The Constitutional Blueprint
The Constitution of India, though not explicitly using the term 'federation', establishes a robust dual polity. It divides governmental powers between the Union (national) government and State (regional) governments, ensuring both national unity and regional autonomy.
Written Constitution
India possesses the world's longest written constitution, meticulously detailing the structure, powers, and functions of both Union and State governments, serving as the supreme law.
Division of Powers
An elaborate three-fold distribution of legislative powers (Union, State, Concurrent Lists) through the Seventh Schedule clearly demarcates their respective jurisdictions.
Independent Judiciary
Headed by the Supreme Court, the judiciary acts as the interpreter of the Constitution and the arbiter of disputes between the Centre and States, upholding constitutional supremacy.
Legislative Harmony & Central Influence
The distribution of legislative subjects is a cornerstone of Indian federalism, yet the Centre retains significant influence, ensuring national coherence.
The Three Lists (Seventh Schedule)
- Union List (List I): 100 subjects (Defence, Foreign Affairs, Banking). Parliament has exclusive power.
- State List (List II): 61 subjects (Public Order, Police, Health, Agriculture). State Legislatures have exclusive power.
- Concurrent List (List III): 52 subjects (Education, Forests, Trade Unions, Marriage). Both can legislate, but Central law prevails in conflict (Article 254).
- Residuary Powers: Parliament has exclusive power over subjects not in any list (Article 248).
Parliament's Overriding Powers
Even on State List subjects, Parliament can legislate under specific circumstances, tilting the balance towards the Centre:
Administrative Interdependence
The executive powers of the Union and States are intertwined, with several mechanisms ensuring administrative coordination and, at times, central control.
The Governor, appointed by the President (Centre), acts as a dual agent: the constitutional head of the state and a vital link to the Centre. They possess discretionary powers, including reserving state bills for President's consideration (Article 200, 201), making their office a frequent point of Centre-State friction.
IAS, IPS, and IFS officers are recruited and trained by the Centre but serve in both Union and State governments. The Centre retains ultimate disciplinary control, a feature that ensures uniformity in administration but is sometimes seen as infringing on state autonomy.
The Centre can issue directions to states on various matters, including ensuring compliance with Union laws, construction and maintenance of means of communication of national or military importance, and protection of railways (Article 256, 257). Non-compliance can lead to President's Rule.
Union Government
Formulates policies, provides guidelines, recruits AIS officers.
Inter-linkages
Governor, All-India Services, Centre's Directions, Grants-in-Aid.
State Governments
Implement policies, administer local laws, manage state-specific issues.
Shared Governance
A complex system of cooperation and control ensuring national unity amidst diversity.
Financial Lifeline & Fiscal Federalism
The financial relations form the backbone of Centre-State interactions, often highlighting states' dependence on Central transfers.
Distribution of Revenue
- Union's Exclusive Revenue: Corporation Tax, Customs Duty, Income Tax (except on agriculture), Service Tax, etc.
- States' Exclusive Revenue: Land Revenue, Excise Duty on alcohol, Sales Tax (now part of GST), Stamp Duties, Vehicle Tax, etc.
- Shared Revenues: Certain taxes levied by the Centre but collected and appropriated by states (e.g., stamp duties on certain documents).
The constitutional framework for taxation largely favors the Centre, leading to financial dependence of states.
Key Financial Mechanisms
| Mechanism | Role | Impact on States |
|---|---|---|
| Finance Commission (Art. 280) | Recommends distribution of net tax proceeds (vertical & horizontal devolution) and grants-in-aid. | Crucial for states' financial stability; defines their share of central taxes. |
| Grants-in-Aid (Art. 275 & 282) | Statutory (recommended by FC) and Discretionary (by Centre) grants. | Supplements state revenues, but discretionary grants can become tools of central influence. |
| Goods & Services Tax (GST) | A unified indirect tax system, governed by GST Council. | Increased formalization; some states expressed concerns over compensation cess and fiscal autonomy post-GST. |
Trends & Challenges in Indian Federalism
Indian federalism is dynamic, evolving through phases of cooperation, competition, and sometimes confrontation, driven by political, economic, and social shifts.
Political Centralisation
Allegations of overreach by the Centre, particularly regarding the use of Article 356 (President's Rule) and the Governor's office. Often tied to single-party dominance at the Centre.
Fiscal Disparities
States often face resource constraints and advocate for greater fiscal autonomy, revenue-sharing, and more generous grants from the Centre, especially post-GST.
Inter-State Disputes
Persistent issues like river water sharing (e.g., Cauvery, Krishna) and boundary disputes (e.g., Maharashtra-Karnataka) highlight the need for effective dispute resolution mechanisms.
Cooperative Federalism
Emphasizes partnership and collaboration (e.g., NITI Aayog, GST Council). Aims for joint policy formulation and implementation, moving away from a top-down planning approach.
Competitive Federalism
States compete to attract investment, improve governance, and deliver better public services, often encouraged by Centre-sponsored ranking indices (e.g., Ease of Doing Business).
Confrontational Federalism
Arises from political differences, perceived encroachment on state rights, partisan use of central agencies, or disputes over resource sharing, leading to strained Centre-State relations.
Landmark Insights & Reform Initiatives
Various commissions and judicial pronouncements have shaped the understanding and practice of Centre-State relations.
S.R. Bommai vs. Union of India (1994)
This landmark Supreme Court judgment declared that federalism is a 'basic feature' of the Indian Constitution. It significantly curbed the arbitrary use of Article 356 (President's Rule), strengthening the federal character by making judicial review mandatory.
Key Commission Recommendations
- Sarkaria Commission (1983-87): Recommended restraint in using Article 356, strengthening the Inter-State Council, and greater consultation with states on concurrent subjects.
- Punchhi Commission (2007-10): Emphasized more autonomy for states, especially in legislative and financial matters, and review of the Governor's powers.
NITI Aayog: Fostering Cooperative Federalism
Established in 2015, NITI Aayog replaced the Planning Commission with a 'think-tank' approach, aiming to involve states more actively in policy formulation and promote "Team India" through shared national goals.