Double-Engine Sarkar: Federalism Challenges, Finance Commission & Centre-State Relations

The concept of a “Double-Engine Sarkar” refers to the political claim that when the same party governs both the Union and the State, development accelerates through better coordination and policy alignment.

• While framed as a form of cooperative federalism, this concept poses several challenges to India’s federal structure.

Constitutional Principle of Cooperative Federalism

• Development as a Right: Article 1 defines India as a Union of States.
  • This implies that development funds are part of the Republic’s constitutional framework and should not depend on political alignment with the Union government.
• Public Money and Democratic Accountability: Taxes collected from citizens constitute national resources and must be distributed through constitutional mechanisms rather than partisan considerations.

Financial Federalism and Institutional Concerns

• Role of the Finance Commission: As a constitutional body under Article 280, the Finance Commission acts as a neutral arbiter distributing tax revenues between the Centre and States using objective criteria such as population, area, and fiscal capacity.
• Impact of Cesses and Surcharges: Increasing reliance on cesses and surcharges (100% stay with the centre)  keeps a significant share of revenue outside the divisible pool, reducing the share of funds automatically transferred to states.
• Regional Equity Debate: Some southern states (Tamil Nadu, Kerala, and Andhra Pradesh) argue that the current formula indirectly penalises them for successful population control, as higher population figures influence fiscal allocations.

Institutional Credibility and Federal Balance

• Perception of Institutional Politicisation: Concerns have been raised that key institutions responsible for safeguarding federal balance may face pressures that weaken their autonomy and credibility.
• Need for Institutional Independence: Strong, impartial constitutional bodies are essential to maintaining trust in federal governance and cooperative policymaking.

Role of the Governor in Centre–State Relations

• Constitutional Position: Governors are intended to function as neutral constitutional heads of state.
• Controversies Over Legislative Delays: Instances in which Governors delay assent to bills passed by state legislatures have been criticised for undermining legislative sovereignty.
• Judicial Clarification: In 2023 and 2025, the Supreme Court ruled that a Governor’s inaction is unconstitutional and that legislative sovereignty lies with the elected assembly
  • However, the President’s use of Article 143 to seek an advisory opinion has, in some cases, nullified specific timelines set for Governors.

Enroll now for UPSC Online Course

Evolution of Federal Tensions

• From Article 356 to Subtle Tactics: Historically, the Centre used Article 356 to dismiss state governments directly until the SR Bommai Case (1994) restricted this misuse.
• Current Strategy: Modern tactics have shifted toward using Governors and funding restrictions to undermine state governments without dismissing them.

Way Forward

• Time-bound Assent to Bills: Introducing a constitutional or statutory time limit for Governors to decide on bills to prevent indefinite delays.
• Empower the Finance Commission: Ensuring greater transparency and adherence to its recommendations to safeguard fiscal federalism.
• Revitalising the Inter-State Council: Activating the council under Article 263 as a forum for structured dialogue and dispute resolution between the Centre and States, as recommended by the Sarkaria Commission.

Check Out UPSC CSE Books

Visit PW Store

Conclusion

Sustaining India’s federal democracy requires balancing political competition with constitutional cooperation, ensuring state autonomy while preserving national unity.