INDIAN FEDERALISM IS A DIALOGUE

Last Updated on 4th November, 2024
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Context:

The Chief Justice of India highlighted federalism and its complexities and dynamic nature and advocated for a comprehensive understanding of this relationship.

About Federalism

It is a system of governance where power is divided between a central authority and various administrative units such as states or provinces. The division of power allows balance of power and ensures that both national and regional interests are served in a comprehensive way.

Federalism is important for India due to its diversity in terms of culture, language and geography,  it allows for regional autonomy while maintaining national unity, which promotes states to address their unique needs and challenges. 

Evolution of Federalism in India

The origin of federalism in India can be traced back to the Government of India Act, 1935. This act introduced a federal framework for the first time in India and established a division of power between the center and provincial  government. 

During the Constituent Assembly debates, the leaders drew inspiration from various sources, including Government of India 1935 and created a Constitutional framework that balance local autonomy and national development goals. 

Constitutional Provisions for Federalism

The Indian Constitution does not explicitly define India as a federal state, but includes several key provisions that establish a federal structure. 

The Constitution defined the legislative powers of the Union and state governments through the 7th Schedule, which contains;

  • The Union List includes subjects of national importance such as defense, foreign affairs and Atomic Energy. The central government has exclusive power to legislate on these matters. 
  • The State list includes subjects mainly related to local interests such as police, public health and agriculture. The state has exclusive legislative authority over these subjects. 
  • Concurrent lists cover subjects of joint interest, including  education, forest and marriage. Both the union and state governments can legislate on these subjects, but in case of a conflict, the Union law will prevail. 

Under Article 280, the Constitution mandates the establishment of a finance Commission every five years to recommend the distribution of taxes between the Union and the states to address fiscal imbalance, and to ensure that states have adequate resources to meet their development needs. 

In 2017, Goods and Services Tax (GST)  was implemented, which created a unified indirect tax system and established the GST Council, including representation from both union and state governments to manage tax policies, and to ensure that both the center and the states have a say in tax matters, under the principle of Cooperative federalism. 

Types of Federalism in India

Cooperative federalism 

  • NITI Aayog encourages states to participate in policy making and implementation. It acts as a platform for states to share best practices and collaborate on development projects.
  • Inter-State Council under Article 263 promotes communication and coordination between Union and States to address issues of common interest and resolve disputes. 

Competitive federalism 

  • NITI Aayog ranks states based on their performance in various sectors; Ease of doing business, healthcare, and education, These rankings encourage states to perform better and adopt best practices. 

Asymmetric federalism 

  • Certain states enjoy special provisions and autonomy due to their unique cultural, historical, or geographical circumstances. This form of federalism acknowledges regional diversity while maintaining national unity. 
  • Article 370 granted special autonomy to Jammu and Kashmir, however, In August 2019, the Article was abrogated, and it was reorganized into two Union territories. 
  • Article 371 provides special provisions to various northeastern states; Nagaland, Assam, Manipur, by acknowledging their unique cultural and historical background. The special provisions includes; special administrative arrangements, protection of local customs and laws, and greater autonomy in governance. 

Role of the Judiciary in Shaping Indian Federalism

In the State of West Bengal v/s Union of India case (1963), the Supreme Court held that the Union government could legislate on subjects even if they fell under the state list if they served national interest. 

In the S.R. Bommai v/s Union of India case (1994), the Supreme Court ruled that president rule could only be applied in exceptional cases, the federal structure should not be undermined by arbitrary actions. 

In the Kesavananda Bharati v/s State of Kerala case (1973), The Supreme Court introduced the doctrine of basic structure; it highlighted that certain fundamental features of the Constitution, including federalism, cannot be modified or abolished by amendments.

Significant Committee Reports on Federalism

Rajamannar Committee

  • It recommended greater autonomy for States and criticized the misuse of president rule under Article 356.
  • It emphasized the need for a clear demarcation of subjects between the Union and state lists to avoid conflict and ensure effective governance. 

Sarkaria Commission

  • It recommended strengthening the role of the Interstate Council to promote better coordination and cooperation between the Center and the States.
  • It proposed revising the distribution of powers to ensure state autonomy while maintaining national utility. 
  • It recommended that Article 356 should be used only as a last option. It also recommended that the imposition of president rules should be based on objective criteria. 

Punchhi Commission

  • It proposed empowering the Interstate Council to resolve disputes and enhance cooperative federalism. 
  • It advocated for a review of the distribution of revenue and functions between the Union and states to address fiscal imbalances.
  • It underlined the need for a more balanced and effective federal structure to promote mutual respect and collaboration between the Centre and the States. 

Challenges to Indian Federalism

A trend towards centralization has emerged with the Union government exercising increased control over the state subjects, for example, the frequent use of Article 356 to impose president rule in a state, raises concern about the misuse of the power.

Economic inequalities among states is a challenge for cooperative federalism. States with more resources can invest in infrastructure and public services, while the poorer states struggle to meet basic needs. Unequal development and can increase regional inequalities, which can obstruct the overall progress of the nation and create tension between states. 

Inter-State water disputes such as Cauvery and Krishna River highlights the limitations of cooperative federalism, mechanisms should be developed to resolve Interstate issues peacefully.

The introduction of goods and services tax has centralized indirect tax administration, which some states argue limited their fiscal autonomy. Several states have expressed concern about the delay in releasing compensation for revenue losses. Many states face difficulties to meet expenditure needs and developmental responsibilities due to limited resources. 

India's linguistic and cultural diversity can lead to the challenge of regionalism, where states prioritize local issues over national interest. Regional parties and movements may push for greater autonomy, which can create challenges for the integrity of the nation. 

Way Forward

The Inter-State Council should be strengthened to promote Comprehensive discussions on federal issues, and to promote greater collaboration between Union and States, regular meetings should focus on policy matters that require joint actions.

A regular review of Finance Commission recommendations is important to ensure fair revenue sharing between Union and states. Addressing imbalances due to GST will improve fiscal autonomy for states. The Finance Commission should consider the unique needs and challenges of each state to ensure equitable distribution of resources. 

Working structure of local bodies should be strengthened to bridge the gap between state government and grassroots communities, improving local governance can improve participation in decision making and ensure that local needs are addressed effectively. 

Government should introduce legal reforms to clarify the power structure between the Union and states to reduce conflict. An efficient mechanism for addressing Interstate disputes is important, this includes revisiting provisions like Article 356 to prevent misuse and ensure that the judiciary plays an active role in resolving federal disputes. 

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Source: 

Indian Express

Wikipedia

PRACTICE QUESTION

Q.Critically analyze the role of judiciary in maintaining the balance of power between Union and States in India. (150 Words)

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