Introduction & Summary
India's Constitution establishes a quasi-federal system, balancing a strong Centre with autonomous States. The dynamics of Centre-State relations have continuously evolved since independence, shaped by political, economic, and social factors. While cooperative federalism is the ideal, several issues—ranging from the role of constitutional offices like the Governor to financial devolution and legislative overlap—have historically been sources of friction. Understanding these trends and contentions is crucial for comprehending the functioning and future of India's unique federal structure.
The evolution of Centre-State relations can broadly be divided into four phases, reflecting changes in the political landscape and power dynamics.
12.5.1: Dominance of Centre (1950s-mid 1960s)
Characteristics: Marked by the near-absolute dominance of the Indian National Congress at both the Centre and in most States.
- One-Party Rule: Jawaharlal Nehru's towering personality and the Congress party's widespread presence.
- Nation-Building Focus: Emphasis on national unity, integration, and planned economic development (through the Planning Commission), which inherently centralises decision-making.
- Cooperative Ethos: States generally deferred to the Centre's authority in the spirit of post-independence consolidation.
Impact: Minimal friction, Centre exercised considerable influence over state affairs.
12.5.2: Emergence of States' Assertiveness (Mid 1960s-1980s)
Characteristics: Decline of Congress dominance, rise of regional parties, and increasing demands for greater state autonomy.
- Fourth General Elections (1967): Congress lost power in several states, leading to coalition governments at the state level.
- Rise of Regional Parties: Emergence of strong regional political identities and parties (e.g., DMK, Akali Dal, Left Front).
- Demand for Autonomy: States sought greater legislative, administrative, and financial powers, often driven by cultural, linguistic, and economic grievances.
- Central Interventions: Perceived misuse of Article 356 (President's Rule), role of Governor, and financial dependence fueled state resentment.
Impact: Increased friction, formation of various commissions (e.g., Sarkaria Commission 1983) to review Centre-State relations.
12.5.3: Era of Cooperative Federalism and Coalition Politics (1990s-2014)
Characteristics: Rise of coalition governments at the Centre, enhancing states' bargaining power and fostering a more cooperative approach.
- Fragmented Mandates: No single party secured a clear majority at the Centre, making regional parties crucial coalition partners.
- Increased Bargaining Power of States: State-based parties influenced national policy-making.
- Institutional Mechanisms: Growth of Inter-State Council, National Development Council, and increasing reliance on consensus.
- Judicial Interventions: Landmark Supreme Court judgments (e.g., S.R. Bommai case 1994) placed restrictions on the arbitrary use of Article 356.
Impact: Greater emphasis on consensus, consultation, and interdependence between Centre and States.
12.5.4: Re-centralisation tendencies / Competitive-Cooperative Federalism (Post-2014)
Characteristics: Emergence of a strong central government with a clear majority, coupled with significant structural reforms. Emphasis on both cooperative and competitive aspects.
- Abolition of Planning Commission (2015): Replaced by NITI Aayog, a think tank fostering cooperative federalism through bottom-up planning.
- Goods and Services Tax (GST) (2017): Unified tax system, necessitated GST Council (Art 279A) as a unique federal body for consensus-based decisions.
- Strong Central Government: Single-party majority raises concerns about potential re-centralisation, despite federal commitments.
- Competitive Federalism: States encouraged to compete for investment and improved governance (e.g., Ease of Doing Business, NITI Aayog indices).
- Focus on National Priorities: Central initiatives (Swachh Bharat, Jal Jeevan Mission) require significant state cooperation.
Impact: Dual narrative of cooperation and competition, alongside concerns about central dominance in fiscal matters and legislative overlaps.
Several aspects of Centre-State relations have consistently been sources of friction.
12.5.5: Role of Governor
Appointment: Appointed by President (on Centre's advice), holds office during pleasure (Art 155, 156), often seen as Centre's agent.
- Discretionary Powers (Art 163): Controversial in inviting CM, dismissing ministry, dissolving assembly.
- Dismissal of State Governments: Accused of partisan actions, especially against opposition parties.
- Reserving Bills for President (Art 200): Used to delay/block state legislation.
- Recent Issues: Frequent spats with elected state governments (Kerala, TN, Telangana, WB Governors 2022-23).
- Recommendations: Punchhi Commission (2010) suggested fixed tenure, clear guidelines, limiting bill reservation.
12.5.6: President's Rule (Art 356)
Provision: Allows President to assume state functions if government cannot function constitutionally.
- Misuse: Used over 100 times, often for political reasons.
- Safeguards (S.R. Bommai Case, 1994): Significantly curbed arbitrary use:
- Subject to judicial review.
- Assembly dissolved only after Parliamentary approval.
- Centre must justify imposition.
- Govt. must prove majority on floor.
- Impact: Misuse reduced post-Bommai, but concerns remain.
12.5.7: Deployment of Central Forces
Provision: Centre can deploy armed forces in states to aid civil power or maintain law and order.
- Consent: States resent deployment without their consent, viewing it as infringement on law and order (State List).
- Jurisdiction: Debates over territorial jurisdiction and powers within states.
- Accountability: Questions on accountability of central forces to state authorities.
- Recent Examples: Deployment during elections, riots where states raised federal concerns.
12.5.8: Financial Issues
- Devolution of Funds: States demand larger share (14th FC: 42%, 15th FC: 41%), adequacy issues remain.
- GST Compensation: Guaranteed period ended June 2022, leading to revenue shortfalls and demands for extension.
- Centrally Sponsored Schemes (CSS): States resent conditional nature, restrict autonomy, challenge matching contributions.
- Cesses & Surcharges (Art 271): Not part of divisible pool, increase fiscal centralisation, reduce states' share.
- Borrowing Powers (Art 293): States cannot borrow directly abroad, need Centre's consent for domestic borrowing if outstanding central loans.
12.5.9: Encroachment on State List
- Via Concurrent List: Centre legislates where states argue it encroaches.
- Art 249 (National Interest): Parliament legislates on State List if Rajya Sabha passes 2/3rd resolution.
- Art 250 (Emergency): Parliament legislates on State List during emergency.
- Art 252 (By Consent of States): Parliament legislates for 2+ states by consent.
- Art 253 (International Agreements): Parliament legislates on any subject to implement treaties.
- Constitutional Amendments: Centre shifts subjects (e.g., 42nd Amendment shifted Education, Forests to Concurrent List).
- Recent Examples: Debates on agricultural laws, education, public health.
12.5.10: All-India Services (AIS)
Role: Recruited by Centre, serve in States; controlled by Centre for recruitment, training, discipline.
- Accountability: States feel officers are loyal to Centre, impeding control.
- Deputation Rules: Disputes over central deputation policies and withdrawal of officers.
- IAS (Cadre) Rules (2022) Controversy: Proposed amendments to give Centre more power to recall officers drew strong opposition from states, seen as undermining federalism.
- Disciplinary Action: Dual control complicates proceedings.
The history of Centre-State relations in India is a testament to the dynamic interplay of constitutional design, political realities, and socio-economic imperatives. While the Constitution leans towards a stronger Centre, the democratic process and the rise of regional aspirations have ensured states' assertiveness. The shift from one-party dominance to coalition politics and now back to a strong Centre with a multi-party federal structure has continuously reshaped this balance.
The ideal of "cooperative federalism" espoused by the government remains a work in progress. While institutions like the GST Council exemplify cooperative decision-making, perennial issues like the Governor's role, financial autonomy, and perceived central overreach continue to fuel friction. The way forward lies in:
- Constitutional Morality: Upholding the spirit of federalism enshrined in the Constitution.
- Dialogue and Consensus: Strengthening inter-state forums like the Inter-State Council and NITI Aayog.
- Fiscal Prudence and Transparency: Ensuring equitable and transparent financial devolution, limiting cesses/surcharges.
- Clarity in Roles: Providing clear guidelines for the Governor's role and safeguarding states' legislative autonomy.
- Democratic Decentralisation: Further empowering local bodies and aligning central schemes with local needs.
- Ultimately, a robust and mutually respectful Centre-State relationship is vital for India's continued unity, diversity, and developmental aspirations.
- Phase I (1950s-mid 60s): Centre Dominance, One-party rule (Congress), Planning Commission.
- Phase II (mid 60s-80s): State Assertiveness, Decline of Congress, Rise of Regional Parties, Demands for autonomy.
- Phase III (90s-2014): Cooperative Federalism, Coalition Politics at Centre, States' bargaining power, Judicial activism (S.R. Bommai).
- Phase IV (Post-2014): Re-centralisation tendencies / Competitive-Cooperative Federalism, Strong Centre, NITI Aayog, GST Council (Art 279A).
- Governor (Art 155, 156, 163, 200): Appointed by President, holds office during pleasure, discretionary powers, reserving bills for President's assent (Art 200). Perennial friction point.
- President's Rule (Art 356): Misused historically. S.R. Bommai Case (1994): Landmark judgment restricting misuse (judicial review, Parliamentary approval, floor test).
- Central Forces: Deployment in states often contentious (law & order is state subject).
- Financial Issues:
- Devolution: States demand higher share. 14th FC (42%), 15th FC (41%).
- GST Compensation: Ended June 2022. Cess extended till March 2026 (for past repayment).
- Centrally Sponsored Schemes (CSS): Conditional nature, funding patterns.
- Cesses & Surcharges (Art 271): Not part of divisible pool, Centre's exclusive revenue. States oppose.
- Borrowing (Art 293): States cannot borrow abroad. Need Centre's consent if outstanding loan.
- Encroachment on State List:
- Art 249: Parliament can legislate on State List for national interest (Rajya Sabha resolution).
- Art 250: During National Emergency.
- Art 252: By consent of 2+ states.
- Art 253: To implement international treaties.
- Concurrent List: Used for central legislation; 42nd Amendment shifted 5 subjects (Education, Forests, etc.) to Concurrent.
- All-India Services (AIS): Recruited by Centre, serve in States. Dual control, deputation rules (e.g., IAS Cadre Rules amendments 2022 controversy).
| Commission/Committee | Year | Primary Focus / Recommendations | Relevance to Centre-State Relations |
|---|---|---|---|
| Sarkaria Commission | 1983 | Examined Centre-State relations in totality. Recommended caution in Art 356 use, Inter-State Council, Governor's role guidelines. | Comprehensive review, foundational. |
| S.R. Bommai Case | 1994 | Supreme Court judgment. Curtailed arbitrary use of Art 356. Emphasized floor test, judicial review. | Judicial landmark, federal safeguard. |
| National Commission to Review the Working of the Constitution (NCRWC / Venkatachaliah Commission) | 2000 | Recommended strengthening Inter-State Council, clear guidelines for Governor, limited use of Art 356. | Holistic constitutional reform. |
| Punchhi Commission | 2007 | Examined Centre-State relations with focus on legislative, administrative, financial aspects, Governor's role, Art 356. | Updated review, specific reforms. |
| 14th Finance Commission | 2015 | Increased states' share in divisible pool to 42%. | Increased fiscal autonomy of states. |
| 15th Finance Commission | 2020 | Maintained states' share at 41% (adjusting for J&K/Ladakh UTs). New horizontal devolution criteria. | Evolution of fiscal transfers. |
- Cooperative vs. Competitive vs. Coercive Federalism:
- Cooperative: Centre and states work together (e.g., GST Council, NITI Aayog).
- Competitive: States compete for investment and development rankings.
- Coercive/Unitary Bias: States argue Centre overreaches through financial leverage, central schemes, Governor's office, or selective use of central agencies/laws.
- Role of Governor: Politicization remains a persistent challenge, often perceived as an agent of the ruling party at the Centre, leading to clashes over legislative assent, government formation, and dismissal.
- Fiscal Federalism: Core of financial relations. States' demand for greater fiscal autonomy versus Centre's need for national fiscal stability. GST regime and cesses/surcharges fuel this debate.
- From Centralised Planning to Cooperative Federalism: Abolition of Planning Commission and creation of NITI Aayog marked a symbolic shift, though actual decentralisation is debated.
- Judicial Intervention: Judiciary (e.g., S.R. Bommai case) played crucial role in setting limits on central power and safeguarding federal principles.
- Rise of Regionalism: Increased political weight of regional parties altered states' bargaining power, compelling Centre to engage more.
- Technology and Governance: Digital platforms facilitate central monitoring and control over state schemes, raising questions about data sovereignty and state autonomy.
- Impact of GST: Structural reform, but debate on states' fiscal autonomy continues post-compensation period; increased dependence on GST Council.
- COVID-19 Pandemic: Exposed strengths and weaknesses; intensified demands for central transfers and fiscal flexibility due to financial strains.
- Polarised Politics: Exacerbates friction points, especially concerning Governor's role and use of central agencies.
- Recommendations of Commissions: Sarkaria, Punchhi, etc., remain relevant for improving relations, though many unimplemented.
Governor-State Government Friction (2022-2023)
West Bengal, Kerala, Telangana: Frequent public spats between Governors and their respective state governments over various legislative and administrative matters, including delayed assent to bills and university appointments.
IAS (Cadre) Rules Amendment Controversy (2022)
The Centre proposed amendments to give it unilateral power to recall IAS officers from state cadres for central deputation. Strongly opposed by at least 10 states, viewing it as undermining federalism and state administration autonomy.
GST Compensation Cess Extension
The collection period was extended till March 31, 2026, to repay pandemic-related loans. However, the guaranteed compensation period for states ended on June 30, 2022, highlighting ongoing fiscal concerns and states' revenue shortfalls.
Prelims MCQs
1. UPSC Prelims 2017:
Which one of the following is not a feature of Indian federalism?
- (a) There is an independent judiciary in India.
- (b) Powers have been clearly divided between the Centre and the States.
- (c) The federating units have been given unequal representation in the Rajya Sabha.
- (d) It is the result of an agreement among the federating units.
Hint/Explanation: Indian federalism is a "holding together" rather than a "coming together" federation (like the USA). States did not come together to form the Union; rather, the Union divides power with its constituent units.
2. UPSC Prelims 2018:
Consider the following statements:
- The Parliament of India can place a particular law in the Ninth Schedule of the Constitution of India.
- The validity of a law placed in the Ninth Schedule cannot be examined by any court and no judgment can be made on it.
Which of the statements given above is/are correct?
- (a) 1 only
- (b) 2 only
- (c) Both 1 and 2
- (d) Neither 1 nor 2
Hint/Explanation: Statement 1 is correct. Statement 2 is incorrect as the Supreme Court in I.R. Coelho case (2007) held that laws placed in the Ninth Schedule after April 24, 1973 (date of Kesavananda Bharati judgment) are open to judicial review if they violate the basic structure. While not directly about Centre-State relations, it touches upon legislative power and judicial review which are part of the federal framework.
Mains Questions
1. UPSC Mains 2018 (GS Paper 2):
"The 14th Finance Commission (FC) has recommended a nearly 10% increase in the devolution of the divisible pool of taxes to States. How far do you think this change will affect the States' ability to draw upon discretionary grants from the Centre?"
Direction: This question directly assesses the impact of fiscal devolution on financial Centre-State relations.
- Intro: Briefly state the 14th FC's recommendation (42% devolution).
- Impact on Discretionary Grants (Positive for States): Explain how increased untied statutory grants (Art 270) reduce states' reliance on conditional discretionary grants (Art 282) from the Centre (erstwhile Planning Commission). This enhances states' fiscal autonomy and flexibility.
- Nuance/Counter-argument (Continued Role of Discretionary Grants): Argue that discretionary grants (especially through CSS) still remain crucial for specific national priorities, flagship schemes, and bridging developmental gaps.
- Conclusion: Significant step towards fiscal decentralisation, increasing states' fiscal space, but discretionary grants still play a role.
2. UPSC Mains 2015 (GS Paper 2):
"The concept of 'cooperative federalism' has been increasingly emphasized in recent years. Highlight the challenges in its implementation in India."
Direction: This question is highly relevant to Centre-State relations and requires a critical analysis.
- Intro: Define cooperative federalism and mention its increasing emphasis (e.g., NITI Aayog, GST).
- Challenges in Implementation (with specific reference to issues of contention): Fiscal imbalances, Centre-State financial dependence, conditionalities of grants, use of cesses and surcharges, Role of Governor, misuse of Art 356, All-India Services, Legislative overlaps/encroachment, Inter-state disputes, Political differences.
- Way Forward: Strengthening institutions like Inter-State Council, respecting federal spirit, fiscal discipline, clear guidelines for constitutional offices, fostering mutual trust.
Original MCQs for Prelims
1. Which of the following bodies/provisions are considered key drivers of 'cooperative federalism' in contemporary India?
- NITI Aayog
- Goods and Services Tax Council
- Inter-State Council
- Centrally Sponsored Schemes
Select the correct answer using the code given below:
- (a) 1, 2 and 3 only
- (b) 1, 2 and 4 only
- (c) 3 and 4 only
- (d) 1, 2, 3 and 4
Explanation: NITI Aayog, GST Council, and Inter-State Council are designed to foster cooperation. Centrally Sponsored Schemes, while important, are often criticized for their conditional nature and limiting state autonomy, leading to friction rather than purely cooperative outcomes.
2. Regarding the deployment of Central Armed Police Forces (CAPFs) in Indian states, consider the following statements:
- Law and order is exclusively a subject of the State List.
- The Union Government can deploy CAPFs in a state without the state government's consent in certain situations.
- The Supreme Court has explicitly mandated that the Centre must obtain prior consent from states for CAPF deployment for any purpose.
Which of the statements given above is/are correct?
- (a) 1 only
- (b) 1 and 2 only
- (c) 2 and 3 only
- (d) 1, 2 and 3
Explanation: Statement 1 is correct (Public order & Police are State List subjects). Statement 2 is correct (Centre retains powers for its own property/institutions or in grave situations). Statement 3 is incorrect; no blanket prior consent mandate from the SC, although consultation is encouraged.
Original Descriptive Questions for Mains
1. "The Governor's office is often viewed as a weak link in India's federal chain, frequently becoming a source of friction between the Centre and the States. Critically examine this statement in light of recent developments and recommend measures to strengthen its impartial functioning." (15 marks, 250 words)
Key Points/Structure:
- Intro: Governor's dual role (constitutional head & Centre's agent) and potential for friction.
- Why a 'Weak Link'/Source of Friction: Appointment & Tenure (partisan), Discretionary Powers (Art 163 misuse), Withholding Assent to Bills (Art 200), Reports for President's Rule (Art 356).
- Recent Developments (Examples): Mention 2-3 specific recent instances of Governor-state government clashes (e.g., Kerala, WB, Telangana Governors).
- Recommendations for Impartial Functioning: Sarkaria & Punchhi Commissions' recommendations (fixed tenure, clear guidelines, removal by impeachment), neutral appointment process, time-bound decisions for assent, judicial review, code of conduct.
- Conclusion: Strengthening impartiality is crucial for cooperative federalism and federal structure integrity.
2. "Despite the establishment of the GST Council and NITI Aayog, issues related to fiscal federalism remain contentious in India. Analyze the persistent challenges and suggest measures to foster greater financial autonomy and cooperation between the Centre and States." (15 marks, 250 words)
Key Points/Structure:
- Intro: Acknowledge progressive steps (GST Council, NITI Aayog) but highlight ongoing fiscal federalism challenges.
- Persistent Challenges: Fiscal Imbalance (Centre's higher revenue powers), GST Impact (centralized authority, compensation end), Cesses and Surcharges (erode divisible pool), Centrally Sponsored Schemes (conditionalities, burden), Borrowing Restrictions (Art 293), Data Asymmetry.
- Measures for Autonomy & Cooperation: Review of divisible pool (increase states' share), Rationalisation of Cesses/Surcharges, Restructuring CSS (block grants, flexibility), Strengthen GST Council (genuine consultation), Greater Borrowing Flexibility, Strengthen State Finance Commissions, Enhance Data Sharing.
- Conclusion: Robust fiscal federalism essential for states' development and India's economic stability, requiring sustained dialogue and reforms.