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Out of the many terms used to define the policy of our country one of the integral term used is Federal. Like many developing economies of the world, India too has a federal setup when it comes to the government. By Federalism, we essentially understand that there are two forms of government, one at the center and another at the state. The rationale that goes behind such a division is many: Historical factors, Administrative factors, Cultural factors etc. India adopted this model in 1950 when the Constitution of India was written.

The division of power between the center and the state is clearly mentioned in the Constitution in the form of three lists: Center List, State List, and the Concurrent List. These lists state the area and the issues clearly demarking the scope of the purview of each entity.  While the Union list contains areas common to the entire nation such as Defense, Foreign Policy, Direct taxes, Atomic and Nuclear Energy the state list contains areas such as Education, Health, Indirect taxes etc. The Concurrent list contains areas which can be disputed and in situations where there is repugnant to a law enacted by state by law enacted by Parliament, then the Law made by Parliament shall prevail.

The Center State relations needs to be amicable and consistent for a federal set up to work and the written Constitution provides a critical juncture and referral point for any such dispute. There are three types of relations between the center and the states: Legislature relations, Administrative Relations, and Financial Relations. Legislature relations define the area or territory for which the center and the state will make laws and where corresponding laws will be valid. Center will make laws for the whole of the nation or a part of the nation, State will enact laws for whole or part of the state. Next is Administrative Relations which concerns the decision taken in respect to appointments and removal of government bureaucrats, policy matters in relation to resource utilization etc. Financial Relations contains the utilization of the financial resources by the Center and the State. The State has a limited amount of Financial Resources and has to do many Social works for which it can request funds from the center and the center has the constitutional liability for any such predicament. The taxation as mentioned earlier also is done at two levels with the direct taxes levied by the Center and the indirect taxes levied by the State.

For amending the constitution there has to be an agreement by both the center and the state and is not left to the whims and mood of the party at the center. What comes across and is a must for this model to work is an independent and impartial judiciary which needs to be objective and in line with the Constitution in case of any disputes between the center and the State. India being a diverse nation and having such a high degree of pluralism, it becomes challenging sometimes for the federal set up to function and there has to be a consensus between the states and the center for the nation to progress as a whole.

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