What is Article 298 of Indian Constitution – Defination & Meaning

Article 298: Power to carry on trade, etc. The executive power of the Union and of each State shall extend to the carrying on of any trade or business and to
📅 Part XII – Finance, Property, Contracts and Suits
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Article Number

298

part

Part XII – Finance, Property, Contracts and Suits

Status

Active

Bare Acts Text

Article 298: Power to carry on trade, etc.

  • The executive power of the Union and of each State shall extend to the carrying on of any trade or business and to the acquisition, holding and disposal of property and the making of contracts for any purpose:
  • Provided that—
    • (a) the said executive power of the Union shall, in so far as such trade or business or such purpose is not one with respect to which Parliament may make laws, be subject in each State to legislation by the State; and
    • (b) the said executive power of each State shall, in so far as such trade or business or such purpose is not one with respect to which the State Legislature may make laws, be subject to legislation by Parliament.
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Full Definition & Explanation

Article 298 of the Indian Constitution grants the executive power of both the Union and the States to engage in trade and business activities. This means that the government can enter into contracts, manage properties, and carry out various commercial activities to better serve the public. For instance, when the government decides to build a highway or establish a public utility, it is exercising this power. It also allows the government to acquire land and manage resources for projects that benefit society. However, there are exceptions to this power. The article states that the Union’s executive power in matters of trade or business is subject to state laws, except where Parliament has exclusive authority. Similarly, a State’s executive power is subject to the laws made by Parliament, unless the State legislature has jurisdiction. This balance ensures that both the Union and the States can exercise their powers without overstepping each other’s authority. For example, if a state wants to regulate a local business, it can do so if Parliament has not made a law regarding that business. In practice, Article 298 provides a framework for government involvement in economic activities. This involvement can lead to better infrastructure, services, and overall economic growth. For instance, public sector enterprises like Indian Railways or Oil and Natural Gas Corporation (ONGC) operate under this article. These enterprises not only provide necessary services but also contribute to the economy by generating employment and creating business opportunities. Thus, Article 298 plays a critical role in how the government interacts with trade and business.

Historical Context

This means that the government can enter into contracts, manage properties, and carry out various commercial activities to better serve the public. For instance, when the government decides to build a highway or establish a public utility, it is exercising this power. It also allows the government to acquire land and manage resources for projects that benefit society. The article states that the Union’s executive power in matters of trade or business is subject to state laws, except where Parliament has exclusive authority.

Key Features

– Article 298 allows both the Union and States to conduct trade.
– It grants power to acquire and manage properties for public purposes.
– The executive power is subject to state and parliamentary laws.
– It facilitates government involvement in economic activities
– Public sector enterprises operate under the provisions of this article.

Importance & Impact

– This article empowers the government to engage in economic activities.
– It helps in creating necessary infrastructure for public welfare
– Governments can enter contracts to facilitate trade and business
– The balance of power prevents conflicts between Union and States.
– It ensures public resources are managed effectively for development

Sample UPSC Question

Consider the following statements regarding Article 298 of the Indian Constitution: 1. It allows the government to conduct trade and business. 2. The executive power of the Union is not subject to state laws. Which of the above statements is/are correct? Consider that: Article 298 of the Indian Constitution grants the executive power of both the Union and the States to engage in trade and business activities in the context of Article 298. A) Only 1 B) Only 2 C) Both 1 and 2 D) Neither 1 nor 2

Answer

The correct answer is A) Only 1. Article 298 permits the Union and States to conduct trade, but the Union’s power is indeed subject to state laws, making statement 2 incorrect. Article 298 of the Indian Constitution grants the executive power of both the Union and the States to engage in trade and business activities.

Key Takeaways

✓ Article 298 allows government trade activities
✓ It balances powers between Union and States
✓ The article supports public resource management
✓ Governments can create public sector enterprises
✓ It helps in establishing necessary infrastructure

FAQs

Article 298 of the Indian Constitution grants the executive power of both the Union and the States to engage in trade and business activities. This means that the government can enter into contracts, manage properties, and carry out various commercial activities to better serve the public. For instance, when the government decides to build a highway or establish a public utility, it is exercising this power.

This balance ensures that both the Union and the States can exercise their powers without overstepping each other’s authority. For example, if a state wants to regulate a local business, it can do so if Parliament has not made a law regarding that business. In practice, Article 298 provides a framework for government involvement in economic activities.

For instance, public sector enterprises like Indian Railways or Oil and Natural Gas Corporation (ONGC) operate under this article. These enterprises not only provide necessary services but also contribute to the economy by generating employment and creating business opportunities. Thus, Article 298 plays a critical role in how the government interacts with trade and business.

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Pramod is the Founder and Editor-in-Chief of StudyHub. He holds a Master's degree and is currently pursuing a Ph.D. in Geology, alongside more than 7+ years spent building and verifying competitive exam content for Indian aspirants. He leads StudyHub's editorial process across Indian Polity, the Constitution, Indian Economy, History, Geography, Science, and the platform's other subject areas — checking every article against primary sources (bare act text and Gazette notifications for constitutional topics, government and Economic Survey data for economy content, standard reference material elsewhere) and flagging it for re-verification whenever a relevant amendment, policy, or data update makes an earlier version outdated.
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