describe the financial relation between the centre and state
Answers
The Financial relationship between the Centre (Union) and the States is provided in the constitution. The constitution gives a detailed scheme of distribution of financial resources between Union and the States.The Indian constitution makes a broad distinction between the power to levy a tax and the power to appropriate the proceeds of a tax. Thus, the legislature which levies a tax is not necessarily the authority which retains the proceeds of a tax levied.
"Center-State relations" of Indian Federalism constitute the core of federalism and they are regulated by the provisions of the Constitution.
(i) The division of powers between the Union and the States, as given in the Indian Constitution has a strong bias in favour of the Center. Various kinds of restrictions are imposed upon the states.
(ii) Administrative relations. The Indian Constitution is based on the principle that the executive power is co-extensive with the Legislative power i.e., Union and state executives can deal with all matters on which legislature legislates.
(iii) In the administrative affairs also the center acquires control over states through All India Services, Grant-in-Aid etc.
Hence, restructuring of the center-state relations is one more way in which federalism has been strengthened in practice.