The financial relationship between the Centre and states is covered in Part XII of the Indian Constitution.
Article 280 deals with mandate provision for setting up Finance Commission.
Indian Constitution → federal in form but unitary in spirit.
Article 248 : The phrase “unitary bias” arises because residuary powers to legislate on the matters not enumerated in the central, state or concurrent list subjects is given to the Centre under article 248.
The Centre was made more powerful as can be recognised from the following points:-
1. Single citizenship
There is no state citizenship. Every Indian has same rights of citizenship, no matter in which state he resides.
2. Centre can change name in boundaries of states
Article 3 give the Central Government the right to change the name and boundaries of states.
3. Single unified judiciary
In India the Supreme Court and High Courts form a single integrated judicial system. To ensure the uniformity of the laws they are placed in the concurrent list.
4. Uniquely in emergencies
Under the Constitution, the President of the Republic has been given emergency powers under article 352, 356 and 360.
5. Common all India services
The Constitution has certain special provisions to ensure the uniformity of the administrative standards. These services include IAS, IPS, IES and many others.
6. Inequality of representation in the council of states.
There is bicameralism (in government, bicameralism is the practice of having two legislative or parliamentary chambers) in India, but states have not been given equal representation. Here the state with more population will have greater representation than smaller ones.
7. Appointment of governors
The President appoints the Governor and this enables the Union Government to exercise control over the State Administration.
8. The office of Comptroller and Auditor General
The office of CAG comes under central government; But his concern is not only with the accounts and auditing of the union government but also states.
9. Centralised electoral machinery
The body of Election Commission is appointed by the President. He is in charge of conducting elections not only to Parliament but also to state legislature.
10. Financial dependence of states
In a federation, states should be financially self-sufficient to ensure maximum autonomy. But in India, the states depend on the Centre for all development. It is the centre who gives grants to the states.