🧾 Article 298 of the Indian Constitution
Title: Power to carry on trade, etc.
🔍 Explanation:
Article 298 empowers both the Union and the State Governments to:
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Carry on any trade or business,
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Acquire, hold, and dispose of property, and
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Make contracts for any purpose.
This Article recognizes the commercial authority of governments, allowing them to function not just as regulators but also as economic participants.
📘 Key Provisions of Article 298:
| Provision | Explanation |
|---|---|
| Trade or Business | Both Union and States can engage in commercial activities directly (e.g., setting up PSUs, industries). |
| Acquisition and Disposal of Property | They can own, buy, or sell any kind of property. |
| Contractual Powers | They may enter into legal contracts in the name of the President (Union) or Governor (State). |
| No Constitutional Restrictions | These powers are not limited by the subject matters in Union or State Lists. |
🏛️ Example:
– The Union can set up ONGC, LIC, Indian Railways, etc.
– A State can start transport services, industrial corporations, etc.
📊 Summary Chart: Article 298
| Feature | Details |
|---|---|
| Article | 298 |
| Applies To | Union and State Governments |
| Main Powers Given | - Trade or business- Property dealings- Legal contracts |
| Purpose | Enables government to act as an economic agent |
| Contract Authority | - President (for Union)- Governor (for States) |
| List Restriction? | ❌ No – not bound by Union/State/Concurrent List |
| Supports | Public Sector Undertakings (PSUs) and state-level enterprises |
🧠 Why Article 298 is Important:
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Allows governments to compete in markets, not just regulate them.
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Facilitates creation of state-owned enterprises.
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Strengthens government’s role in industrialization and economic development.
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Enables the Union and States to enter into commercial partnerships, contracts, and businesses.
Here is a comparison chart of Article 298 and Article 299 of the Indian Constitution.
Both articles deal with the commercial powers and contractual responsibilities of the Union and State Governments, but their focus is different:
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Article 298: Grants power to carry on trade, business, and make contracts.
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Article 299: Lays down the procedure and legality of how government contracts must be made.
📊 Comparison Chart: Article 298 vs Article 299
| Feature | Article 298 | Article 299 |
|---|---|---|
| Title | Power to carry on trade, etc. | Contracts made in the exercise of executive power |
| Primary Focus | Grants commercial & contractual powers to governments | Lays down legal procedure for making government contracts |
| Applies To | Union & State Governments | Union & State Governments |
| Key Powers/Provisions | - Carry on trade/business- Own/dispose property- Enter contracts | - Contracts must be in writing- Made in name of President or Governor- Executed by authorized person |
| Contractual Authority | President (Union), Governor (State) | Same: President (Union), Governor (State) |
| Enforcement of Contracts | Not covered | ✅ Contracts not following procedure under Article 299 are void |
| Example | Government can set up PSU like LIC, SAIL, or State Transport Corp | If a contract isn’t signed properly (e.g., not in President’s name), it is unenforceable |
| Purpose | Empowers governments as economic entities | Ensures accountability & legality of government contracts |
🔁 Simplified Difference
| Article 298 | Article 299 | |
|---|---|---|
| What it does | Gives power to do business | Tells how to legally do it |
| Focus | Commercial rights | Legal validity of contracts |
| Binding Rule? | No specific procedure | ✅ Must follow formality or else void |
🧠 Why This Pair is Important:
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Article 298 allows governments to operate like businesses.
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Article 299 ensures those businesses follow formal contract laws to avoid misuse or fraud.
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Together, they balance freedom + accountability in government economic activity.
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