Article 246 distributes legislative competence by reference to the three lists in the Seventh Schedule. Its clauses establish the constitutional framework for subjects on which Parliament and State Legislatures may make laws.
Clause (1) - Union List
Notwithstanding clauses (2) and (3), Parliament has exclusive power to legislate on matters enumerated in List I of the Seventh Schedule, known as the Union List.
Clause (2) - Concurrent List
Notwithstanding clause (3), Parliament and, subject to clause (1), a State Legislature have power to legislate on matters enumerated in List III of the Seventh Schedule, known as the Concurrent List.
Clause (3) - State List
Subject to clauses (1) and (2), a State Legislature has exclusive power to legislate for that State or any part of it on matters enumerated in List II of the Seventh Schedule, known as the State List.
Clause (4) - Territories not included in a State
Parliament may make laws with respect to any matter for any part of the territory of India not included in a State, even where that matter is enumerated in the State List.