Article 263 provides for setting up an Inter-State council as an advisory and consensus-seeking body having powers to investigate, deliberate and recommend on subjects in which some or all states or centre and states have a common interest. It can be established by the President of India, whenever it is deemed necessary in the public’s interest.. The President also possesses the powers to define the nature of its duties, its organisation and procedures.  

According to Article 263, the functions of the Inter-State Council may include: 

1. Investigating and providing advice on any disputes that may arise between States.
2. Examining and discussing issues of common interest between some or all States and the Union, or among one or more States. 
3. Issuing recommendations regarding any such issue, particularly those aimed at improving the coordination of policies and actions related to that issue.

The first invocation of Article 263 of the Constitution occurred on 9 August 1952 when the President, through a notification, set up the Central Council of Health to review and propose broad policy outlines concerning all aspects of health.. By similar notifications the President established the Central Council for Local Government and Urban Development in 1954 and four Regional Councils for Sales Tax and State Excise Duties in 1968. 

However in 1969, Administrative reforms commission recommended setting up a permanent standing body which can advise on all issues which are of national importance. The commission recommended setting up of the Inter – state council under clauses (b) and (c) of Article 263 (refer above). It was suggested that providing the Council with functions on inquiring and advising on disputes between States under Article 263 (a) would prevent it from giving full attention to issues of national concern. This view was reiterated by Sarkaria commission and finally by Presidential order dated 28th May 1990 the Inter – state council was established. 

Inter-State Council Functions

The Inter-State Council Order (1990) defines the duties of the ISC as the following:

1. Examining and engaging in discussions on topics of common interest to some or all States and the Union and one or more of the States, as may be presented to it; 
2. Offering recommendations on any such topic, especially those that enhance policy and action coordination concerning that issue; 
3. Deliberating upon such other matters of general interest to the States as may be referred by the Chairman to the Inter state council. 

The order also provided that all the meetings of the council are to be held on camera and all questions are decided by consensus. 

Inter-State Council Composition

No provision exists in the constitution with regards to the composition of the Inter-state council. The present composition is based on Presidential notification and provides full representation to each State, Union Territory and the Centre. The composition of the council is as follows: 

1. Prime Minister as the Chairman.
2. Chief Ministers of all the states.
3. Involvement of Chief Ministers from union territories that possess a legislative assembly.
4. Administrators of union territories not having legislative assembly.
5. Governor of States under President’s rule. 
6. Six central cabinet ministers including the union home minister to be nominated by the prime minister. 
7. Five ministers of cabinet rank or ministers of state with independent charge are nominated by the chairman of the council as its permanent invitees to the council. 

Inter – State council and Standing committees: 

The standing committee of the Inter state council is headed by the Union Home Minister. The standing committee are established with the following purpose: 

1. To maintain ongoing consultations and process matters for the Council’s consideration; 
2. To handle all issues regarding Center-State Relations prior to their discussion in the Inter-State Council; 
3. To track the execution of decisions made based on the Council’s recommendations and 
4. To address any other matters assigned to it by the Chairman/Council. 

The Standing Committee may, if required, invite specialists and distinguished individuals in particular areas to gain insights from their perspectives during discussions on relevant topics. Till now 13 meetings of the Standing committee of the Inter State council have taken place. 

Issues with  Inter-State Council

• Infrequent meetings: Inter-State Council Order mandates that the Inter state council should meet at least three times a year. But, in practice the body  has met only 11 times since its formation in 1990. Last meeting of the Inter-State council took place in 2016. The Inter-State council and its standing body were reconstituted in 2022.
• Narrow agenda of meetings: The meetings of the Inter state council takes place in camera and the proceedings are not made public. The agenda of the meeting indicates that the chief topic of discussion in the meetings has been the recommendations of Sarkaria commission and Punchi commission. Thus, there is a need to broaden the scope of discussions which take place in the council. 
• Non-binding recommendations: Both the Presidential order and guidelines are silent on the implications of recommendations which are given by the Inter State council. No obligation has been put on the centre and states to accept the recommendations given by the council (despite its constitutional status).  This led the Eleventh Finance Commission to  observe that the ISC, which should have been utilised for evolving national consensus on economic and other matters, has not seen ‘effective use’.
• Lack of functional autonomy: Due to absence of a committed professional secretariat the Inter-State council lacks the autonomy which it requires to function effectively. For example the secretariat is appointed on the choice of Prime Minister; the other members of the council hold no say in it. Thus, the Secretariat and in turn Inter-state council need to be empowered. 

• Dominance of a Single party: Various states have highlighted the dominance of the ruling party at the centre in the meetings of inter- state councils. Firstly; the meetings are not conducted regularly and when they are conducted there is a dominance of those states where the ruling party is the same as that of centre. Thus, it becomes a forum to push directions of the central government rather than being an institution for debate and discussion between states and centre or between states. 

Hence, there is a need for systemic reforms in the Inter State council. There is an urgent need for an effective intergovernmental forum and providing the Inter State council with powers and adequate technical and bureaucratic support will help it function as such.

Recommendations to strengthen Inter State council: 

• Strengthen legal position of Inter-State council: Steps must be taken to improve legal standing of Inter State council. A proper legal standing (as a permanent constitutional body status similar to one enjoyed by the Comptroller and Auditor general and National commission of Backward classes) will help it function as an autonomous body . A constitutional amendment can be done in Article 263 to give the Inter state council a ‘permanent status’ and make it mandatory to hold its meetings regularly. Although both the Punchi and Sarkaria commission had advised against making the recommendation of Inter State council binding, a positive duty should be imposed on both centre and states to give due consideration to any such recommendations. 

• Need for technical expertise: Various committees had also recommended the Inter state council should make suggestions on complex matters such as grant making. However, to do that policy research and investigation capacity of the body needs to be improved. Sarkaria commission had suggested that the proposed Inter State council and its standing committees should be given the power to set up ad hoc Sub-Committees to investigate special matters. Punchi commission on the other hand recommended that the council can have an expert advisory committee to give suggestions to the ISC. Thus, the Inter State council should have non-partisan experts who can make independent and specialised assessment of proposals.

• Dedicated and permanent Secretariat: For effective coordination between states a dedicated and permanent secretariat of Inter state council should be established. A similar approach is followed in Canada with a dedicated intergovernmental conference secretariat working towards improving coordination among provinces. The secretariat should have staff from both centre and states to improve confidence and coordination. Secondly, the meetings should be made frequent with detailed preparation of the agenda by the secretariat by consulting all parties. The agenda paper should be circulated prior to the meeting to ensure preparation and understanding of different viewpoints and promote consensus building in the meeting. Besides this there is a need to boost infrastructure and resources of the Inter state council. 
• Increased role of council: The role of council should be improved for example the National commission to review the working of the constitution had recommended that states should be involved in deciding the terms of reference for the finance commission and here the inter state council can play an important role by discussing and endorsing additional terms of reference demanded by the states. This will help in improving financial relations between the centre and states. 

Thus, there is an urgent need to improve the role of the Inter state council given the rise of combative federalism with the dispute over bills for example Farm bills etc., role of ED and CBI, partisan role played by the Governors, increased politicisation of inter state river disputes etc.