India’s Experience with Federalism: Lessons Learnt and Unlearnt

 

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India’s federal experiment has undergone, over the past sixty years, many trials and

tribulations. In this presentation, we seek to capture the defining features of this experience,

the hesitations, mistakes and failures as well as the innovations and successes.

During this period, the system has sought to explore and to innovate, trying to

discover how much diversity it was possible to accommodate without sacrificing the essential

unity.

Indian federalism remains in essence work in progress, and we attempt below to

highlight fifteen major features which have marked its development, and to see if there are

any lessons to be learnt.

But at the outset, many dictates of conventional wisdom had to be set aside, much to

the dismay of constitutional purists.2 Unlearning was as much a part of the learning process

as the inspired search for solutions to problems never before encountered in quite the same

way.

1. The Legacy of Partition and the Weight of History

Historical legacies are undoubtedly important in the shaping of any polity. Colonial

rule wrecked the economy but had several unintended consequences for the polity. Through

the development of means of communication, the spread of the English language and mass

mobilisation under Mahatma Gandhi, it forged a political unity which the national leadership

could build upon.

Disorderly decolonisation imposed an urgent need for consolidation of the young

independent State. If Mahatma Gandhi was the father of the nation, Jawaharlal Nehru was the

father of the Indian state.

The wisdom of the founding fathers in the Constituent Assembly lay in not mistaking

the quelling of existing turmoil as their main mission. They transcended the immediate

context to lay the foundations of a durable democracy, forsaking neither their principles nor

their vision of what the Indian Republic was intended to represent.

The Unitarian temptation was strong and so was the urge to situate India ideologically

as a reaction to the immediate context and the tragic turn of events. After intense debate, the

Constituent Assembly opted for a secular Republic with its own brand of federalism.

Not surprisingly, its credentials to be considered federal were deemed dubious. A

literal reading of the Constitution was admittedly misleading, because it was easy to overlook

1 Dr Balveer Arora is Professor of Government and Politics and former Rector, Jawaharlal Nehru University,

New Delhi.

2 Sir Kenneth Wheare and Sir Ivor Jennings. The Sri Lanka Constitution

lasted all of seven years. Fali Nariman, ‘Constitution under Threat’.

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the significant ways in which the federal principle had been superimposed on the

parliamentary system.

2. The Fear of Federalism and Disunity.

Traumatised by the unprecedented horrors and dislocation of Partition, the

Constituent Assembly was obsessively focussed on the need for ensuring the unity and

integrity of the new nation. The fear of excessive federalism was cogently articulated, the

risks of centrifugal and fissiparous forces overwhelming the young Republic were

passionately evoked.

The framework finally adopted departed significantly from all existing models of

federalism. The Constituent Assembly devised a system which seemed most suited to the

needs of the time and the requirements of a federal society. Political processes generated by

the logic of a federal democracy completed this work in course of time.

In the absence of any track record or reliable radar to assess departures from the

existing template of norms and yardsticks, which were derived from the then dominant

models, jurists found it difficult to certify that the system was indeed federal. It was therefore

declared ‘Quasi-Federal’.

Today, India’s political institutions are widely recognised as a vigorous albeit hybrid

variant of the federal species. Self rule and shared rule have been combined in unorthodox

ways which have enabled the Indian Union to not only survive but also flourish in all its

diversity.

3. Recognising Diversity

The recognition of linguistic identities as the basis for territorial organisation surfaced

as a major issue in the Constituent Assembly. It had its roots in a promise first made during

the national movement, and then deferred through a misreading of priorities and popular

sentiment.

The power of recognition and the costs of non-recognition created serious problems

for the polity throughout the 1950s and the 1960s. In retrospect, there was avoidable loss of

life and property through prolonged agitations.

Variable Geometry and flexible States Reorganisation was incorporated in the

Constitution, raising many eyebrows. How has it worked in practice? The Centre has

generally dragged its feet and eventually agreed, when popular pressures built up.

The use of languages for official purposes, the protection of linguistic minorities, and

the flowering of 22 languages alongside English are durable legacies.

The political process in the first two decades of independence was thus marked by a

mix of the politics of identity and the politics of scarcity. Tension areas of this period were

around identity, language and boundaries.

4. The Strong Centre Framework: Functional or Dysfunctional?

The Constituent Assembly created an ‘Indestructible Union of Destructible States’

Secession was banned explicitly in the early years, but constitutional flexibility enabled other

forms of search for solutions.

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Overall, the shift from reluctant to robust federalism was spurred on by the political

process, which made it difficult to ignore the true nature of the Indian federation.

The Strong Centre framework has proved remarkably resilient, even during the phase

when the clarion call was to roll back the State. Given the nature and extent of social

diversities and cleavages, the judicious intervention of a Strong Central State is often

considered indispensable for maintaining social harmony.

This phase of India’s federal development was marked by the stunted growth of

institutional devices designed to cope with the needs of cooperation and coordination. Single

party dominance obscured the challenges that lay ahead.

Even in the economic liberalisation phase, the Centre retains control over all the

macro-economic levers of command. While deregulation in some areas has given more scope

for state initiatives, the needs for central regulation in new areas has emerged.

The strong centre framework is not challenged or sought to be replaced even by

proponents of state autonomy. What they want is strong states and more state autonomy

within the same framework.

5.The Distribution of Powers and Responsibilities : The Lists

The Cardinal Principles of the new Constitution, as defined by B.R.Ambedkar, were:

(a) A single judiciary

(b) Uniformity in fundamental laws, civil and criminal

(c) A common All-India Civil Service for important posts

It is important to recall that the original design vested substantial legislative powers

and responsibilities in state governments for key developmental activities.

Table 1: Distribution of Legislative Powers and Executive Responsibilities between the Union Parliament

and the State Assemblies in Key Areas.3

Development Area List I: Union’s Powers List II: States’ Powers List III :Concurrent

1. Land Land rights, tenures, rents,

transfer (18)

Forests (17A)

2. Water Inter-state rivers and river

valleys notified by law in public

interest (56)

Water supplies, storage,

power, irrigation and canals

(17)

3. Electricity, Power

& Energy

Atomic energy and related

mineral resources (6)

Natural and Bio-Gas (25) Electricity(38)

4. Agriculture &

Fisheries

Fishing/Fisheries beyond

territorial waters (57)

Agriculture(14); Livestock

(15), Fisheries within

territorial waters (21)

Wild Animals (17B)

3 Compiled from Constitution of India , Seventh Schedule. Numbers in brackets refer to item numbers in the

concerned list. The Union List included obvious sovereignty functions such as defence, foreign affairs and

currency, while maintenance of public order and police functions are assigned to the states. Residuary powers

are vested in the Union

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5. Industry Industries notified by law for

national defence (7) or to be in

public interest (52)

Industries other than those in

List I(24)

Factories(36)

6. Oil, Mines,

Minerals,

Mineral oil / Petroleum (53),

Mines and minerals notified to

be in the public interest (54)

Mines and minerals other than

those in List I(23)

7. Trade &

Commerce

Foreign trade and commerce,

import/export, customs

frontiers(41) Inter-state trade &

commerce (42)

Trade & commerce within the

state (26) Production, supply

and distribution of goods (27)

Markets & Fairs (28)

Trade, commerce,

production & distribution

of foodstuffs, edible oils,

cotton & jute (33)

8. Transport &

Communications

Railways (22), national

highways (23), national

waterways (24), maritime

shipping (25) major ports (27)

airways (29) rail/sea/air

transportation (30)

Roads and means of

communication other than

those in List I(13)

Minor ports (31), shipping

& navigation on inland

waterways (32)

9. Education Universities & Institutions of

national importance for

scientific/technical education

and research (63-66)

Incorporation and regulation

of Universities, literary and

scientific societies,

associations, cooperatives (32)

Technical, medical, and

university education

including vocational and

technical training (25)

10. Information &

Broadcasting

Posts/telegraph/telephone/wire

less/broadcasting and

communication.(31) Cinema

censorship (60)

Theatre, Cinema, Sports (33)

11. Public Health

and Social Welfare

Port quarantine (28) Public health and sanitation/

hospitals & dispensaries (6)

Relief of disabled/

unemployable (9)

Infectious and contagious

diseases (29) Economic

& social planning (20)

Population control (20A)

social security/insurance

& employment /

unemployment (23)

Labour welfare (24)

12. Local

government, public

works & cooperatives

Municipal corporations &

local self - government (5)

Public works (35) Cooperative

societies (32)

13.Taxation Powers

and Financial

Resources

Taxes on Personal Income (82),

Corporate Income (85), Capital

(86), Estates (87), Rail/Sea/Air

Transportation (89), Services

(92).

Land Revenue (45),

Agricultural Income Tax

(46), Lands and Buildings Tax

(49), Alcohol (51). Electricity

(53), Sales of Goods (54),

Vehicles (57), Cinema (62).

A literal reading of the Indian Constitution can however be misleading. Multiple

overlaps have occurred, not merely in the concurrent spheres of jurisdiction but also in

spheres explicitly assigned to the states.

Financial constraints of the states have led to the proliferation of central schemes and

national missions. The all encompassing ambit of entry 20 in List III, social and economic

planning, provided the constitutional basis for the planned development model of the first

phase.

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New elements of the division of powers and responsibilities have begun to assume

importance, overshadowing to a certain extent the issues which dominated the reform agenda

of the earlier period.

While the issue of distribution of responsibilities and powers in federal political

systems is generally contentious, a gross mismatch between the two can lead to serious

tensions.

The federal dialogue with the states is often pre-empted by central administrative and

policy decisions. The Centre often decides on a particular course of action and only thereafter

seeks inputs from the states. Consensus building is after the decision, not before. This mode

of decision-making is contested.

6. Asymmetric Federalism: The acceptance of inequality of states.

Unequal States give rise to the need for the constitutional recognition of inequality, to

be built into the federal polity in ways which protect diversity without sacrificing unity or

imposing uniformity.

Related to the quest for a more responsive and participatory federal democracy is the

notion of asymmetric federalism. As political and economic asymmetries get accentuated,

demands are bound to grow for statutory asymmetric arrangements.

In India, the inequality of states, and of regions within states, has commonly

generated tensions and dissatisfactions. Asymmetrical federalism and special status

provisions, including special fiscal regimes and incentives, have helped address these

problems to some extent.

Special Status provisions have been used to resolve issues arising from history,

geography and culture. Articles 370 and 371 provide examples of such accommodative

constitutional engineering.

Special status and unique relationships to meet specific needs and requirements were

very much a part of the original constitutional design from the outset.

Sub-State autonomy structures and autonomous district councils have had a mixed

record. Some have been mere transit points towards statehood, others have proved more

durable. Combining self rule and shared rule can assume many forms: fragmentation and

non-viable units have to be weighed against the advantages of integration and size. The

creation of north-eastern states raised this issue in a particularly acute form.

7. Executive Federalism, All-India Services and Inter-Governmental Relations.

The growth of Executive Federalism is one of the noteworthy features of India’s

federal development. It is linked to the parliamentary system where the executive is part and

parcel of Parliament.

Legislative federalism as embodied in the Rajya Sabha remains weak and

underdeveloped, whereas executive federalism has acquired new dimensions.

What has been the record of the role and contribution of the All-India services to

Indian federalism? Their existence is unique among federations which are generally marked

by horizontally layered bureaucracies.

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The basic postulates and assumptions need to be stated and revisited in the light of

experience. The ‘ring of service’ that Sardar Patel evoked, binding the union and injecting

into policy making an awareness of constraints faced by each level, remains an interesting

experiment.

Among the institutional experiments in executive federalism, the most noteworthy is

the Inter-State Council (ISC), which was established in 1990 under article 263 and was

intended to bring together Chief Ministers at regular intervals to discuss issues of national

policy and action. The reasons for the stunted growth of this institution are not difficult to

comprehend: it was conceptually flawed from its inception as it lacked the requisite status

and authority to mediate effectively between the Centre and the States.

Sarkaria, who submitted his report in the twilight years of Congress party hegemony

and dominance, recognised the need for such a Council. In fact, he recommended two, the

second one to replace the National Development Council

The tensions of this phase emerge clearly in the Sarkaria Report : less central

intervention and more states’ participation.

8. Judicial Power.

The Judiciary is assigned a major role in all federal systems through the power of

judicial review.

The Indian Judiciary has changed its stance on the nature and extent of federalism

embodied in the Constitution.

The first phase was marked by a literal reading of the Constitution and giving the

Centre the benefit of the doubt in most cases.

Subsequent events, notably the experience of the Emergency (1975-77) changed the

perception of the Judiciary. The Central perspective ceased to be the dominant reference

point for judging federal issues. The point of view of the states began to be heard with greater

attention and respect.

It has recognised the trends towards greater assertion of federal principles and has

supported this development in recent years.

The independence of the Judiciary has been a major pillar of the federal democracy

edifice.

9. Multilevel Government –Opposition relations

The 1990s can be viewed as a defining transition for India’s polity; they paved the

way for a political system more federal than ever before.

New modes of participation and decision-making emerged through the mechanism of

federal coalitions, to which the parliamentary system and the Constitution have yet to adapt

in a formal sense.

Through federal coalitions, the power and influence of state-based parties increasingly

shapes national policy as well as the course of Centre-State relations.

More importantly, single-state and multi-state parties have engineered, through the

political process, an enhanced degree of participation in national policy-making that they

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could not achieve through formal institutions of co-operative federalism. In effect, federal

coalitions have given them participatory opportunities that were earlier denied to them.

Two main factors can be flagged as the driving force behind this transition.

First, globalisation has added a new dimension to the polity, with economic reforms

assigning new roles and responsibilities to the States.

Second, the federalisation of the party system, which has brought in its wake a new

dynamic, with its own mix of ‘competing logics’ is a crucial development.

The interplay of local aspirations articulated by state-based parties with the

imperatives of national cohesion derived from a different discourse is at the core of this

debate.

The complex power sharing that results from this multilevel relationship is a

significant factor in holding the system together.

10. Emergency Powers and Constitutional Dictatorship:

Emergency provisions exist in all democratic constitutions to protect and preserve the

State, give it the powers to defend itself from its enemies, both internal and external.

However, important differences with regard to the limitations, checks and safeguards

provided. Preventing abuse has been a major preoccupation ever since Hitler constitutionally

seized absolute and total power under the Weimar Constitution.

Major lessons were learnt in this area on the possibilities of abuse. A trusting

Constituent Assembly had devoted little thought to tight safeguards, given the context of the

debate and the impeccable democratic credentials of the national leadership. The need for

tighter safeguards arose sooner than expected. Uncertainties surfaced over civil-military

relations.

Abandoning the bumpy road of democracy has its own charm and temptation in

periods of intense political turmoil. The difficulties arise in choosing the moment for reviving

the democratic process. Hence the need for stringent limitations and safeguards to ensure that

this state of exception remains as short as possible, with other institutions pushing towards a

return to normalcy at the earliest.

Suspension of federalism was a major consequence of the utilisation of emergency

powers, quite apart from its effects on fundamental rights and freedoms.

11. Governors and their Discretionary Powers.

Governors as the eyes and ears of the Central Government were a legacy of colonial

rule. It was considered necessary to retain this institution, which became the most

controversial instrument of central intervention.

Is the Institution Necessary? The question has been posed repeatedly, when efforts to

curb abuse and reform the system met with little success. Federal flexibility was ironically

one major reason and defence of the institution.

The fundamental issue if the illegitimate exercise of legitimate powers, the abuse of

powers. The Judiciary has been a major force in curbing this trend, laying down norms and

guidelines for the exercise of gubernatorial powers.

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12. Regional Inequalities and Redistribution: Independent Finance Commission

The Finance Commission, with its independent constitutional status, was expected to

engineer the necessary balance between the needs of the Centre and the states.

A new phase in India's political and economic development began in the early 1990s

with liberalisation and an increased role for market forces. This shift has given rise to new

contradictions and cleavages between market driven economics and politics based on

universal suffrage.

Earlier, it was the State that had the primary role in mediating these tensions. It sought

to reconcile those excluded by markets by including them through the policies and processes

of political democracy.

In addition to wide income disparities the Indian Union is characterised by vast

regional inequalities too. Here again, the State was earlier assigned a primary role in

mitigating the consequences of geographically uneven development

Thus the situation today is largely the outcome of the conjunction of two factors: the

economic liberalisation reform programme and the federalisation of the party system. The

problem of growing inequalities is equally complex. How social and economic inequalities

are viewed is a core issue in the debate on the new role of the State.

Greater reliance on market allocation of capital investments has given rise to

competition among states that are unequally equipped and endowed for it. This has given rise

to competitive federalism.

The impact of competition for attracting investments to the states is to be understood

at two levels. On the one hand, states are under pressure to provide good governance and to

manage their finances with prudence. On the other hand, they are acutely aware of the

negative impact of many of these reform measures on their electoral popularity.

13. Creating an Internal Common Market.

The sequence adopted was to aim for political integration first, and the building of a

common market was considered a relatively easier task, given the existence of a common

currency, a central bank, and central government control over other macro economic

parameters.

The development of fiscal federalism however created new obstacles in the path of

this delayed integration. States developed as centres of power and complex negotiations had

to be conducted to persuade them to forego sources of revenue resulting from inter state tariff

barriers.

Introduction of VAT was a long drawn out process, with Tamil Nadu and Uttar

Pradesh holding out till recently. It now paves the way for freer inter-state trade and

commerce, dismantling of tax & excise barriers, and creation of a belated common market.

An integrated Goods and Services Tax, though announced for 2010, is still problematic.

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14. Internal Security, Public Order: Roles and Responsibilities.

The role of an All-India Police Service and the growth of central armed police and

para - military forces have also been questioned in the debate on states’ rights and autonomy

in the first phase.

In the subsequent years, states have tended increasingly to lean on central forces to

supplement their own often inadequate police apparatus.

The role of Central Forces in areas which fall primarily within the sphere of States

Responsibilities has been a contentious issue. The cases of Ayodhya and Godhra can be cited

in this context. The power of the Centre to issue directives to states and to interpret noncompliance

as constitutional breakdown has been selectively invoked.

15. Multilevel Federalism and Local Self Government.

This idea took legislative shape with the 73rd Constitutional Amendment (1992),

which effectively came into operation in 1995.

The new framework of self-government institutions effectively gives constitutional

recognition to a third tier of the federal structure.

However, this does not mean that multilevel federalism is already a generalised

ground reality, or that it is likely to be so in the near future.

It is important to note that there are powerful interests in the states, both within the

political class and the bureaucracy, which resist this decentralisation.

Was it wise to model these on Panchayats or to fashion them as District

Governments? These institutions are in essence the building blocks of a new experiment in

self-government

Table 2.: List of Developmental Responsibilities for Local Governments

Development Area Subjects

1. Land Land improvement, implementation of land reforms, land consolidation and soil

conservation (2)

2. Water Drinking water (11) Minor irrigation, water management and watershed development

(3)

3. Electricity, Power

&Energy

Rural electrification and distribution of electricity. (14) Non-conventional energy

sources (15) Fuel and fodder (12)

4. Agriculture & Fisheries Agriculture (1) Fisheries (5) Animal husbandry, dairying & poultry (4) Social/farm

forestry (6) Minor forest produce

5. Industry Small-scale industries, food processing (8) khadi / village / cottage industries (9)

6. Oil, Mines, Minerals, None

7. Trade & Commerce Markets and fairs (22)

8. Transport

&Communications

Roads, culverts, bridges, ferries waterways and other means of communication (13)

9. Education Education, including primary and secondary schools (17) Technical training and

vocational education (18) Adult & non-formal education (19)

10. Information &

Broadcasting

Libraries (20) Cultural activities (21)

11. Public Health Health and sanitation, including hospitals, primary health centres and dispensaries (23)

12. Social Welfare and Poverty alleviation programme (16) Family welfare (24) women and child welfare (25)

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Security Social welfare (26) Welfare of weaker sections (27) Public distribution system (28)

13. Local government &

co-operatives

Maintenance of community assets (29)

The gradual growth of the panchayat system, working in tandem with civil society

institutions of the voluntary sector, is a defining development of the federal system. The

pressures that are being generated at this level hold the promise of developing into

powerhouses for bringing about further changes in the institutional design.

Within the framework of this multilevel federalism, the recently enacted Right to

Information Act appears to be a potentially powerful weapon for effective decentralisation

and democratisation. While it favours, in a general way, the development of transparency and

accountability in governance, it is capable of producing significant results in smaller settings

of decentralised democratic institutions. In this sphere, civil society institutions and

particularly voluntary sector organisations are playing an increasing role.

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Lessons Learnt and Unlearnt: Concluding Remarks

After 60 years, Indian Federalism is still work in progress. Witness the appointment

of the Second Commission on Centre-State Relations. Five dimensions can be highlighted in

conclusion.

(a) Unresolved issues and new reform agenda

Identity related: Second SRC or recasting the federal system. Statehood demands:

Telangana, Vidharba and the restructuring of Uttar Pradesh.

Resource Related: Water resources, long standing inter-state river water disputes

(Cauvery, Narmada) and compensation through equalisation formula for unequally

endowed states.

Institutional Agenda: Governors, Presidents Rule, and the future role of the Inter-State

Council.

Sectoral issues: relating to health, education and social security combined with

jurisdictional roadblocks in the development of infrastructure and basic minimum needs

water, power, transport and connectivity.

(b) Political Parties and Federalism

The growth in power and influence of state-based parties now shapes the course of

Centre-state relations primarily through the mechanism of coalition governments at the

Centre. More importantly, some parties have engineered, through the political process, an

enhanced participation in national policy-making that they could not achieve through formal

institutions of co-operative federalism. In effect, federal coalitions have given them

participatory opportunities that were earlier denied to the states in institutions such as the

Planning Commission, the National Development Council or the Inter-State Council.

(c) Economic Reforms and Social Justice

Structural changes conducive to an increased role for the market have obviously had

an impact on intergovernmental relations. This has prompted fears that the gap between the

more developed and the less developed states could widen, with the latter being left behind in

the competition for economic growth. Education and Healthcare remain critical areas and the

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policy of quotas and reservations for deprived sections is an important component of the

social justice agenda. Affirmative action has of late come under attack from the Supreme

Court which has viewed it as anti-merit.

(d) Reinforcing Governance Capabilities of the States

The challenge is simultaneously to invent new ways of facilitating the participation of

states in the formulation of national policies and motivating them for effective

implementation in key infrastructural areas such as power, roads, and basic civic amenities.

In the context of a multi-party system and the need to forge federal coalitions for national

governance, this becomes all the more necessary. The political process is able to achieve this

to some extent, but is no substitute for effective institutionalised arrangements.

(e) The Role of Voluntary Sector Institutions

They now interface in more effective ways with multilevel federalism. Local

government issues, concerned as they are with basic land use, water and electricity supply,

education, health and food security concerns, are increasingly becoming the privileged arena

for determining the electoral fate of parties. Performance or non-performance in this area is

bound to increase in significance as pressures on resources intensify.

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