How Central Agencies Affect State Politics
India's central investigative and enforcement agencies — the Central Bureau of Investigation (CBI), Enforcement Directorate (ED), Income Tax (IT) Department, and National Investigation Agency (NIA) — operate from New Delhi under Union government direction, but their jurisdiction extends into state territory on specific categories of cases. Their use has become one of the most contested aspects of Centre-state relations in contemporary India.
The constitutional position is that law and order and policing are State List subjects; state police investigate most crime. But central agencies have jurisdiction over corruption cases involving central government employees and politicians (CBI under the Delhi Special Police Establishment Act), foreign exchange violations and money laundering (ED under the Prevention of Money Laundering Act, PMLA), income tax evasion (IT Department under the Income Tax Act), and terrorism (NIA under the National Investigation Agency Act). In states where opposition parties govern, the use of central agencies against state-level politicians has been a recurring source of federal political conflict.
 |
| Representational Image: How Central Agencies Affect State Politics |
The CBI has the power to investigate with Supreme Court or High Court direction even without state consent, meaning withdrawal of consent limits but does not eliminate central agency access to states. The Enforcement Directorate, which operates under PMLA, does not require state consent; it has emerged as the more frequently used agency in high-profile political cases.
What You Need to Know
- The
Central Bureau of Investigation (CBI) operates under the Delhi Special
Police Establishment Act; it requires either "general consent"
from state governments (which states can withdraw) or specific court
direction to investigate cases in state territory; as of 2025, West
Bengal, Kerala, Rajasthan, Maharashtra, and several other opposition-ruled
states have withdrawn general consent for CBI operations.
- The
Enforcement Directorate (ED) operates under the Prevention of Money
Laundering Act (PMLA), 2002; unlike the CBI, the ED does not require state
consent — it operates on central authority across the country; PMLA
amendments passed between 2012 and 2019 have significantly expanded the
ED's powers of arrest, attachment, and prosecution.
- The
Supreme Court in 2022 upheld the ED's expanded powers under PMLA (Vijay
Madanlal Choudhary v. Union of India), including the reversal of the
presumption of innocence — PMLA accused must prove innocence rather than
the prosecution proving guilt — though the Money Bill question on PMLA
amendments remains pending before a seven-judge bench.
- In
2021–2024, opposition Chief Ministers and state-level leaders from the
Trinamool Congress (West Bengal), Aam Aadmi Party (Delhi), Congress
(Rajasthan, Chhattisgarh), and Jharkhand Mukti Morcha were arrested or
summoned by the ED or CBI during active political campaigns or just before
state elections — generating sustained controversy about the political use
of central agencies.
- The
National Investigation Agency (NIA) has jurisdiction over terrorism cases
nationwide under the NIA Act, 2008; unlike the CBI, the NIA can take suo
motu cognisance of scheduled offences without waiting for state referral;
several states have complained about NIA investigating cases they consider
within state police jurisdiction.
How It Works in Practice
1. Withdrawal of CBI consent as a federal signal:
When a state government withdraws general consent for CBI operations, it is
making a political statement about central overreach rather than a fully
effective legal barrier — CBI can still operate through court directions. West
Bengal's Mamata Banerjee government withdrew consent in 2018; the move was
repeated during the TMC-BJP conflict around 2021 state elections. The practical
consequence is friction and delay in investigations, not absolute exclusion.
2. ED operations as the primary federal flashpoint:
Because PMLA investigations do not require state consent, the ED has become the
central investigative instrument that states cannot formally block. The ED's
use of "attachment" (freezing assets before any conviction) and its
arrest powers have made it the primary vehicle for high-profile political
investigations. Critics document that the majority of ED cases involve
politicians from opposition parties; the government's position is that the
agency follows evidence rather than politics.
3. CBI court directions circumventing state consent:
State governments that have withdrawn CBI consent find that courts — High
Courts and the Supreme Court — can direct CBI investigation in specific cases
over state objections. The Calcutta High Court and the Supreme Court have both
directed CBI investigations into allegations of political violence in West
Bengal despite the state government's opposition, illustrating the limits of
consent withdrawal.
4. IT raids as political timing concern: Income Tax
raids on industrialists, film personalities, and political donors ahead of
state elections have been a recurring feature of Indian politics. The IT
Department is a Union department under the Finance Ministry; its operational
direction is central. Raids on entities connected to opposition-party donors or
affiliated organisations in election periods have generated sustained
controversy about the independence of central fiscal enforcement.
5. State responses and Supreme Court interventions:
States have approached the Supreme Court challenging the constitutional basis
of central agency overreach. The Court has both upheld central agency
jurisdiction (PMLA powers in Vijay Madanlal Choudhary) and imposed some limits
(Pegasus surveillance spyware probe, ongoing; PMLA seven-judge bench reference
pending). The constitutional position on the extent of central agency power
relative to state police jurisdiction continues to evolve through litigation.
What People Often Misunderstand
- Central
agency jurisdiction is legally limited to specific subjects: The CBI
investigates corruption involving central employees, inter-state crimes,
and specific court-mandated cases; it does not have general criminal
investigation jurisdiction that could simply replace state police; the
agencies operate in specific lanes, even if those lanes can be widened
through court directions.
- Withdrawal
of consent is a political act with partial legal effect: A state that
withdraws CBI consent makes investigation more cumbersome but does not
eliminate central jurisdiction; courts can direct investigation
regardless; the withdrawal signals political resistance more than it
creates effective legal barriers.
- The
ED's expansion represents the most significant recent federalism concern:
The ED's growth from a relatively minor enforcement agency to a major
political-investigation body — with its asset attachment powers, bail
denial provisions, and the presumption reversal in PMLA — has created a
central enforcement capacity that does not require state cooperation and
has no state-level equivalent.
- Central
agency use against political opponents has precedents across governments:
The pattern of central agencies being used against political opponents
predates 2014; Congress-era uses of the CBI against opposition states were
also documented; the phenomenon is structural, not party-specific,
reflecting the agencies' institutional position within the central
executive.
- Some
central investigations are genuinely necessary: Not all central agency
operations in states are politically motivated; cases involving
cross-state criminal networks, terrorism, money laundering with
international dimensions, and central public sector corruption genuinely
require central jurisdiction; the problem is distinguishing legitimate
from political use in a system without institutional independence
safeguards.
What Changes Over Time
The ongoing seven-judge bench reference on PMLA amendments
(including the question of whether they were properly passed as a Money Bill)
could significantly affect the ED's legal authority — if the bench holds the
amendments invalid, the legal basis for some ED powers would require
re-enactment through the bicameral process. The Supreme Court is also examining
the constitutionality of some PMLA provisions in the context of the bail
presumption reversal. State elections in 2025–26 (Bihar, West Bengal, Tamil Nadu,
Assam, Kerala) will likely generate fresh controversies about central agency
activity, as the 2024 national election season has shown.
Sources and Further Reading
- Anantam
IAS — Federalism in India (central agency friction): https://anantamias.com/federalism-india/
- Drishti
IAS — PMLA powers and Supreme Court judgment: https://www.drishtiias.com
- The
Wire — Governor and federalism analysis: https://m.thewire.in
- Supreme
Court of India — Jurisdiction overview: https://main.sci.gov.in/jurisdiction/
- I-Connect
Blog — Cooperative to Coercive Federalism: https://www.iconnectblog.com/cooperative-federalism-to-coercive-federalism-how-gubernatorial-discretion-in-practice-is-rewriting-indian-federalism/