India's federal structure is witnessing increasing stress owing to delimitation concerns, fiscal asymmetry, excessive centralisation, and weakening institutional dialogue between the Centre and States, posing challenges to the balance between unity and regional autonomy.
Delimitation and Demographic Imbalance: The 131st Constitutional Amendment Bill, 2026 was introduced to facilitate the post-2026 Delimitation Exercise, reviving concerns over India's federal balance.
o Delimitation is based primarily on population under Articles 81 and 82, States that successfully controlled population growth fear a reduction in their parliamentary representation despite better governance outcomes. This could widen the North-South divide and undermine the principle of political equality.
Growing Fiscal Asymmetry in Centre–State Financial Relations: Although Articles 268–293 provide the constitutional framework for Centre-State financial relations, States increasingly argue that their fiscal autonomy has weakened.
o Under Article 270, cesses and surcharges are excluded from the divisible pool, allowing the Centre to retain a larger share of tax revenues.
o The recommendations of the 16th Finance Commission (2026–31) regarding tax devolution have intensified debates between contributor and recipient States over fiscal equity, while conditional borrowing limits under Article 293 are viewed as restricting States' fiscal autonomy.
Legislative Centralisation: The constitutional division of legislative powers under Articles 245–255 and the Seventh Schedule has increasingly come under strain due to frequent Central legislation on Concurrent List subjects.
o States contend that legislations such as the Bharatiya Nyaya Sanhita, 2023, Labour Codes and earlier Farm Laws were enacted without adequate consultation, weakening cooperative federalism.
o The prolonged inactivity of the Inter-State Council (Article 263) has further reduced institutional dialogue between the Centre and States.
Central Agencies and Federal Friction: The increasing intervention of Central agencies such as the CBI, ED and NIA has generated allegations of political misuse and excessive Central interference.
o Several States have withdrawn the general consent granted to the CBI under the Delhi Special Police Establishment Act, 1946, arguing that such interventions erode State autonomy and weaken cooperative federalism.
"One Nation" Initiatives versus Regional Autonomy: Several nationwide initiatives such as One Nation, One Election, One Nation, One Market, and One Nation, One Ration Card have generated concerns regarding increasing centralisation. States argue that uniform national policies reduce their flexibility to innovate according to local socio-economic conditions, thereby diluting the federal spirit envisaged under the Constitution.
Asymmetric Federalism and Emerging Statehood Demands: The Centre's authority under Articles 2, 3 and 4 to alter State boundaries or create new States without obtaining the consent of the concerned State Legislature has raised concerns over federal security.
o Simultaneously, demands for Sixth Schedule status for Ladakh and Special Category Status for Bihar and Odisha highlight the continuing challenges of managing India's asymmetric federal structure.
Horizontal Federalism: Inter-State Disputes: Federalism in India is challenged not only by Centre-State conflicts but also by disputes among States. Despite constitutional mechanisms under Article 262 and the Inter-State River Water Disputes Act, 1956, prolonged disputes over river waters and territorial boundaries continue to hamper regional cooperation and development.
o Examples: the Cauvery, Mahadayi and Assam–Mizoram disputes.
Language and Cultural Federalism: India's linguistic diversity remains a sensitive federal issue. Recurrent debates over the promotion of Hindi in official communication and the implementation of the National Education Policy (NEP), 2020 have triggered opposition from several Southern and North-Eastern States, which perceive such measures as undermining linguistic autonomy and cultural diversity.
Dilution of the Rajya Sabha's Federal Role: The Rajya Sabha, envisaged under Articles 79–122 as the Council of States, has gradually witnessed a decline in its federal character. Following the removal of the domicile requirement through the Representation of the People (Amendment) Act, 2003, voting increasingly follows party lines rather than regional interests, reducing its effectiveness in protecting State concerns against Central overreach.
Misuse of Article 356 (President's Rule): Although Article 356 empowers the Centre to impose President's Rule in case of constitutional breakdown, its frequent political misuse in the past weakened the federal balance.
o S.R. Bommai v. Union of India (1994), the Supreme Court declared federalism a part of the Basic Structure and imposed strict judicial limitations on arbitrary use of Article 356, thereby strengthening Centre-State relations.
Weak Institutional Mechanisms for Cooperative Federalism: Institutions such as the Inter-State Council (Article 263) and Zonal Councils were established to facilitate consultation and coordination between the Centre and States.
o Their irregular meetings and limited institutional effectiveness have reduced opportunities for consensus-building, forcing States to increasingly seek judicial intervention to resolve federal disputes.
Why is Consensus Important for Preserving the Spirit of Indian Federalism?
- Protects the Constitutional Spirit of Federalism: Although India has a strong Centre, the Constitution envisages a balance of powers through the Seventh Schedule, Articles 245–263, and Articles 268–293. Consensus preserves this constitutional equilibrium by respecting the autonomy of both the Union and the States.
- Strengthens Cooperative Federalism: Consensus promotes cooperation rather than confrontation between the Centre and the States, enabling joint decision-making on matters of national importance through institutions such as the GST Council (Article 279A) and the Inter-State Council (Article 263).
- Promotes Fiscal Harmony: Consensus-based fiscal decisions through institutions such as the Finance Commission (Article 280) and the GST Council (Article 279A) help address disputes relating to tax devolution, GST compensation and revenue sharing, ensuring equitable fiscal federalism.
- Balances National Unity with Regional Diversity: India's linguistic, cultural and regional diversity requires policies that accommodate different State interests. Consensus ensures that national decisions respect regional aspirations while preserving the unity and integrity of the country.
- Facilitates Effective Management of National Challenges: Issues such as pandemics, climate change, internal security, disaster management and public health require coordinated action. Consensus enables seamless cooperation between the Centre and the States for effective crisis response.
- Reduces Litigation and Political Deadlocks: Institutional dialogue through mechanisms like the Inter-State Council and Zonal Councils helps resolve disputes before they escalate into prolonged litigation before the Supreme Court under Article 131.
- Encourages Competitive and Cooperative Federalism: Consensus creates an environment where States compete in governance and innovation while simultaneously collaborating to achieve national development goals, improving overall policy effectiveness.
- Upholds the Basic Structure of the Constitution: In S.R. Bommai v. Union of India (1994), the Supreme Court held that federalism is a part of the Basic Structure of the Constitution. Building consensus strengthens constitutional morality, democratic governance and the long-term stability of India's federal system.
Way Forward to Strengthen Federal Ties
Institutionalise Cooperative Federalism: Strengthen institutions such as the Inter-State Council (Article 263), GST Council (Article 279A) and Zonal Councils through regular meetings and structured consultations to promote consensus-based policymaking and reduce Centre-State conflicts.
Deepen Fiscal Federalism: Ensure timely tax devolution based on the recommendations of the Finance Commission (Article 280), reduce excessive reliance on cesses and surcharges, provide greater flexibility in Centrally Sponsored Schemes (CSS), and enhance the fiscal autonomy of States.
Reform the Office of Governor: Implement the recommendations of the Sarkaria Commission, Punchhi Commission and the Supreme Court's judgment in State of Punjab v. Principal Secretary to the Governor (2023) to ensure politically neutral appointments, time-bound assent to Bills under Article 200, and adherence to constitutional conventions.
Ensure Transparent and Equitable Delimitation: The post-2026 Delimitation Exercise should adopt a balanced approach that considers not only population but also factors such as demographic performance, governance outcomes and federal equity, thereby safeguarding the political representation of all regions.
Strengthen Horizontal Federalism: Promote greater inter-State cooperation through mechanisms for resolving water-sharing, boundary and resource disputes, while encouraging regional development initiatives and best-practice sharing among States.
Strengthen Local Governments: Effectively implement the 73rd and 74th Constitutional Amendments by devolving adequate Funds, Functions and Functionaries (3Fs) to Panchayats and Urban Local Bodies, thereby strengthening cooperative federalism from the grassroots.
