Centre-State Relations in India: Federalism, Conflicts, and the Way Forward

Introduction

India’s federal structure is a unique blend of strong central authority and state autonomy, designed to accommodate its vast diversity. However, tensions between the Centre and States—over finances, legislation, and governance—have sparked debates on whether India is truly federal or a "quasi-federal" system.

This blog explores:

✔ Constitutional Framework of Centre-State Relations

✔ Key Areas of Conflict (Finance, Legislation, Administration)

✔ Recent Controversies (Delhi vs Centre, GST, Governor’s Role)

✔ Judicial Interventions & Reforms Needed

1. Constitutional Framework: Is India Truly Federal?

Federal Features

• Dual Polity: Separate governments at Centre & State levels (Articles 245-255).

• Division of Powers:

  • Union List (Centre) – Defence, foreign affairs, banking.

  • State List (States) – Police, agriculture, health.

  • Concurrent List (Both) – Education, marriage, forests.

• Independent Judiciary: Resolves disputes (Articles 131, 226).

Unitary Features (Why "Quasi-Federal"?)

• Strong Centre: Parliament can override states on Concurrent List (Article 254).

• All-India Services (IAS, IPS): Controlled by Centre but work in states.

• Governor’s Role: Appointed by Centre, often accused of bias (Article 155).

• Emergency Powers (Articles 352-360): Centre can take over state functions.

Dr. B.R. Ambedkar: "Indian Constitution is federal in normal times but unitary in emergencies."

2. Key Areas of Conflict

A. Financial Relations (Biggest Flashpoint)

• Tax Devolution: States get only 41% of central taxes (15th Finance Commission).

• GST Implementation: States lost taxation autonomy; delays in compensation.

• Centrally Sponsored Schemes (CSS): States allege "one-size-fits-all" policies.

B. Legislative Disputes

• Farm Laws (2020): Passed without state consultation, later repealed after protests.

• Delhi vs Centre (2023 SC Verdict): Limited LG’s power, but control over services remains contested.

C. Administrative Tensions

• Governor’s Partisan Actions:

  • Sitting on bills (e.g., Tamil Nadu, Kerala).

  • Appointing/unappointing ministers (e.g., Maharashtra 2022 crisis).

• Central Agencies (CBI, ED): Alleged misuse against opposition-ruled states.

3. Recent Controversies

A. GST & Fiscal Federalism

• States’ Grievance: Compensation cess ended in 2022, revenue uncertainty remains.

• 2023 Council Reforms: More voting power to states, but implementation lags.

B. Delhi vs Centre Battle

• Issue: Who controls bureaucrats in Delhi?

• SC’s 2023 Verdict:

  • LG must act on elected government’s aid & advice except police, land, public order.

  • But: Centre still controls services (officers’ postings).

C. Karnataka & Tamil Nadu Water Dispute

• Cauvery Issue: Centre delayed tribunal award implementation, forcing SC intervention.

4. Judicial Interventions

Landmark Judgments

1. S.R. Bommai Case (1994): Limited arbitrary imposition of President’s Rule.

2. GST Council Ruling (2022): States not bound by Centre’s decisions; cooperative federalism emphasized.

3. NCT of Delhi Case (2023): Strengthened elected state governments’ autonomy.

Pending Cases

• Governor’s Discretion (Kerala, TN): SC examining delays in bill assent.

• CBI vs State Consent: Can states block CBI probes? (Ongoing legal debate).

5. Reforms Needed for Better Federalism

A. Financial Reforms

• Increase State Share in Taxes: Beyond 41%.

• Fix GST Compensation: Permanent mechanism for revenue loss.

B. Curbing Governor’s Overreach

• Fixed Tenure & Impeachment Process.

• Time-bound Bill Assent (as in Punjab Governor Case, 2023).

C. Strengthening Inter-State Councils

• More frequent meetings (Art. 263).

• Decentralize Planning Commission-like body.

D. Depoliticizing Central Agencies

• Autonomous CBI/ED appointments.

Conclusion: Cooperative Federalism or Central Dominance?

While India’s federal structure has prevented Balkanization, recent conflicts highlight central overreach. The GST Council, SC rulings, and Finance Commission offer hope for balance, but systemic reforms are needed.

The future of Indian federalism lies in dialogue, decentralization, and respect for state autonomy—without weakening national unity.