India is a classical federation with a constitutional division of the revenue powers and expenditure functions between the central government and state governments. The Constitution makes elaborate and complex arrangements relating to the distribution of revenue and expenditure between the central government and the state governments. Amongst the sources of revenue of the government, taxation being the major source, Article 265 of the Constitution specifically states that no taxes shall be levied or collected except by the authority of law. In the case of distribution of expenditure powers, "the functions of the central government are those required to maintain macro-economic stability, international trade and relations, and those having implications for more than one state. The major subjects assigned to the states comprise public health, agriculture, irrigation, land rights, fisheries, and industries and minerals. The States also assume a significant role for subjects in the concurrent list, such as education and transportation, social security and social insurance." (Singh, 2004).