• The federal system adopted in India involves division of authority between the union and the states. Both the Centre and the states derive authority from the Constitution and each is sovereign within the field assigned to it.
• Legislative Relations – The Constitution divides the subjects into the union list (99subjects), the state list (61 subjects) and the concurrent list (52 subjects). Parliament enjoys the exclusive power to legislate on subjects enumerated in the union list. This list contains subjects like defense, foreign affairs, currency, communication, interstate trade and commerce, atomic energy etc.
• State legislatures have the right to legislate subjects in the state list, which contains subjects like health, sanitation, public order, agriculture, prisons, local government so forth.
• Both Parliament and state legislatures can legislate on subjects contained in the concurrent list. This list contains subjects like criminal law, forests, education, marriage and divorce, drugs, newspapers, books and printing press, etc. In case of conflict between the law of the state and union on a subject in the concurrent list, the law of the Parliament prevails
• Residuary powers (i.e. subjects not included in any of the lists) rest with the union government. Parliament can also legislate on subjects in the state list if the Rajya Sabha passes a resolution by two-third majority that it is necessary to do so in the national interest.
• During times of emergency, Parliament can make laws on subjects in the state list.

Administrative Relations

 In the administrative field also, the union government occupied a superior position.

1. It can issue directions regarding the construction and maintenance of means of communications of national or military importance.
2. The President can entrust to officers of the states certain functions of the union.
3. The members of the all-India services who occupy key positions in the state administration are recruited by the union government and give the Centre indirect control over the states

Financial Relations

• The States are greatly dependent on the Centre in this sphere as well. Though the Constitution provides independent sources of revenue to states, these are not adequate
• Therefore, the states have to depend on the Centre for subsidies and contributions
• The grants-in-aid provided by the union government to the states also enables the Centre to exercise control
• The appointment of the finance commission by the President every five years, and the determination of the basis for distribution of taxed between the Centre and the states on the basis of recommendations of the finance commission, adds to the importance of the Centre in financial relations