Federalism in India: Distribution of Powers between Centre and States
Federalism in India is a constitutional mechanism designed to balance the powers between the center and states, ensuring unity in diversity. Unlike classic federations such as the United States, where constituent units have sovereignty in their spheres, Indian federalism operates within a structure where the center maintains the dominant authority, particularly in situations of national interest. The Constitution of India, elaborated under the guidance of Dr. B.R. Ambedkar, adopts an almost federal model, where the center and states derive their authority from the constitution itself, not an agreement between independent entities. This unique arrangement ensures that although states enjoy a significant degree of autonomy, their powers are not absolute and remain responsible for the Union in crucial aspects of governance.1
The federal structure in India has evolved through historical influences, especially the 1935 India Government Law, which provided the first significant attempt at Federal Governance in Colonial India. The country’s partition reinforced the need for central control, increasing national integration concerns. Thus, the authors of the Constitution incorporated provisions that would prevent excessive fragmentation, allowing space for regional governance. The Supreme Court played a crucial role in interpreting and forming this federal agreement, ensuring that the division of powers remains functional and adaptable to contemporary challenges.2
Theoretical Foundations of Federalism in India
Federalism is generally understood as a governance system where two government function levels act independently in their respective domains, with clearly defined authority areas. K.C. Where a crucial constitutional scholar defined federalism as a system in which the powers of governance are divided between a central government and regional governments, each operating within its sphere without the interference of the other. However, the Indian model does not strictly adhere to this definition. Instead, it follows what is often described as a structure of cooperative federalism, where the center and states collaborate on various subjects, particularly those of national meaning.3
The Constitution of India reflects federal and unit elements; leaders of scholars such as Granville Austin describe it as a “cooperative federalism with a strong unit bias.” The seventh schedule distributes legislative powers, emergency provisions, and financial control mechanisms, including balance in favor of the center. Nevertheless, the Indian system guarantees a functional balance, where the judiciary acts as the final referee in cases of conflict.Over the years, judicial pronouncements have clarified ambiguities, reinforced state autonomy on certain subjects, and verified the arbitrary centralization of power.4
Legislative Powers and Federalism
The distribution of legislative powers between the Centre and the States is enshrined in the Seventh Schedule of the Constitution. This schedule contains three lists:
Union List and Central Supremacy
The union list comprises subjects of national importance, where uniformity across the country is essential. This includes defense, external matters, atomic energy, and banks. Article 246 (1) places the exclusive legislature on these matters in parliament. The center’s domain in legislative issues is further reinforced by Article 248,5 which grants IT resident powers, allowing parliament to legislate on any subject not explicitly mentioned in any of the three lists. This differs from the United States, where residual powers are invested in the constituent states. 6
State List and Limitations on State Autonomy
The state list contains issues such as police, public health, agriculture, and land, mainly of local importance. State legislatures have exclusive authority over these subjects under Article 246 (3).7 However, this autonomy is not absolute. Article 2498allows Parliament to legislate on state matters if necessary for the national interest, provided that the Rajya Sabha passes a resolution by a majority of two-thirds. In addition, during emergencies, the Center can legislate on issues on the state list, further highlighting the unit bias of the system.
Concurrent List and the Doctrine of Repugnancy
The list includes issues the center and states can legislate, such as education, criminal law, and unions. However, in the case of a conflict between central and state legislation, article 2549 ensures that central law prevails unless state law has received presidential consent. As interpreted by the Supreme Court, the doctrine of disgust ensures that state laws do not contradict or harm national policies.
Financial Relations and Central Control
One of the most significant aspects of federalism is the financial distribution. The Indian Constitution provides for a system in which sources of revenue are divided between the center and the states. Articles 268 to 281 govern financial relations, ensuring an allocation of economic resources through mechanisms such as tax sharing and subsidies. However, the economic autonomy of states is limited, as the primary sources of revenue, such as income tax and special consumer taxes, are controlled by the Center. The introduction of the Goods and Services Tax (GST) has further centralized the tax powers, creating a unified tax system where the GST Council plays a crucial role in the tax administration. This change has led to debates about strengthening cooperative federalism or diminishing the state’s autonomy.
Judicial Interpretation of Federalism
The Supreme Court of India played a crucial role in defining and refining the federal character of the Constitution. He clarified the balance of power through striking judgments and ensured that neither the center nor states violated their constitutional limits. The courts confirmed the supremacy of the Constitution and often acted as mediators in disputes between the two levels of government.
In this case, the State of West Bengal v. Union of India (196310) questioned the extent of the center’s power to acquire land within a state. The state of Western Cane challenged the union’s authority, arguing that land acquisition fell under the state list and was beyond the jurisdiction of Parliament. The Supreme Court favored the Union, emphasizing that India is not a traditional federal state but a functional federation where the center enjoys the highest authority in matters of national importance. This judgment reinforced the principle that the Constitution does not grant absolute sovereignty to states and that Parliament has domestic powers in specific situations. The decision stated that the Indian Constitution is more unitary than federal, ensuring that national interests precede regional autonomy.
One of the most significant cases in Indian constitutional history, Kesavananda Bharati v. State of Kerala (1973), established the doctrine of the basic structure, which states that the power of the Parliament to change the Constitution is not unlimited. Although the case mainly dealt with property rights and constitutional amendments, he profoundly impacted federalism. The Supreme Court considered that federalism is part of the basic structure of the Constitution and cannot be destroyed through amendments. This decision guaranteed that any attempt to excessively centralize power at the cost of the state’s autonomy was subject to judicial revision. The trial provided constitutional protection to the federal structure, preventing parliament from changing the fundamental division of powers. This decision was fundamental to maintaining the essence of federalism in India, ensuring that although the center is firm, states retain their essential autonomy.11
In the case of S.R. Bommai v. Union of India (1994), the misuse of Article 356, which allows the president to dismiss a state government and impose the government of the president, has been a controversial issue in Indian federalism. S.R. Bommai v. Union of India (1994) is a historical case that reduced the arbitrary use of this provision. The case arose when several state governments were fired for political reasons, leading to questions about the legitimacy of such actions. The Supreme Court has ruled that Article 356 is not absolute and subject to judicial revision. He emphasized that the president’s rule cannot be used to destabilize state
elected state governments unless there is a genuine constitutional discourse. This case has established crucial guidelines to impose the president’s domain, including the need for objective justification and the requirement that any proclamation be established before Parliament for approval. This trial has reinforced federal principles, ensuring that states cannot be arbitrarily stripped of their powers.12
In Kuldip Nayar v. Union of India (2006),13 the Supreme Court examined whether states should have greater autonomy in the election of members of the Rajya Sabha. The case arose after Parliament altered the representation of the People’s Law, removing the requirement that candidates for Rajya Sabha be domiciled in the state they were contesting. The petitioners argued that this amendment weakened the federal structure by allowing outsiders to represent states in Rajya Sabha. However, the Supreme Court confirmed the amendment, deciding that the Indian model of federalism would enable Parliament to determine the qualifications of candidates and that these changes do not violate the federal principle. This case reaffirmed the center’s decisive role in structuring electoral processes, reinforcing the idea that, although states play a crucial role in governance, they operate within the constitutional structure established by Parliament.
The state of Karnataka v. Union of India (1978)14 dealt with the governor’s role in center-state relations. The dispute arose when the central government instructed the governor to report the functioning of the Karnataka government, raising concerns about the interference of the center in state matters. The Supreme Court has decided that the governor’s discretion to report to the center is not absolute and must be exercised cautiously. The trial has reaffirmed that the center’s authority over states is not unlimited and must be guided by constitutional principles. It also highlighted the need to maintain a cooperative federal structure where both government function levels work harmoniously without improper interference.
The Impact of Goods and Services Tax (GST) on Federalism
The introduction of the Tax on Goods and Services (GST) significantly changed financial relations between the Center and the States. Although the GST aims to create a uniform tax regime, it also reduces the independent tax powers of the states. Under the GST structure, tax revenues are collected and distributed by the GST Council, which comprises representatives of the Center and the States.15 However, the dominant role of the center in the decision-making process has raised concerns about fiscal centralization. The GST system has led to debates on strengthening cooperative federalism or corroding state autonomy, limiting its ability to increase independent revenues. The judiciary was called to interpret disputes related to implementing the GST, further shaping the federal structure.16
Conclusion
Indian federalism is a dynamic and evolving system that balances the center’s and states’ interests. While the Constitution provides a strong central authority, judicial interpretations protect state autonomy. Reference cases such as S.R. Bommai, Kesavananda Bharati, and State of West Bengal v. Union of India reinforced the federal structure, ensuring that the center does not arbitrarily interfere with state issues. The courts consistently confirmed the spirit of the Constitution, preventing excessive centralization and preserving the autonomy of states. However, the challenges remain, mainly related to financial issues and emergency provisions, where the center exerts considerable influence. As the Indian governance model evolves, the balance between national unity and regional autonomy will remain the object of legal and political discourse. Strengthening cooperative federalism through constitutional and institutional reforms will be essential to ensure that the federal structure remains robust and responsive to the needs of a diverse nation.
1 M Asad Malik, Changing Dimensions of Federalism in India: an Appraisal, II ILI LAW REV. 85 (2019), http://www.hcourt.gov.au/assets/publications/speeches/currentjustices/frenchcj/frenchcj03june09.pdf. 2 Rajesh Choudhary et al., Federalism In India : Assessing State-Centre Relations And Dynamics, 4 816 (2016). 3Susant Kumar Naik & Anil Kumar, Federalism and the Formation of States in India (2016).
4 Centre-State Relations And Cooperative Federalism Under The Indian Constitution By, BHASHKAR MEHTA https://www.ijlra.com/paper-details.php?isuur=2946.
5INDIA CONST. art, 249
6 The Indian & Supreme Court, Edinburgh Research Explorer The Indian Supreme Court and Federalism, 17 (2018).
7INDIA CONST. art, 246
8INDIA CONST. art, 249
9INDIA CONST. art, 254
10 State Of West Bengal vs Union Of India, 1963 AIR 1241
11 Kesavananda Bharati v. State of Kerala, (1973) 4 SCC 225
12 S.R. Bommai v. Union of India, (1994) 3 SCC 1
13 Kuldip Nayar v. Union of India, (2006) 7 SCC 1
14 State of Karnataka v. Union of India ,1978 AIR 68
15 Implications of GST Reforms on Indian Federalism: A Critical Analysis, MYGSTRefund https://www.mygstrefund.com/Implications-of-GST-Reforms-on-Indian-Federalism/. 16 D Ananda, Goods and services tax and its implications for fiscal federalism in India, 6 95 (2024).
