Part XII - Finance • Article

Article 278 Simplified: Agreement with States in Part B of the First Schedule with regard to certain financial matters

Article 278 was a transitional provision that allowed the Union Government to make special financial agreements and tax-sharing arrangements with Part B states (former princely states like Mysore, Hyderabad, and Travancore-Cochin) during the transition to the republic. It was omitted by the 7th Amendment in 1956 when the distinction between states was abolished.

Official Text

Omitted by the Constitution (Seventh Amendment) Act, 1956, s. 29and Sch.(w.e.f. 1-11-1956).

Simple Meaning

Explain Like Ten

This was a rule that let the central government make special tax deals with former princely kingdoms. In 1956, we grouped all states equally, so this rule was deleted.

Student Mode

Article 278 enabled the Government of India to enter into transitional financial agreements with Part B states (former princely states) for up to ten years. It was omitted by the Constitution (Seventh Amendment) Act, 1956, which reorganized states on a uniform linguistic basis and abolished the Part B classification.

Example

In 1950, the State of Travancore-Cochin entered into a temporary financial agreement with the Center. In 1956, this agreement and Article 278 were omitted during linguistic state reorganization to treat all states equally.

Key Takeaway

Article 278 was omitted in 1956 to unify the financial status of all states and delete transitional arrangements with princely states.

FAQs

What were Part B states?

They were former princely states or unions of princely states (like Hyderabad, Mysore, Rajasthan, Travancore-Cochin) that had a distinct constitutional status in the original 1950 Constitution.

Why was Article 278 omitted?

It was omitted in 1956 by the 7th Amendment during the reorganization of states, which abolished the classification of states into Part A, B, and C and brought financial uniformity.

Quiz

Which Constitutional Amendment omitted Article 278 in 1956?

Answer: 7th Amendment

Article 278 dealt with transitional financial agreements with which category of states?

Answer: Part B States