Challenges to Indian Federalism

Challenges to Federalism? You’ll need to ask yourself how India can have federalism problems when it’s not a pure federalist country. Well, that’s one thing that is possible in our country. There has been a power struggle between the states and the Central government, with the Centre always trying to centralize all powers to itself. So the age-old adage ‘Absolute power corrupts absolutely’ holds in this case.

Federalism is the concept of a country being divided into two parts with a strong government in the Centre and each of the states having a government too. The States have all the three organs of the government- Legislative, Executive and the Judiciary. The States have their subjects in which they have monopoly and control over and the Centre has a monopoly over certain subjects and only they can control it. There are also certain subjects which both the States and Centre has control over but in case of any contrasting opinions, the Centre’s decision is absolute.

With that being said, the fact that India not being a pure federalist needs to be made clear. India is a quasi-federal state as it only incorporates only certain elements of what makes a federal like the different levels of government across the country (Central, States and Panchayat). Otherwise, our country cannot be considered as a federal country.

The dominance of regional parties serves as an example where it would seem that federalism works, but in reality, this is just a small example as there has always been a centralizing tendency in Indian polity, even in this pandemic time.

The challenges

Instead of labelling it as challenges, it should be acknowledged that there have been steps taken to undermine federalism and centralize everything. As Fali Nariman said, India is trying to become a quasi-unitary[1].  

The BJP government in its election manifesto of 2014 said that it’ll ensure that centre-state relations are brought to an even keel and that the states will get more importance, something which was on the deterioration in the Manmohan Singh’s period of power. It should be considered that the BJP is a right-wing party and therefore the basic tenet of any right-wing party would be to have a stronger centre than the states.

This was essentially the area where red flags should have popped up in the educated person’s mind, however it didn’t happen because the Congress was involved in one of the biggest corruption scandals and there was a never before seen protest with Anna Hazare and Baba Ramdev leading from the forefront. This scandal gave way to a butterfly effect in which the Aam Aadmi Party rose to power in Delhi, the Congress lost its foothold in the country and the BJP rose to prominence.

As said the BJP mentioned restoring India to its true federalist state. However, the policies and schemes that have been implemented by the BJP have only further divided the chasm between the states and the centre. Let us take a look at some of these measures that have made the ruling party look like hypocrites.

Economic Measures

The Modi government started by abolishing the Planning Commission and replacing it with the National Institution for Transformation of India Commission (NITI Aayog). Narendra Modi called this ‘Team India’. The NITI Aayog was supposed to bring together the states so that they can function together for national interests and by doing that, the spirit of cooperative federalism could be fostered between the states and the centre. He called the NITI Aayog to develop initiatives to ensure that the states function as the ‘drivers of national development’[2].

All of these were tall words and remained tall words. Modi abolished the Planning Commission to remove the excess control of Central over budgets and funds distribution to states and give more powers to state in this matter. However, the NITI Aayog was a weak committee and didn’t have the strength of the Planning Commission. The NITI Aayog was headed by a panel of chief ministers, meaning not all of them were included in this practice. The NITI Aayog also didn’t have funds distribution authority and this was reverted to the Ministry of Finance. So, therefore, all these tall words stand for nothing and the BJP has recentralized financial powers instead of decentralizing.

In another major power-grabbing move, the Goods and Services Taxes Act was brought in and the states lost a major source of revenue which was their taxes. In a bid to unify the national market and reduce inter-state taxes, GST was introduced. Despite its noble intentions, it wasn’t properly implemented and served as a measure to reduce the revenue the states generated from their sales taxes and centralized even this.

Next up, Modi showed himself as a hypocrite with his Centrally Sponsored Schemes (CSS). He showed a strong detestation to it during the preceding Congress term. Then in his term as Prime Minister the Swacch Bharat campaign and the Pradhan Mantri Awaas Yojana both had his face as the personality of the campaign. In three years, there was an increase in the budget for these schemes by 288% and 51% respectively. The Prime Minister claimed sole credit for all these schemes. The more regressive point here is that the allocation of funds to states depends on their effective implementation of the Centre’s flagship schemes according to new terms of reference set by the Finance Commission[3].

Political Decisions

Things done here are more noteworthy and this is the case for Mr Modi too. Mr Modi pulled a brave move and implemented the ‘Demonetization’, where the currency value of the 1000 and 500 notes were scrapped overnight. This was done to combat black money and corruption. The desired results were however not achieved at all. Both black money and corruption exist even now but there were more consequences now.

Firstly, with the Modi government announcing this decision late at night and scrapping the currency value overnight, there was a humongous cash crunch as small scale shops who form a major portion of the national market lost its two most traded currency. People suddenly didn’t have money in their hand and everything was digital now. Secondly, to exchange the old currency in their possession, winding queues could be found at any banks. There were an unprecedented population of people at banks (which in the end came to poor planning and implementation) and banks ran out of cash in daily basis and it took days to refill the ATMs and banks. Thirdly, the economy of the country crashed and it plummeted to terrible depths.

At one point in time during the Modi government, it was predicted that India would overtake China and become the next superpower in 2020 if its GDP was increasing at the rate it was. Cut to 2020 and we’re close to China, who is now going to become the third superpower (provided they manage to escape the wrath of the world nations due to Corona). The Demonetization scheme came at the wrong time, broke the nation’s back and to counter this problem, more cash had to be pumped in and this caused the rupee’s value to drop in the global market. It’ll take years for India to regain its economic stature and go back to the place it was before the demonetization.

The problem here is that this decision was an overnight decision and therefore no one had time to prepare themselves for the inevitable cash crunch. In a bid to keep it in secrecy, even the Chief Ministers of the states were not considered. This shows that the Centre doesn’t trust the States and kept them in the dark about this major decision. A major decision like this had to be taken only after the states were also consulted so that there wouldn’t have been too much of a problem concerning cash.  

Now that demonetization has been mentioned, let’s move on to a more pressing issue of this government- the appointment of state governors.

The appointment of state governors has become much politicized in the BJP era. Governors are usually appointed by the President, but only on the recommendation of the cabinet of ministers. With this loophole, the government appoints favourable governors, who are just foot soldiers for the ruling party working in an esteemed position. Examples of governors acting favourably for the government are plenty, with the governors of Goa, Arunachal Pradesh, Delhi and Manipur. In Goa when there was a power struggle, the governor, instead of asking the larger party (Congress) to prove its majority via a floor test, asked the BJP to form a coalition government.

She confessed that she had asked the advice of a minister in the Central Government, which directly goes against the spirit of the Constitution. There was a similar situation in Manipur too[4]. The Lieutenant-Governor in Delhi has also made matters tough for the Chief Minister of Delhi. With this favouritism showed by the governors to the Centre, it wasn’t surprising when there was the imposition of President’s Rule in Arunachal Pradesh and Uttarkhand.

In a gross misuse of power, President’s Rule was imposed on the advice of the governor stating that the government did not enjoy a majority in the state government. The Supreme Court had to step in and force the Central Government to reverse its decision, which has never happened before in Indian history[5]. The criticism of the Supreme Court forced the governor of Arunachal Pradesh to resign.

Centralizing Tendencies

The deployment of Income Tax Department’s I-T Raids and CBI investigations rampantly in non-BJP ruling states. This led to the withdrawal of consent for CBI investigation in Andhra Pradesh and West Bengal. There has always been an underlying of tension (not of a good kind) between states that are not ruled by the BJP and the Centre. There has been a particular bias against the Southern States because they staunchly oppose the policies of the Central Government (not you Tamil Nadu, not you). Kerala was denied vital foreign aid from the UAE by the Central Government when it was suffering from calamitous flooding. What kind of a joke was that?

The central government is not even trying to mask their bias against non-BJP states anymore, and this is not a good sign for cooperative federalism. Narendra Modi the Prime Ministerial candidate promised to promote cooperative federalism and put states in a higher pedestal, but Narendra Modi the Prime Minister has only worked to centralize everything. BJP doesn’t even field a Chief Ministerial candidate to campaign for in the elections. Campaigning is done by the Prime Minister himself and Chief Ministers are appointed only after they win the elections. Now due to this, chief ministers defer to the Centre to make state decisions, thus making them Centre controlled states. This is a dangerous practice of governance and is undermining freedom of states.

Take the example of this pandemic, even now everything is centralized instead of finding localized solutions because each state faces varying problems due to the virus and only the states know how to properly act in their area. The Central Government should just function as a funds distributer and provide required solutions and expertise to the states instead of taking whole control of the control during this pandemic.

Thus, the author concludes by quoting Sir John Dalberg-Acton

“Power tends to corrupt and, absolute power corrupts absolutely” 


[1] https://www.institutmontaigne.org/ressources/pdfs/blog/indian-federalism-under-modi-theory-practice-policy-brief.pdf

[2]Ibid 1

[3] Ibid 1

[4] Ibid 1

[5] Ibid 1

Rohan Aditya from Tamil Nadu National Law University

  He is a proud fan of Liverpool FC. He has watched the series Dark, and is currently seriously contemplating the idea of life.

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