The Indian federal framework, established by the Constitution of 1950, is often described as a “quasi-federal” system—a unique synthesis of federal and unitary features. While the division of powers between the Centre and the States is formally codified, the dynamics of Indian federalism have historically been marked by tensions, particularly in times of political centralization or asymmetric development. Centre–State relations in India span multiple axes—legislative, administrative, financial, and political—and their contestations reveal the friction between constitutional design and the evolving needs of a plural, multi-tiered polity. This essay explores the principal areas of contention within India’s federal structure, critically analyzing the institutional, normative, and operational challenges that arise in Centre–State relations.
I. Theoretical Foundations and Constitutional Design
The Indian Constitution draws inspiration from both British parliamentary democracy and American federalism. However, the constituent framers, guided by concerns over national unity, administrative integration, and economic reconstruction in the aftermath of Partition, opted for a centralized federal model. B.R. Ambedkar famously described India as a “Union of States,” not a federation derived from a compact among autonomous units.
Article 1 describes India as a “Union of States,” and Article 246 and the Seventh Schedule delineate the division of powers across Union, State, and Concurrent Lists. However, the preponderance of the Union List (97 subjects) and the residuary powers granted to the Centre (Article 248) reflect an inbuilt central bias. Scholars such as K.C. Wheare have classified India’s federalism as “quasi-federal,” emphasizing the supremacy of the Centre, particularly in legislative and fiscal matters. In practice, this constitutional asymmetry has resulted in several enduring areas of tension.
II. Legislative Relations: Overlapping Authority and Central Override
Article 246, which provides for a threefold distribution of legislative powers, creates potential for overlap and conflict, particularly in the Concurrent List (e.g., education, criminal law, marriage and divorce). The provision under Article 254 allows a Union law to prevail over State law in cases of conflict on Concurrent List subjects, unless the State law has received the President’s assent.
Tensions have also emerged with the Centre’s increasing tendency to legislate on subjects traditionally seen as state prerogatives. The farm laws of 2020, now repealed, were widely criticized for bypassing state authority over agriculture, a State List subject. Similarly, the National Education Policy (2020), though not a law per se, imposes significant policy guidance on a subject that is constitutionally shared.
The use of Article 123 (ordinance-making power) and Article 252 (legislation with State consent) further tilts the balance toward central legislative dominance. The Supreme Court’s decisions in State of West Bengal v. Union of India (1963) and S.R. Bommai v. Union of India (1994) have attempted to delineate the boundaries of federalism but remain limited in constraining legislative centralism.
III. Financial Relations: Vertical Imbalance and Fiscal Centralization
One of the most structurally entrenched areas of conflict in Centre–State relations is fiscal federalism. The Centre controls major sources of revenue (e.g., income tax, corporate tax, customs, and excise), while States bear the brunt of expenditure responsibilities, particularly in sectors like health, education, rural development, and law and order.
The Finance Commission (Article 280) is tasked with recommending the devolution of resources. While successive Finance Commissions have sought to rectify the vertical imbalance, states often complain about discretionary central grants, centrally sponsored schemes (CSS), and non-transparent cess and surcharge collections, which are outside the divisible pool.
The Fifteenth Finance Commission (2020), by recommending performance-based incentives and conditional grants, reignited debates over fiscal autonomy versus accountability. States like Kerala and Tamil Nadu criticized the erosion of the fiscal space of States, arguing that the Union increasingly exercises coercive control via fiscal instruments.
Furthermore, the implementation of the Goods and Services Tax (GST) and the creation of the GST Council (Article 279A) has centralized indirect taxation. Although it institutionalizes cooperative federalism, tensions have emerged over compensation payments, especially post-COVID-19. The states’ inability to raise independent GST rates has eroded their financial autonomy, rendering them dependent on central transfers.
IV. Administrative Relations: Dual Control and Central Supervision
Administratively, the Centre exercises significant control over State functioning through mechanisms such as All India Services (e.g., IAS, IPS, IFS), whose members are recruited centrally but serve in the States. The Union’s power to issue directions to States under Article 256 and ensure compliance under Article 365 reinforces administrative subordination.
The role of the Governor (Articles 153–162) has been a persistent site of conflict. As a centrally appointed figure who acts as a constitutional head in States, the Governor wields discretionary powers in government formation, floor test supervision, reporting constitutional breakdown (Article 356), and reserving bills for presidential assent (Article 200). These powers have often been criticized for being misused by the Centre to destabilize elected State governments, particularly when different political parties are in power at the two levels. The Punchhi Commission (2010) and Sarkaria Commission (1988) have both recommended safeguards to ensure that the Governor’s office is not politicized.
V. Political Federalism: Asymmetries and Contestations
The political configuration of Centre–State relations has become increasingly complex with the rise of regional parties and the decline of single-party dominance at the national level post-1989. The coalition era (1989–2014) witnessed a revival of federal demands and a more consultative policy environment.
However, since 2014, there has been a recentralization of political power, with the Union government asserting dominance through policy centralization, digital governance architectures, and direct benefit transfers (DBTs), often bypassing state-level institutions. This has sparked concerns about “executive federalism”, where states are treated as implementing agencies rather than equal partners.
Issues such as language imposition (e.g., Hindi promotion), resource allocation biases, environmental clearance processes, and disaster management have also been flashpoints. The management of the COVID-19 pandemic, where the Centre invoked the Disaster Management Act (2005) to impose uniform protocols, was seen by many states as eroding federal consultation.
VI. Federal Commissions and Judicial Moderation
Several expert commissions have been constituted to recommend federal restructuring:
- The Sarkaria Commission advocated for cooperative federalism, clear demarcation of functions, and respect for State autonomy.
- The Punchhi Commission recommended the establishment of a Federal Council, institutionalization of the Inter-State Council (Article 263), and codification of emergency powers.
- The NITI Aayog, which replaced the Planning Commission in 2015, claims to foster collaborative policy design, yet lacks the financial transfer powers of its predecessor.
The Supreme Court of India, through judgments such as Bommai, Nabam Rebia v. Deputy Speaker (2016), and State of Rajasthan v. Union of India (1977), has tried to uphold federal principles. However, in practice, the court has often deferred to the executive, especially in matters concerning national interest or emergency powers.
VII. Conclusion: Toward a Coherent and Cooperative Federalism
The principal areas of contention in Centre–State relations—legislative centralism, fiscal imbalance, administrative dualism, and political asymmetry—underscore the tension between a constitutionally centralized federation and a pluralist, democratic polity. While centralization may be justified during national emergencies or developmental imperatives, excessive dominance threatens state autonomy, political accountability, and the spirit of cooperative federalism.
In the contemporary era, rebalancing federal relations requires a reinvigoration of institutional forums (e.g., Inter-State Council, GST Council), restructuring of fiscal federalism, and codification of conventions and norms that safeguard the autonomy and dignity of States. As India matures as a federal democracy, moving from command-and-control governance to dialogue-based consensus-building is not just normatively desirable but constitutionally imperative.
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