There are concerns whether the rise of one-party dominance post-2014 is weakening federalism in India.

Background

• Constitutional Basis: Article 1 of the Constitution states that India, or Bharat, shall be a Union of States.
• Quasi-Federalism: K.C. Wheare famously described India as “quasi-federal,” meaning the structure is federal, but the spirit is unitary, with a strong Center. 
• Shift in Political Climate: Post-2014 marks a return to single-party dominance, prompting concerns of over-centralisation, unlike the coalition era of the 1990s, when regional parties shaped governance through accommodation politics.
• Coercive Federalism: While Granville Austin favored “Cooperative Federalism,” the current situation is described by the term “Coercive Federalism,” suggesting forced or compulsory federal relations.

Key Issues Challenging the Federalism In India

• NITI Aayog vs. Planning Commission: Pre-2014, Planning Commission engaged States in resource allocation and investment planning.
  • Post-2014: NITI Aayog replaced it as a think tank, with fund allocation now under the Finance Commission.
• GST Issues: States surrendered indirect tax powers to the GST Council.
  • The center holds significant voting power, diminishing State fiscal sovereignty. 
• Use of Cess and Surcharge: Cess and surcharge revenue bypass the divisional pool, reducing States’ share in national revenue.
  • While the Center claims a higher share for States (41%), the shrinking divisional pool signals a lack of federal trust.
• Income Reverse Formula and North-South Divide: The Finance Commission’s formula benefits poorer states (e.g., UP, Bihar), and disadvantages wealthier states (e.g., Tamil Nadu, Karnataka).
  • Southern states argue that their development efforts are penalized, while northern states lack incentives to grow.
• Expenditure Structure: States focus on capital expenditure (e.g., infrastructure), while the Center spends 80% on revenue expenditure (e.g., salaries, pensions).
• Subsidization Argument: Southern states argue they subsidize the North, countered by claims that the South benefits from cheap labor and receives more national credit.
• Delimitation: Southern states fear future delimitation based on population will favor the North, increasing its political power, despite the South’s economic strength.
• One nation, one Election: Criticized as a tool to consolidate power, bypassing regional interests and using efficiency arguments to justify broader political disenchantment.

Check Out UPSC CSE Books

Visit PW Store

Conclusion

Federalism is under strain as bodies like the Finance Commission and the GST Council are increasingly viewed as less-than-neutral arbiters. With single-party dominance at the Centre, the States’ bargaining power has weakened significantly.

DOWNLOAD PDF