Actual Article
Article 303: Restrictions on the legislative powers of the Union and of the States with regard to trade and commerce
- Notwithstanding anything in Article 302, neither Parliament nor the Legislature of a State shall have the power to make any law giving, or authorizing the giving of, any preference to one State over another, or making, or authorizing the making of, any discrimination between one State and another, by virtue of any entry relating to trade and commerce in any of the Lists in the Seventh Schedule.
- Nothing in clause (1) shall prevent Parliament from making any law giving, or authorizing the giving of, any preference or making, or authorizing the making of, any discrimination if it is declared by such law that it is necessary to do so for the purpose of dealing with a situation arising from scarcity of goods in any part of the territory of India.
UPSC Notes for Article 303
Explanation:
- Non-Discrimination: Clause (1) prohibits both Parliament and State Legislatures from making laws that give preference to one State over another or that discriminate between States in matters of trade and commerce.
- Exception for Scarcity: Clause (2) provides an exception, allowing Parliament to make laws that give preference or discriminate if it is necessary to address a situation arising from the scarcity of goods in any part of India.
Key Points:
- Fair Trade Practices: Article 303 ensures fair trade practices by preventing discriminatory laws that favor one State over another, promoting economic equality.
- Unified Market: By prohibiting preferential treatment and discrimination, the article supports the creation of a unified national market, fostering inter-state trade and commerce.
- Exceptional Circumstances: The provision for exceptions under conditions of scarcity ensures that Parliament can take necessary actions to address urgent economic needs, maintaining balance and fairness.
Important Cases and Commissions Related to Article 303
Cases:
- State of Madras vs. Nataraja Mudaliar (1968): The Supreme Court held that Article 303(1) is designed to prevent discrimination between States but allows for exceptions under clause (2) when necessary to address scarcity.
Commissions:
- Finance Commission: Reviews and recommends measures to ensure equitable distribution of resources and prevent discrimination in trade practices.
- Law Commission of India: Examines legal provisions related to trade and commerce, ensuring compliance with Article 303.
Important Reports Related to Article 303:
- Finance Commission Reports: Provide insights into the equitable distribution of resources and the impact of trade regulations on inter-state commerce.
- Law Commission Reports: Discuss the legal framework for preventing discrimination in trade and commerce, recommending measures for improvement.
Previous Year Prelims Questions Related to Article 303
- (UPSC Prelims 2016) What does Article 303 of the Indian Constitution prohibit?
- A. Discrimination based on religion
- B. Discrimination between States in matters of trade and commerce
- C. Discrimination based on caste
- D. Discrimination in public employment Correct Answer: B. Discrimination between States in matters of trade and commerce
- (UPSC Prelims 2018) Under what condition can Parliament make laws giving preference to one State over another according to Article 303?
- A. During a national emergency
- B. For dealing with a situation arising from scarcity of goods
- C. For promoting industrial development
- D. During a financial emergency Correct Answer: B. For dealing with a situation arising from scarcity of goods
Previous Year Mains Questions Related to Article 303
- Mains 2016: “Discuss the significance of Article 303 in ensuring non-discrimination in trade and commerce between States. How does this article contribute to the creation of a unified national market?”
- Mains 2019: “Evaluate the role of exceptions provided under Article 303(2) in addressing economic crises. What are the potential benefits and challenges of allowing Parliament to make discriminatory laws under conditions of scarcity?”
Additional Insights:
- Promoting Equality: Article 303 plays a crucial role in promoting economic equality by ensuring that no State receives preferential treatment in matters of trade and commerce.
- Economic Integration: By preventing discrimination, the article fosters economic integration, allowing for the free flow of goods and services across State boundaries.
- Crisis Management: The provision for exceptions under conditions of scarcity allows for effective crisis management, ensuring that urgent economic needs can be addressed promptly and fairly.
Understanding Article 303 is crucial for UPSC aspirants as it provides insights into the constitutional mechanisms for preventing discrimination in trade and commerce, emphasizing the importance of economic equality and fair trade practices. This knowledge is essential for both preliminary and main examinations, offering a comprehensive understanding of the constitutional provisions and their impact on economic governance within the Indian Constitution.