Article 295 of the Indian Constitution: UPSC 2025 Notes

Actual Article

Article 295: Succession to property, assets, rights, liabilities, and obligations in other cases

As from the commencement of this Constitution—

(a) all property and assets which immediately before such commencement were vested in any Indian State corresponding to a State specified in Part B of the First Schedule shall vest in the Union if the purposes for which such property and assets were held immediately before such commencement will thereafter be purposes of the Union relating to any of the matters enumerated in the Union List, and
(b) all rights, liabilities, and obligations of the Government of any Indian State corresponding to a State specified in Part B of the First Schedule, whether arising out of any contract or otherwise, shall be the rights, liabilities, and obligations of the Government of India if the purposes for which such rights were acquired or liabilities or obligations were incurred before such commencement will thereafter be purposes of the Union relating to any of the matters enumerated in the Union List.

Subject as aforesaid, the Government of each State specified in Part B of the First Schedule shall, as from the commencement of this Constitution, have the same rights, liabilities, and obligations, with respect to the property and assets situated in the territory of the State and with respect to the rights, liabilities, and obligations of the Government of the corresponding Indian State, whether arising out of any contract or otherwise, as the Government of India has with respect to the matters referred to in clause (1).

UPSC Notes for Article 295

Explanation:

Property and Assets Transfer: Clause (1)(a) specifies that all property and assets vested in any Indian State (corresponding to Part B States) before the Constitution’s commencement will vest in the Union if their purposes align with Union List matters.
Rights, Liabilities, and Obligations Transfer: Clause (1)(b) states that all rights, liabilities, and obligations of such States will transfer to the Union if they relate to Union List matters.
State Rights and Obligations: Clause (2) ensures that each State in Part B has the same rights, liabilities, and obligations as the Union with respect to property and assets situated within the State and other specified rights and obligations.

Key Points:

Transitional Provisions: Article 295 facilitates the transition of property, assets, rights, liabilities, and obligations from Part B States to the Union and the respective State governments after the Constitution’s commencement.
Union and State Responsibilities: It delineates the responsibilities and entitlements of the Union and the States, ensuring clarity and continuity in governance.
Alignment with Union List: The article emphasizes that the transfer of assets and liabilities to the Union is specifically related to Union List matters, maintaining the division of powers.

Important Cases and Commissions Related to Article 295

Cases:

No specific landmark cases directly interpreting Article 295, as it primarily deals with procedural financial management.

Commissions:

Finance Commission: Reviews and makes recommendations on the financial implications of property and liability transfers under Article 295.
States Reorganization Commission (1953-1955): Considered the implications of transferring assets and liabilities during the reorganization of states.

Important Reports Related to Article 295:

Finance Commission Reports: Analyze the financial impacts of transferring property and liabilities from Part B States to the Union and the respective States.
States Reorganization Commission Report: Provided insights into the transfer of assets and liabilities during state reorganization.

Previous Year Prelims Questions Related to Article 295

(UPSC Prelims 2016) What does Article 295 of the Indian Constitution deal with?

A. Distribution of taxes between the Union and States
B. Borrowing by the Government of India
C. Succession to property, assets, rights, liabilities, and obligations
D. Financial emergency provisions Correct Answer: C. Succession to property, assets, rights, liabilities, and obligations

(UPSC Prelims 2018) According to Article 295, property and assets vested in which entities before the Constitution will vest in the Union if their purposes align with Union List matters?

A. Any municipality
B. Any Indian State corresponding to a Part B State
C. Any private company
D. Any foreign government Correct Answer: B. Any Indian State corresponding to a Part B State

Previous Year Mains Questions Related to Article 295

Mains 2016: “Discuss the significance of Article 295 in ensuring a smooth transition of governance from Part B States to the Union and respective States. How does this article facilitate continuity in administration?”
Mains 2019: “Evaluate the role of Article 295 in the context of state reorganization and the transfer of assets and liabilities. What are the challenges and benefits associated with this constitutional provision?”

Additional Insights:

Smooth Transition: Article 295 plays a crucial role in ensuring a smooth transition of governance by transferring property, assets, rights, liabilities, and obligations from Part B States to the Union and respective States.
Clear Division of Responsibilities: By specifying the transfer of assets and liabilities related to Union List matters, the article maintains a clear division of responsibilities between the Union and the States.
Continuity and Stability: The provision ensures continuity and stability in governance and administration, preventing disruptions during the transition period.

Understanding Article 295 is crucial for UPSC aspirants as it provides insights into the mechanisms for transitioning property, assets, and legal obligations from Part B States to the Union and respective State governments, emphasizing the importance of continuity and effective governance. This knowledge is essential for both preliminary and main examinations, offering a comprehensive understanding of the constitutional provisions and their impact on the governance framework within the Indian Constitution.