Sarkaria Commission and Punchhi Commission: Centre-State Relations and Cooperative Federalism

Commissions on Centre State Relations: Why They Were Set Up

Tension Areas in Centre-State Relations Since 1967

Until 1967, Centre-State relations were largely smooth because one party ruled at the Centre and in most States. In the 1967 elections the Congress lost power in nine States, and non-Congress governments began to oppose growing centralisation and demand more powers and resources. The legislative, administrative and financial scheme itself is explained in the article on the Seventh Schedule.

• Governors: The mode of appointment and dismissal, and a partisan role.
• Emergency powers: President’s Rule imposed for partisan interests, and Central forces deployed in States.
• Legislation: Reservation of State Bills for the President and encroachment on the State List.
• Money and planning: Discrimination in financial allocations and the Planning Commission’s role in approving State projects.
• Services: Management of the All India Services.

These issues run through the reports of every later commission. Because they are political as much as legal, demands for autonomy have to be resolved through negotiation rather than only in court.

Rajamannar Committee and the Demand for State Autonomy

The first review came from the Union: the Administrative Reforms Commission of 1966, through a study team under M. C. Setalvad, reported in 1969 with 22 recommendations, including an Inter-State Council under Article 263. No action followed. The States then made their own proposals.

The Rajamannar Committee, a three-member body appointed by Tamil Nadu under Dr P. V. Rajamannar, traced centralisation to special constitutional powers of the Centre, one-party rule, the States' fiscal dependence and Central planning. The Union ignored its recommendations and did not accept the West Bengal demands either.

Sarkaria Commission (1983-88)

Sarkaria Commission: Composition, Terms and Approach

The Sarkaria Commission was constituted by the Ministry of Home Affairs on 9 June 1983 under Justice R. S. Sarkaria, a retired Supreme Court judge, with B. Sivaraman and Dr S. R. Sen as members. It was to examine the working of the arrangements between the Union and the States in all spheres, with due regard to the Constitution's framework for unity and integrity. It was first given one year, but its term was extended four times.

Its report, running to 1,600 pages, was submitted in January 1988 with 247 recommendations in 19 chapters. The Commission did not favour structural change: it found the constitutional scheme basically sound and asked for changes in how power is used. A strong Centre was essential for unity, but not the same as centralisation, which it said leads to "blood pressure at the centre and anemia at the periphery".

Sarkaria Commission Recommendations on Centre-State Relations

• Inter-State Council: A permanent Inter-Governmental Council under Article 263, with a permanent secretariat modelled on the Cabinet Secretariat.
• Article 356: To be used very sparingly, in extreme cases, as a last resort.
• Governors: The Chief Minister to be consulted on appointments; a five-year term not to be disturbed except for compelling reasons; no dismissal of a ministry that commands a majority.
• Legislation: The Centre to consult States before legislating on a Concurrent List subject; reasons to be given when the President withholds assent to a State Bill; residuary powers other than taxation to the Concurrent List.
• Other bodies: Zonal Councils revived; the National Development Council renamed the National Economic and Development Council; more All India Services.

Other recommendations dealt with money, security and language. The Centre could deploy its armed forces without a State's consent, though consulting the State was desirable; the net proceeds of corporation tax could be made shareable; a surcharge on income tax should be only for a specific purpose and a limited period; and the three-language formula should be implemented in its true spirit.

Much of the report was acted on. The Inter-State Council set up in 1990 spent its early meetings on the report, agreeing in 1996 on 179 recommendations examined by its sub-committee. By December 2011 the Union had implemented 180 of the 247.

Punchhi Commission (2007-10)

Punchhi Commission: Composition and Terms of Reference

The second Commission on Centre-State Relations was constituted on 27 April 2007 under Justice Madan Mohan Punchhi, a former Chief Justice of India, to examine new issues since the Sarkaria Commission two decades earlier. Its members were Dhirendra Singh, Vinod Kumar Duggal and Dr N. R. Madhava Menon, with Vijay Shanker as Member Secretary.

• Scope: Legislative and administrative relations, the role of Governors, emergency provisions, financial relations, planning, Panchayati Raj and the sharing of resources, including inter-State river water.
• New questions: The Centre’s role in prolonged communal or caste violence, mega projects such as river linking, a Central agency for crimes with inter-State ramifications, and a law under Article 355 for deploying Central forces.

It presented a seven-volume report on 30 March 2010 with 273 recommendations, counted differently in some books. It drew on the Sarkaria report, the report of the National Commission to Review the Working of the Constitution and the Second Administrative Reforms Commission, but differed from Sarkaria in several areas. Its central conclusion was that cooperative federalism would be the key to India's unity, integrity and development.

Punchhi Commission Recommendations (2010)

• Governors: Chosen by the Sarkaria criteria; a fixed five-year tenure with removal not at the Centre’s will; removal by a procedure like the President’s impeachment; no longer Chancellors of universities.
• Assent to Bills: Governors to decide within six months, and the President also within six months on a reserved Bill.
• Emergencies: Article 356 limited to a real failure of constitutional machinery, with the Bommai guidelines written into the Constitution; a framework for a “localised emergency” under Article 355.
• Concurrent List: Broad agreement with States before legislating; restraint in asserting parliamentary supremacy over State subjects.
• Institutions: A stronger Inter-State Council meeting at least thrice a year; Zonal Councils meeting at least twice a year.

On the Governor's discretion, the Commission held that Article 163 gives no general power to act against the Council of Ministers; the area of discretion is limited and must be exercised with reason and good faith. It laid down guidelines for a hung assembly and for the Governor's other difficult choices.

• Forming a government: Invite the party or combination with the widest support; treat a pre-poll alliance as one party; if no one has a majority, prefer a pre-poll alliance, then the largest party with outside support, then post-poll coalitions.
• Dismissing a Chief Minister: Insist on a floor test within a time limit.
• Prosecution of a minister: The Governor may sanction it against the Cabinet’s advice if the Cabinet’s decision appears biased in the face of overwhelming material.

Cooperative Federalism and Its Institutions

Cooperative Federalism and Competitive Federalism in Practice

The Constitution never uses the word federation. Article 1 calls India a Union of States, which implies that the federation is not the result of an agreement among the States and that no State may secede. Scholars have described the result as quasi-federal (K. C. Wheare), bargaining federalism (Morris Jones) and co-operative federalism (Granville Austin).

In cooperative federalism the Union and the States work as partners through shared forums, and competitive federalism means the Centre and the States, and the States among themselves, competing in the joint pursuit of national development. NITI Aayog, which replaced the Planning Commission in 2015, was meant to foster both, moving from a top-down to a bottom-up approach with a Governing Council of Chief Ministers.

Zonal Councils and the North Eastern Council

The Zonal Councils were created by Part III of the States Reorganisation Act, 1956, one for each of five zones. Each is an advisory body that may discuss any matter of common interest to its States, or to the Union and those States, including economic and social planning, border disputes, linguistic minorities and inter-State transport. The Union Home Minister chairs them, with the zone's Chief Ministers as members.

The north-eastern States are outside the Zonal Councils. Their common problems are handled by the North Eastern Council, set up under an Act of Parliament in 1971, with Sikkim added in 2002. It is chaired by the Union Home Minister and includes the Governors and Chief Ministers of the eight States.

Inter-State Council, GST Council and NITI Aayog as Forums

Cooperative federalism depends on forums where governments meet. Each has a different legal basis and a different weight.

• Inter-State Council: Constitutional under Article 263 but recommendatory; eleven meetings since 1990, the last in 2016. Explained in the article on administrative relations.
• GST Council: Constitutional under Article 279A; decisions by weighted vote needing both the Union and the States.
• NITI Aayog: Replaced the Planning Commission in 2015; its Governing Council brings together the Chief Ministers, and Regional Councils address issues shared by groups of States.
• Zonal Councils and NEC: Statutory and advisory; the Punchhi Commission asked for Zonal Councils to meet at least twice a year.

The older planning bodies show the contrast. The Planning Commission of March 1950 and the National Development Council of August 1952 were created by executive resolution, neither constitutional nor statutory, yet the grants made on the Planning Commission's advice formed the larger part of Central grants to the States. The Rajamannar Committee wanted it replaced by a statutory body; the Sarkaria Commission found its division of work with the Finance Commission reasonable.

Trust Deficit in Centre-State Relations and the Way Forward

Recent years have seen both deeper cooperation and sharper disputes. On the cooperative side, GST pooled the taxing powers of the Union and the States from 2017 through the GST Council, and the Fourteenth Finance Commission raised the States' share of Union taxes to 42 per cent. The finances are explained in the article on the Finance Commission.

• Pressure points: Withdrawals of general consent to the CBI by several States, delays in assent to State Bills, and the role of Governors.
• Institutional gaps: The Inter-State Council has not met since 2016, though it was reconstituted in November 2024.
• The way forward: The Punchhi Commission’s advice to settle governance issues through political and administrative processes rather than long litigation, with the Inter-State Council as the main forum.

Sources and Further Reading

• Inter-State Council Secretariat: Sarkaria Commission
• Inter-State Council Secretariat: Punchhi Commission
• Inter-State Council Secretariat: Inter-State Council, Meetings
• Inter-State Council Secretariat: Inter-State Council, Composition
• Inter-State Council Secretariat: Zonal Councils, Genesis
• Inter-State Council Secretariat: Zonal Councils, Composition
• Inter-State Council Secretariat: Report of the Commission on Centre-State Relations (Punchhi), Volume II, March 2010
• North Eastern Council: Composition of NEC
• North Eastern Council: About NEC
• GST Council: The GST Council
• Legislative Department, Ministry of Law and Justice: The Constitution of India
• NCERT: Indian Constitution at Work, Class 11, Chapter 7, Federalism
• Supreme Court of India: Opinion on the presidential reference under Article 143, 20 November 2025
• Wikipedia: NITI Aayog
• Wikipedia: Anandpur Sahib Resolution