I. Purpose of appointment of commission: The Administrative Reforms Commission and the several other commissions were appointed by the Government of India from time to time to regulate Centre-State relations. The Union Government appointed Sarkaria Commission to suggest ways and means to improve Centre-State relations.

II. Importance and recommendations of Sarkaria Commission:

1. The recommendations of the Sarkaria Commission assume importance so as to evolve an appropriate policy in the areas of legislative, administrative and financial relations. It has not suggested wholesale structural changes in the fundamental fabric of the Constitution. It felt that federalism is more a functional arrangement for co-operative action than a static institutional concept.

2. The Commission strongly recommended the establishment of permanent Inter-State Council. In addition, it desired that both the Centre and the States should have the concern for the development of backward territory or areas. If the economic development of these backward regions are undertaken in a planned manner, the separatist tendencies will be automatically controlled.

3. Differences between the Union and the States should be resolved by mutual consultation. It has taken a favourable view on the demand of the States to provide more financial resources at their disposal. In order to improve Centre-State relations in the country, it has suggested economic liberalization and suitable amendments to the Constitution.