Question -
Answer -
Federalism is an institutional mechanism to accommodate two sets of politics one-at the national level and the other at the regional level:
(a) Division of powers:
- The powers are distributed between the central government and the state governments.
- The constitution demarcates the subjects clearly in the lists.
- The disputes are settled by the judiciary.
- The economic and the financial powers have been centralised to the central government.
(b) Distribution of financial resources:
- Some certain taxes are levelled by the center but are collected by the states, i.e. stamp duty and the taxes on production of medicines and cosmetic preparations.
- Some certain taxes are levied and collected by the center and are distributed among the states, i.e. succession of property other than agricultural land, terminal taxes on goods and passengers carried by railway, sea and air, taxes on railways freights and fare, taxes on newspaper, etc.
- The taxes which are levied and collected by the center but are distributed between the center and the states, i.e. income tax on the income other than agricultural land on the recommendation of the finance commission.
- Bihar, Odisha, West Bengal and Assam have been given grants in lieu of export duty on jute and jute products.
(c) Methods of resolving inter-state dispute:
- An inter-state committee can be established by the Parliament if it thinks it to be fit.
- This committee enquirers into the dispute and submits its report and recommendations to the Parliament.
Example:
- Haryana and Punjab dispute on Chandigarh
- Maharashtra, Madhya Pradesh and Gujarat have dispute over sharing of water of Narmada river.
(d) Appointment of Governors:
- The Governors of the states are appointed by the President of India on the advice of Council of Ministers at center.
- He enjoys the power to remove them also.
- Hence, the Governors work as the representatives of the central Government in the state who inform the center about the condition of the states if required.