Source: TH
Context: The debate on India’s federalism has been reignited following the submission of Part I of the Justice Kurian Joseph Committee Report.
- Commissioned by the Tamil Nadu government, the report advocates for a structural reset to restore state autonomy and right-size the Union’s role in governance.
About India’s federalism is in need of a structural reset:
What it is?
- A structural reset refers to a fundamental recalibration of the power balance between the Union and the States. It moves away from the centralizing bias of the 1940s—born out of post-Partition anxieties—toward a model where States have autonomous legislative and fiscal space.
Indian Federalism: The Current Constitutional Structure
- Article 1: Defines India as a Union of States, implying that the Union is indissoluble, but the states are its essential constituent units.
- The Seventh Schedule: Distributes legislative powers into the Union List (exclusive to Centre), State List (exclusive to States), and Concurrent List (both, but Centre prevails under Article 254).
- Basic Structure Doctrine: In S.R. Bommai vs. Union of India (1994), the Supreme Court declared federalism a part of the Constitution’s Basic Structure, meaning it cannot be abridged even by Parliament.
- Fiscal Federalism (Article 280): Provides for a Finance Commission to recommend the distribution of tax proceeds between the Union and States to correct vertical and horizontal imbalances.
- States’ Autonomy: The Supreme Court in the NCT Delhi vs. Union of India (2018/2023) cases reaffirmed that in a federal spirit, the elected government of a State/UT must have control over its administrative services.
Need for a Structural Reset:
- Erosion of Fiscal Autonomy: States’ share in the divisible pool is often diluted by the Centre’s increasing reliance on cesses and surcharges.
E.g. The share of non-divisible cesses and surcharges rose to over 18% of gross tax revenue by 2025, depriving States of their fair share under Article 270.
- Centrally Sponsored Schemes (CSS) Micromanagement: Rigid templates for national schemes often ignore the diverse developmental stages of different States.
E.g. The replacement of MGNREGA with the Viksit Bharat (Gramin) Act in late 2025 imposed stricter funding conditions that hampered state-specific rural planning in Punjab and Tamil Nadu.
- Encroachment on Concurrent List: The Union increasingly uses subordinate legislation to override State-specific laws.
E.g. Frequent Central interventions in Education (NEP) and Health standards often conflict with regional linguistic and socio-economic priorities.
- Overburdened Union Executive: A central government attempting to supervise everything from space to sanitation faces diminished effectiveness.
E.g. The NITI Aayog often sets performance benchmarks for local issues like water management that States argue are better handled by local knowledge.
- Political Maturity of States: Unlike in 1950, modern States are linguistically and politically consolidated and no longer pose a secessionist threat.
E.g. Innovative State-led policies, like Tamil Nadu’s Noon Meal Scheme, eventually become national models, proving that States are the true laboratories of democracy.
Challenges Associated with the Reset:
- Delimitation Concerns (2026): Reallocating Lok Sabha seats based on current population trends may penalize performing States that controlled population growth.
E.g. Southern states fear a loss of political representation in Parliament compared to Northern states after the 2026 delimitation exercise.
- The Governor’s Interventions: The role of the Governor has frequently become a point of friction, with allegations of stalling State legislation.
E.g. Prolonged delays by Governors in giving assent to Bills in Kerala and Tamil Nadu (2024-25) have led to repeated Supreme Court interventions.
- Fiscal Deficit Caps: Strict Central control over State borrowing limits can stifle regional infrastructure growth during economic shifts.
E.g. Kerala’s 2025 legal challenge against the Centre’s borrowing ceilings highlighted the tension between State welfare needs and Central fiscal diktats.
- One-Size-Fits-All Digital Mandates: Centralized digital architectures sometimes bypass State administrative structures.
E.g. Mandatory Aadhaar-based payment bridges for State welfare schemes have occasionally led to exclusion errors in remote rural pockets.
- National Security vs. State Policing: The expansion of Central agencies’ jurisdiction often overlaps with the State’s Law and Order mandate.
E.g. Increasing the jurisdictional reach of the BSF or Central investigative agencies in border states like Punjab and West Bengal has faced stiff State opposition.
Way Ahead:
- Reform the Finance Commission ToR: Ensure cesses and surcharges are included in the divisible pool to provide States with genuine financial untied resources.
- Revitalize the Inter-State Council: Transform it from a talk-shop into a mandatory consultative body for all legislation involving the Concurrent List.
- Institutionalize Subsidiarity: Adopt the principle that policy should be handled by the lowest competent authority, leaving the Union to focus on strategic national goals.
- Governor Reform: Implement the Punchhi Commission recommendations to limit the Governor’s discretionary powers and set a time frame for Bill assent.
- Protect Political Parity: Decouple the delimitation of seats from mere population numbers to ensure that performing States do not lose their voice in the Union.
Conclusion:
The call for a structural reset is not a demand for a weaker Union, but for a right-sized one that trusts its constituent units. By aligning authority with accountability at the State level, India can transition from a high-command federalism to a truly partnership-based enterprise. Only a balanced federal structure can sustain the diverse Idea of India in an era of global economic competition.
