Evaluating Centre-State-Local Administrative Relations in India

India’s governance architecture rests on a three-tier structure – the Union government at the top, state governments in the middle, and local bodies at the grassroots. On paper, this structure is built for coordination, efficiency, and democratic participation. In practice, the administrative relationships between these three levels have been a continuous work in progress, shaped by constitutional provisions, political realities, and the enduring challenge of making governance truly reach the last mile. An honest appraisal of these relationships reveals both commendable frameworks and persistent fault lines that demand attention.

The constitutional foundation of administrative relations
The role of executive directives and delegation
All-India Services as a binding thread
The Sarkaria Commission: A turning point in the appraisal
Key recommendations and their fate
State control over local bodies: Decentralization in theory and practice
The gap between intent and implementation
Financial relations and resource asymmetry
Cooperative federalism and the path forward

The constitutional foundation of administrative relations

The Indian Constitution, while often described as quasi-federal in nature, lays down a fairly detailed framework for distributing administrative authority. Articles 256 to 263 in Part XI govern the administrative relations between the Centre and the states. Article 256 mandates that state governments must comply with laws made by Parliament and empowers the Centre to issue directives to ensure such compliance. Article 257 further allows the Centre to direct states on matters concerning railways, national highways, and communication networks declared to be of national importance.

The division of legislative – and by extension, administrative – powers operates through the three lists in the Seventh Schedule. The Union List grants the Centre exclusive authority over nearly 100 items, including defence, foreign affairs, currency, and income taxation. The State List covers areas such as public order, health, education, and local government. The Concurrent List, with 47 items, creates a zone of shared authority where both the Centre and states can legislate, though central law prevails in the event of conflict. This tripartite structure is the constitutional bedrock on which all administrative interactions are built.

The role of executive directives and delegation

One of the more powerful tools through which the Centre exercises administrative influence is the issuance of executive directives. These directives cover a wide range of subjects – from the welfare of scheduled tribes to the provision of mother-tongue education for linguistic minorities at the primary stage. Article 365 provides the coercive sanction behind these directives – failure to comply can be treated as grounds for invoking President’s Rule under Article 356. While this keeps states broadly in line with national policy, it also raises valid concerns about the Centre’s capacity for overreach.

At the same time, the Constitution provides mechanisms for cooperative action. Under Article 258, the Centre can delegate certain executive powers to states, allowing for decentralization without a complete surrender of central oversight. The mutual delegation of functions is designed to avoid rigid deadlock and facilitate flexible, context-sensitive governance. On paper, this is a well-conceived arrangement. Whether it works smoothly in practice is a different question altogether.

All-India Services as a binding thread

One of the distinctive features of administrative relations in India is the institution of All-India Services – particularly the Indian Administrative Service (IAS) and the Indian Police Service (IPS), which replaced the colonial ICS and IP in 1947. A third service, the Indian Forest Service (IFS), was created in 1966. These services form a single cadre with uniform scales of pay and common rights throughout the country.

Officers recruited by the Union Public Service Commission serve in both central and state capacities, which means they carry national administrative standards into state-level governance and vice versa. This arrangement serves an important function: it prevents administrative fragmentation across states and promotes a degree of uniformity in how public policy is implemented. The Sarkaria Commission, which examined Centre-State relations extensively, strongly opposed disbanding the All-India Services, viewing them as essential for national integrity. Critics, however, have pointed out that IAS officers serving in states may be more loyal to their central cadre than to the governments they serve locally – a tension that can dilute state-level ownership of administrative decisions.

The Sarkaria Commission: A turning point in the appraisal

No assessment of Centre-State administrative relations would be complete without examining the Sarkaria Commission, established in June 1983 by the Government of India. Chaired by retired Supreme Court Justice R.S. Sarkaria, the commission was tasked with examining the relationship and balance of power between state and central governments and recommending reforms within the constitutional framework.

The commission submitted its report in 1988, containing 247 recommendations spread across 19 chapters. Its approach was notable for avoiding a call for structural overhaul – it did not recommend a fundamental redesign of the Constitution. Instead, it emphasized changes in functional and operational aspects, viewing federalism as a practical arrangement for cooperative governance rather than a rigid ideological stance. On administrative relations specifically, the commission observed that Article 258 – which allows the Centre to delegate powers to states – should be used more generously to promote progressive decentralization.

Key recommendations and their fate

Among the Sarkaria Commission’s most significant recommendations was the creation of a permanent Inter-State Council under Article 263, to serve as a forum for dialogue and coordination between the Centre and states. This recommendation was acted upon – the Inter-State Council was established in 1990. However, many of the commission’s other recommendations remained unimplemented, particularly those requiring constitutional amendments. The 14th Finance Commission (2015-20) increased the states’ share in central taxes from 32% to 42%, which represented a significant step toward fiscal federalism in the spirit the commission had advocated. The commission’s guidelines on Article 356 gained legal force through the Supreme Court’s landmark judgment in the S.R. Bommai v. Union of India case (1994), which restricted the arbitrary imposition of President’s Rule.

State control over local bodies: Decentralization in theory and practice

If Centre-State relations are complex, the relationship between state governments and local bodies is arguably more fraught. Local self-government is the responsibility of state governments, which make laws on how panchayats and municipalities are formed, what they can do, and how they operate. The Constitution sets broad common rules, but the actual substance of local autonomy varies significantly from one state to another.

The 73rd and 74th Constitutional Amendments of 1992 were landmark interventions designed to give local bodies constitutional recognition and genuine governing authority. These amendments institutionalized Panchayati Raj Institutions in rural areas and Urban Local Bodies in urban regions, with the objective of enabling political empowerment, participatory development, and inclusive decision-making. The 73rd Amendment introduced a three-tier rural structure – Gram Panchayat at the village level, Panchayat Samiti at the block level, and Zila Parishad at the district level – and mandated direct elections at all three tiers. The 74th Amendment strengthened municipalities, municipal councils, and municipal corporations in urban areas.

The gap between intent and implementation

Despite the transformative promise of the amendments, the ground reality has been considerably more mixed. In many states, the devolution of powers remains uneven – local bodies often lack adequate funds, trained staff, and full authority to make decisions. State governments continue to exercise discretionary control over the flow of resources and functions to local bodies, which undermines the constitutional spirit of decentralization.

The problem of overlapping jurisdiction is a persistent structural issue. The amendments list various functions that Panchayati Raj Institutions and Urban Local Bodies should perform, but these functions often overlap with those of state governments, leading to confusion over accountability. Both state and local bodies may nominally be responsible for water supply, sanitation, and public health, but the lack of clear demarcation means that neither level takes decisive initiative.

State governments often exercise excessive control over panchayati raj institutions. In many cases, state-appointed officials hold effective authority over funds and scheme implementation, while elected panchayat representatives are left with little meaningful power. Political interference compounds this further – panchayats controlled by opposition parties sometimes receive less funding and face greater bureaucratic hurdles than those aligned with the ruling government, reflecting a broader pattern of using local bodies as extensions of state party politics rather than genuine units of self-governance.

Urban governance faces its own structural weakness. Unlike the 73rd Amendment, which created three distinct tiers of rural government, the 74th Amendment does not provide a comparable multi-tiered framework for urban areas. Ward Committees, which were meant to facilitate citizen participation at the neighbourhood level, have largely remained non-functional in most cities. More broadly, there is a troubling trend of states merging surrounding villages into urban categories and handing over urban development responsibilities to development authorities – administrative units rather than democratic institutions – effectively bypassing elected local bodies altogether.

Financial relations and resource asymmetry

Administrative capacity is inseparable from financial capacity. At every level of this three-tier structure, resource asymmetry creates governance problems. States frequently complain about inadequate financial transfers from the Centre and the imposition of Centrally Sponsored Schemes whose design does not account for local needs or priorities. The introduction of GST in 2017, while aimed at streamlining taxation, reduced states’ direct control over indirect tax revenue, making them more dependent on central devolution. Delays in GST compensation payments have been a particular flashpoint in Centre-State relations.

At the local level, financial constraints, weak implementation, limited public participation, digital exclusion, and inadequate capacity building continue to hinder the effectiveness of local institutions. The 73rd Amendment mandated the establishment of State Finance Commissions to recommend the devolution of funds to local bodies, but the actual transfer of resources has been inconsistent across states. Without financial teeth, elected local bodies remain structurally dependent on state governments and cannot exercise meaningful autonomy.

Cooperative federalism and the path forward

Despite the challenges, the administrative architecture of India has shown resilience. Constitutional bodies such as the Inter-State Council, the Finance Commission, and institutions like NITI Aayog play important roles in mediating Centre-State interactions and recommending reforms. The Supreme Court has served as a critical check on the misuse of central authority – particularly on issues like the imposition of President’s Rule and the appointment and role of Governors.

Strengthening Panchayati Raj Institutions and Urban Local Bodies as a genuine third tier of governance, with proper implementation of the 73rd and 74th Amendments, is central to any meaningful reform agenda. This requires states to reduce discretionary interference in local body functions, establish clearer demarcations of responsibility, and ensure that State Finance Commission recommendations are actually implemented on time. The Centre, too, must exercise restraint in using its directive powers, avoiding unnecessary encroachment on state subjects.

An effective administrative relationship across all three levels of government ultimately depends on three things: balanced authority, adequate resources, and functional autonomy. The constitutional provisions exist. The commissions have spoken. The amendments have been enacted. What remains is the political will to give substance to structures that already exist on paper – and a shared commitment to governance that genuinely reaches the citizen.

What do you think? Three decades after the 73rd and 74th Amendments, local bodies in many parts of the country still function more as implementation agencies than as autonomous self-governing institutions. What structural changes – beyond constitutional amendments – do you think are necessary to make decentralization work in practice? And given the recurring tensions in Centre-State relations, is cooperative federalism a realistic goal within the current constitutional framework, or does the framework itself need rethinking?

References

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Table of Contents

The constitutional foundation of administrative relations 🔗

The role of executive directives and delegation 🔗

All-India Services as a binding thread 🔗

The Sarkaria Commission: A turning point in the appraisal 🔗

Key recommendations and their fate 🔗

State control over local bodies: Decentralization in theory and practice 🔗

The gap between intent and implementation 🔗

Financial relations and resource asymmetry 🔗

Cooperative federalism and the path forward 🔗