Home The Constitution Part XII Article 298

Art. 298 Part XII: Finance, Property, Contracts and Suits

Power to Carry on Trade, etc.

Exact text — Constitution of India

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 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...

In Plain English

What this Article actually means

This Article confirms that both the Union and state governments' executive power extends to running businesses, acquiring/holding/disposing of property, and entering contracts — essentially the government's power to act commercially, not just regulate. This is the constitutional basis allowing government-run enterprises and commercial activity generally.

Why This Matters To You

How it shows up in everyday life

This is why the government (Union or state) can own and operate public sector undertakings, acquire property for various purposes, and enter into ordinary commercial contracts — a foundational 'business capacity' power distinct from the government's regulatory/legislative powers.

Read alongside this one

Art. 299 — Contracts

Frequently Asked

Quick answers about Article 298

Is there any limit on what kind of trade or business the government can engage in?

The proviso creates some nuance — for subjects outside Parliament's own law-making competence, the Union's exercise of this business power within a state remains subject to that state's own legislation, maintaining some federal balance even in commercial activity.

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The text above reproduces Article 298 of the Constitution of India as amended to date, for general educational reference. It is public-domain legislative text, but we recommend cross-checking the authoritative version at legislative.gov.in or india.gov.in before relying on it for a legal matter. The explanation, examples and FAQs are general information, not legal advice — consult a qualified advocate for guidance on your specific situation.