Evolving Trends in Indian Federalism: Constitutional Provisions and Centre-State Relations

Introduction

Federalism in India is a dynamic concept shaped by constitutional provisions, political developments, judicial interpretations, and economic policies. The Indian Constitution establishes a quasi-federal system, balancing unitary and federal features. While India is structurally a federal state, the centralizing tendencies of the government, especially in times of crisis, have led to debates about the nature and extent of federalism.

In recent years, Centre-State relations have undergone significant transformations due to factors such as changing political alignments, economic policies, judicial rulings, decentralization initiatives, and regional aspirations. This essay examines recent trends in Indian federalism, the impact of constitutional provisions, and how political developments have influenced the evolving nature of Centre-State relations.

Constitutional Framework of Indian Federalism

The Indian Constitution divides powers between the Centre and the States through:

1. Three Lists in the Seventh Schedule:
   
   
   • Union List (97 subjects) – Includes defense, foreign affairs, banking, railways, etc.
   • State List (66 subjects) – Includes police, health, agriculture, etc.
   • Concurrent List (47 subjects) – Includes education, marriage laws, environment, etc.
     
     
     
2. Article 246: Defines legislative competence, granting Parliament overriding powers in case of conflict.
   
   
3. Emergency Provisions (Articles 352, 356, 360): Strengthen central control during crises.
   
   
4. Finance Distribution (Articles 268-293): Determines fiscal relations, with major taxes controlled by the Centre.
   
   
5. Inter-State Relations (Articles 262, 263): Address disputes related to water sharing, border conflicts, and economic cooperation.
   
   
6. Article 280: Establishes the Finance Commission to regulate financial distribution.

Despite these provisions, Indian federalism is often termed “cooperative” or “bargaining federalism”, adapting to political and economic realities.

Recent Trends in Indian Federalism

1. Increasing Centralization vs. State Autonomy

In recent years, there has been an increasing tendency of centralization, with the Union government asserting greater control over policymaking, administration, and fiscal matters. Key examples include:

• Abrogation of Article 370 (2019): The revocation of special status for Jammu and Kashmir and its reorganization into Union Territories signified a strong assertion of central authority over state autonomy.
  
  
• Governor’s Role: There have been frequent conflicts between state governments and Governors (appointed by the Centre), particularly in opposition-ruled states like West Bengal, Kerala, and Tamil Nadu.
  
  
• Interference in State Laws: The Centre has passed laws in subjects traditionally under the State List, such as:
  
  
  • Farm Laws (2020) – Led to protests by farmers and were later repealed.
    
    
  • Environmental Laws – Changes in forest and environmental regulations have affected state policies.

While centralization strengthens national unity, it often raises questions about states’ autonomy.

2. Fiscal Federalism and the GST Regime

Financial relations between the Centre and States have witnessed significant shifts due to:

• Introduction of the Goods and Services Tax (GST) (2017):
  
  
  • GST replaced multiple state taxes, reducing fiscal autonomy of states.
    
    
  • The GST Council, a constitutional body, decides tax rates and revenue-sharing formulas.
    
    
  • States have complained about delayed compensation payments from the Centre, leading to fiscal stress.
    
    
• Reduction in State’s Share in Central Taxes:
  
  
  • The 15th Finance Commission (2021-26) recommended 41% devolution to states but also increased conditional grants, limiting their discretionary spending.
    
    
• COVID-19 and Financial Dependence:
  
  
  • The pandemic saw states demanding greater financial assistance, but the Centre retained control over relief funds like PM CARES.

These trends indicate that while fiscal federalism exists, the financial dependency of states on the Centre remains high.

3. Rise of Competitive and Cooperative Federalism

The changing political landscape has promoted both competition and cooperation among states and between the Centre and States:

• Competitive Federalism:
  
  
  • Encouraged by NITI Aayog, which replaced the Planning Commission in 2015.
    
    
  • States compete to attract investments, improve governance, and enhance ease of doing business.
    
    
  • Example: Gujarat Model vs. Kerala Model of Development.
    
    
• Cooperative Federalism:
  
  
  • Seen in initiatives like Aspirational Districts Programme, where states and the Centre work together to improve underdeveloped regions.
    
    
  • One Nation, One Ration Card (ONORC) facilitates welfare benefits across states.

Both these trends redefine Centre-State relations, making governance more dynamic.

4. Regionalism and Asymmetrical Federalism

States have been increasingly asserting their regional identities and demands, leading to tensions:

• Demands for Statehood and Autonomy:
  
  
  • Movements in regions like Gorkhaland (West Bengal), Bodoland (Assam), and Vidarbha (Maharashtra) reflect growing aspirations for greater autonomy.
    
    
  • The bifurcation of Andhra Pradesh into Telangana (2014) and residual Andhra shows that regional identities play a crucial role in federalism.
    
    
• Rise of Regional Political Parties:
  
  
  • States governed by strong regional parties (DMK, TMC, BJD, TRS) often challenge central authority.
    
    
  • Regional parties have resisted central laws and policies, demanding greater fiscal and legislative autonomy.

These trends show a growing demand for federal flexibility in governance.

5. Judiciary’s Role in Federalism

The Supreme Court of India has played a crucial role in defining and protecting federalism through landmark judgments:

• S.R. Bommai Case (1994): Declared that federalism is a part of the Basic Structure and limited misuse of Article 356 (President’s Rule).
  
  
• State of Karnataka v. Union of India (1977): Strengthened state rights against arbitrary central actions.
  
  
• Goods and Services Tax (GST) Case (2021): Reaffirmed that the GST Council’s decisions should be consultative, not binding, protecting state autonomy.

The judiciary continues to act as a mediator, ensuring a balance between Centre-State powers.

6. Interstate Relations and Disputes

Federalism in India is also impacted by interstate conflicts, including:

• Water Disputes:
  • Cauvery Water Dispute (Karnataka vs. Tamil Nadu) – Ongoing conflict over river water allocation.
    
    
  • Mahanadi Water Dispute (Odisha vs. Chhattisgarh) – Conflict over dam construction affecting downstream states.
    
    
• Border Disputes:
  
  
  • Assam-Mizoram Conflict (2021): Violent clashes over territorial claims.
    
    
  • Maharashtra-Karnataka Border Issue: Language and cultural factors drive demands for realignment.

The Centre plays a mediatory role in resolving these disputes, but regional tensions remain high.

Future of Indian Federalism

Given the recent trends, Indian federalism is likely to evolve in the following ways:

• Greater Fiscal Autonomy for States – Strengthening state revenues and financial independence.
  
  
• Decentralization of Governance – Strengthening local self-governance (Panchayati Raj & Municipalities).
  
  
• More Asymmetrical Federalism – Providing special provisions to diverse regions based on cultural, economic, and geographical needs.
  
  
• Judicial Review of Central Laws – Courts will continue to ensure federal balance and protect state rights.

The success of Indian federalism depends on maintaining a delicate balance between central authority and state autonomy, ensuring governance remains inclusive, participatory, and development-oriented.

Conclusion

Indian federalism has evolved significantly, shaped by constitutional provisions, political changes, judicial rulings, and economic reforms. Recent trends show increasing centralization, fiscal challenges, cooperative and competitive federalism, and rising regionalism. While states demand greater autonomy, the Centre often asserts national integration and policy uniformity.

For Indian federalism to thrive, stronger financial devolution, cooperative policymaking, and judicial safeguards are essential. Balancing these aspects will ensure a robust, democratic, and inclusive federal structure that meets the aspirations of both the Centre and the States.