Inter-State Relations

The successful functioning of the Indian federal system depends not only on the harmonious relations and close cooperation between the centre and the states but also between the states Inter se. Hence, the constitution makes the following provisions with regard to Interstate committee: 

1. Adjudication of Interstate water disputes 
2. Coordination through Interstate councils 
3. Mutual recognition of public acts, records and judicial proceedings 
4. Freedom of Interstate trade, commerce and intercourse 

In addition, the sooner councils have been established by the parliament to promote Interstate cooperation and coordination. 

Interstate water disputes: 

Inter-State Water Disputes – Historical Background

• In recent years, increasing water scarcity, a rapid rise in urban and rural demands for freshwater, and contentious political dynamics have further exacerbated the problem.
• Several years have passed since the government proposed the action plan of interstate river water i.e., connecting all the rivers in the country. But since then, it has become the most contiguous issue of Indian federalism.
• Interstate (River) Water Disputes (ISWDs) are a continuing challenge to federal water governance in India.
• Rooted in constitutional, historic-geographical, and institutional ambiguities, they tend to become prolonged conflicts between the states that share river basins.
• India has 25 major river basins, with most rivers flowing across states. As river basins are shared resources, a coordinated approach between the states, with adequate involvement of the Centre, is necessary for the preservation, equitable distribution and sustainable utilization of river water.

Article 262: Adjudication of disputes relating to waters of Interstate rivers or river valleys 

1. Parliament me by law provides for the application of any dispute or complaint with respect to the use, distribution or control of the waters of, or in, any Interstate river or River Valley. 
2. notwithstanding anything in this constitution, parliament may by law provide that neither the Supreme Court nor any other court shall exercise jurisdiction in respect of any such dispute or complaint as is referred to in clause(1). 

Under this provision, the parliament has enacted 2 laws (the river boards act 1956 and the Interstate water disputes act 1956). the river boats act provides for the establishment of river boats for the regulation and development of inter state river and river valleys. a river board is established by the central government on the request of the state governments concerned to advise them. 

Interesting water disputes act empowers the central government to set up an ad hoc tribunal for the education of a dispute between two or more states in relation to the waters of an Interstate river or River Valley. the decision of the tribunal would be final and binding on the parties to the dispute. 

Neither the Supreme Court nor any other quote is to have jurisdiction in respect of any water dispute which may be referred to such a tribunal under this act. 

Interstate councils: 

Article 263: provisions with respect to an Interstate council 

If at anytime it appears to the president that the public interests would be served by the establishment of a council charged with the duty of- 

1. Inquiring into and advising upon disputes which may have arisen between states; 
2. Investigating and discussing subjects in which some or all of the states, are the union and one or more of the states, have a common interest; or 
3. making recommendations upon any such subject and, in particular, recommendations for the better coordination of policy and action with respect to that subject. 

It shall be lawful for the president by order to establish such a council, and to define the nature of the duties to be performed by it and its organisation and procedure. 

The council’s function to inquire and advice on Interstate disputes is complementary to the supreme court’s jurisdiction under article 131. its function is advisory unlike that of the quote which gives a binding decision. 

Under the provisions of article 263, the president has established the following councils to make recommendations for the better coordination of policy and action in related subjects: 

• central council of health and family welfare 
• central council of local government 
• for regional councils for sales tax for the northern, eastern, western and southern zones. 

Composition of the Interstate council: 

1. Prime Minister is the chairman of the Interstate council. 
2. if ministers of all the States and union territories having legislative assemblies, administrators of union territories not having legislative assemblies, governors of states under presidents rule, and six ministers of cabinet rank in the union Council of Ministers, nominated by the chairman of the council, are members of the council. 
3. five members of the cabinet rank nominated by the chairman of the council are permanent invitees to the council. 

Over the years Interstate council has acted as the forum for deliberation on issues like: 

• Federal issues including recommendations of sarkaria Commission and punchhi Commission. 
• Federal fiscal transfers, laws affecting federal relations like GST. 
• Concern over the misuse of article 356 by the central government. 
• In the 11th meeting, discussion on recommendations of punchhi Commission on centre state relations was held recently. 
• deployment of security forces in states. 

Limitations in the working of Interstate council: 

• In its last 29 years of existence, it has merely me 12 times which is inadequate. 
• Its formation itself was heavily delayed despite constitutional provision under article 263 and it came into being after 43 years of independence. 
• Discusses and investigate important subjects of common interests between states but body itself remains advisory and recommendatory. 
• Article 263 contemplates only Interstate issues and not issues between union and states. 
• Interstate council was generally sidelined and institutions like niti ayog served as deliberative forums for States and central governments for discussion on issues of common concern. 
• Rather than utilising inter State Council as forum for dispute resolution, states/ centre often knocked the door of judiciary or tribunals. 

To make Interstate council an effective forum of cooperative federalism:

• It may be given all the powers contemplated in the constitution. clause ‘a’ of article 263, which gave the council the power to investigate issues of Interstate conflict, was dropped in the presidential order establishing the ISC. 
• It may provide greater opportunities to civil society institutions and the corporate sector to make their representations. 
• ISC and NITI Aaypg may be merged into one constitutional forum to improve the participation of state governments in intergovernmental affairs. It will enhance the institutional status of the NITI Aayog as well. 
• Need the ISC a truly federal rather than a central body, its secretariat may be shifted from the union home ministry to the Rajya Sabha secretariat. it would be under the direction of a neutral federal functionary, the vice president of India rather than the union home minister. 

Interstate council hence largely remains an underutilised constitutional body. However, it is an institution that can serve as the main vehicle to bridge mistrust between States and achieve the objective of cooperative federalism. 

Interstate trade and commerce 

Articles 301 to 307 in part XIII off the constitution deal with the trade, commerce and intercourse within the territory of India. 

Article 301: freedom of trade, commerce and intercourse 

Subject to the other provisions of this part, trade, commerce and intercourse throughout the territory of India shall be free. 

The freedom under this provision is not confined to Interstate trade, commerce and intercourse but also extends to the intra state trade, commerce and intercourse. 

The freedom guaranteed by article 301 is a freedom from all restrictions, except those which are provided for in the other provisions- article 302 to 305. 

Article 302: out of parliament to impose restrictions on trade, commerce and intercourse 

Parliament may by law imposed such restrictions on the freedom of trade, commerce and intercourse between one state and another or within any part of victory of India as may be required in the public interest. 

Article303: discussions on the legislative powers of the union end of the states with regard to trade and commerce-

1. Notwithstanding anything in article 302, neither parliament nor the legislature of a state shall have power to make any law giving or authorising the giving of, any preference to one state over another, or making, or authorising the making of, any discrimination between one state and another, by virtue of any entry relating to trade and commerce in any of the lists in the 7th schedule. 
2. nothing in clause one shall prevent parliament from making anything of any law giving, or authorising the giving of, any preference or making, or authorising the making of, any discrimination if it is declared by such law that it is necessary to do so for the purpose of dealing with a situation arising from scarcity of goods in any part of the territory of India. 

Article 304: restrictions on trade, commerce and intercourse among states- notwithstanding anything in article 301 or article 303, the legislature must state may by law-  

1. Impose on goods imported from other states any tax to which similar goods manufactured or produced in that State are subject, so, however, as not to discriminate between goods so imported and goods so manufactured or produced. 
2. Impose such reasonable restrictions on the freedom of trade commerce and intercourse with or within that state as may be required in the public interest:  

Provided that no bill or amendment for the purposes of clause(b) shall be introduced or moved in the legislature  of a state without the date without the previous sanction of the president. 

Article 305: the freedom (under article 301) is subject to the nationalisation laws (I.e., Laws providing for monopolies in favour of the centre or the states). Thus, the parliament or the state legislature can make laws for the carrying on by the respective government of any trade, business, industry or service, whether to the exclusion, complete or partial, off citizens or otherwise. 

The parliament can appoint an appropriate authority for carrying out the purposes of the above provisions relating to the freedom of trade, commerce and intercourse and restrictions on it. the parliament can also confer on that authority the necessary powers and duties. but no such authority has been appointed so far. 

Zonal Councils 

The zonal councils are the statutory bodies. they are established by an act of the parliament- States reorganisation act of 1956. the act divided the country into five zones – northern,central, eastern, western and southern – and provided a zonal council for each zone. 

The union home minister acts as the common ex – officio chairman of all the councils. its members are the concerned chief ministers of the States and duties and two other ministers nominated by the governors of the member states. there are ex-officio adviser members of the respective councils. there are also advisers coming from the Planning Commission to each of the councils. each council has a separate secretarial staff with the chief secretaries of the member – states acting as secretary by rotation. the zonal councils were conceived as instruments of Interstate cooperation in different regions of the union. they were designed to establish certain common links and cooperative collective approach and efforts in matters of planning and development with a view to solving Interstate problems of the member states. they were intended: 

1. the foster Interstate accord and to formulate policies of mutual interests and coordination. 
2. promotion of cooperation successful implementation and execution of development projects and their role as advisory bodies in matters of common interests in the sphere of economic and social planning. 
3. As forums of settling Interstate border disputes. 
4. as a forum for discussing problems of linguistic minorities and Interstate transport problems etc. 

It is also intended to promote means of the common cultural heritage of people living in the zone, and for initiating cooperative ventures for ensuring best possible utilisation of human and material resources of the different states. on occasion, joint meetings of any two or more councils can also be arranged. in 1971, parliament created the north – eastern council as the 6th zonal council.