Answer

India’s federal structure represents a unique governance model, described by political thinker KC Wheare as “Quasi-Federal.” According to the Seventh Schedule, Article 246 of the Constitution divides powers between the Union and the states. However, India’s federal framework faces several challenges, impacting Centre-State relations and the effectiveness of governance.

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Major Challenges Faced by India’s Federal Structure

• Fiscal Federalism Conflicts: The unequal distribution of resources and delayed GST compensation creates financial strain on states, hindering developmental goals.
  For example: Delays in GST compensation payments(Article 279A) have sparked tensions, especially during crises like COVID-19.
• Appointment of Governors: The appointment and role of governors, under Articles 155 and 156, have often been contentious, with perceptions of political bias affecting Centre-State trust.
  For example: Governors’ involvement in state politics, particularly in opposition-ruled states, has occasionally led to allegations of interference in state affairs.
• Legislative Overreach: The Doctrine of Colorable Legislation reflects instances where the Centre’s laws interfere in state jurisdictions, challenging federal principles.
  For example: The Farm Laws enacted by the Centre, which impacted areas traditionally under the State List, like agriculture, led to widespread protests.
• Administrative Disputes: Conflicts over administrative powers, especially in Union Territories like Delhi, highlight the struggles in maintaining balanced governance.
  For example: The Delhi government frequently clashes with the Union regarding control over administrative matters, impacting governance efficiency.
• Political and Ideological Differences: Variances in political agendas between state and central governments lead to conflicts, affecting policy implementation.
  For example: The conflict over Kerala’s borrowing limits underlines ideological clashes, impacting fiscal autonomy.
• Funding for Centrally Sponsored Schemes: Centrally Sponsored Schemes often come with rigid conditions that restrict states’ autonomy in planning and resource allocation, creating friction in Centre-State relations/
• Security and Autonomy Conflicts: The imposition of AFSPA in Northeast states creates friction over state autonomy and central intervention in security matters.
• Competitive Federalism Issues: Uneven development among states due to competitive federalism creates disparities and can foster unhealthy competition.
  For example: Industrial investment often favours economically advanced states, creating a regional imbalance in growth.

Effectiveness of Existing Institutional Mechanisms for Resolving Union-State Conflicts

• Untimely Meetings of Inter-State Council (ISC): Established in 1990 on the recommendation of the Sarkaria Commission, the ISC was designed to facilitate Centre-State cooperation, but infrequent meetings have limited its impact on resolving intergovernmental issues.
  For example: Since its inception, the ISC has convened only 11 times, with the last meeting held in July 2016, indicating a lack of consistent engagement.
• Lack of Power Devolution to NITI Aayog: Although NITI Aayog promotes cooperative federalism by engaging states in national development planning, its recommendations remain advisory, limiting their enforceability.
  For example: While NITI Aayog meetings encourage policy alignment, the absence of binding authority restricts the practical implementation of its recommendations.
• Perceived Fiscal Bias of the Finance Commission: The Finance Commission is tasked with equitable resource allocation but often faces criticism for favouring the Union, creating a perceived fiscal imbalance that impacts state finances.
  For example: The 15th Finance Commission’s recommendations have been criticised for disproportionately benefiting the Centre, straining the financial resources of states.
• Compensation Issues in GST Council: The GST Council fosters tax uniformity, yet compensation disputes reveal limitations in its ability to address states’ financial crises.
  For example: Delays in GST compensation have caused financial stress for states, exposing the Council’s limitations in handling urgent fiscal issues.
• Inactivity of the National Development Council (NDC): The National Development Council (NDC), originally intended to promote national integration through developmental planning, has become largely inactive, reducing its role in fostering Union-State cooperation.
  For example: The NDC has not met in recent years, which limits its ability to address collaborative development goals across the country.

Reforms to Strengthen Cooperative Federalism

• Revitalising the Inter-State Council(ISC): Regularizing ISC meetings and strengthening its mandate can improve dialogue and foster cooperative conflict resolution.
  For example: The 2nd Administrative Reforms Commission (ARC) has recommended that the ISC should meet regularly, ideally bi-annually, to address pressing issues and strengthen its role in cooperative federalism.
• Enhancing Financial Transparency: Transparent revenue-shart between Centre and sting and timely GST compensation can build trusates, fostering cooperative governance.
  For example: Introducing a fixed timeline for GST payments can reduce financial conflicts, as recommended by state finance ministers.
• Encouraging Collaborative Policy-Making: Including states in policy formulation, especially in concurrent subjects, can reduce ideological conflicts and improve implementation.
  For example: State involvement in health policy design can ensure tailored, region-specific solutions, enhancing effectiveness.
• Strengthening NITI Aayog’s Role: Granting NITI Aayog more decision-making powers in policy areas could improve the execution of cooperative federalism initiatives.
  For example: Giving NITI Aayog an enforcement role in key development projects could bridge implementation gaps.

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Recommendations from the Punchhi Commission and the National Commission to Review the Working of the Constitution (NCRWC), including revisiting the Seventh Schedule to better delineate the powers of the Centre and the states, represent a crucial step toward strengthening India’s federal framework, fostering balanced development, and reinforcing national unity.

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