Recent Trends in Federalism in India

In recent years, federalism in India has witnessed dynamic shifts due to changing political, economic, and judicial landscapes. Federalism in India is characterized by a balance of power between the central government and the state governments, outlined in the Constitution. However, several recent trends have impacted this balance, leading to debates about the nature of federalism in India. Here are the key recent trends in Indian federalism:

1. Increasing Centralization of Power

One of the most prominent trends has been the growing centralization of power by the Union government, which some argue undermines the principles of cooperative federalism. This has been evident in various areas:

a. Economic Centralization:

• The implementation of the Goods and Services Tax (GST) in 2017 is often cited as a significant move toward economic centralization. While GST aimed to create a unified national market by consolidating indirect taxes, states lost considerable autonomy over their taxation powers. Although a GST Council was formed with both central and state representatives, decisions are largely influenced by the Union government.
• The 15th Finance Commission’s recommendation of reducing states’ share in tax revenue and the increasing use of central schemes (such as PM Awas Yojana and Swachh Bharat) have also contributed to states depending more on central funds.

b. Increasing Role of the Governor:

• Governors, who are appointed by the President (acting on the advice of the Union government), have played a more prominent role in influencing state politics. In some instances, Governor’s discretion has been criticized as being used in a partisan manner, particularly during government formation, such as in Maharashtra (2019) and Karnataka (2018).

c. Use of Article 356 (President’s Rule):

• There has been concern about the increased use of President’s Rule under Article 356, which allows the central government to dismiss a state government and take over state administration. While its use has reduced since the S.R. Bommai case (1994), allegations of its misuse for political reasons persist, as seen in Arunachal Pradesh (2016) and Uttarakhand (2016).

2. Judicial Interventions in Federalism

The Supreme Court of India has played a key role in maintaining the balance of power between the center and the states. Recent judicial rulings have reaffirmed or altered the course of federalism in India.

a. S.R. Bommai Case Legacy:

• The S.R. Bommai case (1994) is significant as it restricted the arbitrary use of Article 356 (President’s Rule). The judiciary has continued to uphold these principles by reviewing and often overturning the imposition of President’s Rule, ensuring that federalism is preserved.

b. NCT of Delhi Case (2018):

• In a landmark judgment, the Supreme Court clarified the powers of the elected Delhi government and the Lieutenant Governor, reducing the central government’s control over Delhi’s local administration. The court emphasized the spirit of cooperative federalism, stating that the Lieutenant Governor must act on the aid and advice of the elected government in all but three reserved areas (public order, police, and land).

c. Kashmir’s Special Status (2019):

• The abrogation of Article 370 in 2019, which revoked the special status of Jammu and Kashmir, marked a significant shift in India’s federal structure. The decision not only reorganized the state into two Union Territories but also raised concerns about the central government’s ability to alter the status of a state without the consent of its legislative assembly. This move is seen by some as an encroachment on federal principles.

3. Cooperative Federalism Initiatives

Despite growing centralization, there have been efforts to promote cooperative federalism, where both the center and states work together on key policy issues.

a. NITI Aayog:

• The NITI Aayog replaced the Planning Commission in 2015 and aims to promote cooperative federalism by fostering state participation in national development strategies. Unlike the Planning Commission, which allocated resources to states, NITI Aayog functions as a think tank, emphasizing collaboration between states and the center.

b. GST Council:

• The GST Council is often cited as an example of cooperative federalism. It includes representatives from both the central and state governments, and decisions are made through discussions and voting. While the Union government holds significant influence, the council fosters a spirit of cooperation between the two levels of government.

c. Centrally Sponsored Schemes:

• Many central schemes, such as Ayushman Bharat (health insurance), PM Kisan (direct income support to farmers), and Swachh Bharat Mission (cleanliness), require the collaboration of state governments for successful implementation. These schemes reflect a mixed approach to federalism, where the center provides the framework and funding, and states handle local implementation.

4. Political Federalism and Regionalism

Political trends have played an influential role in shaping the federal structure, particularly with the rise of regional political parties and shifting state-center relations.

a. Rise of Regional Parties:

• Over the past few decades, regional political parties have gained prominence, especially in states like West Bengal (Trinamool Congress), Tamil Nadu (DMK, AIADMK), and Telangana (TRS). These parties often challenge central policies and assert their state’s rights, advocating for greater autonomy.
• The increasing power of regional parties has led to a more competitive federalism, where states compete with each other to attract investment and resources.

b. Inter-State Cooperation and Competition:

• The notion of competitive federalism has gained traction, where states compete to attract investments, improve ease of doing business, and develop infrastructure. However, this has also resulted in disparities among states, with more prosperous states benefiting from greater resources and investment, leading to regional inequalities.

c. Centre-State Tensions:

• In some states, tensions between the center and the state governments have risen, especially in cases where the ruling party at the center is different from the party in power in the state. For instance, the West Bengal government has had numerous disagreements with the Union government over various issues, from law enforcement to taxation policies.

5. Impact of Demonetization and COVID-19

The economic and health crises in recent years have had profound implications for Indian federalism, highlighting the need for cooperation as well as exposing fault lines in center-state relations.

a. Demonetization (2016):

• The demonetization of ₹500 and ₹1,000 currency notes in 2016 was a central policy that had widespread effects on states, especially in terms of economic disruption. While this was a centrally decided move, it affected state economies, demonstrating the impact of central decisions on states’ autonomy in economic matters.

b. COVID-19 Pandemic:

• The COVID-19 pandemic tested Indian federalism as both the center and the states needed to work together to manage the crisis. Initially, the National Disaster Management Act (NDMA) was invoked, giving the Union government a dominant role in managing the crisis, including the implementation of nationwide lockdowns.
• Over time, as the pandemic progressed, states took on greater roles in healthcare delivery, vaccinations, and local management of the crisis. However, the financial strain on states due to the pandemic led to demands for greater financial support and autonomy in decision-making.
• The vaccine policy also became a subject of federal contention, with states demanding more control over procurement and distribution.

6. Emergence of Digital Federalism

With the increasing role of technology in governance, India has seen a rise in what can be termed digital federalism. Initiatives like Digital India, the push for Aadhaar-based governance, and E-governance initiatives often require both the center and states to work together. However, these developments also raise concerns about data privacy, surveillance, and the balance of power between the center and states in managing digital infrastructure.

Conclusion:

The Recent Trends in Indian federalism reflect a complex interplay of centralization and regional assertion, cooperative and competitive dynamics, and evolving judicial interpretations. While centralization has increased in certain areas, there have been efforts to promote cooperative federalism and address regional disparities. The role of regional parties, the judiciary, and economic shifts will continue to shape the evolving nature of federalism in India, highlighting both the strengths and challenges of the federal structure.