The Constitutions may be Unitary or Federal in nature. The federalism implies the division of powers between the governments. The Indian federalism is not competitive like true federal countries it is co-operative federalism. The co-operation and co-ordination between the two governments is the pre- requisites for the successful working of the democracy in India. The Indian federalism also known as quasi-federal in nature, the federal means the method of dividing the powers so that the general and regional governments are each within their sphere co-ordinates and independent and not subordinate to one another’. The division of powers between the governments was first coined by the Montague Chelmsford reforms. The government of India Act of 1935 is another code which divided the powers between the governments as provincial and central powers to legislate. Article 280 of the Indian Constitution empowers the President of India to set up a Finance Commission once in every five years to give recommendations with regard to tax sharing between the Central and State Governments.