Federalism under the Indian Constitution
India is a vast country with different languages, religions, cultures, and traditions. To govern such diversity effectively, the makers of the Indian Constitution adopted the principle of federalism. Federalism means a system of government in which power is divided between a central authority and regional or state authorities. Both levels of government derive their authority from the Constitution and function within their respective spheres.
In India, this principle plays a very important role in maintaining unity while also respecting diversity. The Indian Constitution does not simply copy the classical federal model of countries like the United States but creates its own unique form of federalism suited to Indian conditions. This model is often described as “quasi-federal” because it combines features of both federal and unitary systems. Understanding federalism under the Indian Constitution is important to appreciate how India balances national integration with regional autonomy.
Historical Background of Federalism in India
The roots of federalism in India can be traced back to the colonial period. The Government of India Act, 1935 introduced the idea of provincial autonomy and division of powers between the Centre and the provinces. Though it was never fully implemented, it laid the foundation for a federal system in independent India. When the Constituent Assembly began drafting the Constitution after independence, its members had to choose a system that would suit the social, political, and geographical conditions of India.
India was emerging from centuries of colonial rule, facing partition, communal tensions, and regional disparities. A purely federal system, giving complete independence to states, was seen as risky because it could threaten national unity. At the same time, a unitary system concentrating all power in the Centre was also not desirable because it could neglect regional aspirations. Therefore, the framers of the Constitution carefully created a balance by adopting a federal system with a strong Centre.
Meaning and Features of Federalism
Federalism under the Indian Constitution means that power is distributed between the Union and the States by the Constitution itself. Both the Centre and the States are independent in their respective spheres. The Constitution clearly demarcates the areas of law-making, administration, and taxation between them.
Some features that highlight the federal character of the Constitution include the existence of a written Constitution, supremacy of the Constitution, distribution of powers, dual polity, and an independent judiciary to settle disputes. At the same time, the Indian model is not a rigid federal system because the Centre has been given extra powers to maintain unity and integrity. This makes Indian federalism unique and flexible.
Distribution of Legislative Powers
The most important element of federalism is the division of legislative powers between the Union and the States. The Constitution provides for a three-fold distribution of powers in the Seventh Schedule. There is a Union List which contains subjects of national importance such as defence, foreign affairs, railways, and communication. Only the Parliament can make laws on these subjects. There is a State List which contains subjects of local and regional importance such as police, public order, agriculture, and public health.
Normally only the State Legislatures can make laws on these subjects. Finally, there is a Concurrent List which contains subjects of common interest such as criminal law, marriage, education, and forests. Both Parliament and State Legislatures can make laws on these subjects, but in case of conflict, the law made by Parliament prevails. Matters not mentioned in any list, known as residuary subjects, are also placed under the power of Parliament. This system ensures that important national matters remain under central control while states have authority over local matters.
Distribution of Financial Powers
Federalism is incomplete without distribution of financial powers because both the Centre and the States need resources to carry out their functions. The Constitution divides the power to tax between the Union and the States. Certain taxes like customs, excise duty on manufactured goods, income tax (other than on agricultural income), and corporation tax are levied and collected by the Centre. Taxes like land revenue, stamp duty on land, excise on alcoholic liquor, and taxes on professions are assigned to the States.
The Concurrent List does not provide taxation powers, which means each tax is clearly assigned to either the Union or the State. To ensure balanced development, the Constitution also provides for sharing of certain revenues between the Union and the States. The Finance Commission, which is appointed every five years, recommends how central revenues should be shared and how grants-in-aid should be provided to states. This financial arrangement aims to reduce inequalities between richer and poorer states and to maintain cooperative federalism.
Distribution of Administrative Powers
Along with legislative and financial powers, administrative responsibilities are also distributed between the Union and the States. The Union government is responsible for administering subjects under the Union List, while the States administer subjects under the State List. In practice, however, the Centre has been given wider authority to ensure uniformity. For example, the Union can give directions to states to ensure that the laws of Parliament are implemented.
In certain cases, the Union government can even take over the administration of a state, such as during President’s Rule. The All India Services like the Indian Administrative Service (IAS) and Indian Police Service (IPS) are common to both the Union and the States. Officers of these services are recruited by the Union but serve under both levels of government. This arrangement strengthens unity and ensures efficiency in administration.
Emergency Provisions and Federalism
One of the distinctive features of Indian federalism is the presence of emergency provisions. During an emergency, the normal division of powers between the Union and the States undergoes significant changes. The Constitution provides for three kinds of emergencies—national emergency, state emergency (President’s Rule), and financial emergency. During a national emergency, Parliament acquires the power to legislate on subjects in the State List and the Centre can exercise greater control over the states.
During a state emergency, the government of the state is dismissed, and the President takes direct control. In case of a financial emergency, the Centre can reduce the salaries of government employees and direct states to observe certain financial rules. These provisions show that Indian federalism is flexible and can shift towards unitary character during extraordinary situations. While some critics argue that this makes the system less federal, the framers believed such provisions were necessary to preserve unity and security in times of crisis.
Role of the Judiciary in Federalism
The judiciary plays a vital role in maintaining the federal balance under the Constitution. The Supreme Court of India acts as the guardian of the Constitution and ensures that both the Union and the States act within their powers. If any law passed by Parliament or a State Legislature goes beyond its authority, the Supreme Court can strike it down as unconstitutional.
Article 131 of the Constitution gives the Supreme Court exclusive jurisdiction in disputes between the Union and States or between two or more states. This ensures that conflicts are resolved peacefully through legal means rather than political confrontation. The judiciary also interprets constitutional provisions and clarifies the scope of powers. Over the years, the Supreme Court has delivered several landmark judgments that have shaped the nature of Indian federalism.
Federalism and the Working of Indian Politics
While the Constitution lays down the structure of federalism, its actual working depends a lot on the political environment. In the early years after independence, one party dominated both the Centre and most states, which led to greater central control. However, with the rise of regional parties and coalition governments since the 1980s and 1990s, federalism became more cooperative. States started playing a larger role in national decision-making.
Institutions like the Inter-State Council, National Development Council, and Finance Commission have encouraged dialogue between the Centre and the States. Cooperative federalism has gained importance in areas like planning, economic reforms, and disaster management. Yet there are also tensions when states accuse the Centre of encroaching on their powers or discriminating in financial allocations. Thus, Indian federalism is a dynamic system that changes with political realities.
Cooperative Federalism
Cooperative federalism means the Centre and the States work together as partners rather than as rivals. In India, cooperative federalism is seen in many areas such as planning, implementation of welfare schemes, and economic reforms. For example, programs like the Goods and Services Tax (GST) require cooperation between both levels of government.
The GST Council is a unique body where the Union and State governments jointly decide tax rates and policies. Similarly, in matters of disaster management or public health emergencies, the Centre and States have to coordinate closely. The idea is that while the Centre provides leadership and resources, the States ensure local implementation. Cooperative federalism reflects the spirit of “unity in diversity” by combining the strengths of both levels of government.
Competitive Federalism
In recent years, the concept of competitive federalism has also emerged in India. Competitive federalism means states compete with each other to attract investment, improve governance, and provide better services to citizens.
For example, different states compete to create investor-friendly policies, improve ease of doing business, or introduce innovative welfare schemes. This healthy competition benefits citizens because it encourages states to perform better. The Centre often provides incentives or rankings to encourage competition among states. At the same time, competitive federalism should not harm unity or widen inequalities, so a balance between cooperation and competition is essential.
Unique Nature of Indian Federalism
Scholars often describe Indian federalism as “quasi-federal” or “federal with a strong unitary bias.” This means that while the structure is federal, with clear division of powers, the Centre has been given greater authority. The reasons for this design lie in India’s historical and social conditions. At the time of independence, the country faced partition, communal violence, integration of princely states, and regional tensions.
To prevent disintegration, the framers gave the Centre overriding powers in matters of national importance. For example, residuary powers belong to the Union, emergency provisions tilt power towards the Centre, and Parliament can legislate on state subjects in certain situations. Yet despite this strong Centre, states have been able to assert their identity and powers, showing that the federal spirit is alive. Indian federalism is thus unique—neither purely federal nor purely unitary, but a blend of both, designed to hold together a diverse nation.
Federalism and Language Policy
Language has always been a sensitive issue in Indian politics. With hundreds of languages and dialects spoken across the country, the Constitution had to carefully design a language policy that would support national integration while respecting diversity. Hindi was declared the official language of the Union, but English was allowed to continue as an associate official language.
States were given the freedom to adopt their own official languages for administrative purposes. The Constitution also recognises 22 scheduled languages. This arrangement reflects federal principles because it allows states to use their regional languages while maintaining a link language at the national level. Language disputes have sometimes created tensions between the Centre and States, but overall, the flexible language policy has helped preserve federal harmony.
Federalism and Local Governments
The idea of federalism in India extends beyond just the Union and the States. With the 73rd and 74th Constitutional Amendments, local self-government was given constitutional status through Panchayati Raj institutions in rural areas and municipalities in urban areas. These amendments created a third tier of government, bringing power and decision-making closer to the people. Local bodies have been entrusted with functions relating to local development, welfare, and infrastructure. They also receive funds from the state and central governments. This decentralisation strengthens democracy and deepens federalism by involving citizens directly in governance at the grassroots level.
Federalism and Fiscal Relations
Fiscal relations are an important aspect of federalism because without resources, states cannot exercise their powers effectively. While the Constitution clearly divides taxation powers, the Centre collects more revenue than the States, creating vertical imbalances. To address this, the Constitution provides for tax devolution and grants-in-aid.
The Finance Commission is a constitutional body that recommends how central revenues should be shared with states and how grants should be distributed to achieve balanced development. Over the years, fiscal federalism has evolved through mechanisms like the Planning Commission, NITI Aayog, and GST Council. While states often demand more financial autonomy, cooperative arrangements ensure that funds are allocated fairly and national priorities are met.
Challenges to Indian Federalism
Despite its strengths, Indian federalism faces several challenges. One major challenge is the tendency of the Centre to dominate states, especially through the use of Article 356 which allows imposition of President’s Rule. Though the Supreme Court has limited its misuse through the Bommai case, tensions still arise.
Another challenge is financial dependency, as many states rely heavily on central funds. Regionalism and demands for greater autonomy sometimes create friction, as seen in movements for separate states or special status. Language issues, ethnic conflicts, and uneven development also test the federal spirit. Political conflicts between central and state governments ruled by different parties can lead to accusations of discrimination. Yet, despite these challenges, Indian federalism has survived and evolved, showing its resilience.
Judicial Pronouncements on Federalism
Several landmark judgments of the Supreme Court have shaped the understanding of federalism in India. In the case of State of West Bengal v. Union of India (1963), the Court held that the Indian Constitution is not truly federal in the strict sense.
In Kesavananda Bharati v. State of Kerala (1973), the Court declared federalism as part of the basic structure of the Constitution, which cannot be destroyed even by constitutional amendments. In S.R. Bommai v. Union of India (1994), the Court restricted arbitrary use of Article 356 and upheld the federal character of the Constitution. These judgments show that while the Constitution gives the Centre strong powers, the judiciary ensures that federalism remains protected as a core constitutional principle.
Federalism in Practice Today
In present times, federalism in India is both a necessity and a reality. With coalition politics, strong regional parties, and increasing role of states in development, the Centre can no longer act unilaterally. States actively participate in policy-making through institutions like the GST Council and NITI Aayog. Federalism has become more cooperative, with both levels of government working together on issues like economic reforms, climate change, disaster management, and health crises such as the COVID-19 pandemic. At the same time, competitive federalism encourages states to innovate and perform better. The balance between cooperation and autonomy defines the functioning of Indian federalism in the 21st century.
Conclusion
Federalism under the Indian Constitution is a unique and carefully crafted system designed to maintain unity while respecting diversity. By distributing powers between the Union and the States, it ensures that governance is both centralised for national matters and decentralised for regional needs. The strong Centre reflects the historical conditions of India’s independence, while the independent powers of states preserve regional identity.
Over time, federalism has evolved into a more cooperative and competitive model, involving not just the Union and the States but also local governments. Despite challenges of central dominance, financial dependency, and regional tensions, Indian federalism has survived and grown stronger. It continues to be the backbone of India’s democratic structure, enabling a diverse and complex society to function together as one nation. Federalism is not merely a constitutional arrangement in India but a living reality that sustains its unity in diversity.
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