Introduction
The Indian Constitution establishes an indestructible Union composed of destructible states under Article 1, inherently incorporating a strong unitary tilt. While institutions like the GST Council reflect pooled sovereignty, recent functional, fiscal, and administrative developments highlight a discernible trend toward centralisation in Indian federal dynamics.
Trends Indicating Centralisation in Indian Federalism
- Fiscal Centralisation: Although the 15th Finance Commission recommended devolving 41% of central taxes to states, the effective divisible pool has shrunk. Non-shareable cesses and surcharges constituted approximately 14.5% of Gross Tax Revenue in 2023-24, reducing the actual untied transfers to states. Additionally, stringent caps on states' off-budget borrowings under Article 293(3) have curtailed state fiscal autonomy.
- Administrative and Constitutional Friction: Increased friction between Governors and elected state governments has emerged over prolonged delays in granting assent to state legislation. In State of Punjab v. Principal Secretary to the Governor (2023), the Supreme Court clarified that the phrase 'as soon as possible' in Article 200 bars Governors from exercising an indefinite pocket veto over state bills.
- Legislative and Investigative Overreach: Central unilateralism in enacting laws on Concurrent List subjects without prior consensus, coupled with contentious deployments of central investigative agencies, has heightened friction between the Union and state administrations.
- Nuance in Federal Institutions: In contrast to these centralising trends, bodies such as the GST Council (Article 279A) embody cooperative federalism and pooled sovereignty, demonstrating that centralisation is not absolute.
Measures to Enhance Centre-State Cooperation
- Revitalising the Inter-State Council (ISC): Strengthen the Inter-State Council under Article 263 as a permanent, regular deliberative body. Implementing the Sarkaria Commission's recommendation for mandatory pre-legislative consultation on Concurrent List subjects will foster mutual consensus.
- Fiscal Rationalisation: Impose a statutory or constitutional ceiling on the levy of cesses and surcharges (such as capping them at 10% of Gross Tax Revenue) or bring them within the divisible pool to preserve the spirit of fiscal federalism.
- Regulating the Gubernatorial Office: Implement the Punchhi Commission's recommendation to introduce a defined timeframe—such as six months—for Governors to assent to or return state legislation under Article 200, minimizing institutional gridlock.
Conclusion
As held in the landmark S.R. Bommai case, federalism forms an inviolable part of the Constitution's basic structure. Shifting from reactive friction to structured, consensus-based cooperative federalism is essential to preserve constitutional morality and democratic decentralisation.