Part XII: Finance, Property, Contracts and Suits

Article 298: Power to Carry on Trade, etc.

Original Article:

The executive power of the Union and of each State shall extend to the carrying on of any trade or business and to the acquisition, holding and disposal of property and the making of contracts for any purpose: Provided that—

(a) the said executive power of the Union shall, in so far as such trade or business or such purpose is not one with respect to which Parliament may make laws, be subject in each State to legislation by the State; and

(b) the said executive power of each State shall, in so far as such trade or business or such purpose is not one with respect to which the State Legislature may make laws, be subject to legislation by Parliament.

Explanations:

Article 298 empowers both the Union and State governments to engage in trade, business, and property dealings. This authority supports economic development and effective resource management across India. Amendments, like the Constitution (Seventh Amendment) Act, 1956, have refined this article to balance legislative oversight and executive power.

Key Provisions:

Clause 1: General Executive Power

The Union and State governments can engage in trade, business, and property dealings for governance purposes, aiding in national and regional economic development.

Proviso (a): Union Power and State Legislation

The Union's executive power in trade and property dealings is subject to State legislation in areas where Parliament cannot legislate.

Proviso (b): State Power and Union Legislation

Similarly, States' executive power in trade and property dealings must align with Union legislation in areas under Parliament’s jurisdiction.

Real-Life Examples:

The Union and States manage economic activities such as public infrastructure projects. For instance, a State may acquire land for industrial zones, while inter-state projects like national highways involve Union oversight.

Amendments:

The Constitution (Seventh Amendment) Act, 1956, clarified the distribution of executive powers, ensuring that trade and property dealings align with respective legislative competencies.

Historical Significance:

Article 298 reflects India’s federal structure by balancing State and Union powers, promoting cooperative governance in economic activities.

Debates and Deliberations:

During Constituent Assembly discussions, Dr. B.R. Ambedkar emphasized the need for a clear division of powers to prevent conflicts between Union and State governments in economic matters. Members debated ensuring equitable resource management while respecting federal principles.

References:

• Constitution of India: Full text and analysis of Article 298.
• Seventh Amendment: Expanding scope of executive powers.