Challenges to Federal India

26th January, 2022 Polity

Figure 1: No Copyright Infringement Intended

Context:

On January 26, 1950 when the Indian Constitution came into force, it was a big step for the nation that had longed to achieve the ideals of justice, equality, liberty and fraternity.

Indian Federalism: K.C. Wheare, a federal theorist, has maintained that the Indian Constitution is quasi-federal in nature.
The Supreme Court of India concluded in Sat Pal v State of Punjab and Ors (1969) that the Indian Constitution is more quasi-federal than federal or unitary.
Provisions in the Constitution to Ensure Federalism: Articles 245 to 254 of the Indian Constitution outline the states' and the Centre's separate legislative powers.

7^th Schedule: The listings in the Constitution's 7th Schedule — Union, State, and concurrent — also demonstrate a fair distribution of powers, with each level of government having its own realm, allowing for context-sensitive decision-making.
Article 263: Article 263 established an Inter-State Council to ensure a seamless transition of commerce between the Union and the states, as well as the resolution of disputes.
Article 280: Article 280 established the Finance Commission, which was charged with defining the Union's and states' financial relationships and terms.

73^rd and 74^th amendment: The 73rd and 74th amendments further provided structures for local self-government in order to improve grassroots democracy.
Institutions for Federalism: The Planning Commission was always open to debate on matters relating to the polity's federal nature and was attentive to the various developmental needs of states.
Inter-state tribunals, the National Development Council, and other informal bodies have acted as platforms for dialogue between the Union, states, and UTs.

Several bodies are ineffective: the Planning Commission has been abolished, the Inter-State Council has only met once in the last seven years, and the National Development Council has never met.
Problems with the Tax System:

The ill-conceived Goods and Services Tax (GST) has already stripped states of most of their sovereignty and made the country's indirect tax framework unitary.
The Union government routinely breached the GST regime's reimbursement commitments to the States during the pandemic. The impact of the economic slump was exacerbated by the failure to pay the States their dues.

Encroachments on States' Autonomy in State Subjects: In recent years, several major and politically sensitive decisions have been made without consultation or reference to the relevant states, such as:

Without consulting the state legislature, Article 370 was repealed.
Overstepping its power and forcing a law on the states, Parliament legislated on "agricultural" in the state list to enact the three disputed farm laws.
The New Education Policy 2020 has also been criticised for infringing on the polity's federal nature.
In addition, the BSF's jurisdiction was expanded without consultation with the respective governments in Assam, West Bengal, and Punjab.

Covid-19's impact: The states were limited in their ability to control Covid-19 in areas such as testing kits, immunisation, the application of the Disaster Management Act of 2005, and the unplanned nationwide lockdown.

Furthermore, during the Second Wave, an unprepared administration responded to criticism by declaring health to be a "State topic."

Recognition of Federalism: Article 1 of the Constitution asserts that "India, which is Bharat, is a union of states," and that devolution of powers is required in such a situation.
To protect India's national character, a conscious recognition of the polity's federal character is required.
Strengthening Inter-State Relations: State governments should consider allocating human resources to assist them in preparing responses to the Union's consultations, particularly with regard to the federalism element.
Coordination between Chief Ministers: Chief Ministers might organise venues for frequent dialogue on this subject instead of merely reaching out to one other during crisis times.
Pushing for GST Compensation: This would be critical in pushing for big demands like extending GST compensation until 2027 and including cess in the divisible pool of taxes.
Bringing Reforms to the Table While Maintaining Federalism: India's diversity necessitates a fair balance between the pillars of federalism (autonomy of states, centralisation, regionalisation etc). Extreme political centralization and chaotic political decentralisation must be avoided since both erode Indian federalism.