Federalism in India: Balancing Central and State Powers

Federalism forms the foundation of India’s governance,
distributing power between the central and state governments. The Indian
Constitution establishes a federal system with unitary characteristics,
creating a delicate balance between national unity and regional autonomy. This
system allows for efficient governance in a diverse country, addressing both
regional needs and national interests.

Understanding Federalism in India
Federalism is a governance system where power is shared between a central
authority and regional entities. In India, this system is embedded in the
Constitution, which delineates powers between the Union and State Governments.[1]
Unlike classic federations such as the USA or Canada, India’s federalism
incorporates unitary features, granting the central government significant
powers. This structure ensures national unity while allowing states to manage
local affairs.

Constitutional Provisions of
Federalism in India
The Indian Constitution provides a detailed framework for federalism through
various provisions, particularly in the Articles and Schedules. Some key
elements include:[2]

1. Division of Powers: The Three Lists
   The Seventh Schedule divides subjects into three categories:
• Union List (List I): These are areas exclusively
  managed by the central government, such as defense, foreign affairs,
  atomic energy, railways, and banking.
• State List (List II): These subjects fall under the
  jurisdiction of state governments, including police, public health,
  agriculture, and local governance.
• Concurrent List (List III): Issues under
  this list involve joint control by both central and state governments,
  such as education, marriage laws, criminal law, and environmental
  protection. In the case of conflict, central laws prevail.
2. Distribution of Financial Powers
   Financial federalism is essential to India’s governance system. The
   Finance Commission advises on the distribution of resources between the
   central and state governments.
• The central government collects major taxes like
  income tax, customs duties, and excise duties.
• States rely on grants from the center and local taxes
  such as sales tax and state excise duties.
• The introduction of the Goods and Services Tax (GST)
  has further redefined financial federalism by establishing a unified tax
  system and facilitating revenue-sharing between the center and the
  states.
3. Role of the Governor
   The Governor, appointed by the President, acts as the central government’s
   representative in states. While the Governor’s constitutional role is
   significant, their discretionary powers have at times led to disputes
   between the center and states.
4. Article 356 and President’s Rule
   Article 356 allows the President to impose President’s Rule in states if
   there is a breakdown of constitutional machinery. Although meant for
   emergencies, this provision has often been criticized for being misused to
   interfere in state governance.

Balancing Central and State Powers

1. Strong Central Features
   Although India operates under a federal system, it has several unitary
   characteristics:
• Single Constitution: Unlike countries like the USA,
  Indian states do not have their own constitutions.
• Single Citizenship: Every Indian citizen holds
  uniform national citizenship.
• Residuary Powers: Any subject not explicitly
  mentioned in the three lists is governed by the central authority.
• Emergency Provisions: During a national emergency,
  the center can assume extensive control over states.
2. Autonomy of States
   Despite the unitary traits, states retain substantial autonomy:
• Elected State Governments: Each state
  has its own legislature and Chief Minister to govern local matters.
• State-Specific Laws: States can legislate on matters
  in the State List, allowing them to address regional concerns.
• Financial Commissions: The Finance Commission ensures
  that resources are distributed equitably, balancing the needs of the
  center and states.
3. Inter-Governmental Cooperation
   To maintain harmony, mechanisms such as:
• The Inter-State Council work to resolve disputes between
  states and the central government.
• Zonal Councils facilitate regional cooperation
  on economic and social matters.
• NITI Aayog promotes cooperative federalism
  by involving states in policymaking processes.

Challenges to Indian Federalism

1. Centralization of Power
• The increasing influence of centrally sponsored
  schemes has reduced the financial autonomy of states.[3]
• Article 356 has been misused in the past to dismiss
  state governments, raising concerns over central overreach.
2. Disputes Over Financial Resources
• The GST system, while streamlining taxation, has
  created tension over the distribution of tax revenues.
• States seek more control over their financial
  resources to better manage their own economic affairs.
3. Interstate Conflicts
• Issues such as water-sharing disputes (e.g., the
  Cauvery River dispute between Karnataka and Tamil Nadu) have highlighted
  regional tensions.
• Border disputes between states occasionally threaten
  the federal balance.
4. Regionalism and Demand for Autonomy
• Some states have called for greater autonomy due to
  differences in culture, language, or economic conditions (e.g., demands
  for separate statehood in Gorkhaland).
• The revocation of Jammu and Kashmir’s special status
  in 2019 represents the changing dynamics of Indian federalism.

Landmark Cases on Federalism
The Indian judiciary has played a crucial role in preserving federal
principles:

• S.R. Bommai Case (1994)[4]: This case
  limited the arbitrary use of Article 356 and strengthened state autonomy.
• Kesavananda Bharati Case (1973)[5]: The Court
  established the Basic Structure Doctrine, which prevents Parliament from
  altering federalism.
• State of West Bengal v. Union of India (1963): The Court
  affirmed that the center holds greater authority in matters of national
  interest.

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