Why in the News? 

In recent times, the Central government has exerted significant political and financial control over the regional states.

Indian Federalism:

• India opted for a federal form of government because of linguistic and regional diversity. It has dual objectives, to safeguard and promote the unity, and to accommodate regional diversity.
• However, Indian Federalism has been described as quasi-federal since it contains major federation and union features (Article 1 says, “India that is ‘Bharat’, shall be the Union of the states”).
• The central government has more authority, especially in fiscal matters (due to which it is sometimes called “asymmetrical federalism”).
• Federalism is part of the basic structure which cannot be altered or destroyed under the constituent powers of the Parliament without undergoing judicial review by the Supreme Court.

Federal Features

Non-federal features

The Present Political Federal Issues in India:

• Centralization of Power: Certain propositions laid down in the Supreme Court’s judgment, have upheld the prospects of Federalism in India
  • For example, the abrogation of Article 370 concerning Jammu and Kashmir’s special status by the central government without adequate consultation with the state government was seen as a move towards the Centralization of power.
• Reorganization of States: The provision under Article 3 of the Constitution states that the President shall refer the Bill for the reorganization of any State to the legislature of the State concerned to elicit its opinion. 
  • The recent SC’s verdict that dismissed the challenges to the abrogation of Article 370 led to a serious undermining of federalism and the rights of the elected State legislatures.
• Lack of clarity in Division of Powers: Although the subjects are enlisted in the Seventh Schedule and Emergency Provisions of the Constitution, the distribution of power between the Central government and the states lacks clarity and equity. 
  • For example, internal security assumes utmost importance with the Maoist challenge and cross-border terrorism, which threaten all the states across the country.
  • The Constitution does not refer either to ‘security’ or ‘internal security’ anywhere. However, it mentions five related terms namely ‘pubic order’ (List II, Entry 2), ‘war’ (Article 352), ‘external aggression’ (Article 352), ‘armed rebellion’ (Article 352), and ‘internal disturbance’ (Article 355).
  • Further, the imposition of President’s Rule in states under Article 356 has been recently criticized for being used arbitrarily by the central government.
• Unequal Representation in Rajya Sabha: The representation of states in Parliament and other federal institutions does not accurately reflect their population, size, or contributions. Some states are over-represented while others are under-represented.
  • For example, the allocation of 80 Lok Sabha seats to Uttar Pradesh and only one to Sikkim results in unequal representation, impacting resource distribution and decision-making.
• Simultaneous Elections: Measures discussed and recommended like the “One Nation One Election” undermined India’s federal structure and conflated the different priorities voters had for National, State, and “Panchayati raj” institutions, degrading each one’s different sphere of responsibility. 

The Present Fiscal Federal issues in India:

• Fiscal Divisible Pool: The states often face financial constraints due to their dependence on the central government for funds. The unequal distribution of resources can exacerbate disparities among states. 
  • For example, states like Bihar and Uttar Pradesh receive more funds from the central government under various schemes. However, recently the Kerala government faced serious financial crunches due to a lack of funds.
• Implementation of Goods and Services Tax (GST): GST’s implementation has raised issues related to fiscal autonomy. States have voiced concerns about the loss of their taxation powers and uncertainties regarding compensation from the central government for revenue losses.

Way Forward: The Centre cannot afford to ignore the importance of states to effectively respond to the Federal issues:

• Empowerment of State Governments: Strengthen the powers and autonomy of state governments in decision-making processes, allowing them greater authority over issues within their jurisdiction, and revenue management is necessary.
• Promoting Co-operative Federalism: Enhance the effectiveness of the Inter-State Council as a forum for dialogue and cooperation between the Centre and states on matters of common interest, ensuring meaningful participation of state leaders in decision-making processes.
• Need a Balanced Approach: First, the government needs to review and make necessary amendments to clarify the distribution of powers, ensuring a more balanced and transparent framework for political governance.  Second, implement a balanced system of grants where states with weaker fiscal capacities receive adequate support to address developmental disparities.
• Bringing Clarity: Clearly define revenue-sharing boundaries and internal security mechanisms between the Centre and states to ensure equitable distribution of resources.

Prelims PYQ 

Q) Which one of the following is not a feature of Indian federalism? (UPSC IAS/2017)

1. a) There is an independent judiciary in India.
2. b) Powers have been clearly divided between the Centre and the States.
3. c) The federating units have been given unequal representation in the Rajya Sabha.
4. d) It is the result of an agreement among the federating units.

Q) Consider the following statements: (UPSC IAS/2020)

1) The Consititution of India defines its ‘basic structure’ in terms of federalism, secularism, fundamental rights and democracy.

2) The Constitution of India provides for ‘judical review to safeguard the citizens’ liberties and to preserve the ideals on which the Constitution is based.

Which of the Statement given above is/are correct?

1. a) 1 only
2. b) 2 only
3. c) Both 1 and 2
4. d) Neither 1 nor 2

Mains PYQ 

Q1 How far do you think cooperation, competition and confrontation have shaped the nature of federation in India? Cite some recent examples to validate your answer. (UPSC IAS/2020) 

Q2 The concept of cooperative federalism has been increasingly emphasised in recent years. Highlight the drawbacks in the existing structure and the extent to which cooperative federalism would answer the shortcomings.

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