Executive Power of the Union and States to Carry on Trade and Business
Official heading: “Power to carry on trade, etc.”
- Source edition
- The Constitution of India (as on 1 May 2026)
- Source locator
- Part XII, Article 298, printed page 174
- Last human source-link check
- Not yet checked
- Last human legal review
- Not yet reviewed
AI-assisted source comparisons are noted with the citations below; the check date remains pending until a human confirms the link. The report link opens your email app; you choose whether to send it.
1. In One Sentence
Expands executive power of the Union and States to carry on trade or business, acquire and dispose of property, and make contracts.
2. What It Means in Everyday Language
Substituted by the Seventh Constitutional Amendment in 1956, Article 298 provides constitutional authority for state-led economic activity and public sector enterprises.
It clarifies that the executive power of both the Union and the States extends to: (a) carrying on any trade or business; (b) the acquisition, holding, and disposal of property; and (c) the making of contracts for any purpose.
Under proviso (a), if the Union carries on a trade or business regarding a State List matter, it is subject to state legislation.
Under proviso (b), if a State carries on a trade or business regarding a Union List matter, it is subject to parliamentary legislation.
This provision establishes that government commercial activities do not require a prior enabling statute, provided they do not infringe upon citizen rights or require coercive powers.
3. Practical Illustrative Example
The Government of India establishes a state-owned telecommunications company, or a State Government operates a state transport bus corporation.
4. Important Limits, Qualifications & Exceptions
Article 298 enables the state to participate actively in commercial and economic life.
- Commercial capacity: Extends executive power to carrying on any trade, commerce, or business.
- Asset management: Authorizes acquiring, holding, and disposing of movable and immovable property.
- Reciprocal legislative subordination: Commercial activity outside home legislative list is subject to the other tier’s laws.
5. Operative Constitutional Text
6. Sources & Historical Assembly Deliberations
Assembly quotations are withheld until wording, dates, and attribution have been checked against the primary record.
- •Government of India (Legislative Department, Ministry of Law and Justice) • Part XII, Article 298, printed page 174 • Human source-link check pending
Primary PDF accessed and transcribed with AI assistance on 14 October 2026. Formatting and amendment annotation markers are omitted; operative wording is retained. This is not human legal review. Later amendments and commencement notifications have not been comprehensively checked.