The Constitution of India has made the following provisions for ensuring harmonious inter-state relations:
Adjudication of inter-state water disputes.
Coordination through inter-state councils.
Freedom of inter-state trade, commerce and intercourse.
Inter-state water disputes :
Under Art. 262 Parliament has constituted the Inter-State Water Disputes Tribunal for adjudication of disputes between States for the waters of any inter-State river or river valley.Inter-State river water disputes are excluded from the jurisdiction of all Courts including the Supreme Court.
Article 263 contemplates the establishment of an InterState Council for effective coordination between the states and between Centre and states. The Inter State Council is chaired by the Prime Minister and has all the Chief Ministers of the States and UTs having legislatures, Lt. Governors/ Administrators of the Union Territories, and six Union Ministers nominated by the Prime Minister.
The Sarkaria Commission recommended the constitution of a permanent inter-State council for co-ordination among states and with the Union. Inter-State Council meets thrice a year.
Inter-state trade and commerce :
Articles 301 to 307 in Part XIII of the Constitution deal with the trade, commerce and intercourse within the territory of India.
Article 301 declares that trade, commerce and intercourse throughout the territory of India shall be free. The freedom guaranteed by Article 301 is a freedom from all restrictions, except those which are provided for in the other provisions (Articles 302 to 305). These are explained below:
Parliament can impose restrictions on the freedom of trade, commerce and intercourse between the states or within a state in public interest.
The legislature of a state can impose reasonable restrictions on the freedom of trade, commerce and intercourse with that state or within that state in public interest. But, a bill for this purpose can be introduced in the legislature only with the previous sanction of the president.
The legislature of a state can impose on goods supplied from other states or the union territories any tax to which similar goods manufactured in that state are subject. The freedom (under Article 301) is subject to the nationalisation laws (i.e., laws providing for monopolies in favour of the Centre or the states).