Planning Commission
8.1 Planning Commission.
8.2 National Development Council.
8.3 Plan grants.
9. Co operative Federalism
9.1 Full faith and credit.
9.2 Inter State Council.
9.3 Zonal Councils.
9.4 Inter State disputes.
10. Federal Government in India
10.1 Model of Jammu and Kashmir.
10.2 Sarkaria Commission Report.
10.3 What Reforms are Necessary?
10.4 Federalism under chaining political scene in India.
10.5 Federalism under chaining political scene in India.
11. Federalism and changing political scene in India
11.1 Under Single Party dominating era till 1977.
11.2 During the period of political turmoil.
11.3 Under coalition form of government.
1104 Federal form of Government: Effect of multi party system and