Hindu Editorial Analysis : 21-June-2024

In recent years, tensions between the Union government and the States in India have become more common. These disputes highlight the challenges of federalism in the country.

What is Federalism?

Federalism is a system that divides power between a central authority and its regions. In India, this means sharing power among the Central government, state governments, and local governance bodies.

Key Features of Federalism
  • Multiple Levels of Government: Federalism includes different levels of government that operate within their territories.
  • Division of Power: Power is divided based on subjects to minimize conflicts.
  • Written Constitution: A clear Constitution helps define the powers of each level of government.
  • Independent Judiciary: Courts help resolve disputes between the different government levels.
  • Interdependence: The Indian system is designed so that the Union and State governments rely on each other.

Types of Federalism

  1. Cooperative Federalism: This refers to collaboration between different government levels for unified development.
  2. Competitive Federalism: States compete to improve their economic conditions, encouraging development.
  3. Fiscal Federalism: This involves the financial powers and responsibilities shared among various government levels.

Recent Frictions in Federalism

Dependence on Public Expenditure

Since economic reforms in 1991, States have gained some autonomy. However, they still rely heavily on the Centre for revenue, creating friction.

Areas of Conflict
  • Social Sector Policies: Central policies often override state initiatives.
  • Regulatory Institutions: States feel their powers are being undermined.
  • Central Agencies: Increased central oversight can lead to disputes.

Economic Consequences of Federal Frictions

Dilemma of Investments

Central initiatives can crowd out State investments. For example, the PM Gati Shakti project requires States to follow a national master plan, limiting their flexibility.

Concentrated Spending

The Centre’s spending is focused on a few large States, which can distort local economies. Between 2021-24, major States like Uttar Pradesh and Maharashtra received nearly half of total spending, affecting overall investment patterns.

Competition Challenges

In a tense federal environment, States may compete among themselves, especially in welfare provisioning. The Centre’s larger fiscal space gives it more spending power, while State revenues remain stagnant.

Inefficiencies from Parallel Policies

Conflicts often lead to overlapping policies, resulting in inefficiencies. These duplications stem from a lack of trust, costing the economy in the long run.

Why In News

In recent years, disputes between the Union government and the States have become more frequent, reflecting deeper tensions over power dynamics and resource allocation within India’s federal structure.

MCQs about Federalism in India

  1. What is the primary characteristic of federalism as defined in the essay?
    A. A single central authority governs all regions.
    B. Power is divided between a central authority and constituent regions.
    C. There are no levels of government.
    D. States operate independently without any oversight.
    Correct Answer: B. Power is divided between a central authority and constituent regions.
    Explanation: Federalism involves the division of power between a central government and various regional governments, allowing for shared authority and responsibilities.
  2. Which type of federalism encourages competition among states for economic development?
    A. Cooperative Federalism
    B. Competitive Federalism
    C. Fiscal Federalism
    D. Centralized Federalism
    Correct Answer: B. Competitive Federalism
    Explanation: Competitive federalism promotes healthy competition among states, motivating them to improve their economic performance and catch up with or maintain their rankings.
  3. What has been a significant source of friction between the Union government and the States in recent years?
    A. Increased public participation in governance
    B. Dependence of States on the Centre for revenue
    C. Complete autonomy of State governments
    D. Unilateral decision-making by State governments
    Correct Answer: B. Dependence of States on the Centre for revenue
    Explanation: The reliance of State governments on the Centre for revenue receipts has created tensions, especially as they seek more autonomy over public expenditure policies.
  4. How has the centralization of planning affected state investments, according to the essay?
    A. It has increased state investments significantly.
    B. It has led to equal distribution of resources.
    C. It has curtailed the flexibility of states in formulating their plans.
    D. It has eliminated the need for state planning altogether.
    Correct Answer: C. It has curtailed the flexibility of states in formulating their plans.
    Explanation: Centralized planning, such as the PM Gati Shakti initiative, limits the ability of states to develop their own infrastructure plans, resulting in underinvestment at the state level.

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