India, that is Bharat, shall be a union of states. Federalism underpins the basic structure of the Indian Constitution. By prising open spaces for negotiation and accommodation of India’s ethic, regional and linguistic diversity, it is this federal principle that has enabled the modern Indian nation state to cohere. Today, as tensions in Centre-state relations have heightened, India’s federal compact appears at a crossroads. New sites of contestation have emerged amid increasing political centralisation. At the same time, social and economic transitions of the last 30 years have shifted the dynamic of intergovernmental relationships, creating new distributional pressures over resources. Can India negotiate a new federal bargain, or will the political lure of centralisation trump federal principles that grounded the Constitution?
Written against the backdrop of Partition, India’s Constitution adopted a unique brand of federalism that sought to respond to the twin imperatives of nation building and democratic consolidation that placed relatively weak checks and balances on the powers of the Union government. A strong Centre can, for instance, redraw state boundaries. This strong centre coexisted with the recognition that India’s diversity of language, region and religion could only be preserved through federal accommodation. Thus the constitution allowed for other unique political arrangements that offer varying degrees of autonomy (what political scientists have termed asymmetric federalism) to accommodate specific religious, regional and ethnic identity claims. This is why federalism in India is so closely intertwined with its project of democratic consolidation. The Constitution also crafted a framework for intergovernmental power sharing that has locked the Centre and the states in a relationship of administrative and fiscal interdependence. The Union government has overwhelming revenue powers, while state governments bear the bulk of expenditure responsibilities. In this sense, states are dependent on the Union to fulfil their constitutionally-assigned responsibilities, and the Centre, in turn, is dependent on the states to pursue national goals.