Federalism in India: Issues and Challenges

By Hemant Kumar|Updated : May 25th, 2020

Federalism in India: India is Quasi Federal Nation in which Power is more aligned to the Centre but at the same time India does have essential features to be called as Federal Nation. In this article, we will discuss various challenges faced by Indian Federalism and issues like Fiscal federalism in India, Cooperative federalism in India, Federalism in Indian Constitution etc. This is an important topic for UPSC General Studies 2 Paper and also for UPSC Prelims 2020.

Federalism in India: Issues and Challenges

The Constitution of India establishes a federal system of government where the powers are divided between the national and the regional governments. They have separate jurisdictions and responsibilities. Indian federal system is modelled on the ‘Canadian model’ which establishes a strong 'Centre'. 

According to Dr B R Ambedkar, “the Constitution is a federal Constitution in as much as it establishes a dual polity. It avoids the tight mould of federalism and could be both unitary and federal as per time and circumstances.”

In general, There are two types of federations:


  • Holding together federation: A large country decides to share its power between the Centre and the States. The powers are tilted towards the central government. e.g. India,Belgium,Spain etc.
  • Coming together federation: The Independent States coming together to form a bigger unit. The States enjoy more autonomy. e.g. USA,Australia,Switzerland etc.

Federal features of Indian Constitution:

  • Dual government,
  • Written Constitution,
  • The Supremacy of the Constitution, 
  • Division Of Power
  • Independent judiciary, 
  • Bicameral legislature 

Non-Federal/Unitary Features of Indian Constitution:

  • Strong Centre
  • Single Constitution
  • Single Citizenship
  • Integrated Judiciary
  • Constitutional Flexibility
  • All India Services
  • Governor's appointment by Centre
  • Emergency Provision

Different Constitutional experts have different views about the federal character of the Indian Constitution:

  • KC Wheare: Quasi-Federal
  • Paul Appleby: Extremely federal
  • Moris Jones: bargaining federalism
  • Granville Austin: Cooperative Federalism.

In SR Bommai vs Union of India(1994) case, the Supreme Court held that federalism is the basic feature of the Constitution.

Challenges for Indian Federation

Though India’s federal experiment has on the whole been a success, there have also been some challenges:

  • The States have been of the view that they are not being provided with enough fiscal space in central grants and a free hand in spending. There have been instances of States demanding funds from the centre, which makes the rationalisation of funds a critical task.
    • To address this issue, the 14th Finance Commission had increased the share of States in the Central pool from 32% to 42%(15th Finance Commission has recommended for 41%). Centrally Sponsored Schemes have been rationalised, and increased choice and flexibility have been given to the States to select the optional schemes. The flexible funds in each CSS have been raised from 10% to 25% for the States.
  • The States have surrendered their taxation rights by implementing GST.GST collections had fallen 2.7% in September and 5.3% in October from the corresponding months in 2018 which has led to the States asking the 15th Finance Commission to extend the compensation period under GST beyond 2022.
    • Article 279A of the Constitution allows for the constitution of GST Council for making recommendations to the Union and the State governments on the matters related to GST. It is mandated to establish an adjudication mechanism between the Centre and one or more states. In the recently held 39th meeting of the GST Council, there has been no consensus on creating such a mechanism.
  • There have been instances of a tussle between the agencies of the central and state governments such as IT raids at the offices and residence of aides of CM of Madhya Pradesh which saw a face-off between CRPF officers and state police. Such instances have also been seen in West Bengal, Karnataka, Andhra Pradesh where central agencies went to probe corruption cases. The states have often blamed the centre for misusing central agencies.
    • Any interference by state agencies to prevent central agencies from doing their jobs creates law and order issue. This requires close coordination and cooperation between them.
  • The office of the Governor sometimes is misused which poses a threat to the federal system. The imposition of President’s Rule in Arunachal Pradesh in 2016 despite having the elected government in the State is an example. However, the Supreme Court termed it unconstitutional and ordered for the restoration of the previous government.
    • In SR Bommai vs Union of India 1994 case, the Supreme Court tried to curb the misuse of Article 356.
  • The Citizenship (Amendment) Act 2019 has presented the latest challenge to Indian federal system where several States such as Maharashtra, Punjab, Kerala, West Bengal, Bihar etc. have declared that they will not implement the CAA in their states.
    • Under the Constitution of India, the laws made by the Parliament are constitutional unless the court holds it otherwise. In India’s quasi-federal structure, the disputes between the governments are familiar instances.
  • Regionalism is one of the most significant challenges to the federal structure. North East, though strategically important, has been in neglect politically. There are many tribal districts that are governed by their own laws, and many of them have been given autonomy. The agitations for Gorkhaland, Bodoland etc. have intensified. There are demands for separate Vidarbha state in Maharashtra and Harit Pradesh and Poorvanchal in Uttar Pradesh.
  • Foreign Policy of India takes a beating when a state refuses to implement the decisions acting on the regional interests. Teesta River Water Treaty between India and Bangladesh was met with objection from West Bengal government citing that it was deterrent to the interest of farmers of West Bengal.
  • The linguistic diversity coupled with parochial mindset can become an impediment in the path of the federation. The Southern states have been opposed to the idea of Hindi as the official language of India.


  • Though there are challenges to the federal structure of India, Indian federalism have been successful in many ways. Over the last few decades, more powers have been shared between the states and the national government.
  • NITI Aayog has been created to work towards participative governance. All States have been given representation in GST Council. Inter-State Council has been working for holistic Centre-State relationship.
  • A shift has been witnessed towards “cooperative federalism”. States are being given more say in Centrally Sponsored Schemes. The vision of Sabka Sath, Sabka Vikas, is the priority of the government to move towards inclusiveness.
  • The present situation of COVID-19 pandemic has witnessed greater collaboration and cooperation between the Centre and the States, which fulfils the vision of Ek Bharat, Shreshtha Bharat.

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