The nature of Indian federalism

The first principle

India did not become a federation because sovereign states agreed to unite, as the American colonies did, but because a newly partitioned country chose to share power to hold its diversity together: a "holding together" federation rather than a "coming together" one. The Union is permanent and the states are not, yet the states have their own constitutional sphere that the Union cannot simply take over. Every feature in this note, from the Seventh Schedule to the quarrels over the Central Bureau of Investigation (CBI), follows from that mix of a strong centre and real, protected states.

The core

An indestructible Union of destructible states

• Article 1. India is described as a "Union of States", not a federation. B. R. Ambedkar explained the choice: the Union is not the result of an agreement among states, and no state has the right to secede from it.
• Articles 2 to 4. Parliament can form, merge or rename states and change their boundaries by ordinary law, after seeking only the views of the state concerned. The map has been redrawn often, from the linguistic reorganisation of 1956 to Telangana in 2014 and the conversion of Jammu and Kashmir into two Union territories in 2019.
• Quasi federal. K. C. Wheare called the Constitution "quasi federal", a unitary state with subsidiary federal features rather than a federal state with subsidiary unitary features. Ambedkar said it could be federal in normal times and unitary in an emergency.

How legislative power is divided

• The three lists. The Seventh Schedule divides subjects into the Union List, the State List and the Concurrent List, with 97, 66 and 47 entries at the start. The Forty second Amendment (1976) moved education, forests, weights and measures, protection of wild animals and birds, and administration of justice from the State List to the Concurrent List.
• Residuary power with the Union. Article 248 and Entry 97 of the Union List give Parliament power over any matter not listed anywhere, including taxes not named in any list.
• When Parliament may enter the State List. Under Article 249, a two thirds resolution of the Rajya Sabha lets Parliament legislate on a State List matter in the national interest for a year at a time. Under Article 252, two or more states can ask Parliament to legislate on a state matter, and other states may adopt the law later; the Wild Life (Protection) Act, 1972 and the Water (Prevention and Control of Pollution) Act, 1974 were made this way.
• Repugnancy. Under Article 254, if a state law on a Concurrent List subject conflicts with a central law, the central law prevails. The exception is a state law reserved for and given the President's assent, which prevails in that state, though Parliament can later override it.

How courts settle disputes over the lists

• Pith and substance. A law is judged by its true nature, and incidental intrusion into another list does not invalidate it. In Prafulla Kumar Mukherjee v Bank of Commerce, Khulna (1947) the Privy Council upheld a Bengal money lenders law even though it touched promissory notes, a central subject, because its substance was money lending.
• Harmonious construction. Entries are read together so that each is given effect and none is made redundant, for instance by reading a general entry narrowly where a specific entry in another list covers the matter.
• Federal supremacy. Where the conflict cannot be reconciled, the Union prevails, because Article 246(1) begins with a non obstante clause ("notwithstanding anything in clauses (2) and (3)") that gives the Union List priority over the other two.
• Colourable legislation. A legislature cannot do indirectly what it cannot do directly. In K. C. Gajapati Narayan Deo v State of Orissa (1953) the Court held that the test is competence, not motive.
• Federalism as basic structure. In S. R. Bommai v Union of India (1994) a nine judge bench held federalism to be part of the basic structure, said the states are not mere appendages of the Centre, and made Article 356 proclamations reviewable.

Dimensions

• Cooperative. The Centre and states act jointly through shared bodies: the Goods and Services Tax (GST) Council, where both levels pool their taxing power, and the Governing Council of the National Institution for Transforming India (NITI) Aayog, where Chief Ministers meet the Prime Minister.
• Competitive. States compete for investment and for better outcomes, encouraged by rankings such as NITI Aayog's health and Sustainable Development Goals indices and the business reform rankings of the Union commerce ministry. The Fifteenth Finance Commission rewarded tax effort and demographic performance.
• Confrontational. Disputes have grown more open: Governors delaying assent to Bills, states withdrawing general consent to the CBI, quarrels over GST compensation, and suits by states against the Union under Article 131.
• Bargaining. W. H. Morris Jones called it "bargaining federalism", because states negotiate resources with the Union, before each Finance Commission or for special packages.
• Political. The federation changes with the party system: one party dominance until 1967 kept disputes inside the party, the coalition era from 1989 to 2014 gave regional parties a voice in Delhi, and single party majorities since 2014 have shifted weight back to the Centre.

In practice

Centralising tendencies

• COVID 19. The Epidemic Diseases Act, 1897 lets states take special measures, and the Disaster Management Act, 2005 lets the National Disaster Management Authority, chaired by the Prime Minister, and the National Executive Committee issue binding directions. In March 2020 the Union used the 2005 Act to impose a nationwide lockdown, although public health is a State List subject, showing how a central law can override state choices in a crisis.
• Farm Acts, 2020. Agriculture and markets are State List subjects, but the Centre relied on the Concurrent List entry on trade and commerce in foodstuffs to pass three farm laws without much consultation with states. Parliament voted to repeal them in November 2021 after a year of protests.
• Recent changes since 2019. Jammu and Kashmir was reorganised into two Union territories (2019); GST compensation ended in June 2022; the use of central agencies against opposition leaders in the states became a frequent complaint; disputes over Governors and Bills reached the Supreme Court; and the Government of National Capital Territory of Delhi (Amendment) Act, 2023 overrode a Supreme Court judgement on control of services.

National and regional parties

• Regional demands for autonomy. The Rajamannar Committee (1969), set up by the Tamil Nadu government, sought residuary powers for states and a permanent Inter State Council. The Anandpur Sahib Resolution (1973) of the Akali Dal wanted the Centre limited to defence, foreign affairs, communications, railways and currency. The West Bengal memorandum (1977) asked for Articles 356, 357 and 360 to be deleted and for equal representation of states in the Rajya Sabha.
• The position depends on where a party sits. National parties tend to favour a strong Centre when they govern in Delhi and speak for state rights when they govern a state, while regional parties have backed centralising measures when they shared power at the Centre, so the divide is better read as one between the party ruling the Centre and those ruling states.

Accommodating diversity and settling disputes

• Diversity. Linguistic reorganisation (1956), the 22 languages of the Eighth Schedule, and asymmetric arrangements (Articles 371 to 371J, the Sixth Schedule for tribal areas of Assam, Meghalaya, Tripura and Mizoram, and earlier Article 370) give regional identities a place inside the Union.
• Article 131. The Supreme Court has original and exclusive jurisdiction in legal disputes between the Union and states, or between states.
• Article 262. Parliament may exclude courts from inter state water disputes; the Inter State River Water Disputes Act, 1956 provides for tribunals whose awards have the force of a Supreme Court decree.
• Article 263. The Inter State Council was set up in 1990 on the Sarkaria Commission's advice, chaired by the Prime Minister, but it has met only rarely.
• Zonal Councils. Five Zonal Councils under the States Reorganisation Act, 1956, chaired by the Union Home Minister, coordinate regionally.

The CBI and state consent

• The law. Under the Delhi Special Police Establishment Act, 1946, Section 5 lets the Centre extend the CBI's jurisdiction to states, but Section 6 requires the consent of the state government, because police and public order are State List subjects.
• Withdrawal of general consent. Several states, including West Bengal, Punjab, Kerala and Tamil Nadu, have withdrawn general consent at various times, so the CBI must seek consent case by case.
• The limits. Consent is not absolute. In State of West Bengal v Committee for Protection of Democratic Rights (2010) a Constitution Bench held that the Supreme Court and High Courts can direct a CBI probe without the state's consent. In State of West Bengal v Union of India (July 2024) the Court held West Bengal's suit against the Union maintainable under Article 131, rejecting the plea that the CBI is independent of the Union, and allowed the suit to proceed to a hearing on merits.

Issues and way forward

• Weak forums for consultation. The Inter State Council rarely meets, and the dispute mechanism that Article 279A envisages for the GST Council has not been set up. The Sarkaria (1988) and Punchhi (2010) Commissions both asked for a standing Inter State Council that meets regularly, and Sarkaria asked that states be consulted on Concurrent List laws.
• Article 356. Sarkaria wanted it used only as a last resort, which Bommai enforced, and Punchhi suggested "localised emergencies" in place of President's rule over a whole state.
• Central agencies. Repeated disputes over the CBI call for a fresh law with clear rules on consent, in place of a 1946 statute and litigation.
• Trust building. Consulting states before reorganisation, keeping Governors out of politics, sharing cesses and surcharges, and settling Article 131 suits quickly would rebuild trust.

Common confusions

• Article 249 and Article 252. Under Article 249 the Rajya Sabha invites Parliament into a state subject for a year; under Article 252 the states themselves ask, and the law lasts until Parliament repeals it.
• Pith and substance and colourable legislation. The first saves a law whose substance is within power despite incidental trespass; the second strikes down a law whose substance is outside power despite its disguise.
• Cooperative and competitive federalism. The first is about the Union and states working together; the second is about states competing with one another.

For the exam

• Keyword bank: holding together federation, indestructible Union, quasi federal, Seventh Schedule, residuary power, Article 254 repugnancy, pith and substance, harmonious construction, federal supremacy, colourable legislation, S. R. Bommai, cooperative and competitive federalism, asymmetric federalism, Inter State Council, general consent to the CBI.
• Practise the previous year questions on this topic →
• Use in an answer:
  • Introduction with data: "The Seventh Schedule began with 97 Union, 66 State and 47 Concurrent entries and a residuary power with the Union, a design that tilts the federation towards the Centre by intent."
  • Introduction with a judgement: "In S. R. Bommai (1994) the Supreme Court held federalism to be part of the basic structure and said that the states are not mere appendages of the Centre."
  • Conclusion: "Indian federalism has held a diverse country together because it bends, unitary in a crisis and federal in normal times."
  • Conclusion: "The test of the federation now lies less in the text than in practice: regular consultation through the Inter State Council, restraint in the use of Governors and central agencies, and a fair share of revenue for the states."