Dual character, unique feature of India's federalism

In the light of several issues that have emerged of late between the Centre and various states and among states, one wonders what the exact nature of Indian federalism is. Is it federal, unitary or somewhere in between the spectrum?

The uniqueness of Indian federalism is conspicuous by its “dual character”. In the words of Ambedkar, the Chairman of the Drafting Committee, “…the Draft Constitution can be both unitary as well as federal according to the requirements of time and circumstances. In normal times, it is framed to work as a federal system. But in times of war, it is so designed as to make it work as though it was a unitary system.” Subsequently, the Supreme Court had pertinently observed: “In a sense, the Indian Union is federal. But, the extent of federalism in it is largely watered down by the needs of progress and development of a country which has to be nationally integrated, politically and economically coordinated, and socially, intellectually, and spiritually uplifted.”

It is perhaps for this reason that “Union of States” and not “federalism” is used in the Constitution. Justifying the usage of word “Union of States” instead of “Federation of States”, Ambedkar had explained: “The federation was not the result of an agreement by the States to join in a federation and that the federation not being the result of an agreement, no State has the right to secede from it. The federation is a Union because it is indestructible.

Though the country and the people may be divided into different states for convenience of administration, the country is one integral whole, its people a single people living under a single imperium derived from a single source.” Accordingly, the basis of the distribution of powers between the Union and States is that “only those powers which are concerned with the regulation of local problems are vested in the states and the residue especially those which tend to maintain the economic industrial and commercial unity of the country are left to the Union.”

Despite the clarity provided by the Constituent Assembly debates, the Constitution and various judicial pronouncements, one wonders why there is still room for discussion on the actual nature of Indian federalism. In the initial years of independence, due to the same party rule (Congress), issues of Centre-state relations were often played out within the ranks of the Congress, and the states, in turn, remained just as “glorified municipalities”.

There was a “hegemonic consensus” on various issues between the Centre and the states. However, since the late 1960s when parties of different ideologies started ruling the states, cracks started emerging. But, it did more forcefully since the late 1980s due to the emerging political and economic situation.

Politically, the party system began a rapid transition from a one-party dominant to a multi-party coalition system. Regional parties started playing an increasingly decisive role in the formation of governments at the Centre. Also, the growing importance of regional leadership has allowed the process of “decentring the centre” in a major way. Some of the states like Tamil Nadu and West Bengal went to the extent of demanding “reallocation of powers”.

On their part, the Akalis adopted the Anadapur Sahib Resolution on October 17, 1973, demanding “a true fede­ral Constitution” in which four sub­jects – defence, foreign affairs, communications and currency – allotted to the Centre and the rest to the states. The then Left Front government in West Bengal argued that the advocacy for strong states “is not necessarily in contradiction to that of a strong Centre, once the respective spheres of authority are clearly marked out” and in fact demanded amending the Preamble of the Constitution to include word “Federal”.

Role of planning

Regional parties questioned the existing structure of the Centre-State relations and resented any kind of “Centre’s encroachment” in the name of security or development. History is repeating itself now in response to strong centralist tendency of the present government. Economically, Jawaharlal Nehru, impressed by Soviet Union’s five-year plans, emphasised on the role of planning at the national level in economic development. He believed that a ‘majority rule’ and ‘unified sovereignty’ would facilitate socialist transformation and economic growth in independent India.

Though not entirely in favour of federalism, he agreed to the system, but with a strong Centre. However, when India witnessed a severe balance of payment crisis in the early 1990s, there was a need for opening up of markets resulting in the emergence of a ‘federal market economy’. It brought openness not only at the Central level but also to the states. The policy shift enabled the States to directly invite foreign direct investment as against the earlier arrangement through the Centre.

As a result, state governments actively competed for FDI, though with results that varied dramatically across states. This has widened the gap between the more developed and the less developed states with the latter being left behind in the competition for economic growth. It led to a concept of ‘empowered states’, which claimed to have developed strong and modern infrastructure and which, in turn, exuded confidence for self-protection.

They sought little or no financial support from the Union government. As a result, the Centre’s economic leverage declined considerably, especially vis-à-vis the ‘empowered states’. Thus, the economic clout of the regions added to their political strength impacted the federal system in practice. However, in the recent past, the introduction of GST and other centralised economic regimes have shaken such confidence of the states.

In sum, Indian federalism has stood as a classic case of Riker’s observation: “The essence of federalism... is the political feature: (1) the political bargain that creates it and, (2) the distribution of power in political parties which shapes the federal structure in its maturity. Everything else about federalism is accident: the demarcation of areas of competence between central and constituent governments, the operation of intergovernmental relations, the division of resources, etc.”

(The writer is with the Department of International Studies, Political Science and History, Christ University, Bengaluru. He earlier served at the National Security Council Secretariat)