Federalism

India is a vast country with many languages, religions and regions. A single government sitting in the capital cannot understand or manage the needs of every part of such a country. Federalism is the answer to this problem. It divides power between one government for the whole nation and separate governments for the regions. Each government is supreme in its own sphere.

In India the government for the whole nation is the Union government. The government for each region is the State government. A citizen belongs to both at once, as a Gujarati or a Tamil and also as an Indian. The Constitution sets out the powers of each level. It stands above both as the supreme law.

Federalism is a way of organising a country so that two levels of government exist side by side. One level looks after matters that concern the whole nation, such as defence and currency. The other level looks after matters that are best handled close to the people, such as police and public health. Each level gets its powers from the Constitution. Neither can simply abolish the other.

A federal system needs a few supports to work. The division of powers must be written in a constitution that both levels accept as supreme. An independent judiciary must settle disputes about who holds which power. Above all, the people and their leaders must show trust, cooperation and restraint. No written rule can hold a federation together if its regions do not wish to live together.

The makers of the Constitution chose a federal system because the country was too large and too diverse to be run from one centre alone. People of different regions and languages had to govern themselves in their own areas. The Constitution does not use the word federation. Article 1 says that India, that is Bharat, shall be a Union of States. This wording shows that the States have no right to break away and that the Union is permanent.

Indian federalism rests on cooperation between the centre and the States rather than on rivalry. The Constitution recognises the diversity of the regions, yet it puts a strong emphasis on the unity of the nation.

Indian federalism shows the usual marks of a federal system, but with important differences from the American model:

• Division of powers between the centre and the States, written into the Constitution through the three lists: a genuine federal feature.
• An independent judiciary (headed by the Supreme Court) that settles disputes between the centre and the States about who holds which power: also a federal feature.
• NOT the result of an agreement among the units. Unlike the United States, where sovereign states came together by compact, the Indian States never had a sovereign existence before the Union. The federation was created from above, and the States therefore have no right to secede. Article 1 deliberately calls India a "Union of States."
• Unequal representation of the units in the Rajya Sabha. States are given seats roughly in proportion to population, so a large State has many more seats than a small one. This differs from the United States Senate, where every state gets two seats regardless of size. This unequal representation is a feature of Indian federalism, not a flaw.

The Constitution divides the subjects of law making into three lists, set out in the Seventh Schedule:

• Union List: subjects of national importance on which only Parliament can legislate (defence, foreign affairs, banking, currency, railways, atomic energy). Several subjects that sound "inter-state" sit here, not in the State List: inter-State trade and commerce, inter-State migration, and inter-State quarantine are all Union subjects, as is corporation tax. So is the regulation of labour and safety in mines and oilfields (Entry 55 of the Union List). Mining safety affects national resources and workers across States, so the Constitution keeps it with the centre. A useful test in exams: if a matter spills across State borders or affects the whole nation, look for it on the Union List.
• State List: subjects of regional importance on which normally only the State legislatures legislate (police, public order, public health, agriculture, fisheries, local government, prisons). Note the contrast that examiners exploit: agriculture, fisheries and public health are State subjects, but labour and safety in mines and oilfields is a Union subject.
• Concurrent List: subjects on which both Parliament and the State legislatures may legislate (education, forests, criminal law, marriage, bankruptcy). If a Union law and a State law clash, the Union law prevails. The exception is where the State law was reserved for and received the President's assent. In that case the State law prevails in that State, though Parliament can still later override it (Article 254(2)).

Any subject named in none of the three lists is a residuary subject, and the power to make laws on it belongs to Parliament (Article 248). The courts decide whether a given matter really is residuary.

The Constitution builds a federation with a strong centre. The framers wanted unity and rapid development. A powerful central government seemed the surest way to hold a newly independent country together and to fight poverty and inequality. Several provisions give the centre this strength:

• Reshaping the States. Parliament can change the boundaries, the area and even the name of a State, so the very shape of a State rests in its hands.
• Emergencies. During an emergency the federal system can turn almost unitary, and Parliament can make laws on subjects in the State List.
• The purse. The centre controls the main sources of revenue, so the States depend on it for grants and loans.
• The Governor. Appointed by the centre, the Governor can reserve a State bill for the President and recommend the dismissal of a State government.
• The all-India services. Officers of the IAS and IPS serve in the States but stay under the centre's control. Parliament can create a new all-India service if the Rajya Sabha first passes a resolution by a two-thirds majority that it is in the national interest to do so (Article 312).

These powers together give the Indian Constitution what is often called a unitary bias.

Once the States are given their own identity, it is natural that they ask for a greater role and more powers. This leads to tension with the centre. Legal disputes about who holds which power are settled by the judiciary. Demands for more autonomy are political and must be settled through negotiation.

The relations between the centre and the States have changed with politics. In the early decades one party ruled at the centre and in most States. Relations were mostly smooth. Later, different parties came to power in the States. They began to demand more powers, more financial resources and more control over administration. The office of the Governor has been a special source of friction. The Governor is appointed by the centre and is often seen as its agent.

The sharpest flashpoint has been Article 356. It lets the centre impose President's rule on a State when its government cannot run according to the Constitution. This power has often been misused to dismiss State governments led by rival parties. The landmark check came in S.R. Bommai v. Union of India (1994). The Supreme Court placed real limits on it:

• The proclamation is subject to judicial review (the courts can examine it).
• The floor of the Assembly, not the Governor's report, is the proper place to test a government's majority.
• The Assembly may only be dissolved after Parliament approves the proclamation.
• A dismissed government can be restored if the court finds the proclamation invalid.

The States have also pressed for the creation of new States on the basis of language. Many such States have been formed since 1956. States quarrel among themselves too, over borders and over the sharing of river waters.

Indian federalism does not treat every State in exactly the same way. The Constitution gives some States special provisions because of their distinct history and social make-up, a pattern called asymmetric federalism. Most of these sit in Part XXI (Articles 371–371J) and protect tribal customs, land and local interests, chiefly in the north-east.

• Article 371: a special responsibility of the Governor for development boards in Maharashtra and Gujarat, covering the backward regions of Vidarbha, Marathwada, Saurashtra and Kutch.
• Article 371A (Nagaland) and Article 371G (Mizoram): an Act of Parliament on religious or social practices, customary law, civil and criminal justice according to customary law, and the ownership of land and its resources does not apply unless the state assembly resolves that it shall.
• Article 371B (Assam) and Article 371C (Manipur): special committees of the assembly for the tribal and hill areas.
• Articles 371D–371E (Andhra Pradesh and Telangana): equitable opportunities in public employment and education across the regions of the state, with a separate Administrative Tribunal for service disputes.
• Article 371F (Sikkim): inserted by the 36th Amendment, 1975, when Sikkim became a full state.
• Article 371H (Arunachal Pradesh) and 371I (Goa): arrangements tailored to each state.
• Article 371J (Karnataka): inserted by the 98th Amendment, 2012. It gives a special development board and reservations in education and employment for the Hyderabad-Karnataka region.

The State of Jammu and Kashmir once had a special autonomous status under Article 370, including its own constitution and a limited reach for Parliament's laws. Its removal unfolded in clear steps. In August 2019 the centre, by Presidential Orders and the Jammu and Kashmir Reorganisation Act, 2019 (the law that reorganised the State), rendered Article 370 largely inoperative. The same Act split the State into two Union Territories: Jammu & Kashmir with a legislature and Ladakh without one. In 2023 the Supreme Court upheld the abrogation.

Not every part of India is a full State. The Constitution also provides for Union Territories, areas governed directly by the centre:

• Article 239: every Union Territory is administered by the President, acting through an Administrator he appoints. The Administrator carries different titles. He is called Lieutenant Governor in the larger UTs (Delhi, Puducherry, Jammu & Kashmir, Ladakh, Andaman & Nicobar) and plain Administrator elsewhere. He is a centre-appointed agent of the President, not a constitutional head like a state Governor.
• Article 239A: Parliament may by law create a legislature and council of ministers for a UT. That is how Puducherry got its assembly. Such bodies have powers narrower than a full state's, and Parliament retains overriding legislative authority.
• Parliament's reach: for a Union Territory, Parliament can legislate on any subject, including State List subjects, that an ordinary state legislature alone could touch. The UT assembly's power is correspondingly limited.
• Article 240: the President can make regulations for the peace and good government of certain UTs, and a regulation can amend or repeal an Act of Parliament applying there.
• Article 241: a UT does not need its own High Court. Parliament may extend (or bar) the jurisdiction of a High Court to any UT.

Delhi has special status as the National Capital Territory under Articles 239AA and 239AB. This status was inserted by the 69th Amendment, 1991 and came into force on 1 February 1992. Delhi has an elected Legislative Assembly and a Council of Ministers. However, public order, police and land are reserved to the centre. The Lieutenant Governor normally acts on the aid and advice of the elected Council of Ministers. In the few matters where he is empowered to use his discretion, he may act independently.

The Constitution divides centre–state relations into three kinds:

• Legislative relations (Articles 245–255): the three lists of the Seventh Schedule (Union, State, Concurrent). The centre can legislate on a State subject in special cases. These are: when the Rajya Sabha passes a resolution in the national interest (Art 249: Rajya Sabha empowers Parliament on a State subject), during an emergency, or to implement an international treaty.
• Administrative relations (Articles 256–263):
  • States must comply with central laws.
  • The all-India services (IAS, IPS) serve both levels.
  • The Inter-State Council (Art 263: centre–state coordination body) and zonal councils promote cooperation.
• Financial relations (Articles 268–293): taxes are divided between the levels, with grants-in-aid to the states. The Finance Commission (Art 280: recommends how central taxes are shared with states) is appointed every five years. It recommends how central taxes are shared with the states. The GST Council now coordinates indirect taxes.

Two commissions reviewed centre–state relations and recommended a fairer balance:

• Sarkaria Commission: set up in 1983 (R.S. Sarkaria, a retired Supreme Court judge), reported in 1988. On the contentious office of the Governor, it recommended that the Governor should be an eminent person from outside the State, a detached figure with no intense political links and one who has not taken part in active politics in the recent past. It also recommended that the Centre should consult the Chief Minister before appointing a Governor. It urged that Article 356 be used very sparingly, as a last resort. It also urged that the Inter-State Council be activated.
• Punchhi Commission: set up in 2007 (M.M. Punchhi, a former Chief Justice of India), reported in 2010. It went further. It proposed fixed guidelines and consultation for Governor appointments. It also proposed a fixed tenure of five years for Governors, removable only by an impeachment-like procedure. It recommended localising emergency rule to a troubled district or region rather than the whole State where possible.

Both commissions pressed for restraint in using Article 356 and the Governor's office. Note: earlier, the Rajamannar Committee was set up by Tamil Nadu in 1969. It too demanded more autonomy for the States. But it was a State-appointed body, not a national commission.

Tribunals were added by the 42nd Amendment (1976), the sweeping Emergency-era amendment. They are specialised bodies that decide particular kinds of disputes faster than ordinary courts:

• Article 323A: empowers Parliament alone to set up administrative tribunals for service matters of public servants. Parliament acted on this and passed the Administrative Tribunals Act, 1985. That Act created the Central Administrative Tribunal (CAT) and State Administrative Tribunals.
• Article 323B: empowers the appropriate legislature (Parliament or a State legislature) to set up tribunals for other matters. These include taxation, foreign exchange, land reforms, elections to Parliament and the Assemblies, food, and industrial and labour disputes.
• L. Chandra Kumar v. Union of India (1997): the Supreme Court held that certain parts of Articles 323A and 323B were unconstitutional. Those were the parts that ousted judicial review by the High Courts (Articles 226 and 227, the writ and supervisory jurisdiction) and the Supreme Court (Article 32, the right to move the Supreme Court for enforcement of rights). The reason: judicial review is part of the basic structure of the Constitution. Tribunal decisions are therefore subject to review by a High Court division bench.