Federalism in India: What you need to know

• The journey of India towards federalism began with its struggle for independence from colonial rule. Its evolution has been dynamic since.
• The government has been emphasising more on cooperative and competitive federalism through National Institution for Transforming India (NITI) Aayog.
• Many state governments often allege that the Union government is not sharing the fund of the Goods and Services Tax (GST) compensation and this has led to a confrontational federalism.

Key highlights

• Generally, Federalism can be classified into three different types
  • Holding Together Federation,
  • Coming Together Federation and
  • Asymmetrical Federation.
• In the Holding Together Federation, powers are shared between various constituent parts to accommodate the diversity in a country. In such cases, the central authority often holds the upper hand. India, Spain, and Belgium are included in this group.
• Coming Together Federation stands for an arrangement where separate states combine to create a more unified entity.
• In this case, states enjoy greater autonomy compared to a holding federation. Examples include the United States, Australia, and Switzerland.
• Asymmetrical Federation refers to a form of federalism in which the components that make up a nation have uneven powers and relationships in the domains of politics, administration, and finance.
• Asymmetry in a federation’s arrangements from both a vertical (between the states and the center) and a horizontal (among the states) perspectives. India with the sole exception of Jammu and Kashmir (till 2019). Also, there are various clauses in Article 371 which accord special powers to India’s north-eastern states.

India’s journey towards federalism

• The demand for autonomy and self-governance had a significant influence on a variety of linguistic, cultural, and geographical groupings.
• The framers of the Indian Constitution recognised the need to uphold unity in diversity.
• India possesses bicameralism, two governments (the Union and the State), a written constitution, and an independent court to uphold the system of checks and balances.
• The Indian constitution also contains many unitary elements,
  • including a powerful union government, a single constitution, a single citizenship, the appointment of state governors by the central government, all-India services, emergency provisions.
• Moreover, the term “federation” is not used in the Constitution, suggesting that no state has the power to secede from the federation and that the Indian Federation is not the result of an agreement reached by individual states.
• India is hence referred to as a “holding together federation”,
• while political analyst K. C. Wheare describes Indian federalism as quasi-federalism. In a quasi-federal system, the union has more authority than the states.

Evolution of federalism in India

• Since independence, the evolution of federalism in India has been dynamic and can be examined along various phases:
• Inner-party federalism:
  • During the first phase of federalism (1950-68), major disputes between the federal government and the states were resolved in Congress party forums.
  • created a consensus-based form of “inner-party federalism”.
• The Congress Party suffered a great loss of autonomy after the party split in 1969. In this phase, because of the party’s extreme centralisation and authoritarianism under the leadership of Indira Gandhi, the Congress party completely subordinated its regional leaders and organisational structures.
• Multi-Party Federalism:
  • The 1990s saw the coalition period, also known as multi-party federalism, in which national parties were not able to win a majority in parliament. National coalitions maintained influence in the union with the help of regional powers.
  • This period saw a decline in the intensity of Center-state confrontations as well as in the Center’s arbitrary use of Article 356 to topple state administrations.
  • A 1994 Supreme Court ruling (SR Bommai v. Union of India case verdict) that questioned the Center’s arbitrary use of the provision
• Co-operative federalism:
  • During this period, the Indian economy was also liberalised, giving state governments a considerable amount of autonomy to initiate businesses and attract foreign investment.
  • Strengthening the foundation from the bottom up, the 73rd and 74th Constitutional Amendment Acts of 1992 further empowered local self-government.
  • Thus, true federalism was made possible by the discussions and contests between the Union and states during this period.
• Competitive federalism:
  • In terms of governance, the federal government advocated co-operative federalism and agreed on measures like enacting the GST law, establishing the GST Council and NITI Aayog, and approving the Finance Commission’s suggestion to raise the states’ funding share. In addition,
  • Through open rankings in a number of areas and a helping hand, it promotes healthy competition across states.
• Confrontational federalism:
  • “dominant party” reappeared with the NDA’s rise in 2014.
  • Concurrently, the party solidified its grip on power by taking over several states.
  • Confrontational federalism emerged during times of significant federal disputes between states led by the opposition and the centre.
  • Examples include governor abuse, state fiscal centralisation, and subversion of state rights.
• To summarize, Indian federalism entered a new phase after 1991 when states engaged in bargaining or negotiation to settle politics and economy.
• It is possible to argue that cooperative and competitive federalism are inherently advantageous, but confrontational federalism maintains that the state and federal governments ought to bargain or negotiate on behalf of the people.
• The ultimate objective of federalism is to accept diverse issues and offer a common path so that welfare and national advancement come first.