The Indian Union is based on the principle of ‘Holding Together Federation' i.e., the Union to the unit rather than from the units to the Union. Our Constitution says that "India shall be a 'Union of States'. It is basically a federal system with striking unitary features. Hence, it is also called 'Quasifederal.'
'The power sharing' arrangement in our country is mainly based on the 'Quasifederal nature' of the federation. The constitution therefore, clearly provides a three-fold distribution of Legislative powers between the union government and the state government. These folds are:
(i) Union List
(ii) State List
(iii) Concurrent List
(i) Union List : Union List is the first fold of the three List system. It includes subjects of national importance because we need a uniform policy on the Union List subjects throughout the country. It has 97 subjects.'
• The Parliament is solely empowered to enact laws on the Union List subjects.
• Defence, atomic energy, foreign affairs, railways, banking, posts and telegraphs are the important Union List subjects.
(ii) State List: State List is the second fold of the three fold division. This list contains subjects of state and local importance such as police, trade and commerce, agriculture and irrigation, it has 66 subjects.
• The state legislature alone can make laws relating to the subjects mentioned in the state list.
(iii) Concurrent List: This list constitutes the third fold of the List System. Th£ Concurrent list includes subjects of common interest to both the Union government as well as the state government. Such as, education, forests, trade unions, marriages, adoption and succession.
• Both the Union as well as State governments can make laws on the 'Concurrent List'. But in case of a conflict between the Central and State Laws, Central Law Prevails.
On the whole Indian federal system is an example of the 'holding together nature of federalism' with the aim of decentralisation of power with a normal division of subjects under the 'three list system'.