Union-State and Inter State Relations (Art 263, Inter State disputes and Trade and Commerce)

Union-State and Inter-State relations in India are structured to balance the distribution of power between the central government and the states. This framework is fundamental for maintaining a functional federal structure, as delineated in the Indian Constitution, particularly in Parts XI and XII (Articles 245 to 263). These articles address the legislative, administrative, and financial relationships between the Union and the states.

Article 263: Inter-State Council

Article 263 empowers the President of India to establish an Inter-State Council to effect coordination between the states and between Centre and states. The Council is considered a recommendatory body aimed at discussing and investigating policies and disputes of national importance which may affect the federal structure or the relations between the states and the Union. It is designed to:

• Investigate and discuss subjects of common interest between the Union and state(s), or among the states themselves.
• Make recommendations for better coordination of policy and action on these subjects.
• Deliberate on disputes which may arise between states or between states and the Union.

The creation of the Inter-State Council is seen as a mechanism to foster cooperative federalism, allowing for a structured dialogue platform that aids in conflict resolution and policy alignment across different levels of government.

Inter-State Disputes

The resolution of disputes between states is a critical aspect of federal dynamics. The Constitution, under Article 262, specifically provides for the adjudication of disputes relating to waters of inter-state rivers or river valleys. The Parliament can enact laws to address such disputes and exclude the jurisdiction of all courts, including the Supreme Court. For instance, specific tribunals like the Krishna Water Disputes Tribunal and the Cauvery Water Disputes Tribunal have been established to address water sharing conflicts between states.

Apart from water disputes, other inter-state conflicts may arise, related to boundaries, resources, migration, etc. The Supreme Court generally has jurisdiction over these matters unless specifically restricted by law, as in the case of water disputes under Article 262.

Trade and Commerce (Article 301-307)

The Constitution guarantees the freedom of trade, commerce, and intercourse throughout the territory of India under Article 301. This provision is fundamental for creating a unified market across the country, ensuring that trade barriers between states are minimized. However, this freedom is not absolute. Under Articles 302 to 307, both Parliament and the state legislatures are provided specific powers to impose restrictions on trade and commerce:

• Article 302:

Allows Parliament to impose restrictions on the freedom of trade, commerce, or intercourse between states or within a state in the public interest.

• Article 303:

Prohibits discrimination between states or gives preference to one state over another by the legislature unless it is necessary for dealing with a situation of scarcity of goods in any part of India.

• Article 304:

Permits states to impose reasonable restrictions on the freedom of trade and commerce within their territory in the public interest. However, such laws must first receive the President’s assent.

• Article 305:

Preserves existing laws and laws providing for State monopolies.

• Article 306 (repealed in 1956) and Article 307:

Article 307 empowers the appointment of an authority to ensure the provisions regarding the freedom of trade, commerce, and intercourse are observed.