Federalism in India

• Context (TH): The government has promoted cooperative and competitive federalism via NITI Aayog.
• Withholding of GST compensation funds is seen as confrontational federalism by state govts.

Federalism and its Types

• Federalism is a system of government in which the power is shared between a central authority and various constituent units of the country.

Type of Federalism	Description
Holding Together Federation	Powers are shared among various constituent parts to accommodate a country’s diversity. The central authority often holds the upper hand. E.g. India, Spain, Belgium
Article 1 of the Constitution refers to India as a “Union of States,” implying that no state can secede and that the federation is not formed by an agreement among states.
Coming Together Federation	Separate states combine to create a more unified entity. States enjoy greater autonomy compared to a holding federation. E.g. United States, Australia, Switzerland
Asymmetrical Federation	Components that make up a nation have uneven powers and relationships in the domains of politics, administration, and finance. Asymmetry can be seen from both a vertical (between the states and the centre) and a horizontal (among the states) perspective. Russia (Chechnya), Ethiopia (Tigray), Canada (Quebec), India (Jammu and Kashmir until 2019, and various clauses in Article 371, which accord special powers to India’s north-eastern states).

Evolution of Federalism in India

Phase	Characteristics
Inner-party Federalism (1950-68)	Disputes resolved in Congress party forums (“Congress System“) Consensus-based form of “inner-party federalism“ The Union government dismissed Kerala’s state government in 1959. The Congress Party lost autonomy after the 1969 split.
Multi-Party Federalism (1990s)	National parties unable to win a majority, coalitions with regional powers. Decline in Centre-state confrontations and arbitrary use of Article 356. SR Bommai case 1994, SC questioned the Centre’s arbitrary use of Article 356.
Co-operative Federalism	Liberalisation gave state governments autonomy to attract investment. 73rd & 74th Constitutional Amendments empowered local self-government. Discussions between the Union and states made true federalism possible.
Competitive Federalism	The federal govt. advocated cooperative federalism (GST and NITI Aayog). NITI Aayog supports states’ performance through open rankings & assistance.
Confrontational Federalism	NDA’s rise in 2014 reintroduced “dominant party” federalism. Significant federal disputes between opposition-led states and the centre.
Bargaining Federalism	State governments’ bargaining strength increased in the 1990s due to regionalisation and an open economy. Used to resolve interstate disagreements (e.g., territorial or water disputes)

For more details, visit – Asymmetric Federalism