Hindu Editorial Analysis : 18-September-2024

In recent years, disputes between the Union government and State governments in India have become more common. Understanding these conflicts requires a look at federalism and its implications for governance in the country.

What is Federalism?

Federalism is a system where power is divided between a central authority and smaller political units, such as states. In India, this means that power is shared between the Central government, state governments, and local governance bodies.

Key Features of Federalism
  1. Multiple Levels of Government: Federalism operates on different levels, each with its defined roles.
  2. Division of Power: Power is divided among various entities to minimize conflicts.
  3. Written Constitution: A written constitution clarifies how power is divided and protects that division from frequent changes.
  4. Independent Judiciary: The judiciary resolves disputes between the different levels of government.
  5. Interdependence: In India, the Union and State governments are interdependent, which can lead to conflicts over authority.

Types of Federalism

Cooperative Federalism

This involves collaboration between the central and state governments to promote unified socio-economic development.

Competitive Federalism

This encourages healthy competition among states to stimulate economic growth, with lagging states urged to catch up with more successful ones.

Fiscal Federalism

This refers to how financial powers and responsibilities are shared, including tax collection and distribution. Institutions like the Finance Commission ensure fairness in financial dealings.

Growing Frictions in Federalism

Dependence on Public Expenditure

Since the economic reforms of 1991, state governments have gained some autonomy. However, they still rely heavily on the Centre for funding, leading to tensions.

Issues of Resource Sharing

Conflicts have also arisen around:

  • Standardizing social sector policies
  • The functioning of regulatory bodies
  • The authority of central agencies
Central Influence

Central bodies often try to exert more control over state policies, which should ideally be decided at the state level. This increases friction and reduces state autonomy.

Economic Consequences of Federal Friction

Investment Dilemma

Increased central control can lead to underinvestment by states. For example, the PM Gati Shakti initiative requires states to align their plans with the national master plan, limiting their flexibility.

Concentrated Spending

The Centre’s spending is often focused on a few large states like Uttar Pradesh, Maharashtra, and Gujarat, leading to unequal distribution of resources. This concentration limits regional economic growth.

Reduced Competition

In a strained relationship with the Centre, states may find it difficult to compete effectively. The Centre has more financial resources, while state revenues are often stagnant.

Inefficiencies of Duplicate Policies

Conflicts can result in the Centre and states duplicating each other’s policies, leading to inefficiencies and waste.

Why In News

In recent years, disputes between the Union government and the States have become more frequent, reflecting growing tensions over authority and resource allocation within India’s federal system.

MCQs about Increasing Federal Disputes in India

  1. What is the primary characteristic of federalism ?
    A. Centralized power
    B. Vertical division of power
    C. Unitary governance
    D. Absolute autonomy of states
    Correct Answer: B. Vertical division of power
    Explanation: Federalism involves a vertical division of power between a central authority and smaller political units, ensuring that multiple levels of government coexist.
  2. Which type of federalism emphasizes collaboration between the central and state governments?
    A. Competitive Federalism
    B. Cooperative Federalism
    C. Fiscal Federalism
    D. Centralized Federalism
    Correct Answer: B. Cooperative Federalism
    Explanation: Cooperative Federalism refers to the collaboration between different levels of government to achieve unified socio-economic development.
  3. What has been a significant source of friction between the Union and State governments in India?
    A. Increase in state revenues
    B. Decrease in federal regulations
    C. Dependence on the Centre for public expenditure
    D. Complete autonomy of states
    Correct Answer: C. Dependence on the Centre for public expenditure
    Explanation: State governments rely heavily on the Centre for funding, which has led to tensions over authority and resource distribution.
  4. Which of the following best describes the economic impact of federal frictions mentioned in the essay?
    A. Increased investments by states
    B. Concentrated spending in a few large states
    C. Enhanced competition among states
    D. Complete alignment of state and central policies
    Correct Answer: B. Concentrated spending in a few large states
    Explanation: The Centre’s spending is often concentrated in states like Uttar Pradesh, Maharashtra, and Gujarat, leading to unequal resource distribution and affecting regional economies.

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