India’s federal structure, envisioned by the Constitution, balances power between the Union and the States. However, since 2014, India’s federalism has undergone notable changes, sparking debates about whether it’s evolving—or eroding. This blog explores how India's federal dynamics have transformed in the last decade, focusing on governance, policy-making, fiscal relations, and political trends.
Understanding Indian Federalism: A Brief Context
Indian federalism is quasi-federal—a mix of strong central control with autonomy for states. While the Constitution allocates powers through the Union, State, and Concurrent lists, cooperative federalism has historically been promoted to ensure harmonious Centre-State relations.
But since 2014, the discourse has seen a pivot from cooperative to competitive and even coercive federalism, particularly in areas of legislation, taxation, and political influence.
1. GST and Fiscal Federalism: A Double-Edged Sword
The introduction of the Goods and Services Tax (GST) in 2017 was historic—it subsumed numerous indirect taxes, simplified compliance, and created a unified national market.
✅ Positive: Strengthened economic integration, reduced cascading taxes.
⚠️ Concerns:
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States ceded significant fiscal autonomy.
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GST Council—though collaborative—is often criticized for being Union-dominated.
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Delay in compensation payments during COVID-19 exposed structural weaknesses.
Conclusion: GST showcases economic federalism with central overtones.
2. Legislative Overreach: A Rising Concern
Post-2014, there has been a noticeable increase in central laws impacting State subjects, particularly in:
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Agriculture (e.g., now-repealed farm laws),
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Education (via NEP),
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Labour Codes.
This has led to accusations of Parliament encroaching upon State List subjects, bypassing State legislatures and undermining democratic decentralisation.
3. Governors: Instruments of the Centre?
Governors, often appointed based on political alignment, have become controversial actors in Centre-State dynamics:
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Delaying bills in Tamil Nadu and Kerala.
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Influencing cabinet decisions in Maharashtra.
The Sarkaria Commission had warned against such politicisation, but recent trends suggest a widening rift.
4. Federalism in Cooperative Schemes: One Size Fits All?
Centrally Sponsored Schemes (CSS) like:
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Ayushman Bharat,
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PM-KISAN,
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Swachh Bharat Abhiyan,
...while ambitious, often ignore regional diversities. States bear partial financial burden without full control over design or implementation.
The rise of “New India” narratives sometimes sidelines local contexts and governance styles, especially in non-BJP ruled States.
5. Political Centralisation: Shrinking Space for States
The dominance of one party at the Centre and growing electoral asymmetry have contributed to political centralisation. Institutions like NITI Aayog were meant to encourage cooperative federalism—but critics argue it has become a top-down policy tool, replacing the Planning Commission without empowering states.
6. The Way Forward: Strengthening Federal Balance
To preserve the spirit of the Constitution:
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Strengthen the Inter-State Council as a forum for dialogue.
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Reform the role and neutrality of Governors.
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Redesign CSS with state-specific flexibility.
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Protect fiscal federalism through timely compensation and revenue autonomy.
Conclusion
The post-2014 era has redefined Indian federalism, with undeniable moves toward centralisation. While national cohesion and efficiency are valid goals, diversity, regional autonomy, and democratic decentralisation are equally vital.
If Indian federalism is to evolve, it must not lose its soul—cooperation, consultation, and constitutional respect.
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