What's New

Undermining federalism, eroding States’ autonomy

Context: There has been a perception in India that federalism functions smoothly when a coalition comes to power at the center, but shows a downfall when the ruling party has enough support on its own.

Downfall in the Cooperative federalism

Finance Commissions

• It has been a well-established tradition to treat all the recommendations of the FC relating to transfers to States as an award and a package.
• This tradition was broken while dealing with the recommendations of the Fifteenth Finance Commission.
• The Commission, in its first report, had recommended a special grant to three States to ensure that the tax devolution. This recommendation was not accepted by the Union Government.

Cess and Surcharge

• The share of cesses and surcharges in the gross tax revenue of the Centre increased from 5% in 2014-15 to 20% in the Budget estimates for 2022-23.
• Though the States’ share in the Central taxes is 41%, as recommended by the Fifteenth Finance Commission, they only get a 29.6% share because of higher cesses and surcharges.

Centrally Sponsored Schemes (CSS)

• There has been an increase in the States’ share in a number of CSS, thereby burdening States.
• Most of the CSS are operated in the subjects included in the State list. Thus, States have lost their autonomy.
• The Sub-Committee of Chief Ministers appointed by NITI Aayog has recommended a reduction in the number of schemes and the introduction of optional schemes. These recommendations have not been acted upon.

Role of NITI Ayog

• NITI Aayog acts as the quintessential platform for the Government of India by bringing States together as ‘Team India’ to work towards the national development agenda.
• In view of this, a number of steps have been taken by NITI Aayog to foster cooperative federalism These include:
• Meetings between the Prime Minister/Cabinet Ministers and all Chief Ministers;
• Subgroups of Chief Ministers on subjects of national importance;
• Sharing of best practices;
• Policy support and capacity development of State/UT functionaries;
• Launching of the Aspirational Districts Programme for development of backward districts;
• Theme-based extensive engagements in various sectors;
• Framing model laws for land leasing and agriculture marketing reforms; and
• Area-specific interventions for the North-Eastern and Himalayan States and island development.

Analysis of Indian federalism

• If we examine the sources of federalism scepticism. As BR Ambedkar had put it, “India’s Draft Constitution can be both unitary as well as federal according to the requirements of time and circumstances.”
• The ideological underpinnings of this flexible federalism are still the default common sense of Indian politics.
• The imperatives of security, state building, and economic development are always allowed to trump federal pieties.

India is a diverse country with distinct languages, faiths and cultural ecosystems. The States of the Union do not want to be mere appendages of the Centre. They seek a decisive say in determining the architecture of economic growth and development. The one-size-fits-all approach, often inherent in central planning, has the potential of creating needless tensions and undermining the harmony needed for national effort.