Answer

The Centre-State relations in India have undergone significant changes, in recent years, especially with the rise of debates around cooperative federalism and fiscal devolution. The 15th Finance Commission’s recommendations on state allocations and the growing tension over issues like GST compensation and farm laws have brought attention to the need for reforms in this dynamic relationship.

Recent Changes Introduced by the Union Government (Centre-State Relations)

• 15th Finance Commission’s Recommendations: The Centre implemented Commission’s recommendation of reducing the states’ share in taxes from 42% to 41%
  For instance: The reduction in states share acknowledges the fiscal challenges while balancing the needs of Jammu & Kashmir as a Union Territory.
• Introduction of GST: Goods and Services Tax (GST) unified India’s market, yet it has led to financial stress for states, straining federal relations.
  For example: Several states have raised concerns over GST compensation delays.
• Farm Laws and Agriculture: The farm laws passed by the Centre, while aimed at reforming agriculture, caused significant unrest, with several states arguing that agriculture is a State subject.
  For example: Punjab and Haryana led protests, claiming the laws infringed on their legislative domain.
• Establishment of NITI Aayog: The dissolution of the Planning Commission and the establishment of NITI Aayog was a step toward cooperative federalism, yet some states feel that decision-making is still too centralised in certain areas.
• Increase in Centrally Sponsored Schemes: This has reduced financial autonomy of states, as they are often required to contribute funds, limiting flexibility in local developmental priorities.
  For example: The Pradhan Mantri Awas Yojana (PMAY) is one such scheme where states must contribute to funding.
• Implementation of the Direct Benefit Transfer (DBT) Scheme: By centralising welfare disbursement through the DBT Centre has reduced state control over social welfare programs, which could lead to a lack of responsiveness to local conditions.
  For instance: Schemes like MGNREGA and LPG subsidy now rely on direct transfers from the Centre.
• One Nation, One Election Proposal: The proposal for simultaneous elections across Lok Sabha and State Assemblies has sparked debate, with several states arguing that this undermines the federal structure.

Measures to Build Trust and Strengthen Federalism

• Strengthening the Inter-State Council: Revitalising the ISC as a consultative platform encourages dialogue on policy decisions and disputes to ensure inclusiveness and transparency in governance.
  For instance: The Sarkaria Commission recommended strengthening ISC for better coordination.
• Timely GST Compensation: This ensures fiscal stability and trust between the Centre and States, allowing states to plan their budgets without uncertainty.
• More Autonomy in Centrally Sponsored Schemes: This would empower them to tailor schemes according to their local needs, ensuring more efficient and effective execution.
• Cooperative Federalism through NITI Aayog:Transforming NITI Aayog to include states in key decisions would enhance cooperative federalism and ensure shared ownership of national development goals.
  For instance: States should have a more active role in the Aspirational Districts Program to cater to local development needs.
• Resolving Disputes through Consensus: Adopting a collaborative and consensus-based approach to resolve issues like river water-sharing disputes would reduce Centre-State friction.
  For instance: The Cauvery water dispute could benefit from dialogue-based solutions involving both Tamil Nadu and Karnataka.
• Constitutional Clarity on State Subjects: Clearly defining the powers and responsibilities of state governments ensures effective governance and minimises conflicts with central authorities, thereby securing cooperative federalism.
  For instance: Agriculture, being a state subject, should involve more consultation with states before reforms are enacted.
• Fiscal Empowerment of States: Revisiting the recommendations of the 15th Finance Commission and providing states with greater fiscal autonomy would ensure balanced development and reduce financial dependency on the Centre.
• Collaborative Policy Formulation: Engaging states in the initial stages of policy formulation, rather than imposing centrally made decisions, would build a sense of ownership and cooperation, leading to better implementation.

India’s federal structure requires constant nurturing through mutual trust and cooperation. As Dr. B.R. Ambedkar emphasised, “Federalism is not a matter of administrative convenience but one of political necessity.” Strengthening Centre-State relations through cooperative dialogue, financial autonomy, and constitutional clarity will enhance the foundation of Indian democracy.

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