{"id":3519,"date":"2026-08-11T22:11:34","date_gmt":"2026-08-11T16:41:34","guid":{"rendered":"https:\/\/forumias.com\/psir\/notes\/changing-nature-of-centre-state-relations\/"},"modified":"2026-08-12T02:57:48","modified_gmt":"2026-08-11T21:27:48","slug":"changing-nature-of-centre-state-relations","status":"publish","type":"psir_note","link":"https:\/\/forumias.com\/psir\/notes\/changing-nature-of-centre-state-relations\/","title":{"rendered":"Changing nature of centre-state relations"},"content":{"rendered":"<div class=\"n-wrap\">\n<div class=\"n-shell\">\n<div class=\"n-crumb\"><a href=\"\/psir\/psir-notes\/\">PSIR Notes<\/a><span class=\"sep\">\u203a<\/span><a href=\"\/psir\/psir-notes\/#i-b\">I-B Indian Government and Politics<\/a><span class=\"sep\">\u203a<\/span><span>Changing nature of centre-state relations<\/span><\/div>\n<header class=\"n-head\">\n<div class=\"n-eyebrow\">Paper I \u00b7 Indian Government and Politics<\/div>\n<h1 class=\"n-title\">Changing nature of centre-state relations<\/h1>\n<div class=\"n-syl\"><b>Syllabus \u00b7 Paper I-B \u00b7 7<\/b> \u2014 Federalism : Constitutional provisions; <span class=\"cur\">changing nature of centre-state relations<\/span>; integrationist tendencies and regional aspirations; inter-state disputes.<\/div>\n<\/header>\n<div class=\"n-grid\">\n  <main class=\"n-body\"><\/p>\n<h3 id=\"cooperative-federalism\">Cooperative Federalism<\/h3>\n<p><span class=\"n-lab\">Meaning.<\/span> Coordinated working of Union, States &amp; local bodies for common goals \u2014 built on <span class=\"n-term\">interdependence, not isolation<\/span>. Union frames policy + funds; States adapt, implement, innovate; local bodies deliver; shared institutions reduce distrust. <span class=\"n-sch\">Granville Austin<\/span> \u2014 cooperative federalism; <span class=\"n-sch\">W. H. Morris-Jones<\/span> \u2014 bargaining federation (cooperation through negotiation).<\/p>\n<p><span class=\"n-term\">Constitutional &amp; institutional basis:<\/span> 7th Schedule \u00b7 Concurrent List \u00b7 Art 263 \u00b7 Inter-State Council \u00b7 Art 261 \u00b7 Full Faith &amp; Credit \u00b7 Art 282 \u00b7 grants \u00b7 Art 279A \u00b7 GST Council \u00b7 Art 312 \u00b7 All India Services \u00b7 Finance Commission \u00b7 Zonal Councils (1956) \u00b7 NITI Aayog \u00b7 &#8220;Team India&#8221;<\/p>\n<h4 id=\"working-examples\">Working examples<\/h4>\n<ul>\n<li><span class=\"n-lab\">GST Council<\/span> \u2014 Union FM chairs; State FMs participate; Union one-third vote, States two-thirds; three-fourths threshold forces negotiation. <span class=\"n-sch\">Arun Jaitley<\/span> called it &#8220;pooled sovereignty.&#8221;<\/li>\n<li><span class=\"n-lab\">NITI Aayog<\/span> \u2014 replaced Planning Commission; Governing Council of CMs; indices &amp; policy dialogue; DMEO &amp; Atal Innovation Mission.<\/li>\n<li><span class=\"n-lab\">Finance Commission<\/span> \u2014 corrects vertical &amp; horizontal imbalance. <span class=\"n-term\">Inter-State Council<\/span> \u2014 constitutional platform, underused. <span class=\"n-term\">NDC, All India Services<\/span>, judiciary.<\/li>\n<\/ul>\n<blockquote class=\"n-quote\">\n<p>&#8220;In a sense, the Indian Union is federal. But the extent of federalism in it is largely watered-down by the needs of progress and development of the country\u2026 the States cannot stand in the way of legitimate and comprehensively planned development of the country in the manner directed by the Central Government.&#8221; \u2014 <span class=\"n-law\">Supreme Court, State of Rajasthan v. Union of India<\/span><\/p>\n<\/blockquote>\n<p><span class=\"n-law\">Govt of NCT of Delhi v. Union of India, 2018<\/span> \u2014 stressed <span class=\"n-term\">collaborative federalism<\/span>; Lieutenant Governor to use discretion sparingly.<\/p>\n<h4 id=\"strengths-challenges-way-forward\">Strengths \u00b7 challenges \u00b7 way forward<\/h4>\n<div class=\"n-tw\">\n<table>\n<thead>\n<tr>\n<th>Strengths<\/th>\n<th>Challenges<\/th>\n<th>Way forward<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>suits diversity \u00b7 national integration \u00b7 less duplication \u00b7 national standards + State adaptation \u00b7 crisis management \u00b7 welfare delivery<\/td>\n<td>Centre&#8217;s dominance in funds \u00b7 Governor&#8217;s discretion \u00b7 ISC underuse \u00b7 conditional grants &amp; CSS \u00b7 delayed GST compensation \u00b7 centralised design \u00b7 Union-opposition rivalry<\/td>\n<td>regular ISC meetings \u00b7 neutral Governors \u00b7 flexible CSS \u00b7 timely GST compensation \u00b7 respect State specificity \u00b7 stronger Zonal Councils \u00b7 fiscal predictability \u00b7 avoid &#8220;one size fits all&#8221;<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<p><span class=\"n-lab\">COVID-19<\/span> \u2014 showed Union, States, Panchayats &amp; Municipalities must cooperate; some local bodies acted effectively without detailed central guidance \u2014 value of grassroots federalism.<\/p>\n<div class=\"n-pyq\"><span class=\"n-pyq-chip\">UPSC 2015 \u00b7 10m<\/span><span class=\"n-pyq-q\">Comment on cooperative federalism in India.<\/span><\/div>\n<p><span class=\"n-term\">Answer map (2015).<\/span> Union &amp; States as partners \u2192 <span class=\"n-term\">Elazar<\/span> self-rule + shared rule \u2192 <span class=\"n-sch\">Manmohan Singh<\/span> \u2014 an essay in persuasion &amp; nation-building \u2192 basis: Arts 263, 261, 282, 279A, 312 \u2192 GST Council, ISC, FC, NITI, Zonal Councils, AIS \u2192 <span class=\"n-term\">S.R. Bommai<\/span> &amp; <span class=\"n-term\">NCT Delhi 2018<\/span> \u2192 challenges (ISC underuse, GST compensation, water disputes, CSS, distrust) \u2192 essential for terrorism, public health, migration, disaster, development.<\/p>\n<h3 id=\"competitive-federalism\">Competitive Federalism<\/h3>\n<p><span class=\"n-lab\">Meaning.<\/span> Competition among States to improve governance, attract investment, perform better on development indicators. <span class=\"n-sch\">John Kincaid<\/span> \u2014 rivalry whereby each government seeks a scarce benefit (e.g. foreign investment) or avoids a cost (e.g. a large welfare population).<\/p>\n<p><span class=\"n-term\">Evolution of competition among Indian States.<\/span> Before 1991 (Planning Commission dominant; limited State autonomy) \u2192 After 1991 (liberalisation; States compete for capital, infra, ease of business) \u2192 After 2015 (NITI rankings, indices, peer learning) \u2192 Competitive\u2013cooperative.<\/p>\n<p><span class=\"n-term\">Instruments:<\/span> Smart Cities Mission \u00b7 NITI indices \u00b7 India Innovation Index \u00b7 Health Index \u00b7 School Education Quality Index \u00b7 Aspirational Districts \u00b7 Ease of Doing Business \u00b7 performance-linked FC indicators \u00b7 State investment policies<\/p>\n<h4 id=\"for-against\">For &amp; against<\/h4>\n<div class=\"n-tw\">\n<table>\n<thead>\n<tr>\n<th>Support<\/th>\n<th>Caution \/ criticism<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td><span class=\"n-sch\">Arvind Panagariya<\/span> \u2014 improves governance &amp; business climate \u00b7 <span class=\"n-sch\">Bibek Debroy<\/span> \u2014 decentralised, efficient structure \u00b7 <span class=\"n-sch\">Rekha Saxena<\/span> \u2014 growth &amp; policy performance \u00b7 <span class=\"n-sch\">Louise Tillin<\/span> \u2014 empowers States to meet specific needs \u00b7 <span class=\"n-sch\">Albert Breton<\/span> \u2014 a check against monopolistic governance<\/td>\n<td><span class=\"n-sch\">Maram Govinda Rao<\/span> \u2014 widens rich\u2013poor inequalities \u00b7 <span class=\"n-sch\">Balveer Arora<\/span> \u2014 race to the bottom in labour\/social\/environmental standards \u00b7 <span class=\"n-sch\">A. G. Noorani<\/span> \u2014 excessive competition weakens national unity \u00b7 advanced States gain more; poorer States lack capacity<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<p><span class=\"n-lab\">Assessment.<\/span> India has <span class=\"n-em\">not<\/span> simply moved cooperative \u2192 competitive. Cooperative federalism stays necessary for national issues; competitive promotes State innovation; coercive tendencies appear when Union dominates consultation. Best model = <span class=\"n-term\">competitive-cooperative federalism<\/span>. <span class=\"n-sch\">Ronald L. Watts<\/span> \u2014 federations alternate between cooperative and competitive modes.<\/p>\n<div class=\"n-pyq\"><span class=\"n-pyq-chip\">UPSC 2017 \u00b7 10m<\/span><span class=\"n-pyq-q\">Indian federation has moved from cooperative to competitive federation.<\/span><a class=\"n-pyq-a\" href=\"\/psir\/psir-pyq\/indian-federation-has-moved-from-cooperative-federation-to-upsc-psir-2017-2202\/\">Answer<\/a><\/div>\n<p><span class=\"n-term\">Answer map (2017).<\/span> <span class=\"n-sch\">Austin<\/span> cooperative base (GST Council, FC, ISC, NITI, Zonal Councils) \u2192 competition strengthened post-1991 &amp; post-NITI \u2192 instruments (Smart Cities, indices, EoDB, Aspirational Districts) \u2192 <span class=\"n-term\">Kincaid<\/span> definition; <span class=\"n-term\">Panagariya\/Debroy<\/span> for; <span class=\"n-term\">M.G. Rao\/Arora\/Noorani<\/span> against \u2192 verdict: balance of cooperative + competitive + sometimes coercive; ideal = competitive-cooperative with capacity support for weaker States.<\/p>\n<h3 id=\"executive-bargaining-federalism\">Executive &amp; Bargaining Federalism<\/h3>\n<h4 id=\"executive-federalism\">Executive federalism<\/h4>\n<p><span class=\"n-lab\">Definition.<\/span> Federal relations shaped mainly through <span class=\"n-term\">executive institutions and administrative negotiation<\/span> rather than legislative federalism \u2014 CM\u2013PM interaction, State bureaucracies implementing Union schemes, AIS, GST Council \/ NITI \/ ISC as executive forums, Governors as constitutional-executive links.<\/p>\n<p><span class=\"n-term\">Use:<\/span> faster coordination, national programmes, pandemics\/disasters\/security. <span class=\"n-term\">Risk:<\/span> consultation becomes executive dominance; State legislatures bypassed; bureaucratic federalism can weaken democratic federalism.<\/p>\n<h4 id=\"bargaining-federalism\">Bargaining federalism<\/h4>\n<p><span class=\"n-sch\">W. H. Morris-Jones<\/span> \u2014 Indian federalism is <span class=\"n-term\">bargaining federalism<\/span>: Centre &amp; States negotiate continually; <span class=\"n-sch\">Mahendra Prasad Singh<\/span> \u2014 cooperative federalism in practice may become bargaining federalism. Bargaining power varies with party alignment &amp; economic strength.<\/p>\n<p><span class=\"n-term\">Bargaining arenas:<\/span> GST compensation \u00b7 CSS \u00b7 special-category status \u00b7 Finance Commission terms \u00b7 river-water disputes \u00b7 State-specific packages \u00b7 coalition-era concessions.<\/p>\n<p><span class=\"n-term\">GST = both.<\/span> A &#8220;three-legged race&#8221; \u2014 Centre-State coordination + inter-State coordination + fiscal trust. States surrendered part of indirect-tax autonomy; Union one-third \/ States two-thirds; three-fourths threshold forces consensus; compensation disputes exposed bargaining pressures.<\/p>\n<h3 id=\"asymmetrical-federalism\">Asymmetrical Federalism<\/h3>\n<p><span class=\"n-lab\">Meaning.<\/span> Different units enjoy <span class=\"n-term\">different powers, status or autonomy<\/span> under the same Constitution (vs symmetrical, where all units are identical). India combines symmetry (shared framework) + asymmetry (special provisions for particular States, regions, tribes, UTs).<\/p>\n<p><span class=\"n-term\">Axes:<\/span> vertical (Union\u2013State) \u00b7 horizontal (among States) \u00b7 de jure (in law) \u00b7 de facto (by practice). <span class=\"n-sch\">Ronald L. Watts<\/span> separates <span class=\"n-term\">political asymmetry<\/span> (size, population, economy, weight \u2014 e.g. UP&#8217;s Rajya Sabha seats vs small States) from <span class=\"n-term\">constitutional asymmetry<\/span> \u2014 &#8220;differences in the status or legislative and executive powers assigned by the constitution to the different regional units.&#8221;<\/p>\n<h4 id=\"constitutional-provisions\">Constitutional provisions<\/h4>\n<div class=\"n-tw\">\n<table>\n<thead>\n<tr>\n<th>Provision<\/th>\n<th>Content<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td><span class=\"n-term\">Art 370<\/span><\/td>\n<td>earlier special status to J&amp;K abrogated 2019.<\/td>\n<\/tr>\n<tr>\n<td><span class=\"n-term\">Art 371 series<\/span><\/td>\n<td>Maharashtra\/Gujarat (dev boards) \u00b7 Nagaland (customary law, land) \u00b7 Assam\/Manipur (tribal-hill committees) \u00b7 Andhra (education\/employment, central university) \u00b7 Sikkim \u00b7 Arunachal (Governor &amp; law &amp; order) \u00b7 Mizoram, Goa.<\/td>\n<\/tr>\n<tr>\n<td><span class=\"n-term\"><span class=\"n-law\">Fifth Schedule<\/span><\/span><\/td>\n<td>Scheduled Areas, Tribes Advisory Council, Governor&#8217;s role, tribal land protection.<\/td>\n<\/tr>\n<tr>\n<td><span class=\"n-term\"><span class=\"n-law\">Sixth Schedule<\/span><\/span><\/td>\n<td>autonomous district \/ regional councils; tribal self-government (esp. North-East).<\/td>\n<\/tr>\n<tr>\n<td><span class=\"n-term\">Union Territories<\/span><\/td>\n<td>Delhi, Puducherry, J&amp;K have legislatures; others administered differently; Parliament retains overriding power.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<h4 id=\"rationale-defence-criticism\">Rationale, defence &amp; criticism<\/h4>\n<p>Reason: equal treatment of unequal regions may produce injustice \u2014 cultural protection, tribal autonomy, historical compacts, frontier integration, peace accords, customary law, land rights, regional backwardness, unity through accommodation.<\/p>\n<blockquote class=\"n-quote\">\n<p>&#8220;What emerged was a new kind of federalism designed to hold together a highly plural society.&#8221;<\/p>\n<p><cite>Granville Austin<\/cite><\/p><\/blockquote>\n<ul>\n<li><span class=\"n-sch\">Will Kymlicka<\/span> \u2014 minority rights may require &#8220;differentiated citizenship status\u2026 rights or opportunities not available to other groups.&#8221;<\/li>\n<li><span class=\"n-sch\">Yogendra Yadav<\/span> \u2014 India a &#8220;state-nation\u2026 a new model of how to deal democratically with deep diversities.&#8221;<\/li>\n<li><span class=\"n-sch\">Ashutosh Varshney<\/span> \u2014 a &#8220;salad bowl&#8221; approach, not a &#8220;melting pot.&#8221;<\/li>\n<li><span class=\"n-sch\">V. D. Mahajan<\/span> \u2014 asymmetry useful for ethno-cultural accommodation. <span class=\"n-sch\">Louise Tillin<\/span> \u2014 asymmetry an essential characteristic of Indian federalism.<\/li>\n<\/ul>\n<div class=\"n-tw\">\n<table>\n<thead>\n<tr>\n<th>Criticism<\/th>\n<th>Defence<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td><span class=\"n-sch\">Charles Tarlton<\/span> \u2014 may promote separatism \u00b7 <span class=\"n-sch\">Brian Barry<\/span> \u2014 two classes of citizenship (nationality-based vs merely regional) \u00b7 <span class=\"n-term\">M. G. Rao<\/span> \u2014 transparent asymmetry justified, but discriminatory short-term arrangements harm unity<\/td>\n<td><span class=\"n-lab\">Kymlicka, Charles Taylor, Ferran Requejo, Alain-G. Gagnon, Gibb<\/span> \u2014 defend asymmetry in multinational societies \u00b7 <span class=\"n-sch\">Balveer Arora<\/span> \u2014 neutral channels (ISC) to manage tensions<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<p><span class=\"n-lab\">Assessment.<\/span> Asymmetry is a <span class=\"n-term\">functional device, not a defect<\/span> \u2014 useful when transparent, constitutional, negotiated, accommodative, integrative; problematic when politicised, arbitrary, fiscally discriminatory, used for patronage.<\/p>\n<div class=\"n-pyq\"><span class=\"n-pyq-chip\">UPSC 2018 \u00b7 15m<\/span><span class=\"n-pyq-q\">Discuss asymmetrical federalism in India.<\/span><a class=\"n-pyq-a\" href=\"\/psir\/psir-pyq\/discuss-asymmetrical-federalism-in-india-upsc-psir-2013-2204\/\">Answer<\/a><\/div>\n<p><span class=\"n-term\">Answer map (2018).<\/span> Unequal constitutional\/political\/fiscal arrangements within one federation \u2192 <span class=\"n-term\">Elazar<\/span> self-rule + shared rule \u2192 Art 370 (pre-2019), Arts 371\u2013371J, 5th &amp; 6th Schedules, UTs, gubernatorial responsibilities \u2192 <span class=\"n-term\">Watts<\/span> political vs constitutional asymmetry; vertical\/horizontal\/de jure\/de facto \u2192 <span class=\"n-term\">Kymlicka, Varshney, Mahajan<\/span> for; <span class=\"n-term\">Tarlton, Barry<\/span> against; <span class=\"n-term\">M.G. Rao<\/span> transparency test \u2192 <span class=\"n-sch\">Arora<\/span> \u2014 stronger ISC.<\/p>\n<h3 id=\"centre-state-relations-contested-areas\">Centre\u2013State Relations &amp; Contested Areas<\/h3>\n<div class=\"n-tw\">\n<table>\n<thead>\n<tr>\n<th>Legislative contestation<\/th>\n<th>Administrative contestation<\/th>\n<th>Financial contestation<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>Union encroachment into State List \u00b7 Concurrent List expansion \u00b7 Art 254 override \u00b7 Arts 249\/250\/252\/253 \u00b7 farm laws \u00b7 education &amp; NEET \u00b7 environment\/forests \u00b7 NIA taking cases without State approval. <span class=\"n-term\"><span class=\"n-law\">42nd Amendment<\/span><\/span> shifted education, forests, weights &amp; measures, wildlife to Concurrent List.<\/td>\n<td>All India Services \u00b7 directions under Arts 256\u2013257 \u00b7 central forces \u00b7 central agencies \u00b7 Governor \u00b7 LG in Delhi \u00b7 CSS \u00b7 State machinery implementing Union policy. States allege tools used against opposition-ruled States.<\/td>\n<td>vertical &amp; horizontal imbalance \u00b7 GST &amp; loss of tax autonomy \u00b7 delayed GST compensation \u00b7 conditional grants \u00b7 CSS \u00b7 borrowing limits (Art 293) \u00b7 FC terms \u00b7 cesses &amp; surcharges outside divisible pool. <span class=\"n-sch\">C. Rangarajan<\/span> Committee on State dependence; <span class=\"n-term\">M.G. Rao, Raja Chelliah, Arvind Subramanian<\/span> \u2014 fiscal autonomy with equalisation.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<h4 id=\"governor-president-s-rule-central-agencies\">Governor, President&#8217;s Rule &amp; central agencies<\/h4>\n<ul>\n<li><span class=\"n-lab\">Governor<\/span> \u2014 Centre&#8217;s agent perception; Art 163 discretion; reserving Bills; delayed assent; government formation; Art 356 reports. <span class=\"n-term\">Sarkaria<\/span> &amp; <span class=\"n-term\">Punchhi<\/span> \u2014 neutrality &amp; transparent appointment. <span class=\"n-law\">B.P. Singhal v. UoI, 2010<\/span> \u2014 fairness in Governor removal.<\/li>\n<li><span class=\"n-lab\">Art 356<\/span> \u2014 <span class=\"n-sch\">Ambedkar<\/span> hoped it would &#8220;remain a dead letter.&#8221; <span class=\"n-term\">S.R. Bommai, 1994<\/span> \u2014 judicial review; floor test; federalism = basic structure; arbitrary dismissal restricted; Assembly not dissolved before parliamentary approval.<\/li>\n<li><span class=\"n-lab\">Central agencies<\/span> \u2014 CBI, ED, NIA, paramilitary; States object when seen as instruments of political pressure.<\/li>\n<\/ul>\n<h4 id=\"gst-neet-as-federal-challenges\">GST &amp; NEET as federal challenges<\/h4>\n<div class=\"n-tw\">\n<table>\n<thead>\n<tr>\n<th>GST<\/th>\n<th>NEET<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td><span class=\"n-law\">101st Amendment<\/span>, 2016; from 1 July 2017. Concerns: States lost rate autonomy; manufacturing States feared revenue loss; compensation disputes; GST Council central to fiscal federalism; long-term dependence. <span class=\"n-sch\">Prabhat Patnaik<\/span> \u2014 cuts fiscal autonomy. <span class=\"n-sch\">Kumar<\/span> &amp; <span class=\"n-term\">M.G. Rao<\/span> \u2014 centralised tax admin may unbalance relations. <span class=\"n-term\">Mukherjee<\/span> \u2014 compensation helped temporarily; States vulnerable after. <span class=\"n-sch\">Arun Jaitley<\/span> \u2014 &#8220;pooled sovereignty.&#8221;<\/td>\n<td>Uniform medical entrance. Concerns: education in Concurrent List, health mainly State; Tamil Nadu \u2014 uniformity ignores unequal literacy &amp; social realities; reservation &amp; rural-service incentives affected. <span class=\"n-sch\">Garga Chatterjee<\/span> \u2014 State exams let States shape their health workforce. <span class=\"n-sch\">M.K. Stalin<\/span> \u2014 &#8220;the state government is being forced to fight for even the basic rights from the Union government.&#8221; <span class=\"n-sch\">A.K. Singh<\/span> \u2014 current phase is &#8220;national federalism.&#8221;<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<blockquote class=\"n-quote\">\n<p>GST Council \u2014 &#8220;the most shining example of cooperative federalism\u2026 pooled autonomy for the larger public good.&#8221;<\/p>\n<p><cite>Nand Kishore Singh<\/cite><\/p><\/blockquote>\n<p><span class=\"n-term\">Doctrinal safeguards:<\/span> pith and substance \u00b7 colourable legislation \u00b7 judicial review \u00b7 Inter-State Council \u00b7 constitutional morality.<\/p>\n<div class=\"n-pyq\"><span class=\"n-pyq-chip\">UPSC 2015 \u00b7 15m<\/span><span class=\"n-pyq-q\">Identify the contested areas in Centre-State relations.<\/span><\/div>\n<div class=\"n-pyq\"><span class=\"n-pyq-chip\">UPSC 2018 \u00b7 10m<\/span><span class=\"n-pyq-q\">GST &amp; NEET as a major challenge to Indian federalism.<\/span><a class=\"n-pyq-a\" href=\"\/psir\/psir-pyq\/implementation-of-gst-and-neet-is-a-major-challenge-to-indian-upsc-psir-2013-2203\/\">Answer<\/a><\/div>\n<p><span class=\"n-term\">Answer map (2018, GST &amp; NEET).<\/span> Tension between <span class=\"n-term\">national uniformity<\/span> and <span class=\"n-term\">State autonomy<\/span> \u2192 GST unified indirect tax but cut States&#8217; rate power; destination-based, so manufacturing States feared loss; compensation &amp; irregular Council meetings \u2192 NEET vs Concurrent-List education &amp; State health (<span class=\"n-term\">Chatterjee<\/span>, Tamil Nadu) \u2192 <span class=\"n-sch\">Patnaik<\/span> autonomy concern; <span class=\"n-term\">Jaitley<\/span> &#8220;pooled sovereignty,&#8221; States two-thirds vote \u2192 balance challenge with cooperative potential: equity, consultation, stronger ISC.<\/p>\n<h3 id=\"inter-state-council-zonal-councils\">Inter-State Council &amp; Zonal Councils<\/h3>\n<p><span class=\"n-lab\">Basis. Art 263<\/span> \u2014 President may establish an Inter-State Council in the public interest to (i) inquire into &amp; advise on disputes between States, (ii) investigate &amp; discuss subjects of common interest, (iii) recommend better coordination. Established <span class=\"n-term\">1990<\/span> on <span class=\"n-term\">Sarkaria Commission<\/span> recommendation.<\/p>\n<h4 id=\"composition\">Composition<\/h4>\n<p>PM (Chairperson) \u00b7 CMs of all States \u00b7 CMs of UTs with Assembly \u00b7 Administrators of UTs without Assembly \u00b7 Governors of States under President&#8217;s Rule \u00b7 six Union Cabinet Ministers nominated by PM \u00b7 other Union Ministers invited when relevant. One of the few bodies where Union, States &amp; UTs sit together.<\/p>\n<h4 id=\"working-limitations\">Working &amp; limitations<\/h4>\n<ul>\n<li><span class=\"n-lab\">Non-permanent<\/span> \u2014 exists via Presidential Order; structure alterable by Union executive.<\/li>\n<li><span class=\"n-lab\">Advisory<\/span> \u2014 recommendations non-binding; no positive duty to act.<\/li>\n<li><span class=\"n-lab\">Infrequent<\/span> \u2014 far below mandated frequency; long gap 2006\u20132016.<\/li>\n<li><span class=\"n-lab\">Narrow agenda<\/span> \u2014 excludes matters of FC, Planning Commission, NDC.<\/li>\n<li><span class=\"n-lab\">Weak secretariat<\/span> \u2014 under Union Home Ministry; little technical\/research capacity.<\/li>\n<li><span class=\"n-term\">In-camera<\/span> proceedings \u00b7 weak follow-up. <span class=\"n-term\">Political bypassing<\/span> \u2014 party forums &amp; coalition bargaining; GST Council &amp; NITI took over key areas.<\/li>\n<\/ul>\n<blockquote class=\"n-quote\">\n<p>&#8220;The performance of the ISC has been abysmal; there has hardly been any constitutional amendment or enactment flowing from its recommendations.&#8221;<\/p>\n<p><cite>Rekha Saxena<\/cite><\/p><\/blockquote>\n<h4 id=\"reform-proposals-zonal-councils\">Reform proposals &amp; Zonal Councils<\/h4>\n<div class=\"n-tw\">\n<table>\n<thead>\n<tr>\n<th>Body<\/th>\n<th>Recommendation<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td><span class=\"n-term\">Sarkaria<\/span><\/td>\n<td>regular meetings; stronger coordination role; sub-committees; consultation on common matters.<\/td>\n<\/tr>\n<tr>\n<td><span class=\"n-term\">Punchhi<\/span><\/td>\n<td>constitutional\/statutory status; meet thrice a year; permanent secretariat; expert bodies; quasi-judicial advisory capacity; secretariat shifted from Home Ministry to Rajya Sabha Secretariat under neutral functionaries.<\/td>\n<\/tr>\n<tr>\n<td><span class=\"n-term\">11th Finance Commission<\/span><\/td>\n<td>ISC not effectively used for national economic consensus.<\/td>\n<\/tr>\n<tr>\n<td><span class=\"n-term\">Venkatachaliah (NCRWC)<\/span><\/td>\n<td>use the ISC &#8220;in tune with the spirit of cooperative federalism.&#8221;<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<p><span class=\"n-lab\">Zonal Councils<\/span> \u2014 <span class=\"n-law\">States Reorganisation Act, 1956<\/span>; five (Northern, Southern, Eastern, Western, Central); advisory bodies for regional tensions, border disputes, transport, linguistic minorities, balanced development.<\/p>\n<div class=\"n-pyq\"><span class=\"n-pyq-chip\">UPSC 2022 \u00b7 15m<\/span><span class=\"n-pyq-q\">Composition, functions &amp; success of the Inter-State Council.<\/span><\/div>\n<div class=\"n-pyq\"><span class=\"n-pyq-chip\">UPSC 2019 \u00b7 10m<\/span><span class=\"n-pyq-q\">Despite constitutional mandate, the ISC has not come of age.<\/span><a class=\"n-pyq-a\" href=\"\/psir\/psir-pyq\/despite-constitutional-mandate-the-inter-state-council-has-not-upsc-psir-2019-2205\/\">Answer<\/a><\/div>\n<p><span class=\"n-term\">Answer map (ISC).<\/span> Constitutional body, Art 263, est. 1990 (Sarkaria) \u2192 composition (PM + CMs + UT CMs + Administrators + Governors under PR + six Cabinet Ministers) \u2192 functions (inquire, discuss, recommend) \u2192 success limited: infrequent (2006\u20132016 gap), advisory, weak secretariat, bypassed by party channels &amp; sectoral bodies (<span class=\"n-sch\">Saxena<\/span>) \u2192 <span class=\"n-term\">Punchhi<\/span> reforms; NITI itself flags reactivation \u2192 institutionally important, operationally underused.<\/p>\n<h3 id=\"fiscal-federalism\">Fiscal Federalism<\/h3>\n<p><span class=\"n-term\">Design.<\/span> Distribution of taxation, expenditure, grants, borrowing, transfers, equalisation, fiscal autonomy. India: strong Union revenue authority + major State expenditure burden + FC transfers + CSS + GST Council + Art 293 borrowing control + cesses\/surcharges as friction.<\/p>\n<h4 id=\"finance-commission\">Finance Commission<\/h4>\n<div class=\"n-tw\">\n<table>\n<thead>\n<tr>\n<th>Commission<\/th>\n<th>Key feature<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td><span class=\"n-term\">14th FC<\/span><\/td>\n<td>raised States&#8217; divisible-pool share <span class=\"n-term\">32%<\/span> \u2192 <span class=\"n-term\">42%<\/span>; strengthened fiscal autonomy in principle.<\/td>\n<\/tr>\n<tr>\n<td><span class=\"n-term\">15th FC<\/span><\/td>\n<td>high devolution at <span class=\"n-term\">41%<\/span>; sector-linked grants (health, power reforms); criticised by Southern States over population criteria.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<p><span class=\"n-term\">Concerns:<\/span> devolution % alone insufficient \u00b7 cesses\/surcharges shrink divisible pool \u00b7 conditional grants cut flexibility \u00b7 poorer States need equalisation \u00b7 richer States seek performance recognition.<\/p>\n<h4 id=\"gst-council-the-planning-shift\">GST Council &amp; the planning shift<\/h4>\n<p><span class=\"n-lab\">GST Council (Art 279A)<\/span> \u2014 joint tax decision-making, shared sovereignty, one-nation-one-tax, unified market; problems: reduced State tax autonomy, compensation disputes, manufacturing-State losses, pandemic revenue stress, post-compensation vulnerability. Fiscal federalism is now <span class=\"n-term\">also negotiated in a permanent fiscal council<\/span>, not only FC-based.<\/p>\n<p><span class=\"n-term\">From directive planning to cooperative\u2013competitive coordination.<\/span> Planning Commission 1950 (Five-Year Plans, plan grants, top-down) \u2192 National Development Council (consultation, still Centre-heavy) \u2192 NITI Aayog 2015 (think tank, no grant power, indices, CMs&#8217; council).<\/p>\n<ul>\n<li><span class=\"n-sch\">Durga Das Basu<\/span> \u2014 Planning Commission &#8220;the economic cabinet of the country.&#8221; <span class=\"n-sch\">Arun Maira<\/span> \u2014 &#8220;a force for allocation of money, not for persuasion of change.&#8221;<\/li>\n<li><span class=\"n-sch\">Arvind Panagariya<\/span> \u2014 the new model is &#8220;competitive cooperative federalism.&#8221; <span class=\"n-sch\">Bibek Debroy<\/span> \u2014 &#8220;NITI Aayog is better suited for a rapidly evolving economy, where the Centre no longer imposes a single plan on diverse regions.&#8221;<\/li>\n<li>NITI criticism: advice without funds; opposition boycotts; rankings as pressure; fiscal imbalance persists.<\/li>\n<\/ul>\n<h4 id=\"the-fc-gst-council-niti-triangle\">The FC \u2014 GST Council \u2014 NITI triangle<\/h4>\n<p><span class=\"n-sch\">Pinaki Chakraborty<\/span> \u2014 three changes reshape Union-State fiscal relations: abolition of Planning Commission, higher tax devolution, creation of GST Council. FC sets transfer norms &amp; uses performance criteria; GST Council shapes the tax base &amp; revenue available for devolution; NITI supplies rankings\/data that indirectly influence grant criteria. Result: fiscal federalism is more interactive; cooperation &amp; conditionality coexist; fiscal trust = federal trust. <span class=\"n-sch\">Maram Govinda Rao<\/span> \u2014 cooperative federalism is tested most during fiscal stress.<\/p>\n<h3 id=\"coastal-federalism-the-blue-economy\">Coastal Federalism &amp; the Blue Economy<\/h3>\n<p><span class=\"n-term\">Emerging frontier.<\/span> Centre-State tension over marine economy \u2014 ports, fisheries, coastal regulation, seabed minerals, offshore energy. The blue economy shifts contestation from river valleys to coastal waters; authority changes around the <span class=\"n-term\">12-nautical-mile<\/span> mark.<\/p>\n<p><span class=\"n-lab\">Art 297<\/span> \u2014 Union controls things of value in territorial waters, continental shelf &amp; EEZ. But States bear coastal erosion costs, fisher welfare, port land, local policing, labour, grid connection, climate risk. <span class=\"n-term\">Sagarmala<\/span> \u2014 600+ projects, around <span class=\"n-term\">\u20b98 lakh crore<\/span> in port\/shipping\/logistics.<\/p>\n<div class=\"n-tw\">\n<table>\n<thead>\n<tr>\n<th>Flashpoint<\/th>\n<th>Issue<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td><span class=\"n-term\">Indian Ports Bill<\/span><\/td>\n<td>Tamil Nadu \u2014 converting Maritime State Development Council into a regulator would violate State powers.<\/td>\n<\/tr>\n<tr>\n<td><span class=\"n-term\">Marine Fisheries Bill, 2021<\/span><\/td>\n<td>fisheries economist <span class=\"n-sch\">John Kurien<\/span> noted protests with &#8220;black flags on boats, beach protests, strikes and petitions of dissent.&#8221;<\/td>\n<\/tr>\n<tr>\n<td><span class=\"n-term\">Offshore wind \/ seabed mining<\/span><\/td>\n<td>leases off Gujarat &amp; Tamil Nadu, deep-sea permits \u2014 Union powers but State infrastructure.<\/td>\n<\/tr>\n<tr>\n<td><span class=\"n-term\">Coastal Regulation Zone<\/span><\/td>\n<td>2019 CRZ notification \u2014 fishing communities &amp; State agencies felt ignored.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<p><span class=\"n-term\">Way forward:<\/span> Maritime Federal Council \u00b7 equal State voice in coastal matters \u00b7 seabed lease-rent sharing \u00b7 joint licensing protocols \u00b7 fisher-community consultation \u00b7 coastal adaptation fund. No GST Council-type body or revenue-sharing law yet exists for marine wealth.<\/p>\n<h3 id=\"judiciary-the-federal-balance\">Judiciary &amp; the Federal Balance<\/h3>\n<div class=\"n-tw\">\n<table>\n<thead>\n<tr>\n<th>Case<\/th>\n<th>Federal principle<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td><span class=\"n-term\">Kesavananda Bharati, 1973<\/span><\/td>\n<td>basic structure \u2014 federal character protected; Parliament cannot alter it.<\/td>\n<\/tr>\n<tr>\n<td><span class=\"n-term\">S.R. Bommai, 1994<\/span><\/td>\n<td>federalism = basic structure; Art 356 judicial review; floor test; secularism &amp; democracy protected; arbitrary dismissal restricted.<\/td>\n<\/tr>\n<tr>\n<td><span class=\"n-law\">State of West Bengal v. UoI, 1963<\/span><\/td>\n<td>clarified Union powers &amp; limits of State sovereignty within the Union.<\/td>\n<\/tr>\n<tr>\n<td><span class=\"n-term\">B.P. Singhal, 2010<\/span><\/td>\n<td>Governor removal cannot be arbitrary; must respect constitutional fairness.<\/td>\n<\/tr>\n<tr>\n<td><span class=\"n-term\">Govt of NCT of Delhi, 2018<\/span><\/td>\n<td>collaborative federalism; LG must not use discretion routinely.<\/td>\n<\/tr>\n<tr>\n<td><span class=\"n-term\">NCT Delhi Services, 2023<\/span><\/td>\n<td>services belong to the elected city government \u2014 democratic accountability in a special federal context.<\/td>\n<\/tr>\n<tr>\n<td><span class=\"n-term\">Lalit Miglani, 2016<\/span><\/td>\n<td>directed an Inter-State Council for riparian States of the Ganga, with ecology\/environment\/irrigation experts.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<p><span class=\"n-term\">Limit:<\/span> judiciary protects federalism but cannot replace political consultation \u2014 federal harmony also needs constitutional restraint, ISC, Zonal Councils, GST Council, political maturity, fiscal fairness.<\/p>\n<h3 id=\"contribution-criticism-assessment\">Contribution, Criticism &amp; Assessment<\/h3>\n<div class=\"n-tw\">\n<table>\n<thead>\n<tr>\n<th>Contribution<\/th>\n<th>Criticism<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>holds together a plural society \u00b7 linguistic reorganisation without breakup \u00b7 tribal\/regional accommodation \u00b7 democracy&#8217;s survival \u00b7 rise of regional parties \u00b7 Panchayat\/Municipal decentralisation \u00b7 development planning &amp; welfare \u00b7 constitutional conflict-settlement \u00b7 judicial protection. <span class=\"n-sch\">Will Kymlicka<\/span> &amp; <span class=\"n-sch\">Ashutosh Varshney<\/span> \u2014 unity in diversity \/ &#8220;salad bowl.&#8221;<\/td>\n<td>excessive centralisation \u00b7 weak State fiscal autonomy \u00b7 Art 356 misuse \u00b7 politicised Governor \u00b7 ISC underuse \u00b7 central agencies vs opposition States \u00b7 delayed water-dispute resolution \u00b7 uneven GST benefits \u00b7 conditional schemes \u00b7 incomplete local empowerment.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<p><span class=\"n-term\">Balanced verdict.<\/span> Indian federalism is <span class=\"n-term\">centralised in design, federal in structure, cooperative in aspiration, bargaining in practice, competitive in development, asymmetrical in accommodation, sometimes coercive in operation, resilient in performance<\/span>. The real question is not strong Centre vs strong States \u2014 <span class=\"n-term\">a strong Centre needs strong States; strong States need a stable Union<\/span>. The task is constitutional balance.<\/p>\n<p><span class=\"n-lab\">Conclusion.<\/span> An evolving arrangement for governing diversity \u2014 a centralised federation shaped by Partition, integration &amp; planning, later adjusted to linguistic reorganisation, regional parties, coalitions, liberalisation, local self-government, GST, NITI Aayog &amp; new autonomy demands. Its durability lies in flexibility; its weakness in over-centralisation, fiscal dependence, politicised institutions &amp; weak consultation. A living system of <span class=\"n-term\">negotiated unity<\/span> \u2014 one political community without forcing all regions to be the same.<\/p>\n<div class=\"n-next\"><a href=\"\/psir\/notes\/constitutional-provisions-on-federalism\/\"><em>Previous<\/em><b>Constitutional provisions on federalism<\/b><\/a><a class=\"r\" href=\"\/psir\/notes\/integrationist-tendencies-and-regional-aspirations\/\"><em>Next<\/em><b>Integrationist tendencies and regional aspirations<\/b><\/a><\/div>\n<p><\/main><\/p>\n<aside class=\"n-rail\">\n<h4>On this page<\/h4>\n<p><a href=\"#cooperative-federalism\">Cooperative Federalism<\/a><a href=\"#competitive-federalism\">Competitive Federalism<\/a><a href=\"#executive-bargaining-federalism\">Executive &amp; Bargaining Federalism<\/a><a href=\"#asymmetrical-federalism\">Asymmetrical Federalism<\/a><a href=\"#centre-state-relations-contested-areas\">Centre\u2013State Relations &amp; Contested Areas<\/a><a href=\"#inter-state-council-zonal-councils\">Inter-State Council &amp; Zonal Councils<\/a><a href=\"#fiscal-federalism\">Fiscal Federalism<\/a><a href=\"#coastal-federalism-the-blue-economy\">Coastal Federalism &amp; the Blue Economy<\/a><a href=\"#judiciary-the-federal-balance\">Judiciary &amp; the Federal Balance<\/a><a href=\"#contribution-criticism-assessment\">Contribution, Criticism &amp; Assessment<\/a><\/aside>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Changing nature of centre-state relations for the UPSC PSIR optional \u2014 PSIR Notes \u203a I-B Indian Government and Politics \u203a Changing nature of centre-state relations Paper I \u00b7 Indian <\/p>\n","protected":false},"template":"","meta":{"jetpack_post_was_ever_published":false,"fx_note_key":"I-B.7.2","fx_note_sec":"I-B","fx_note_point":"7","fx_note_desc":"Changing nature of centre-state relations for the UPSC PSIR optional \u2014 PSIR Notes \u203a I-B Indian Government and Politics \u203a Changing nature of centre-state relations Paper I \u00b7 Indian ","footnotes":""},"class_list":["post-3519","psir_note","type-psir_note","status-publish","hentry"],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/psir\/wp-json\/wp\/v2\/psir_note\/3519","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/psir\/wp-json\/wp\/v2\/psir_note"}],"about":[{"href":"https:\/\/forumias.com\/psir\/wp-json\/wp\/v2\/types\/psir_note"}],"version-history":[{"count":2,"href":"https:\/\/forumias.com\/psir\/wp-json\/wp\/v2\/psir_note\/3519\/revisions"}],"predecessor-version":[{"id":3837,"href":"https:\/\/forumias.com\/psir\/wp-json\/wp\/v2\/psir_note\/3519\/revisions\/3837"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/psir\/wp-json\/wp\/v2\/media?parent=3519"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}