India’s Federalism Needs a Structural Reset

Q: What is meant by the ‘centralising bias’ of the Indian Constitution, and how did historical circumstances shape it?

The centralising bias of the Indian Constitution refers to the deliberate concentration of significant legislative, financial, and administrative powers in the Union government. Although India is described as a ‘Union of States’, the constitutional design—drawing heavily from the Government of India Act, 1935—placed residuary powers, emergency provisions, and key fiscal instruments in the hands of New Delhi. The Union List is expansive, the Concurrent List allows Union override, and Articles such as 356 enable central intervention in States under specified conditions.This architecture must be understood in its historical context. At Independence, India faced Partition, communal violence, integration of over 500 princely States, and fears of secession. In such an environment, centralisation appeared essential for national unity and territorial integrity. The framers prioritised stability over experimentation.However, what was justified as a transitional necessity gradually hardened into structural habit. As India’s political maturity and linguistic consolidation deepened, the original anxieties diminished, raising questions about whether the degree of centralisation remains proportionate to present realities.

Q: How does decentralisation promote innovation and policy effectiveness within a federal system?

Decentralisation enables parallel experimentation, allowing States to design policies suited to local conditions while containing risks within manageable boundaries. Successful models can then diffuse horizontally or be adopted nationally. This process mirrors laboratory experimentation—diverse approaches are tested, refined, and scaled.India offers multiple examples. Tamil Nadu’s noon meal scheme began as a State initiative before informing the national Mid-Day Meal Programme. Kerala’s advances in literacy and public health influenced broader development discourse. Maharashtra’s Employment Guarantee Scheme inspired the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA).Such cases demonstrate that innovation often originates in States rather than the Union. Decentralisation fosters responsibility and capacity-building. When States are trusted with authority, they cultivate administrative competence and accountability mechanisms, strengthening the federation as a whole.

Q: In the context of GST and centrally sponsored schemes, how does fiscal centralisation affect State autonomy?

The introduction of the Goods and Services Tax (GST) marked a significant restructuring of India’s fiscal federalism. While it enhanced tax harmonisation and reduced cascading effects, it also subsumed several State taxation powers into a unified framework governed by the GST Council. Though cooperative in design, revenue dependency and compensation debates have highlighted tensions.Similarly, centrally sponsored schemes often come with rigid guidelines and conditional funding. States must align priorities with centrally determined templates to access resources. This constrains flexibility in addressing region-specific challenges and can produce a one-size-fits-all approach.Case implications:Reduced fiscal manoeuvrability for States.Dependence on Union transfers for social sector programmes.Potential erosion of accountability as lines of responsibility blur.Fiscal autonomy is integral to meaningful federalism; without it, legislative competence becomes nominal rather than substantive.

Balancing federalism through autonomous States and accountable governance is essential for national unity and efficient administration.

Gopi

•February 17, 2026•6 mins read

Tamil Nadu panel calls for recalibrating Centre-State balance to strengthen Indian federalism

Not Started

1. Historical Foundations of Centralisation in the Indian Constitution

The Constitution of India, though federal in structure, was designed with a pronounced centralising bias. Drawing heavily from the Government of India Act, 1935, it vested substantial powers in the Union while leaving comparatively limited autonomy to the States.

This design reflected the extraordinary circumstances of independence — the trauma of Partition, integration of 14 provinces and over 500 princely States, and fears of fragmentation. In this fragile environment, centralisation was perceived as essential to preserve sovereignty and territorial integrity.

However, members like K. Santhanam cautioned against excessive concentration of powers, emphasising that federal strength lies not merely in allocation of authority but also in disciplined restraint.

“It is in this positive as well as negative delimitation of powers that a real federal system rests...” — K. Santhanam

The governance logic was clear: authority functions best when exercised close to knowledge and accountability. If the Union assumes excessive responsibilities, administrative overload and inefficiency follow, weakening rather than strengthening national unity.

2. Evolution of Centralising Tendencies Post-Independence

In the early decades, single-party dominance at both Union and State levels fostered a “high command” political culture, reducing the autonomy of State leadership. This reinforced centralisation beyond constitutional text.

The coalition era and rise of regional parties later produced a more balanced federal arrangement without destabilising unity. This indicates that political maturity, not excessive central control, sustains cohesion.

Despite the consolidation of linguistically reorganised and politically stable States, constitutional practice has continued to reflect the anxieties of the late 1940s. Centralisation, initially justified by necessity, has gradually become institutional habit.

If political centralisation persists despite maturity of States, it risks misalignment between constitutional design and contemporary realities, leading to friction in Centre–State relations.

3. Mechanisms of Expanding Union Dominance

Over time, centralising tendencies have deepened through constitutional amendments, expansive Union legislation in Concurrent List subjects, and fiscal mechanisms that constrain State discretion.

Centrally Sponsored Schemes (CSS) with rigid guidelines and conditional Finance Commission transfers have increased Union leverage over State priorities. Additionally, Union ministries often duplicate State functions, leading to administrative overlap.

An emerging concern is the use of subordinate legislation to override plenary State laws in Concurrent List subjects, raising questions about cooperative federalism.

Key Institutional Channels of Centralisation:

Expansion of Union legislation in Concurrent List
Conditional fiscal transfers
Centrally Sponsored Schemes with strict templates
Executive overreach via subordinate legislation

When fiscal and legislative tools are used to micromanage States, accountability becomes blurred. Citizens may struggle to attribute responsibility, weakening democratic oversight and policy efficiency.

4. Federalism as Part of the Basic Structure

In S.R. Bommai v. Union of India (1994), the Supreme Court declared federalism part of the Constitution’s Basic Structure. The Court affirmed that States are not mere appendages but are supreme within their allotted spheres.

This judicial articulation elevated federalism from administrative arrangement to constitutional principle. It recognised India’s diversity as foundational to governance architecture.

Despite this affirmation, erosion of State autonomy has continued through legislative expansion and interpretations favouring uniform national solutions.

“Federalism… is part of the basic structure of the Constitution.” — S.R. Bommai Judgment, 1994

Ignoring constitutional federalism risks institutional imbalance. If diversity is administratively flattened, policy responsiveness declines and constitutional tensions increase.

5. Decentralisation as a Governance Strategy

India’s size and heterogeneity limit the effectiveness of centralised policy design. No single authority can tailor solutions equally across linguistic regions, agricultural systems, or labour markets.

Decentralisation enables parallel experimentation. States can test policies at manageable scale, contain failures, and allow successful innovations to diffuse nationally.

Illustrative Examples of State-led Innovation:

Tamil Nadu’s Noon Meal Scheme
Kerala’s public health and literacy model
Maharashtra’s Employment Guarantee Scheme

These initiatives later influenced national programmes, demonstrating that innovation often emerges from subnational experimentation.

Excessive centralisation suppresses diversity of policy approaches. Without experimentation, governance becomes rigid, reducing innovation and long-term competitiveness.

6. Capacity Argument and the Dependency Trap

A common argument for centralisation is that States lack sufficient administrative or technical capacity. However, prolonged Union intervention may inhibit the development of such capacity.

Responsibility fosters institutional growth. If States are denied autonomy, they remain dependent, creating a self-reinforcing cycle where central control justifies itself.

Many Indian States are comparable in scale to sovereign nations in population and economy, undermining the assumption of inherent incapacity.

Capacity emerges through responsibility, accountability, and corrective learning. Without delegated authority, institutional competence cannot mature, weakening overall governance outcomes.

7. Assessing Outcomes of Centralisation

Centralisation might be justified if it produced demonstrably superior outcomes. However, concerns include regulatory complexity, resource dilution, blurred accountability, and gradual erosion of State capacity.

The model has struggled to deliver universal access, sustained quality, equity, or global competitiveness at the desired scale. Expanding mandates without commensurate resources risks underperformance.

If centralisation expands functions without ensuring efficiency or clarity of accountability, governance outcomes stagnate while institutional trust declines.

8. Tamil Nadu’s Federal Advocacy and Institutional Efforts

Tamil Nadu has historically articulated concerns about excessive centralisation. In 1967, C.N. Annadurai argued that Union strength should relate to sovereignty and defence, not routine subjects like health and education.

In 1969, the State constituted the Rajamannar Committee on Union–State Relations, whose 1971 Report became a landmark in federal discourse. Later national bodies such as the Sarkaria Commission (1983–88) and Punchhi Commission (2007–10) acknowledged the need for recalibration.

In April 2025, the Government of Tamil Nadu constituted a High-Level Committee on Union–State Relations under Justice Kurian Joseph. Part I of its report, submitted on February 16, 2026, addresses contemporary issues including:

Role of Governors
Language policy
Delimitation
Elections
Education and health
Goods and Services Tax

Such institutional reviews reflect an evolving federal discourse. If ignored, unresolved tensions may intensify friction between constitutional ideals and administrative practice.

9. The Case for Recalibration: Right-Sizing the Union

The contemporary challenge is not weakening the Union but right-sizing it. A focused Union can better discharge genuinely national responsibilities — defence, foreign affairs, macroeconomic stability — while States exercise autonomy in sectoral governance.

Recalibration aligns authority with responsibility, strengthening both accountability and efficiency. Federalism need not imply fragmentation; rather, it deepens unity through trust and shared constitutional enterprise.

If authority is aligned with function, governance efficiency improves. Conversely, misalignment breeds duplication, fiscal stress, and institutional conflict.

Conclusion

India’s federal architecture emerged from a period of existential uncertainty. However, seven decades later, political maturity and institutional consolidation call for calibrated decentralisation.

Strengthening federal balance can enhance innovation, accountability, and responsiveness — enabling the Union to be strong because it is focused, and the States to be strong because they are trusted.

Such a recalibrated federalism aligns constitutional principle with developmental imperatives, reinforcing both national unity and governance effectiveness.

Quick Q&A

Everything you need to know

The centralising bias of the Indian Constitution refers to the deliberate concentration of significant legislative, financial, and administrative powers in the Union government. Although India is described as a ‘Union of States’, the constitutional design—drawing heavily from the Government of India Act, 1935—placed residuary powers, emergency provisions, and key fiscal instruments in the hands of New Delhi. The Union List is expansive, the Concurrent List allows Union override, and Articles such as 356 enable central intervention in States under specified conditions.

This architecture must be understood in its historical context. At Independence, India faced Partition, communal violence, integration of over 500 princely States, and fears of secession. In such an environment, centralisation appeared essential for national unity and territorial integrity. The framers prioritised stability over experimentation.

However, what was justified as a transitional necessity gradually hardened into structural habit. As India’s political maturity and linguistic consolidation deepened, the original anxieties diminished, raising questions about whether the degree of centralisation remains proportionate to present realities.

Excessive centralisation can undermine governance efficiency because it disconnects decision-making from local knowledge and accountability. India’s vast diversity—linguistic, cultural, ecological, and economic—means that uniform policy design from New Delhi may lack contextual sensitivity. Policies in agriculture, health, or education often require adaptation to regional realities.

Over-centralisation also leads to administrative overload. When the Union attempts to manage subjects such as rural sanitation, school curricula, and urban development simultaneously, it risks regulatory complexity and blurred accountability. Large central ministries may duplicate State functions, creating procedural delays and micromanagement rather than facilitation.

Illustrative consequences include:

Conditional transfers and centrally sponsored schemes limiting State flexibility.
Expansion of Union legislation in Concurrent List subjects.
Reduced scope for policy experimentation.

In a federal democracy, strength arises not from accumulation of authority but from calibrated delegation aligned with subsidiarity.

Decentralisation enables parallel experimentation, allowing States to design policies suited to local conditions while containing risks within manageable boundaries. Successful models can then diffuse horizontally or be adopted nationally. This process mirrors laboratory experimentation—diverse approaches are tested, refined, and scaled.

India offers multiple examples. Tamil Nadu’s noon meal scheme began as a State initiative before informing the national Mid-Day Meal Programme. Kerala’s advances in literacy and public health influenced broader development discourse. Maharashtra’s Employment Guarantee Scheme inspired the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA).

Such cases demonstrate that innovation often originates in States rather than the Union. Decentralisation fosters responsibility and capacity-building. When States are trusted with authority, they cultivate administrative competence and accountability mechanisms, strengthening the federation as a whole.

The belief that the Union becomes stronger by diminishing States reflects a zero-sum understanding of federalism. Constitutionally, this view is problematic. In S.R. Bommai vs Union of India (1994), the Supreme Court affirmed that federalism forms part of the Basic Structure and that States are not mere appendages but supreme within their allotted spheres.

Empirically, weakening States can reduce administrative capacity, distort accountability, and centralise blame without improving outcomes. Excessive reliance on centrally sponsored schemes and conditional Finance Commission transfers can erode fiscal autonomy. Moreover, intrusive subordinate legislation overriding State laws in Concurrent List subjects raises concerns about democratic hierarchy.

However, proponents argue that uniformity ensures national standards and prevents regional disparities. The challenge lies in balancing national coherence with contextual flexibility. A right-sized Union—focused on defence, macroeconomic stability, and inter-State coordination—can coexist with empowered States responsible for social sector delivery.

Tamil Nadu has long articulated a structured vision of federal balance. In 1967, C.N. Annadurai argued that while the Union must safeguard sovereignty, it need not control subjects like health or education. Kalaignar M. Karunanidhi institutionalised this philosophy through the maxim, ‘Autonomy to the States, Federalism at the Centre’, and established the Rajamannar Committee in 1969.

The Rajamannar Committee (1971) critically reviewed Union-State relations and recommended greater fiscal and legislative autonomy. Later commissions such as Sarkaria and Punchhi acknowledged the need for recalibration, though structural reforms remained limited.

The 2025 High-Level Committee on Union-State Relations under Justice Kurian Joseph represents a contemporary effort to revive informed debate. Its review of issues like the role of Governors, GST, and delimitation underscores that federal balance is not static but requires periodic reassessment.

The introduction of the Goods and Services Tax (GST) marked a significant restructuring of India’s fiscal federalism. While it enhanced tax harmonisation and reduced cascading effects, it also subsumed several State taxation powers into a unified framework governed by the GST Council. Though cooperative in design, revenue dependency and compensation debates have highlighted tensions.

Similarly, centrally sponsored schemes often come with rigid guidelines and conditional funding. States must align priorities with centrally determined templates to access resources. This constrains flexibility in addressing region-specific challenges and can produce a one-size-fits-all approach.

Case implications:

Reduced fiscal manoeuvrability for States.
Dependence on Union transfers for social sector programmes.
Potential erosion of accountability as lines of responsibility blur.

Fiscal autonomy is integral to meaningful federalism; without it, legislative competence becomes nominal rather than substantive.