FEDERALISM IN INDIA: CHALLENGES AND PROSPECTS

This article is written by Vandna Singh of 3^rd Semester of  Kazi Nazrul University, an intern under Legal Vidhiya

ABSTRACT

Federalism is a system of governance in which power is divided between the central government and state governments. India adheres to a federal form of governance, specifically characterized as “quasi-federal.” Quasi-federalism is a type of federal structure where the central government holds relatively more power than the state governments. Federalism allows a country to function efficiently by appropriately allocating roles at both the state and national levels. Although India adopted its Constitution in 1950, the concept of federalism had already been practiced in the country since the pre-partition era. Given that India follows a quasi-federal model, its features differ from those of other countries such as the United States, Switzerland, and the United Kingdom, where a more balanced form of federalism is implemented. This article explores the Indian federal system, its evolution, the challenges it faces, and the prospects it holds.

KEYWORDS

Dyarchy, Montagu–Chelmsford Report, Quasi-federalism and federalism.

INTRODUCTION

The separation of powers or the division of authority between the central and state governments is referred to as federalism. Federalism is a crucial element of Indian democracy as it thoughtfully allocates different roles to be governed by both the state and the Centre. India has embraced the concept of federalism since the pre-partition era; however, over the years, the form of federalism has evolved significantly. The evolution reflects the nation’s efforts to balance decentralization with centralization and vice versa.[1]

The concept of federalism was first introduced in the Montagu–Chelmsford Report of 1918[2], which laid the foundation for the Government of India Act of 1919[3]. A central reform of the Montagu–Chelmsford Report was the introduction of dyarchy. In 1946, Pandit Nehru presented a federal structure where the states would possess more power than the Centre [4]. However, this concept faced criticism in the assembly and was hence subsequently altered, reversing the power dynamics in favour of the central government rather than the state.

After independence, India continued to follow the principle of quasi-federalism. This approach was adopted to align with the country’s unique divisions based on states, languages, and other factors while also addressing national-level challenges. Since the inception of this framework, India has encountered numerous challenges as well as benefits. From inter-state conflicts to perceived central bias, the country faces considerable challenges under this form of governance. Nonetheless, despite the challenges, federalism enables India to function effectively despite its vast diversity—linguistic, cultural, geographical, and religious. Federalism ensures that all issues are managed efficiently by dividing governance responsibilities between the Centre and the states. This article seeks to delve into the complexities of federalism, the quasi-federal system of governance in India, and its impacts and consequences faced by India.

HISTORICAL BACKGROUND OF FEDERALISM

It is often noted that the United States represents one of the oldest examples of a federal system of government. However, there are other historical instances of federal governance that predate it. For example, ancient Greece exhibited several characteristics of federalism, with the Achaean League (280-146 BCE) being one of the most notable federations [5]. Ancient Greece was comprised of numerous small city-states that, despite being politically divided, were united by common cultural and linguistic ties. These city-states formed alliances to achieve shared objectives, and the Achaean League is recognized as one of the earliest federations that resemble modern federal systems. It is said that the Constitution of the United States drew significant inspiration from the practices of the Achaean League.

Throughout history, numerous influential figures have advanced the concept of federalism. Johannes Althusius, a German political theorist, is particularly notable for his contributions and is often regarded as the father of modern federalism [6]. He championed the principles of federalism and sovereignty, developing a thorough theory that linked federalism to the attainment of national unity. His work laid foundational ideas for modern federal systems, emphasizing the integration of diverse entities into a unified political framework.

David Hume, a Scottish philosopher and historian, posited that a federal system of governance involves both the central legislature and the constituent units [7]. He argued that the central legislature should hold supremacy over the unit members. While the units could participate in decision-making, Hume believed that in a federal system, the central legislature retains the authority to override or influence decisions. According to Hume, relying on the central authority would be preferable for decision-making, as it would be more likely to prioritize the public interest.

Jean-Jacques Rousseau, a distinguished philosopher and writer, argued that in a federal system of governance, powerful and significant entities should unite to form a governing body, with the legislation created by this collaboration being binding[8]. He believed that the combined strength of these forces must exceed that of any individual state. Rousseau contended that this form of governance would succeed if these conditions were met, emphasizing the importance of ensuring that no powerful entity could withdraw from the alliance.

Immanuel Kant, a prominent philosopher, was a strong advocate for peace [9]. He proposed that the primary goal of any political power should be the promotion of peace. According to Kant, all major states or forces should be involved in peace agreements, and the laws established by these forces should be binding on everyone. He argued that the collective strength of these forces must surpass that of any other entity. Kant believed that this approach would be effective only if secession by these forces were strictly prohibited.

John Stuart Mill, a philosopher and former member of the United Kingdom Parliament, held the view that the central government of any federation should possess sufficient authority to maintain national unity, particularly in economic matters, such as eliminating trade barriers[10]. He emphasized that no member state within a federation should become so powerful that it could operate independently of the federation. Mill advocated for a balanced distribution of power between the central authority and the member states to ensure stability and cohesion within the federation.

Officially, the concept of federalism was introduced during the colonial period, but Indian history reveals that the idea of federalism was practiced in ancient times as well. Ancient India saw the rise of several powerful dynasties. Empires such as the Cholas, Mauryas, Guptas, Rajputs, and Mughals operated under a central authority, yet they also practiced the division of powers by delegating authority to provincial or regional levels.

Federalism in India was first properly introduced under British rule. The Montagu–Chelmsford Report of 1919 outlined several reforms [11], which were later incorporated into the Government of India Act, 1919[12]. The most significant reform of this report was the introduction of dyarchy, marking the initial step toward federalism in India.

Dyarchy or diarchy refers to the division of power between two independent authorities. In India, this power was shared between British governors and Indian ministers [13]. The concept of federalism gained further traction during the 1st Round Table Conference, leading to broader agreements. Eventually, the British government agreed to form a new government for India, resulting in the Government of India Act of 1935[14]. This Act proposed a federation between British Indian provinces and princely states. However, due to various political challenges, it was never fully implemented.

After India gained independence, B.R. Ambedkar, as chairman of the drafting committee for the Constitution, strongly advocated for federalism and the union of states, with the central government holding significant power. The Constitution divided powers between the states and the centre, as outlined in Article 246. This division was intended to maintain harmony and peace in India while embracing its diversity.

PROVISIONS OF FEDERALISM UNDER THE INDIAN CONSTITUTION

B.R. Ambedkar, as Chairman of the Drafting Committee for the Constitution, played a crucial role in its creation. He ensured that the principles of federalism were explicitly integrated into the Constitution. The following are the provisions of Indian federalism:

1. Article 1[15]: This article emphasizes India’s federal structure and unity, declaring that India is a union of states.
2. Article 79: This article specifies that the Parliament consists of the Rajya Sabha and the Lok Sabha. In the federal system, the Rajya Sabha serves as the representative body.
3. Article 131: This article establishes that the Supreme Court of India operates independently as the sole authority to adjudicate disputes between the constituents.
4. Article 246: This article addresses the division of legislative subjects into distinct lists for the state and central governments: the State List, the Union List, and the Concurrent List.
5. Article 368: This article outlines the process for amending the Constitution.

The following are the unitary features of federalism under the Indian Constitution that reflect the aforementioned provisions:

1. Article 3: Establishes that states can be altered or created by Parliament, which holds the power to form new states.
2. Article 352: Grants the President the authority to declare a national emergency if the country faces a threat of war.
3. Article 356: Provides for President’s Rule in a state, effectively transforming the central-state relationship to a unitary one.
4. Article 248: Confers exclusive power on Parliament to make new laws on matters not enumerated in the State List.
5. Article 249: Empowers Parliament to legislate on State List matters in the national interest, with the consent of the Rajya Sabha.
6. Article 254: Resolves conflicts between central and state laws on matters in the Concurrent List by giving precedence to central laws, irrespective of the date of enactment.
7. Article 256: Mandates that states enforce central laws.
8. Article 257: Allows the central government to issue directives to state governments to ensure effective implementation of central laws.
9. Article 141: Ensures that decisions of the Supreme Court are binding on all courts and throughout India.

While the federal form of governance in India has evolved over time, it has certainly encountered a significant number of obstacles along the way.

CHALLENGES AND PROSPECTS OF FEDERALISM IN INDIA

India has faced several challenges due to its federal form of governance, reflecting broader issues that need attention. Achieving a balance between state and central power remains an unresolved issue since the partition. Although the Constitution clearly outlines these principles, there have been numerous instances where the central government has interfered in matters within the state list. This interference often stems from ambiguities in Article 131 of the Indian Constitution. Such disputes between the state and central governments undermine national unity, as evidenced during the COVID-19 pandemic and the challenges in managing the crisis effectively.

The dispute and lack of unity also impacts the revenue distribution aspect within the state. this challenge affects the overall development of the country as a whole. The central government acquires the power over major revenues like corporate and income taxes and custom duties. On the other hand, the state generates revenues from sales tax, property taxes, etc. the issues of imbalance in revenue arises in the state due to lack of revenue resources and the lack of support from the central government usually. Article 280 of the Indian constitution deals with the financial distributions. However, the state usually faces the issue of imbalance regardless as the allocation of these grants rise from favouritism and political benefits.

Fiscal imbalance is another challenge resulting from India’s federal structure. This issue has led to expenditure gaps in many states. The 7th Schedule of the Indian Constitution delineates the distribution of powers across different lists. Before the introduction of the Goods and Services Tax (GST), states had the authority to levy taxes listed under List 2. However, with the implementation of GST, this framework was reformed to simplify the tax structure. Despite its intended benefits, the GST has led to a reduction in states’ fiscal autonomy.

Following the introduction of the 101st Constitutional Amendment, Article 264A was added to address special powers concerning GST between the central and state governments. However, the central government possesses a relatively stronger voting share, which has led to concerns about inadequate representation for states.

The aforementioned challenges highlight key issues faced by India under its federal system. Disputes often arise from overlapping responsibilities between the state and central governments. Additionally, variability in implementation can lead to inconsistencies. For example, some states seek greater autonomy based on regional identities or other factors, creating a challenge in balancing these demands while maintaining overall consistency.

If reformed and implemented effectively, Indian federalism holds great promise for the future. Over the years, since partition, we have witnessed its evolving nature. The future of Indian federalism depends heavily on the relationship between the states and the central government. Numerous state-central programs, such as the Swachh Bharat Mission, the National Institution for Transforming India (NITI Aayog), and the National Rural Employment Guarantee Act (NREGA), have significantly benefited the country.

A balanced distribution of power between the state and the centre is absolutely crucial. Recent constitutional amendments have undeniably influenced the shifting power dynamics. For instance, the introduction of the Goods and Services Tax (GST) has significantly impacted fiscal responsibilities. Future reforms must prioritize maintaining an equitable balance that accommodates the interests of both the central and state governments.

The Finance Commission plays a pivotal role in addressing fiscal imbalances. Reforming revenue distribution is crucial to resolving these disparities and ensuring that both the centre and states have the necessary funds to fulfil their respective responsibilities. This authority rests with the Finance Commission. Therefore, for Indian federalism to have a promising future, it is vital to address and reform these imbalances.

As previously mentioned, balancing state autonomy with overall consistency is challenging but crucial for federalism. This responsibility should not rest solely on the central government. To effectively uphold state autonomy while maintaining national coherence, states must also be flexible in their governance, ensuring that central interests are not undermined. The prospects for federalism in India are promising, provided that ongoing and future reforms are implemented effectively to address the challenges faced.

KEY LANDMARK CASES AND IMPORTANT JUDGEMENTS

Kesavananda Bharati vs. State of Kerala, 1973[16]

In the Kesavananda Bharati v. State of Kerala case, the Supreme Court addressed the basic structure doctrine of the Constitution. The 13-judge bench ruled that federalism is a fundamental component of the Constitution’s basic structure. While this concept can be amended, it cannot be fundamentally altered.

State of Rajasthan vs. Union of India, 1977[17]

The Supreme Court addressed the central government’s power to impose President’s Rule under Article 356 of the Constitution. The Court affirmed that the central government plays a significant role in maintaining constitutional order within India’s federal structure. However, it emphasized that Article 356 should be invoked with utmost caution.

S.R. Bommai vs. Union of India, 1994[18]

In the case of S.R. Bommai v. Union of India, the Supreme Court reinforced federal principles by limiting the arbitrary use of Article 356 for imposing President’s Rule. The judgment established that if the imposition of President’s Rule is deemed unconstitutional, the dissolved state assembly can be revived and the dismissed government reinstated. The Court also clarified that the power under Article 356 is not absolute and can be challenged if exercised in bad faith or based on irrelevant grounds, thereby protecting states’ rights from central overreach.

State of West Bengal vs. Union of India, 1962[19]

This case set a precedent for interpreting federalism in India, ensuring a balance between state autonomy and national priorities. West Bengal challenged the central government’s authority to acquire land under the [20]Coal Bearing Areas (Acquisition and Development) Act, 1957, arguing that land is a state subject. The central government defended its action, citing its powers under Entries 52 and 54 of the Union List. The Supreme Court ruled in favor of the central government, stating that although land falls under the State List, the law’s primary focus was on coal mining and development, which is valid under the Union List.

Shamsher Singh vs. State of Punjab, 1974[21]

The Supreme Court, through a seven-judge bench, ruled that while the governor is the head of the state, their powers must be exercised based on the advice of the council of ministers under Article 163, except in specific circumstances. This case highlighted the limitations of the governor’s powers and underscored the judiciary’s role in upholding constitutional norms.

CONCLUSION

In any federal system, achieving a perfect balance of power between central and state authorities is elusive. India’s federal journey, described as “quasi-federal,” has been intricate and evolving. Since the Indian Constitution’s adoption in 1950, India has established a federal structure aiming to distribute powers between the central and state governments. This quasi-federal model reflects a nuanced balance, with the central government holding more authority compared to the states, a dynamic that has developed over time.

Federalism in India has undergone various phases, beginning with the introduction of dyarchy and the Government of India Act of 1935, which proposed a federal structure but was only partially implemented. The Supreme Court of India has significantly influenced this federal framework through landmark rulings. The Kesavananda Bharati case, for instance, confirmed that federalism is a fundamental element of the Constitution’s basic structure. While amendable, this structure cannot be fundamentally changed, ensuring the preservation of federal principles amid evolving political and administrative contexts.

However, Indian federalism faces several challenges. Fiscal imbalances, inter-state disputes, and central government interference frequently strain the federal structure. The central government’s control over major revenue sources and grant allocations often creates disparities and perceptions of bias, affecting states’ fiscal independence and development. Despite these complexities, Indian federalism remains a resilient system that can manage the country’s vast diversity and complex needs.

To maintain a balanced federal structure, it is essential to address fiscal imbalances and enhance state autonomy. With thoughtful reforms and effective implementation, Indian federalism can continue to thrive, balancing national priorities with state interests and ensuring a cohesive and effective governance framework.

REFERENCES

1. Adam Bilinski, Federalism | Definition, Importance & Examples, Study.com, (Sep. 10, 2024, 8:32 PM), https://study.com/learn/lesson/federalism-significance-examples.html.
2. Vajiram and Ravi, https://vajiramandravi.com/quest-upsc-notes/federalism-in-indian-polity/http://www.benjerry.com (last visited Sep. 10, 2024).
3. Byju’s, https://byjus.com/free-ias-prep/federalism/ (last visited Sep. 10, 2024).
4. Adithi Holla,What next for Indian federalism?, Deccan Herrald, (Sep. 11, 2024, 10:42 AM), https://www.deccanherald.com/opinion/what-next-for-indian-federalism-2845426
5. Stanford Encyclopedia of Philosophy, https://plato.stanford.edu/entries/federalism/#:~:text=there%20is%20compass%20and%20room,member%20unit%20and%20central%20legislatures., (last visited September 11, 2024)

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[1] [Study.com], [https://study.com/learn/lesson/federalism-significance-examples.html]. [(last visited September 10, 2024)].

[2] [Britannica], [https://www.britannica.com/event/Montagu-Chelmsford-Report]. [(last visited September 10, 2024)].

[3] Government of India Act of 1919, 1919 (India).

[4] [Vajiram and Ravi], [https://vajiramandravi.com/quest-upsc-notes/federalism-in-indian-polity/]. [(last visited September 10, 2024)].

[5] [Britannica], [https://www.britannica.com/topic/Achaean-League], [(last visited September 10, 2024)].

[6] [Britannica], [https://www.britannica.com/biography/Johannes-Althusius], [(last visited September 10, 2024)].

[7] [Stanford Encyclopedia of Philosophy], [https://plato.stanford.edu/entries/federalism/#:~:text=there%20is%20compass%20and%20room,member%20unit%20and%20central%20legislatures.], [(last visited September 10, 2024)].

[8] [Stanford Encyclopedia of Philosophy], [https://plato.stanford.edu/entries/federalism/#:~:text=there%20is%20compass%20and%20room,member%20unit%20and%20central%20legislatures.], [(last visited September 10, 2024)].

[9] Ibid

[10] Ibid

[11] [Britannica], [https://www.britannica.com/event/Montagu-Chelmsford-Report]. [(last visited September 10, 2024)].

[12] Government of India Act of 1919, 1919 (India).

[13] [Merriam Webster], [https://www.merriam-webster.com/dictionary/diarchy]. [(last visited September 11, 2024)].

[14] Government of India Act of 1935, 1935 (India).

[15] Constitution of India 1950, 1950 (India).

[16] Kesavananda Bharati Sripadagalvaru … v. State Of Kerala And Anr, 1973, AIR 1973 SUPREME COURT 1461

[17] STATE OF RAJASTHAN & ORS.  ETC. ETC. v. UNION OF INDIA ETC. ETC., 1977 AIR 1361

[18] S.R. Bommai v. Union of India, 1994 , 1994 AIR 1918

[19] State of West Bengal v. Union of India, 1962, 1963 AIR 1241

[20] Coal Bearing Areas (Acquisition and Development) Act, 1957, 1957 (India).

[21] Shamsher Singh v. State of Punjab, 1974, 1974 AIR 2192

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