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Index
1. Introduction02
2. Meaning of Federalism...02
3. Definition of Federalism....03
4. History of Federalism..03
5. Constitutional Intent06
6. Necessity of Federalism.07
7. Components of Federal Constitution..08
8. Distinctive Federation in India..10
9. Indian Experience (New Dimensions)....12
10. Judicial Interpretation of Federation.19
11. Recent Development in Indian Federation24
12. Co-operative & Organic Federalism...24
13. GST as Emerging Challenges of Federalism..25
14. Comparative Study of Federalism....25
15. Conclusion...27
16. Bibliography28
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Introduction:

The constitution of India is not an end, but a means to an end, not mere democracy as a political-
project but a socio-juridical process which opens up through a humanist, radical social-order, the
opportunity to unfold the full personhood of every citizen.

The constitution of India in which the Union of India is permanent & indestructible.

Both the Centre & the states are co-operating & coordinating institutions having independence &
ought to exercise their respective powers with having independence & ought to exercise their
respective powers with mutual-adjustment, respect, understanding & accommodation. Tension &
conflict of the interests of the centre & the respecting units is an integral-part of Federation.
Prevention as well as amelioration of conflicts is necessary. Thus, the Indian-federation was devised
with a strong-centre. Federalism with a strong centre was inevitable as the framers of the Indian-
constitution were aware that there was economic-disparities as several-areas of India were
economically as well as industrially for behind in comparison to others. The Nation was committed
to a socio-economic revolution not only to secure the basic-needs of the common-man & economic
units of the country but also to bring about a fundamental-change in the structure of Indian-society
in accordance with the egalitarian-principles.

Meaning

The term Federalism originate From the Latin word Foedus meaning treaty or covenant. Some
free states bound together by agreement constitute a Federal-state.

Federalism is a system of government of a country under which there exist simultaneously a federal
or central government (legislature & executive) & several state legislatures & government as
contrasted with a unitary state both federal & state governments drive their powers from the
federal-const., both are supreme in particular sphere & both operate directly on the people.
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Definition

Federation is a political-concept in which a group of members are bound together by covenant with
a governing representative head.

A system of National-government in which power is divided between a central authority & a number
of regions which delimited self-governing authority.

A system of governance in which distribution of power of constituent-units is ensured by a written-


constitution, having independent judiciary to resolve, state of local-levels. Under the principal of
government, power & authority is allocated between the national & local-government units, such
that each unit is delegated a sphere of power & authority only it can exercise while other powers
must be shared.

History Of Federalism

Federalism has evolved over the course of American history. At different points in time, the balance
and boundaries between the national and state government have changed substantially. In the
twentieth century, the role of the national government expanded dramatically, and it continues to
expand in the twenty-first century.

Dual Federalism (17891945)

Dual federalism describes the nature of federalism for the first 150 years of the American republic,
roughly 1789 through World War II. The Constitution outlined provisions for two types of
government in the United States, national and state. For the most part, the national government
dealt with national defense, foreign policy, and fostering commerce, whereas the states dealt with
local matters, economic regulation, and criminal law. This type of federalism is also called layer-cake
federalism because, like a layer cake, the states and the national governments each had their own
distinct areas of responsibility, and the different levels rarely overlapped.1

The Civil War and the Fourteenth Amendment (18611868)

Part of the disputes that led to the Civil War (18611865) concerned federalism. Many Southerners
felt that state governments alone had the right to make important decisions, such as whether
slavery should be legal. Advocates of states rights believed that the individual state governments
had power over the federal government because the states had ratified the Constitution to create

1 http://www.sparknotes.com/us-government-and-politics/american-government/federalism/section2.rhtml
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the federal government in the first place. Most Southern states eventually seceded from the Union
because they felt that secession was the only way to protect their rights. But Abraham Lincoln and
many Northerners held that the Union could not be dissolved. The Union victory solidified the
federal governments power over the states and ended the debate over states rights. 2

The Fourteenth Amendment, ratified a few years after the Civil War in 1868, includes three key
clauses, which limit state power and protect the basic rights of citizens:

1. The privileges and immunities clause declares that no state can deny any citizen the
privileges and immunities of American citizenship.

2. The due process clause limits states abilities to deprive citizens of their legal rights.

3. The equal protection clause declares that all people get the equal protection of the laws

Industrialization and Globalization (18651945)

The nature of government and politics in the United States changed dramatically in the late
nineteenth and early twentieth centuries. The national government assumed a larger role as a result
of two major events:

1. Industrialization: The economy became a national, industrial economy, and the federal
government was much better equipped than the states to deal with this change. For much
of the nineteenth century, the government pursued a hands-off, laissez-faire economic
policy, but it began to take a stronger regulatory role in the early twentieth century.

2. Globalization: Because of its vast economy and its extensive trading networks, the United
States emerged as a global economic power. The federal government assumed a greater
economic role as American businesses and states began trading abroad heavily.

Although these events played out over many decades, they reached their high points during the
presidency of Franklin Roosevelt (19331945). The Great Depression, brought about by the crash of
the stock market in 1929, was one of the most severe economic downturns in American history.
Many businesses failed, roughly one-third of the population was out of work, and poverty was
widespread. In response, Roosevelt implemented the New Deal, a series of programs and policies
that attempted to revive the economy and prevent further depression. The New Deal included
increased regulation of banking and commerce and programs to alleviate poverty, including the
formation of the Works Progress Administration and a social security plan. In order to implement
these programs, the national government had to grow dramatically, which consequently took power
away from the states.

Cooperative Federalism (19451969)

Federalism over much of the last century has more closely resembled a marble cake rather than a
layer cake as federal authority and state authority have become intertwined. The national
government has become integrated with the state and local governments, making it difficult to tell
where one type of government begins and the other types end. State and local governments

2 Ibid.
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administer many federal programs, for example, and states depend heavily on federal funds to
support their own programs. This type of federalism is called cooperative federalism, or marble-
cake federalism.3

New Federalism (1969present)

Since the 1970s, political leaders and scholars of the New Federalism school have argued that the
national government has grown too powerful and that power should be given back to the states.
Although the national government remains extremely important, state governments have regained
some power. Richard Nixon began supporting New Federalism during his presidency (19691974),
and every president since Nixon has continued to support the return of some powers to state and
local governments. Although political leaders disagree on the details, most support the general
principle of giving power to the states.

New Federalism has taken concrete form in a variety of policies. New Federalists have argued for
specific limits on federal power, as well as devolution, a policy of giving states power and
responsibility for some programs. For example, the 1996 welfare reforms gave states the ability to
spend federal dollars as they saw fit. Supporters claim that local and state governments can be more
effective because they understand the circumstances of the issue in their state. They argue that a
one-size-fits-all program imposed by Washington cannot function as effectively.4

Advantages and Disadvantages of New Federalism

New Federalism appeals to many people because of its emphasis on local and state governments.
Many Americans feel that the national government has become too intrusive and unaccountable.
These people champion state and local government as closer to the people and thus more
accountable. However, Americans often want a single seat of power for some tasks. Competing local
and state governments can cause more problems than they solve, especially during emergencies. For
example, the terrible hurricanes of 2005 led residents of Louisiana, Mississippi, and Alabama to
demand a better, more unified national response.

The Supreme Court and New Federalism

The Supreme Court has played a New Federalist role by siding with state governments in a number
of cases. Perhaps the most well known of these cases is United States v. Lopez (1995), in which the
Court ruled that Congress had overstepped its authority in creating gun-free school zones. More
controversially, in 2000, the Court struck down parts of the Violence Against Women Act (1994) for
much the same reason in United States v. Morrison. In other cases, the court has ruled that state
governments cannot be sued for violating rights established by federal law. Overall, the Supreme
Court in the 1990s reduced the power of the federal government in important ways, particularly in
relation to the commerce clause.

3 Ibid.
4 Ibid.
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Constitutional-Intent

Being aware that notwithstanding a common cultural heritage, without political unity, the country
would disintegrate under the pressure of Fissiparous forces, the constituent Assembly addressed
itself to the immensely complex-task of devising a union with a strong centre. In devising the pattern
of the central state relations they were influenced by the constitution of Canada & Australia which
have a parliamentary-form of government. The Government of India act, 1935 was also relied upon
significant changes. The constitution cannot be called Federal or Unitary in the ideal-sense of the
terms.5

According to ARTICLE 1 of the Constitution:

India, i.e. Bharat will be the Union of States.

The Constitution, thus postulated India as a union of states & the consequently, the existence of
Federal-structure of governance for this union of states becomes a basic structure of the union of
India.

Dr. B.R. Ambedkar, the principal-architect of the constitution observed

the use of the word union is deliberate. The Drafting committed wanted to make it clear that
though India was to be a federation, the federation was not a result of agreement by the states to
join in the federation & the federation not being the result of an agreement no state has a right to
secede from it. Though the country & the people may be divided into different states for
convenience of administration the whole country is one integral whole, its people a single people
living under a single imperium derived from a single source.6

5 http://www.legalservicesindia.com/articles/c1onst.htm
6 Ibid.
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Necessity of Federalism:

(i) Emergence of different-set of states:

Before independence, the earliest from of political-organization was not federal but unitary. But
after independence, the pressure of economic, political & social-circumstances which compelled
unitary-states (generally Monarchical) to enter into alliance with other states for meeting common
problems which initially related to defence. Require a special-type of government which leads to
federalism.

(ii) Scientific-development:

Scientific & technological-developments & increased economic interdependence have changed


the scenario of the past, which brought the emerging states (independent) on the same- platform.
The exchange of Scientific-technologies between the development of these states. Scientific &
technological-development brought a revolution during the era of federalism.

(iii) End of British-Colonies:

In India, the historical-process to create the federal-system was different. For long, before 1935,
British India has been administered on a unitary basis. There existed a unitary-system. But after the
end of British-colonies, the unitary system was replaced by a federal-system. The present federal-
system was built on the foundation of the 1935 system.

The past history of India establishes that in the absence of a strong Central-Government. the country
soon disintegrates. This belief was strengthened by the recent-portion of the country. Therefore
adequate precautions have to be taken against any such future contingency by making the centre
strong in Indian-Federalism.

Owing to its vastness of territory & variety of people, India could not be governed efficiently as a
unitary-state & so a unitary constitution was out of question.
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India, such a large country with diverse-cultures, religions, languages, tribal & ethnic differences &
even marginal racial variations, with historical, geographical & political-divergences, cannot bear
true faith with democracy & collective freedom without authentic Federal Features.

Components of a Federal Constitution:

The legal-test of federalism, when analyzed, leads to the following broad features of a federal-
constitution.7

(i) Distribution of powers (Dual-polity):-

An essential feature of every federal-constitution is the distribution of powers between the central-
government & the governments of the several-units forming the federations.

Federation means the distribution of the power of the state among a number of coordinate bodies,
each originating in and controlled by the constitution. (Dicey)

(ii) Written-Constitution:

A federal-state derives its existence from the constitution, just as a corporation derives its existence
from the grant or statute by which it is created. Every power (executive, legislature or judicial)
whether it belongs to the central, or to the component-states, is subordinated to & controlled by the
constitution. Therefore, a federal-state requires a written-constitution for the obvious reason that in
order to be workable & stable & the limitations, must be precisely defined by written-instrument.
Hence, it will be practically impossible to maintain the supremacy of the constitution, unless the
terms of the constitution have been reduced into writing.

(iii) Supremacy of the Constitution:

7 Dr. J.N. Pandey, Constitutional Law of India 18 (Central Law Agency, Allahabad, 52nd edn.,2015)
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This means that the constitution should be binding on the federal & state-government. Neither of
the two governments should be in a position to override the provisions of the constitution relating
to the power and status which each is to enjoy.

This requirement is satisfied if the supremacy or overriding authority is accorded only to the
provisions relating to the division of power.

According to K.C. Wheare:

The Supreme Const. is essential if government is to be federal and the written-const. is essential
if federal-government has to work well

(iv) Rigidity of the Constitution: - (Non unilateral change)

A natural corollary of a written-constitution is its rigidity. A constitution which is the supreme-law of


the land must also be rigid. In a rigid constitution, the procedure of amendment is very complicated
& difficult. This does not mean that the constitution should be legally unalterable. The constitution
provides a process for changing its provisions called Amendment. It simply means that the
procedure of amending the constitution should not remain exclusively with either the centre or
state-Governments means No Unilateral-change.

(v) Authority of the courts (Interpretation by Judiciary) :

The distribution of powers made by the constitution must be guarded by the judiciary. Which is to
interpret the constitution as the Fundamental-law of the lands to enforce its provisions against
both the federal and Regional-governments and to invalidate any of their acts which transgresses
the limitations imposed upon them by the constitution.

The constitution of India appears to have all the above mentioned essential-features of the federal-
constitution. The most important feature of a federal-constitution is the distribution of legislative
power between the centre & the sates.
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The Constitution of India has adopted the scheme of the Government. of India-Act 1935 with minor
changes.

Distinctive Federation in India

The federal polity, which our constitution establishes, contains, as compared with other federal-
constitutions, several distinctive features. These are:

(1) No Dual citizenship:

The constitution of the USA allows dual citizenship-the citizenship of the USA & the citizenship of the
state in which he is domiciled as opposed to this, the Indian-constitution does not provide dual
citizenship. There is a dual-polity with single-citizenship. There is only one citizenship for the
country. There is no state citizenship. Every Indian has the same rights of citizenship, no matter in
which state he resides.

(2) Single-Constitution:

The state in USA has the right to make their own constitution. In India no such power is given to the
units. The constitution of the Unions of the states is a single-from fro which neither can get out &
within which they must work.

(3) In emergencies the constitution can become Unitary:

In normal times, the const. is framed to work as a federal-system but it times of war & other national
emergencies it is designed to work as if it were unitary.
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Dr. B.R. Ambedkar says:

The Draft Constitution can be both unitary as well as Federal according to the requirements of time
& circumstances.

(4) Minimizes Rigidity & Legalism:

Federation is said to be a weak form of government. Two reasons are described for the weakness of
a federal-government, namely Rigidity & Legalism. A federal-const. is necessarily a written const. & a
written-const. is invariably a rigid const. It cannot be changed by ordinary-process.

Legalism in a federal const. means the necessary predominance given to the judiciary in making it
the arbiter of the validity of the laws enacted by the federal or state-legislature.

The Indian Constitution makes provisions to minimize Rigidity & Legalism in it. The process for the
amendment of the constitution is less rigid that what is found in other federal-constitutions except
that the basic feature of the constitution become unamenable. Out constitution provides a long
list of Concurrent-subjects. Power is given to parliament to legislate on exclusively state subjects
under certain circumstances.

(i) When a subject in the List becomes a matter of National-importance.

(ii) When the president has proclaimed an emergency.

(iii) If the state consent to such exercise of power by Parliament &

(iv) When it becomes necessary to give effect to International-agreement.

(5) It maintains unity in basic-matters: -


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The Indian-constitution adopts the following three means to maintain administrative & legislative
unity:

a. A single-Judiciary.

b. Uniformity in fundamental-laws, civil & criminal.

c. Common All India services.

In our constitution, the High court & supreme-court from a single integrated judiciary having
jurisdiction over all cases arising under various laws-union state, constitutional, civil & criminal. To
eliminate diversity of laws, codes of civil & criminal laws are placed in concurrent list.

To maintain uniformity in administration, the constitution provides that there shall be All India
services, including Judicial-services recruited on an All India basis which shall be common to Union &
States. The members of these services shall be placed in key-posts of the Union & states.

(6) State & Union not rivals:

Our constitution does not set-up the states as rivals to one another or to the union. Each is intended
to work harmoniously in its own-sphere without disturbing by other, with an over-riding power of
the Union, when it is necessary in the public-interest.

Indian-Experience:

In the following constitutional provisions, it is pointed-out, that the Indian-Constitution contains


the modifications of the federal principle:8

(i) Parliament power to form New-States & alter boundaries of existing states: (Art 2&3)

8 Id. At 19,20
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Art.2: gives complete discretion to parliament to admit or establish new-states on suck terms &
conditions as it thinks fit. Such terms & conditions must, however, be consistent with the
foundational-principles viz, the basic-structue of the constitution.

Art.3: Provide that, parliament can by unilateral-action increase or diminish the area of any state
or alter the boundaries of any state or alter the name of any state.

The very existence of the State thus depends upon the Sweet-will of the Union Government.

The power conferred on the Union-parliament to make territorial-adjustments is better explained on


historical-basis:

The Government. of India Act, 1935, which had for the first-time introduced the federal-system in
India deliberately created the constituent-units of the federation, although they had no organic-
roots in the past. The makers of the present constitution were aware of peculiar-condition under
which & the reasons for which the states were formed & their boundaries were defined & so they
deliberately adopted the provisions in Art. 3 with a view to meeting the possibility of the
redistribution of the states territory after the integration of the Indian-States.

The changes thus contemplated (work-our) illustrate the working of the peculiar & striking feature
of the Indian-Constitution.

(ii) Parliaments-power to make law on State-matters:

Art 249:Provides that, if the upper House (Council of states) of the Union-parliament passes a
resolution, supported by not less than 2/3 rd of the members present & voting, that it is necessary in
the National-Interest that parliament should make laws with respect to any matter enumerated in
the state-list, it would be competent for parliament to make laws for the states with respect to that
matter to be operative for such period not exceeding 1 year, as may be specified therein.

In normal-course this cannot be done unless the Constitution is amended.

This power is given to parliament by the council of states itself by passing a resolution supported by
2/3rd majority of the members present. Thus, in effect by this device the constitution is amended by
the agreement of majority of the states.
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Thus Art. 249 does not place the states in a subordinate-position .

Art 250: Provides that, parliament shall have the power to make laws for the whole or any part of
the territory of India with respect to any matters enumerated in the state-list when the
proclamation of emergency is in operation.

Art 251: Provides that Parliament have the power to make laws on State-matters under the Art 249
(in national-interest) & Art 250 (under Proclamation of emergency). In both cases the power of the
state legislature to deal with matters falling in the state list is not abrogated. The Legislature of a
state can thus make a law on those matters which has been taken over by the Union-Legislature.

But in case of a conflict or inconsistency between a Union & a State-law, the former will prevail.

Art. 253: Provides that parliament has power to make any law for the whole or any part of the
territory of India for implementing any treaty, agreement or convention with any other country or
countries or any decision made at any international conference.

Ex: Legislations relating to T.R.I.P.S., ensuring Indias conformity with WTO membership, are being
enacted under this provision.

Questions are also being raised about the legal-tradition in our country under which treaties
become operative & binding without prior participation of parliament in their making. They can be
entered into & implemented by the Union executive in exercise of its executive power under Art. 73

(iii) Administrative-relations between the Union & States :

The Union Government is empowered to issue administrative-directions to the states in relation to


certain matters, these directions are binding on the states:

Art: 256: Provides that, it shall be the duty of the state to exercise its executive-powers so as to
ensure that due-effect is given with in state to every Act of Parliament & to every existing law which
apply in the state. This is a constitutional-duty of every state. The Govern of India is entitled to given
directions to the state-government regarding the duly which is imposed upon it by this article.

Art 257: Provides the control of the Union over state in certain cases:
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(a) The manner in which the executive-powers of the state shall be exercise so as not to impede or
abridge the executive-powers of the Union.

(b) The construction & maintenance of means of communication, declared to be of national or


military-importance; &

(c) Measures to be taken for the protection of Railways within the start.

The authority given to the centre to enforce its administrative-directions against a state which fails
to comply with them is indented to ensure-harmony btw the Union & the state. If a state exercises
its executive authority as to impede or obstructs the execution of Union-laws or services, that states
exhibits a revolt against the central government & hence to maintain the integrity of the country.
It is right that the Union has been empowered to intervene.

(iv) Distribution of Legislative-power between the Union & the states (Article 246)

The Constitution in making the distribution of legislative-powers that the union & the states, follows
the government. of India 1935. It enumerates various items of legislation in three-lists given in 7th
Schedule:

List I The Union List

List II The State List

List III The Concurrent List

The parliament has exclusive powers of legislation with respect to 97 items in List I

The State Legislatures have exclusive-powers with respect to 66 items in List II

Both Parliament & state Legislatures can make laws in respect to 47 items in List III.

Residuary powers of Legislation : (ARTICLE 248)

Parliament has exclusive power to make any law with respect to any matter not enumerated in
the concurrent. List or State-List. Such power shall include the power of making any law imposing a
tax not mentioned in either of those lists.
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This Art. Assigns Residuary-powers of legislation exclusively to parliament Entry 97 of List I,


Schedule VII to the constitution read with art. 246(i) also lays down that parliament has exclusive-
power to make laws with respect to any mater not given in List II or List III, including any tax not
mentioned in either of those lists.

Complex modern governmental-administration, with the advancement of society, expanding


horizons of scientific & technical-language, in a federal-set up providing for distribution of
legislative-powers coupled with the power of judicial-review may raise such situations that a subject
of legislation may not squarely fall in any specific-entry in three list.

In such a situation parliament would have power to legislate on the subject in the exercise of
residuary-powers under this Article & Under Article 246 (1) read with Entry of List I.

Emergency-provisions

Art. 352 : Provides that if the president is satisfied that a gave emergency exists where by the
security of India or any part of the territory is threatened, weather by War or external aggression
or armed-rebellion, he by proclamation, make a declaration to that effect.

When the proclamation of emergency is made under Ar. 352, the normal distribution of power
between the centre & the states undergo a vital-change.

Parliament is empowered to make laws with respect to any matter enumerated in the state-List.

The centre is empowered to give directions to any state as to manner in which the states executive
power to be exercised.

Further, the president may be order, direct that all or any of the provisions of Article 278 to 279
relating to distribution of revenue between the centre & the state shall take effect with such
exception or modifications as he thinks fit.
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Art 356: Provides that, if the president, who is the head of the Union-executive is satisfied that the
Government. of a State cannot be carried on in accordance with the provisions of the constitution he
can issue a Proclamation to that effect. He can then assume all the functions of the government of
the state, including the powers of the Governor.

The only exception is that he cannot assume any of the powers exercisable by the High Court.

Art 360: Provides that, if the President is satisfied that a situation has arisen which threatens the
Financial stability or credit of India or any of its units, he can declare a Financial-emergency. In such
an event the can issue necessary directions, including order for the reduction of salaries &
Allowances of public-servants belonging to union & the states. All Money-bills passed by the state-
legislatures during the period of financial-emergency are also subject to the control of the centre.

Effect of Emergency-provisions on Federalism:

The emergency-provisions which come into operation only on the happening of the specific-
contingencies do not modify or destroy the federal system. It is rather a merit of the constitution
that it visualizes the contingencies when the strict application of the Federal-principle might destroy
the basic assumptions on which our constitution is built.

The Indian constitution by adapting itself to the changed circumstances strengthens the Government
in its Endeavour to overcome the crisis.

In an emergency, the behaviour of each federal-constitution is very much different from that in
peace time.

For example in Swiss Constitution, which is a federal Constitution expressly empowers the federal
government to intervene on its own initiatives if the external-disorder might occur which endanger
the safety of the nation.

In USA, Australia & Canada do not expressly provide for enlargement of federal power during the
period of emergency, but during the two world-wars, the defense power of the Federal Government
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was given so extension as interpretation by the courts, that these countries behaved more likely
unitary than federal-state.

Thus every constitution implies devices for its own-survival.

Appointment of Governors

Art 155: The governor of a state shall be appointed by the president by warrant under his hand &
seal.

Art 156: The Governor shall hold office during the pleasure of the President.

The Governors of the states are appointed by the President, they hold their office during his
pleasure & to extent they exercise their power in their discretion, are answerable to him.

The Governor is only the constitutional head of the state who shall normally act on the advice of his
ministers. There are provisions in the constitution under which the Governor is required to send
certain state-laws for the assent of the President. The President has power to veto those state laws
[Art 200,280 (2) ].

The power of veto given to president is intended to be exercised only when a state-law will
adversely affect the interests of other states or of the country as a whole.

The only example of veto-power used by the president is Inre, Kerala educational Bill Air 1958, but
here also the Centre obtained the Advisory-opinion of the Supreme Court before sending it back to
the state-Legislature for suitable-amendments in the light of the courts-opinion.
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Judicial Interpretation of Federation

West Bengal v. Union of India9

The debate whether India has a federal-constitution Federal-Government was discussed at length
by the apex-court in West-Bengal v/s union of India.

The main issue involved in this case was the exercise of sovereign-powers by the Indian states. The
legislative-competence of the parliament to enact a law for compulsory-acquisition by the union of
Land & other properties owned by the state & the sovereign-authority of states as distinct-entities
was also examined.

The Supreme Court held that the:

Indian- Constitution did not propound a principle of Absolute-Federalism. Though the authority
was decentralized this was mainly due to the arduous-task of governing the large-territory.

The Court outlined the characteristics, which highlighted the fact that the Indian-constitution is
not a traditional-federal constitution.

i.Firstly, there is no separate-constitution for each state as is required in a federal-state.

ii.Secondly, the constitution is liable to be attend by the union parliament alone & the units of the
country i.e. the states have no power to alter it.

iii. Thirdly the distribution of powers is to facilitate local-governance by the States & National
policies to be declared by the Centre.

iv. Lastly, which contains internal checks & balances, the Indian constitution renders supreme
power upon the courts to invalidate any action violative of the constitution.

The Supreme Court Further held that both the legislative & the executive-power of the states are
subject to the respective supreme-power of the Union. Legal sovereignty of the Indian nation is
vested in the people of India. The political-sovereignty is distributed between the Union & the states
with greater weightage in favour of the Union.

9 1963 AIR 1241


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Thus, the learned Judges concluded that the structure of the Indian-Union as provided by the
constitution one is centralized, with states occupying a secondary-position. Hence the centre
possessed the requisite-powers to acquire properties belonging to states.

On the other hand, Justice Subba Rao, the great champion of state-rights expressed his minority
view has consistency with the federal-scheme under the Indian-constitution. The Indian Constitution
accepts the federal-concept & distributes the sovereign-powers btw the union & the states.

State of Rajasthan v. Union of India10

The next landmark case where the nature of the Indian-constitution was discussed at length. In
this case, the learned Judges state that even if it is possible to see a federal structure behind the
establishment of separate executive, legislative & judicial-organization in the states, it is apparent
from the provision illustrated in Article 35 that the Union Government is entitled to enforce its own-
views regarding the administration & granting of power in the states.

The extent of federalism of the Indian-union is largely waterned down by the needs of progress
development & making the ratio integrated, politically & economically coordinated & socially &
spiritually uplifted.

In conclusion, the Apex-court held that it was the right of the Union parliament to issue directives
if they were for the benefit of the people of the state & were aimed at achieving the objectives set
out in the preamble.

State of Karnataka v. Union of India11

The Supreme Court held that, our constitution has, despite whatever federalism may be found in
its structure, so strongly unitary-features also in it.

10 (1977) 3 SCC 592


11 (1978) 11 SCJ 190
21

Kesavananda Bharti v. State of Kerala12

The basic structure thesis case, some of the Judges in full Constitutional Bench expressed federalism
as one of the basic-

Features of the Indian Constitution.

S.R. Bommai v. Union of India13

Four opinions were given, expressing varying views:

Justice Ahmadi: opined that in order to understand the true-nature of the Indian-constitution, it is
essential to comprehend the concept of federation. The essence of the federation is the existence of
the union & the states & the distribution of power between them.

The significant absence of expressions like federal or federation in the constitution, the powers
of the parliament under Articles 2&3 in the constitution powers conferred to meet emergency-
situations, residuary powers, powers to issue directions to the state, concept of single-citizenship &
the system of integrated judiciary all these provisions create doubts about the federal-nature of
Indian const. Thus, it would be more appropriate to describe the const. as Quasi-Federable or
Unitary rather than federal-const in the true nature of the term.

Justice Sawant & Kuldip Singh: gave opposite view

They two regarded Democracy & Federalism as essential features of the Indian constitution. The
overriding powers of the centre in the event of -----emergency do not destroy the federal-character
of the Indian-constitution. They aid, every state is constituent political unit & have an exclusive
Executive & Legislative elected & Constituted by the same process as the Union Government. The
judges justified the use of power of president (Art 35)

12 AIR 1973 SC 1461


13 AIR 1994 SC 191
22

Justice Ramaswamy opined that

The units of the federation had no roots in the past & hence the constitution does not provide
mechanisms to uphold the territorial integrity of the state above the powers of the parliament. He
declared the Indian constitution as Organic-federalism, designed to suit the parliamentary from of
government the diverse conditions prevailing in India.

Justice Jeevan Reddy & Agarwal opined that

The expression Federal or Federal-Form of government has no fixed meaning the constitution is
also distinct in character, a federation with a bias in favour of the centre. But his Factor does not
reduce the states to within the sphere allotted to them the states are supreme.

Rajamannar Commission

In 1969, the Government. of Tamil Nadu, dissatisfied with the constitution, appointed a
Rajamannar Committee, to examine the entire question regarding the relationship btw the centre
& the states in federal set up, with reference to the provisions of the constitution of India & to
suggest suitable amendments to the constitution so as to secure to the states the utmost
autonomy

The committee in its report issued in 1971 criticized certain aspects of the Indian-constitution
because they were not reconcilable.
23

The Committee accepted the position that the power vested in the centre does not reduce the
states of the state to that of administrative-units in a unitary government as in the days of the British
role.

The committee suggested some modifications in the constitutional-provisions relating to the


distribution of legislative & taxing powers emergency etc.

The proposals made by Rajamannar Committee suffer from an extreme over-statement of the
case for the state-autonomy.

These proposals did not evoke much public-enthusiasm & were endorsed neither by any state-
government nor by any All India political party & the report became a dead-letter.

Sarkaria-Commission

In 1983, in response to an insistent demand to review the Central-State relations, the central
government appointed the Sarkaria Commission under the chairmanship of Justice R.S. Sarkaria, a
retired Judge of a Supreme Court. The limitations on the commissions-term of inquiry was that, in
making its recommendations, the commission was expected to ensure that they were with in the
constitutional-provisions which safeguard the independence, unit& integrity of the country.

The commission presented its report in 1988.

It has rejected the demand for curtaining the powers of the centre saying that a strong centre is
necessary to preserve the unity & integrity of the country.

The commissions view is that there is no need for drastic changes in the existing-provisions of the
constitution.

It its view the fundamental-provisions of the constitution have done reasonably well &with stood
the stresses & strains of heterogeneous society in throes of change.
24

Recent developments in Indian-Federalism

1. Firstly, the 73rd & 74th amendments of the Constitution in 1992 have created a third-tier of local-
governments i.e. the panchayats & Municipalities of course these amendments have no impact on
central state relations but they encourage federal-tendencies at the base.

2. With reference to Article 356, the Supreme Court in S.R. Bommai versus union of India14
emphasized the federal-character of the constitution & has imposed several procedural restraints on
the exercise of power by the centre under the Art.

3. In quick succession, once in 1987 & again in 1998, the president has asked the central-Cabinet to
reconsider its advice to impose Presidents rule under Article 356. On both occasions the cabinet
dropped its recommendations. The Union-Government has become very cautious in exercising its
power under Article 356. For quite some-time now the power has not at all been exercises.

4. With the installation of Coalition-Government at the centre since 1996 consisting of political
parties ruling in different stats, the central government has always to seek the cooperation of the
states.

This has changed the real-politics of the country which is not moving towards a federal-government
even through the constitution may not be federal in the classical-description of K.C. wheare.

5. A centre state commission has again been constituted in 2007 which is to look into the
developments since the last commission, arising particularly in the light of globalization.

Co-operative Federalism & Organic Federalism

Where the units or states & the federation do not compete for power but co-operate through
various instrumentalities to promote the common purpose is known as cooperative-federalism. The
present stage in India can be described as Organic-Federalism, where the federations the units
function as a part of one organism to achieve the common-governmental purposes. The lessons to
be learnt form the recent-developments & the pressure of Circumstances that developed together
with the large-scale interdependence of the states in many matters, had really indicated a case for

14 Id. At note 13
25

organic-federalism. There are strong organic-Filaments-constitutional, financial & administrative,


which may be relied upon to uphold the unity of India.

For example: Several industrial establishments are financed & managed by the Union Government,
but are operating within the territories of the unit-states; & various nation wide agricultural-
operations in the matters of improving technology, seeds etc.

GST (Goods and Services Tax) as Emerging challenges of Fiscal


Federalism

GST as a comprehensive tax scheme conveys the abolition of various indirect taxes that were
previously in authority of the Central and State governments. Hence, it has amalgamated the various
taxes into a single tax, procurement of which will then be divided among states in a prescribed ratio.
Various central taxes such as excise duties, service tax, etc. and the State taxes such as sales, value-
added, purchase, entertainment tax etc. will be levied on a fixed rate known as GST or Integrated
GST/IGST. GST is a fundamental step in our taxation policy and hence, it requires more time and an
in depth concurrence to come into operation. Furthermore, if one raises a contention that GST is
being discussed for the past few years since it is an initiative under the UPA Government, then one
must also consider some basic changes that have been introduced in the Constitutional (122nd
Amendment) Bill, 2014 as compared to the Constitutional (115th Amendment) Bill, 2011. It does not
seem unwarranted to forward the Bill to a select committee which would recommend the possible
changes in the present scheme of GST. The present scheme of GST has to be made more rigid since
the flexibility that it provides serves nothing but an impasse on certain basic features of federalism
in which decentralization and fiscal liberty are prominent. Taxation is part of Eminent Domain and
hence, it does not just get hampered when such power is interrupted but it also gets extinguished
when there is a change in the center of flow of such powers that is apparent in case of GST, as the
power is centralized in the hands of the Central Government.15

Comparative Study of Federalism16

The U.S.A Constitution has been regarded as the epitome of the classic federalism. America started
on its Federal carrier with a weak-centre & emphasis on States rights. The reason was that the U.S
constitution came into being as a result of a voluntary compact among the pre-existing states which
conceded rather limited-powers to the Centre. A similar process occurred in Australia.

15 http://www.gstindia.com/gst-is-it-truly-a-threat-to-fiscal-federalism-in-india/
16 Watts, Ronald L. (1999). Comparing Federal Systems. (Montreal: Queen's University, 2nd edition)
26

Also, the US- constitution was the product of the laissez-Faire era which signified minimum-
government & maximum-private enterprises.

In course of time, however things have changed. The powers of the centre have expanded since
1787 & correspondingly the powers of the states have shrunk.

This has been achieved without any explicit-amendment of the const. but through ingenious
legislative devices & also through judicial Activism.

Now in present context, the states in the U.S.A are co-ordinate with the central government. As
there was definitely-weaker vis--vis the centre. The process has been aided by such factors as tense
international situations, wars, vast economic & technological-developments, replacement of laissez
faire by the social-welfare etc.

Canada

The Canadian-constitution, definitely told an accent on the centre. In course of time, however the
privy-council, by its process of interpretation weakened the centre & raises the provinces. This was
the result of assertion of bilinguism & biculturism by Quebec (a French majority state). The central-
power to veto the provincial-legislation has also come to be used sparingly as a result of growth of
conventions.

On the whole, therefore, the provinces in Canada have grater freedom of action than the other
units in other units in other federations & this has at times been inconvenient & embarrassing to the
centre, primarily in the area of foreign relations & economic-matters.

India

The Indian-federalism was not a result of a compact between several sovereign-units but a result
of Conversion of a unitary system into a federal-system. Here the movement has been from unity
to union. From unitarism to federalism, unlike other countries where the process has been for
separate-units to come together to from the federal-union In India, it was rather the reverse process
viz. to convert a unitary constitution into a federal-constitution.
27

Conclusion

Dr. B.R. Ambedkar, one of the chief-architects of the Indian Const-said: Our constitution would be
both Unitary as well as Federal according to the requirements of time & circumstances.

In historical as well as present context, the above statement is fully correct because: federalism is
not static but a dynamic concept it is always in the process of evolution & constant adjustments
from time to time in the light of the contemporary needs the demands being made on it.

Constant discussions & negotiations between the centre & the states in various field can help in
removing frictions & difficulties in the area of inter government cooperation.

For making Indian Federalism more robust & viable system the differences between the centre &
the state must be sort out so that India may successfully meet the great-challenges of difference,
external & internal security & socio-economic development.

At last, it is very necessary that neither the federal set-up becomes unitary not that it becomes too
lose & weak affecting the unitary & integrity of the nation.
28

Bibliography:
Books:

i. M.P. Jain, Indian Constitutinal Law (Lexis Nexis, 7th edn., 2014)

ii.Mahendra P. Singh, V.N.s Constitution of India (Eastern Book Company, Lucknow, 11th edn., 2008)

iii.Dr. J.N. pandey, Constitutional law of India (Central Law Agency, Allahabad, 52nd edn., 2015

Websites:

(i) http://www.legalservicesindia.com/articles/c1onst.htm

(ii) http://www.gstindia.com/gst-is-it-truly-a-threat-to-fiscal-federalism-in-india/

(iii) http://www.sparknotes.com/us-government-and-politics/american-
government/federalism/section2.rhtml

(iv) http://www.thehindu.com/books/practice-of-fiscal-federalism-in-india/article1987942.ece