State governments in India are the governments ruling States of India, and the head of the council of ministers in a state is chief minister. Power is divided between thecentral government and state governments. While the central government handles military and external affairs etc., the state governments deal with internal security (through state police) and other state issues. Income for the central government is fromcustoms duty, excise tax, income tax etc., while state government income comes fromsales tax (VAT), stamp duty.Each state has a legislative assembly.

The Sarkaria Commission was set up to review the balance of power between states and the union. The central government can dissolve a state government in favor ofPresident's rule if necessary. The state ofJammu and Kashmir has higher autonomy compared to other states by virtue of Article 370.

tate legislature has exclusive powers over subjects enumerated in List II of the Seventh Schedule of the Constitution and concurrent powers over those enumerated in List III. Financial powers of legislature include authorisation of all expenditure, taxation and borrowing by the state government. Legislative assembly alone has power to originate money bills. Legislative council can make only recommendations in respect of changes it considers necessary within a period of fourteen days of the receipt of money bills from Assembly. Assembly can accept or reject these recommendations.

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