The article highlights the challenges faced by the federalism in India in various domains and forms and suggests the ways to deal with these challenges.

Growing tendency towards Centralisation

• Moves to erode the powers of State governments are not new.
• The Centre, on several occasions, has used its powers to dismiss or use the Governor to intimidate democratically elected governments.
• During the Emergency, education was moved to the Concurrent list which was until then a State subject under the constitutional division of responsibilities.
• However, the changes to federal relations at present are more systemic.
• There has been increasing centralisation in resource allocations and welfare interventions.
• After GST, the gap between the revenue that State governments are allowed to generate and the expenditure that they are expected to incur has been widening.
• The Centre has been encroaching into domains under State government control through centrally sponsored schemes in sectors such as education and health.

Three domains in which federalism faces challenges

1) State-capital relation

• At present there is growing trend towards centralising economic power in conjunction with political centralisation.
• The consolidation and expansion of a few big business groups is taking place, probably at the expense of smaller players.
•  On the one hand, the Centre has sought to insulate Indian big business from global competition by choosing not to enter into the Regional Comprehensive Economic Partnership (RCEP).
• But the power of small businesses is eroded through support for GST and the call for a single national market.
• So, big businesses are more likely to benefit from a removal of State-level barriers to trade at the expense of smaller regional players.

2) Institutional transgression

• Central institutions are increasingly weakening the policy levers of State institutions.
• There are growing allegations of the misuse of institutions such as the Income Tax Department, the Enforcement Directorate and the National Investigation Agency are being used to intimidate opponents..
•  Direct transfers to beneficiaries of welfare schemes bypassing States are also contributing to this dynamic.
• The Centre is increasingly ignoring elected representatives of State governments, holding meetings with State secretaries and district collectors on issues that are primarily under State control.
• Governors perform active administrative roles instead of their signatory roles.
• To ensure national uniformity in educational institutions NEET was introduced in medical education.
• But it subverts the affirmative action policies developed at the regional level in response to local.
• In the domain of health, the Centre has now put State governments at a disadvantage in vaccine usage by fixing differential pricing for procuring vaccines.

3) Socio-cultural foundations

• Beside the legal-constitutional aspects of federalism, it is diversity in cultural foundation of regions that sustains Indian federalism.
•  Markers of regional identities and regional socio-cultural practices are now interpreted as belonging to a pan-Indian Hindu tradition.

Conclusion

To stem this trend towards centralisation we need to provide more legal and constitutional safeguard to the States, strong regional political assertion and a strong federal coalition.

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