Hindu Editorial Analysis : 25-March-2024

In recent years, disputes between the Union government and the States in India have become more frequent and intense. This shift raises important questions about the nature of federalism in the country and the interdependence of various levels of government.

What is Federalism?

Federalism is a system of governance where power is divided between a central authority and regional entities. In India, this means that political power is shared among the Central government, State governments, and local governance bodies.

Key Features of Federalism:
  • Multiple Levels of Government: Federalism involves several layers of government, each with defined powers.
  • Division of Power: Responsibilities are divided among different entities to minimize conflicts.
  • Written Constitution: A clear constitution outlines the powers of each level of government.
  • Independent Judiciary: Courts help resolve disputes between different governmental levels.
  • Interdependence: In India, the Central and State governments rely on each other more than in many other federal systems.

Types of Federalism

Cooperative Federalism
  • Encourages collaboration between the Central and State governments for national development.
Competitive Federalism
  • Promotes healthy competition among States to enhance economic growth.
Fiscal Federalism
  • Deals with financial powers and responsibilities between different government levels, ensuring fair tax distribution.

Increasing Federal Friction

Dependence on Public Expenditure

Since the economic reforms of 1991, States have gained some autonomy, but they still depend on the Centre for revenue. This dependence has led to friction, making negotiations difficult.

Areas of Conflict
  • Homogenization of social policies
  • Regulatory institution functioning
  • Powers of central agencies
Growing Influence of the Centre

The Centre has increasingly pushed for control in areas that should ideally be managed by States, leading to tensions.

Economic Consequences of Federal Friction

Investment Dilemmas

As the Centre expands its influence, States often find themselves sidelined in terms of investment. For example, the PM Gati Shakti initiative, while intended for integrated planning, limits States’ flexibility in infrastructure projects.

Concentrated Spending

A significant portion of central expenditure is concentrated in a few States, leading to disparities. For instance, between 2021-22 and 2023-24, major States accounted for almost half of the total expenditure.

Reduced Competition

With increased friction, States face challenges in competing with the Centre and each other, particularly in welfare provisions. The Centre’s enhanced financial power means States struggle to maintain their funding levels.

Inefficiencies from Parallel Policies

Conflicts can lead to duplicated policies, resulting in inefficient spending and a lack of trust between the Centre and States.

Why In News

In recent years, the frequency and intensity of disputes between the Union government and the States have increased, highlighting significant challenges in maintaining a balanced federal structure and effective governance.

MCQs about Understanding Federalism in India

  1. What is the primary characteristic of federalism in India?
    A. Centralized authority
    B. Complete autonomy of States
    C. Division of power between different levels of government
    D. Elimination of local governance
    Correct Answer: C. Division of power between different levels of government
    Explanation: Federalism in India is defined by the division of power between the Central government, State governments, and local governance institutions, ensuring that multiple levels of government function within their defined territories.
  2. What does cooperative federalism promote?
    A. Competition among States
    B. Separation of powers
    C. Collaboration between the Central and State governments
    D. Complete autonomy for local governments
    Correct Answer: C. Collaboration between the Central and State governments
    Explanation: Cooperative federalism encourages cooperation between different levels of government to achieve unified socio-economic development, fostering a collaborative environment.
  3. What has led to increasing friction between the Union and State governments in India?
    A. Complete independence of State governments
    B. Decreased economic reforms
    C. Dependence of States on the Centre for revenue
    D. Lack of a written constitution
    Correct Answer: C. Dependence of States on the Centre for revenue
    Explanation: The ongoing dependence of State governments on the Centre for revenue has created tensions and conflicts, making it difficult for States to negotiate effectively.
  4. Which of the following describes the economic consequences of federal friction?
    A. Increased investment by States
    B. Concentrated spending in a few large States
    C. Enhanced competition among all States
    D. Duplicated policies leading to efficiency
    Correct Answer: B. Concentrated spending in a few large States
    Explanation: The economic consequences of federal friction include concentrated spending, where a significant portion of central expenditure is directed toward a few major States, leading to disparities and impacting regional economies.

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