[Answered] Examine the necessity of a structural reset in Indian federalism to harmonize State autonomy with Union efficiency. Evaluate the proposition that the Union and States are partners in a shared constitutional enterprise rather than competitors in a zero-sum contest.

Introduction

Seventy-six years after adopting a quasi-federal Constitution, rising fiscal tensions, GST disputes, and Governor–State confrontations signal that India’s centralized design requires recalibration for a $5-trillion-plus, demographically diverse economy.

Constitutional Design and Centralising Bias

1. India’s Constitution, influenced by the Government of India Act, 1935, created a federation with strong unitary features—residuary powers to the Union, emergency provisions, and expansive Union and Concurrent Lists under the Seventh Schedule. This was historically justified by Partition, integration of princely States, and fragile unity.
2. However, as affirmed in S.R. Bommai v. Union of India, federalism forms part of the Basic Structure. States are not administrative appendages but constitutionally sovereign within their domain.
3. Over time, legislative expansion into Concurrent subjects, centrally sponsored schemes (CSS), conditional fiscal transfers, and executive overreach have tilted the balance.

Necessity of a Structural Reset

1. Fiscal Federalism and Vertical Imbalance: Despite the 14th Finance Commission raising States’ share in divisible taxes to 42%, tied grants and CSS continue to limit fiscal autonomy. The GST regime, governed by the GST Council, though cooperative in theory, has generated compensation disputes and rate-setting frictions. A structural reset requires moving from conditional central patronage to genuine fiscal empowerment.
2. Concurrent List Overreach: Union legislation in subjects such as education, agriculture, and forests increasingly shapes State priorities. Excessive central templates reduce contextual policy flexibility in a country marked by demographic asymmetry—aging southern States and youthful northern States.
3. Governor–State Frictions: Frequent delays in assent to State Bills and perceived partisan interventions have raised concerns about federal propriety. The Punchhi Commission (2010) recommended codified timelines and clearer conventions to prevent misuse.
4. Capacity vs Autonomy Paradox: Centralists argue States lack capacity. Yet over-centralisation stunts institutional development. Capacity emerges from responsibility and accountability, not perpetual supervision.

Union and States: Shared Constitutional Enterprise

The zero-sum lens assumes Union strength depends on State weakness. This is empirically flawed.

1. Innovation through Decentralised Experimentation: Many national schemes originated as State-level experiments: Tamil Nadu’s Midday Meal Scheme influenced the national PM-POSHAN programme, Maharashtra’s Employment Guarantee Scheme shaped MGNREGA, Kerala’s public health model demonstrated decentralized human development success. Decentralization allows policy laboratories, fostering horizontal diffusion of best practices.
2. Cooperative Federalism in Practice: The GST Council, despite tensions, represents institutionalized intergovernmental negotiation. It demonstrates that shared sovereignty can manage complex indirect tax harmonisation in the world’s largest democracy. Similarly, initiatives like the Aspirational Districts Programme illustrate synergy—Union vision combined with State execution.
3. Efficiency and Specialization: The Union is indispensable for: National security and foreign affairs, Macroeconomic stability, International treaties and Interstate trade and digital infrastructure. States are essential for: Public health, Education delivery, Agricultural reform and Local infrastructure. Optimal governance requires subsidiarity—allocating functions to the lowest competent authority.
4. Comparative Perspective: Mature federations like the United States and Germany demonstrate that decentralization does not weaken national unity. Instead, it enhances resilience through distributed authority and competitive federalism.

Way Forward: Toward Collaborative Federalism

1. Revitalize the Inter-State Council as a permanent conflict-resolution forum.
2. Rationalize Centrally Sponsored Schemes to reduce overlap.
3. Clarify gubernatorial roles through statutory conventions.
4. Deepen third-tier federalism under the 73rd and 74th Amendments.
5. Institutionalize transparent fiscal devolution formulas.

6. A structural reset is not about dismantling Union authority but right-sizing it—allowing it to focus on genuinely national priorities while empowering States to innovate.

Conclusion

As B. R. Ambedkar observed, the Constitution is workable if those in power are constitutional in spirit; India’s federal future depends on partnership, trust, and shared responsibility.