The Hindu Editorial Analysis- 30th November 2022 | Current Affairs & Hindu Analysis: Daily, Weekly & Monthly - UPSC PDF Download

Context

Cooperative federalism and ‘cultural chauvinism’. The latter expression found mention in an editorial comment recently and bears repetition: “This latest efort to impose Hindi raises once again and quite retrogressively the issue of cultural nationalism at a time when it is least required. India has remained uniquely unifed despite the infnite multiplicities of its cultures….” 

Federalism in India

• Meaning: 
  • Federalism refers to a vertical division of power in a political system. It is a system in which power is divided between a central authority and other constituents. 
  • For e.g. in India, political power is divided between the Central government, state governments and the institutions of local governance. 
• Four important features of a federal system:
  • Multiple levels of government: Federalism, by its very definition, requires multiple levels of government functioning within their defined territory.
  • Division of Power: The power is divided by the division of subjects between the entities so that the chances of conflict are reduced to a minimum.
  • Written Constitution: It ensures there is clarity in the respective division of power. Again, a rigid constitution ensures that this division of power is not easily disturbed.
  • Independent Judiciary: It acts as a dispute resolution mechanism between the different levels of government.
• Interdependence of state and Central Government: 
  • India consciously adopted a version of federalism that made the Union government and State governments interdependent on each other (latter more vis-a-vis the former).
  • Thereby violating the primal characteristic of a federal constitution i.e., autonomous spheres of authority for Union and State governments. 
• Other constitutional features, on similar lines, include:
  • The size and composition of the Rajya Sabha akin to that of the Lok Sabha thereby favouring larger States; 
  • Article 3 of the Indian Constitution which allows the Union to alter the boundaries of a State without the latter’s consent, 
  • Emergency powers, and 
  • Concurrent list subjects of the Seventh Schedule wherein the Union possesses more authority than the State barring a few exceptions. 
• ‘Holding together’ Federalism: 
  • India’s centralised federal structure was not marked by the process of ‘coming together’ but was an outcome of ‘holding together’ and ‘putting together’.
• Indestructible & Flexibility: 
  • B. R. Ambedkar called India’s federation a Union as it was indestructible which is why the Constitution does not contain words related to federalism. 
  • He also said that India’s Constitution holds requisite flexibility to be federal and unitary on a need basis. 

Types of Federalism

• Cooperative Federalism: It refers to the horizontal relationship between the entities in a federal structure. For e.g. India is a federal country with power divided between the Centre and the States. Cooperative federalism refers to the cooperation between the two entities in pursuit of unified socio-economic development of the country. For e.g. despite having their divisions over various issues, the Centre and States are expected to come together to face a crisis, which affects the country in its entirety.
• Competitive Federalism: It refers to promoting healthy competition between the states to keep them motivated in pursuit of economic development. For e.g. NITI Aayog has developed multiple indices to showcase the progress achieved by respective states in different sectors. The laggard states are expected to put in extra efforts to catch-up with the front-runners, while the front-runners are expected to work hard to retain their ranking in the indices.
• Fiscal Federalism: It deals with the division of financial powers as well as the functions between multiple levels of the federal government. It has within its ambit the imposition of taxes as well as the division of different taxes between the Centre and the constituent units. Similarly, in the case of joint collection of taxes, an objective criterion is determined for the fair division of funds between the entities. Usually, there is a constitutional authority (like Finance Commission in India) for the purpose to ensure fairness in the division.

Supreme Court of Federalism in India

• The Supreme Court of India held that federalism was a part of the basic structure of the Indian Constitution in the S.R. Bommai vs Union of India case (1994). 
• The Court also held that the Indian variant of federalism upholds a strong centre in the Kuldip Nayar vs Union of India case (2006).

Reason for a centralised federal structure in India

• Partition of India and the concomitant concerns: Anticipating the Muslim League’s participation in the Constituent Assembly debates following the Cabinet Mission plan in 1946, the Objectives Resolution introduced by Jawaharlal Nehru in the Assembly were inclined towards a decentralised federal structure. In it, the States would wield residuary powers. 
• Safeguarding the integrity of the nation: After the Partition a revised stand was unanimously taken by the Union Powers Committee of the Constituent Assembly, in favour of a strong Union with residuary powers and weaker States, to safeguard the integrity of the nation.
• Helping India come out of social problems, a strong centre was important: Nehru and Ambedkar believed that a centralised federal structure would unsettle prevalent trends of social dominance, help fight poverty better and therefore yield liberating outcomes. 
• Objective of building a welfare state: In a decentralised federal setup, redistributive policies could be structurally thwarted by organised (small and dominant) groups. Instead, a centralised federal set-up can prevent such issues and further a universal rights-based system.
• Alleviation of inter-regional economic inequality: The cotton mill industry in Bombay, and the jute mill industry in the Bengal region were subject to a ‘race to the bottom’ or rampant cost cutting practices. 
  • Provincial interventions seemed to exacerbate inequalities. 
  • India’s membership in the International Labour Organization, the Nehru Report (1928), and the Bombay Plan (1944) pushed for a centralised system to foster socio-economic rights and safeguards for the working and entrepreneurial classes.

• Cooperative federalism is a notion or subset of federalism in which the federal government, state governments, and local governments work together to solve common problems.
• In a system dominated by the national government, such as India or Canada, they make numerous policies separately but more or less equally, or the dispute over a policy.
• Cooperative federalism establishes a relationship in which the federal government exerts influence over state governments' policies and behaviours, often through the use of funding in kind or cash, the manipulation of policies and norms (for example, freight equalisation policy, SEZs), the construction of strategic highways or similar corridors, and other means.
• For example, if the federal government wants to ensure that national highways are well-maintained, it could offer grants in aid, which are a type of federal grant that sends funding to states to pursue a policy.
• The grants in help in this scenario would most likely be used to purchase necessary elements or other supplies or to pay contractors and road building personnel.

• Federalism is defined in India as "an indestructible union of destructible states."
• On the floor of the constituent assembly, it was felt that states must be integral parts of India, with no right to secede.
• As a result, the need for a strong union was anticipated, and the constitution granted the central government supremacy.
• However, sufficient authorities were delegated to the states in order for them to effectively manage and govern local government.
• The Union, concurrent, and state lists of the seventh schedule show such groupings. Cooperation between the centre and the state is critical in order to streamline the development process and improve the progress of all regions.
• Due to India's breadth, immensity, and great variety, this type of cooperative federalism is even more necessary.

• Separation of Powers: Schedule 7 of the Constitution establishes a clear division of powers between the federal government and the states. (With the exception of emergencies, which are subject to court scrutiny.)
• Judiciary: The Supreme Court has exclusive jurisdiction to hear matters between states and the Centre under Article 131 of the Constitution. In January 2020, Chhattisgarh filed a petition in the Supreme Court challenging the NIA Act.
• Coalition governments: Coalition administrations have improved the bargaining power of states.
• Politically, federalism is significantly more developed than it was previously in respect to the imposition of the President's rule under Article 356 of the Constitution.

• GST Council: The passage of GST is a beautiful example of cooperative federalism, in which the states and the federal government have sacrificed their taxing authority and created a single tax system to fulfil the dream of a single Economic India with 'One Nation, One Market.'
• Since the 10th FC, the state's share has been steadily increasing until the 14th FC, when it devolved 42 per cent.

• NITI Aayog: The Aayog, which has taken over from the old Planning Commission, is promoting a bottom-up approach to development planning.
• Inter-State Council: Article 263 of the Constitution mandates the formation of an Inter-State Council to investigate, discuss, and make recommendations for improved cooperation between the Centre and the States.
• Zonal Council: The State Reorganization Act of 1956 established Zonal Councils as an additional institutional instrument for centre-state and inter-state cooperation to resolve disagreements and reinforce the framework of cooperation.
• National Development Council and the National Integration Council: Two more major forums for discussion and resolution of differences of opinion are the National Development Council and the National Integration Council. Various ministries have established central councils to improve cooperation.
• Sabka Saath Sabka Vikas includes states as equal development partners. There is a shift toward federalism that is both competitive and cooperative.

• Several difficulties to hamper Centre-State interactions, including a trust imbalance and the shrinking of divisible pools. They make entire cooperation impossible when they work together.
• On the one hand, the Centre has increased the states' portion of the divisible pool, while states are receiving a smaller amount in reality.
• Many southern states, for example, are losing their share of tax revenue as a result of the 16th FC proposals.
• The amount of money allocated to various social assistance initiatives has also decreased, hurting the health of the states.
• Inter-state water disputes, such as the Mahadayi issue between Goa and Karnataka, and the Mahanadi water issues (between Odisha and Chhattisgarh), necessitate cooperation from all parties involved (centre and riparian states).

• In their current form, Articles 3 and 4 are enabling measures that allow Parliament to act in unusual circumstances. Such agreements and recommendations should be reached by broad consensus or negotiation.
• Governors should be appointed generously, with the state government's confidence.
• More groups, such as the National Development Council, the National Integration Council, and the Inter-State Council, should be established to address concerns such as tax devolution, constitution amendment, and grants, among others.
• There have previously been flaws in the application of Article 356. It should be used with utmost prudence and vigilance, following the recommendations of the Sarkaria Commission and the Punchhi Commission, as well as other Supreme Court directives.
• In India, states have limited sovereignty, and the Constitution's operation is guided by the federal spirit. However, as a result of global trends, India's federalism is deepening. States could be given more prudent autonomy.