There is a three-level government in India :
1. local body
2. state government and
3. central government.
Every government has to make laws, recover taxes and establish their own area of administration. The Constitution has divided the powers and functions of the government into three lists clearly between the central government and state government. These lists are – Union list, State List and Concurrent list.
The Union list contains 97 subjects of national and international importance such as defense, external affairs, banking, communications, railways and currency. The power to make laws on these subjects has been given only to the Central Government.
The State list contains 66 topics of local importance like police, local trade/business and commerce, agriculture and irrigation. The power to make laws on these subjects has been given only to the State government.
The third list is Concurrent list. This list includes education, forest, labour union, marriage, etc. 47 subjects on which both the central and state governments can make laws. But the law of the Center has been given precedence.
