India’s federalism is in need of a structural reset

Source: The post “India’s federalism is in need of a structural reset” has been created, based on “India’s federalism is in need of a structural reset” published in “The Hindu” on  17th February 2026.

UPSC Syllabus: GS Paper-2- Polity

Context: India adopted a federal system with a strong Union to ensure unity after Partition, integration of princely States, and linguistic diversity. Over time, however, constitutional practice has moved toward greater centralisation through legislation, fiscal control, and administrative oversight. Many scholars and political leaders argue that India now needs a structural reset to achieve balanced federalism with autonomous States and an efficient Union.

Constitutional Basis of Indian Federalism

1. India is described as a “Union of States” under the Constitution of India, which provides a federal structure with unitary features.
2. The design drew heavily from the Government of India Act 1935, which concentrated powers in the Centre.
3. Federalism was declared part of the basic structure of the Constitution in S.R. Bommai v. Union of India, affirming that States are not mere administrative units.
4. The Seventh Schedule distributes powers through Union, State, and Concurrent Lists, but residuary powers rest with the Union.

Reasons for Initial Centralisation

1. The trauma of Partition created fears of secession and fragmentation.
2. Integration of more than 500 princely States required a strong central authority.
3. Economic planning in the early decades favoured centralised decision-making.
4. One-party dominance in the early years reinforced the “high command culture” in governance.
5. Emergency provisions such as Article 356 allowed the Centre to intervene in State governance.

Thus, centralisation was historically justified but has persisted even after those conditions changed.

Present Challenges in Union–State Relations

I. Legislative Centralisation

1. The Union increasingly legislates on Concurrent List subjects such as education, agriculture, and labour.
2. National laws sometimes leave little flexibility for States to adapt policies to local conditions.
3. Subordinate legislation and regulations occasionally override State laws in practice.
4. This trend weakens the principle of State autonomy recognised by the Constitution.

II. Fiscal Centralisation

1. States rely heavily on Finance Commission transfers and centrally sponsored schemes.
2. Conditional grants often require States to follow rigid templates designed in New Delhi.
3. Implementation of the Goods and Services Tax reduced States’ independent taxation powers.
4. Delays in GST compensation payments created fiscal stress for States.
5. Many States face rising debt while their fiscal flexibility declines.

III. Administrative Centralisation

1. Large Union ministries operate schemes in sectors such as health, education, and agriculture, which are State subjects.
2. Centrally sponsored schemes impose uniform guidelines despite regional differences.
3. Duplication of administrative functions leads to inefficiency and confusion.
4. Policy micromanagement reduces innovation at the State level.

IV. Role of Governors

1. Delays in granting assent to State bills have created constitutional controversies.
2. Governors are sometimes perceived as acting politically rather than neutrally.
3. Such conflicts undermine cooperative federalism and democratic accountability.

V. Weak Intergovernmental Institutions

1. Bodies like the Inter-State Council are rarely used for meaningful policy dialogue.
2. Mechanisms for resolving Centre–State disputes are slow or ineffective.
3. Lack of regular consultation creates mistrust between governments.

Consequences of Excessive Centralisation

1. Policies designed centrally may not suit diverse local conditions.
2. States lose incentives to innovate in governance.
3. Fiscal dependence reduces accountability of State governments to citizens.
4. Administrative overload at the Centre leads to inefficiency.
5. Political tensions increase between Union and State governments.

Importance of Balanced Federalism

1. India’s diversity in language, culture, and economy requires decentralised policy solutions.
2. States can act as laboratories of democracy and experiment with innovative policies.
3. Successful State policies can later be adopted nationally.
4. Balanced federalism improves service delivery and accountability.
5. Strong States contribute to a stronger Union.

Examples of State innovations include Tamil Nadu’s noon-meal scheme, Kerala’s public health model, and Maharashtra’s employment guarantee programme.

Recommendations for Structural Reset

I. Legislative Reforms

1. The Union should limit legislation on State subjects unless national uniformity is essential.
2. Pre-legislative consultation with States should be mandatory.
3. Governors’ roles should be clarified with time-bound procedures for assent to State bills.

II. Fiscal Reforms

1. Increase untied transfers to States through Finance Commissions.
2. Restore fiscal autonomy by expanding States’ taxation powers.
3. Simplify GST structure and ensure timely compensation.
4. Reduce the number of centrally sponsored schemes.

III. Institutional Reforms

1. Revitalise the Inter-State Council as a permanent policy forum.
2. Strengthen cooperative decision-making in GST Council.
3. Implement recommendations of the Sarkaria Commission and Punchhi Commission on Union–State relations.

IV. Administrative Reforms

1. Encourage decentralised planning at State and local levels.
2. Build administrative capacity of States and local bodies.
3. Reduce duplication between Union and State ministries.

V. Political and Democratic Reforms

1. Encourage constructive Centre–State dialogue rather than confrontation.
2. Respect electoral mandates of State governments.
3. Promote cooperative federalism through NITI Aayog and policy councils.

Way Forward

1. India must right-size the Union so it focuses on defence, foreign policy, macroeconomic stability, and national infrastructure.
2. States should have greater autonomy in health, education, agriculture, and policing.
3. Federalism should evolve with India’s maturity as a democracy.
4. Balanced federalism will improve governance outcomes and reduce regional disparities.

Conclusion

India’s unity is now strong and resilient, and greater State autonomy will not weaken the nation. A structural reset in federalism will align authority with accountability. Strong States and a focused Union together can ensure inclusive growth, better governance, and democratic stability.

Question: India’s federal structure, though constitutionally balanced, has evolved with increasing centralisation. Discuss why India’s federalism needs a structural reset. Suggest measures to achieve cooperative and balanced federalism.